wti, down by 67 cents to $54.58. look at the ten-year note. the yield on the ten-year up at about 2.7% earlier now 2.711% i want to thank melissa lee for being here are you here tomorrow? >> no. wednesday. >> later in the week for melissa. watch her later today. right now time for "squawk on the street." ♪ good morning and welcome to "squawk on the street." i'm david faber with jim cramer. we're live from the new york stock exchange carl is on assignment this morning. let's give you a look at futures as we get ready to begin a new trading week here at the new york stock exchange. you can see -- i'll call it flat i don't know what you want to call it. european markets open for some time and euro stocks overall, down a little bit dax down a little bit, ftse the

only winner so far in trading. that will conclude a couple of hours from now ten-year note yield, yields coming down, got that strong employment number the other day. there it is. 2.711% is where we stand and wti around 54.5, down a bit. let's get to our road map this morning. it does start with the rally pause. futures, as you saw, flat open, potentially being pointed to the dow and nasdaq coming off six straight weekly gains. the s&p, by the way, is at its highest level since the third of december 2018. plus the word of the day, defense. new england patriots holding the l.a. rams to 3 points. it was the lowest scoring super bowl ever and the sixth lombardi trophy of the brady/belichick era. and cracking down on corporate buybacks senators chuck schumer and bernie sanders blame the practice for contributing to income inequality in america

we'll discuss that go on and on and on about the larger ramifications of it let's get to the markets first dow and nasdaq in the midst of a six-week win streak, the first time we have seen that since november 2017. this as we begin what is another busy week on the earnings front. you have clorox beating on the bottom line with its quarterly results. alphabet due to release its own earnings after the bell today. clorox always one of your favorites because you love to point to that multiple as being higher >> they had 4% growth. it is what you wanted. by the way, with oil down, they're very reactive to the price, the different prices related to oil oil down 91 cents, good for them, bad for the rest of the market the market has been taking its cue from oil oil, if you look at oil going up, has led during that six-week period that you talked about so if oil goes down, the market will go down. >> simple as that. that seems to have been more or less the way it has been holding

for some time. it is important -- we tend to mention these things now at the top. because the complexion of the market trading has changed and a lot of it is run by algorithms, by computer scientists and others, physicists, whoever, people who work at places like renaissance technologies or too sigma that have enormous amounts of money >> isn't that what those ads in the super bowl were about? the algos have been right. oil goes up and then the stock market goes up, sojust set the issue that i have is that there are a lot of companies that are going up as part of etfs, the etf issue again. let's not get too cocky. if oil goes down, expect the market to go down, led by amazon, a big damper on friday i think amazon is good, but right now amazon is being wrapped up into the notion of that it paid too much to move

into india a lot of negative notes about that. >> india is still small. but has a component of its potential growth, people would focus on. >> notice retail, retail was down on friday with the belief that if amazon didn't blow away retail, what is going to be at brick and mortar one of the most overlooked i would say and read wrong conference calls last week by simon property group and they are very, very smart. they're talking about malls doing fabulously and rates are a lot -- but the bcd malls are doing terribly that's something that -- by the way, the -- they have a lot of what i regard as being those off price malls. they did quite well. so i'm trying to figure out to triangulate how real retail went it is not that great if amazon was feeling some pressure. >> no. and we pointed this out many times, been a tale of two cities in the mall industry with as doing very well and everybody

else sort of suffering >> but also i thought that microsoft was a much better quarter and ann winblad was saying the same thing. >> yep. >> and azure was really amazing. i think we'll hear alphabet tonight, they should talk about google cloud services, but that will not be a focus because they don't -- they got a new ceo. i think if they don't talk health care, waymo, they don't talk businesses, we're going to be cost to click cost to click is not going to be good. >> cost to click. >> the whole -- the mo, the mo of facebook was going to be better than the mo of alphabet. >> facebook now is coming through as the best quarter of any. >> turned out that it doesn't matter what the times and the wall street journal say, the advertisers won't step away. it is instagram stories. my hat is off to zuckerman, he did pivot enough to realize instagram story was the number one way for small and medium size businesses to reach other

customers. the conference call last week, i would put facebook at the top of the list. >> an a-rating. >> orchestrated terrific analysis i give amazon bottom. >> bottom. >> amazon gave the least information. >> we do have one deal this morning, jim, that got my attention this morning, this ultimate software. for a number of reasons, in part because it is so large for a private equity deal. $11 billion. obviously the significant premium to where the stock was trading. it is a club deal. so, yes, led by hellmann and friedman which does these kind of deals management staying in place. but along with blackstone, with gic from singapore, the canadian pension plan and other investors as well. i'm hearing $7 billion in equity being contributed. so very large equity check and financing of course to go with it. $11 billion, i can't remember a

deal this size since prior to the financial crisis. >> this is an extremely high multiple stock if people just presume that a company like this, which has always been a good company, that nobody would ever buy a company that sells at 50 times earnings. >> had 20% -- they had 20% growth though for year after year after year. >> does it mean that the companies that are growing consistently have -- are tired of not seeing their stocks get a reward for their growth? because that would be something. >> i know. there is a lot of questions i don't have answered here including why the ceo and president and founder of the company believes that their customers will benefit from their ability to bring new features and services to market more quickly while still enjoying the same high level of service. why he believes they're better off private than not 5100 or so employees 5600 customers >> when you take a service now,

john donahoe, they -- >> is workday a competitorof theirs >> i believe so. >> not a name that -- >> no one wants to say anybody beats with anybody but the one thing i want to point out is i see something like an ultimate software and say to myself, how many others are there, just kind of out there, give an example, ca, ca, no one thought that would be bought that was a -- not a high multiple software company. >> came along, said i'll take it, thank you. >> what does this mean for the companies that have been kind of, you know, i'm not saying they have done nothing obviously benioff has created amazing amount of sales force. but this one took my breath away $11 billion deal, for a company that was already considered to be overvalued by a lot of analysts, rather amazing >> significant premium and, again, as a large amount of equity being part of the overall, you don't typically see it approaching, what, 60%, 70%

of the overall purchase price. the reason it may be trading above the bid price is i have as well heard from people close to the situation, it was one on one. there is the 50-day go shop. to your point, in a sense, would there be interest from a strategic here that didn't potentially have an opportunity, wasn't an auction, or oracle, which has a history of stepping in here. unlikely always unluke unlikely in thoseo cases, but they could say, here we are if anybody else is interested. >> look, that would be a faster grower for oracle. oracle has been buying back a lot of stock and it hasn't helped their multiple at all so this was a deal i'm so glad you pointed out. it made me think, if we get a revaluation of the myriad of companies that are what i would just regard as being helpful to companies, to do better, outsourcing, i had carlos

rodriguez on, all of their human capital management is on fire. paychecks, they could be a target when you think about this they got a great human capital management, not a lot of -- not the growth they would like it is worth following this deal. >> okay, good. and we will. make it six championship for tom brady. head coach bill belichick and the new england patriots including, of course, their ownership, robert craft. last night in atlanta, the patriots won super bowl liii, defeated the rams 13-3 in the lowest scoring game in the history of the super bowl. julian edelman named the most valuable player. new england tied the pittsburgh steelers for the most super bowl victories at six >> yeah. >> there is belichick. brady. you have to -- just -- let this -- enough already >> yeah. i mean, i -- >> it is incredible. >> my wife was all over me, i said, i think the eagles could beat the -- she said the eagles aren't in the super bowl, good call it is a very difficult thing to watch a game where it is punt,

punt, punt, punt, punt >> it was an offensive struggle. as opposed to defense. >> the whole season was so great in terms of the amount of excitement and the playoffs were great. this game was very subpar. >> yes, it was it was not exciting. any advertisements in particular given the fact that the game itself wasn't of great interest. >> i thought the nfl ads were more interested than the gig. >> the nfl ad. that was far more interesting. a lot more activity, a lot more passing, a lot more good running. >> apparently the anheuser-busch product bud light is not made with corn syrup. i learned that >> yeah. i was drinking a coors light when i was watching the ad i immediately put that down. >> yes >> ridiculous. >> corn syrup, i'm not going to drink it anymore to the coors people, memo to the coors, i liked your beer until i saw the -- >> didn't know what was in it. >> i switched to corona light. >> the game of thrones taking

over the ad. >> you're a "game of thrones" fan. i was hating to see the bud knight die but scene cast i find myself thinking, am i watching these to be able to talk about them tomorrow because the game itself, and edelman destroyed a defense, and to listen to tony romo tell them what to do and then not listen to tony romo tony romo is a great coach what happened to todd gurley, just tell us already. >> what happened there >> nobody knows. and, look, cooper cupp, he went down, you were not going to get josh reynolds up there it was just one of those games, frankly, where everyone was struggling except for romeo to make it interesting. >> yeah. well, and there is -- look at those bud ads. >> yeah. >> yeah. all right. when we come back, we're going to get more academic here. senators chuck schumer and

bernie sanders are taking aim at stock buybacks this in a "new york times" op-ed. the details of that. another look at futures as we set up to open about 17 minutes from now a lot more "squawk on the street" from post nine when we come back. i don't know what's going on. i've done all sorts of research, read earnings reports, looked at chart patterns. i've even built my own historic trading model. and you're still not sure if you want to make the trade? exactly. sounds like a case of analysis paralysis. is there a cure? td ameritrade's trade desk. they can help gut check your strategies and answer all your toughest questions. sounds perfect. see, your stress level was here and i got you down to here, i've done my job. call for a strategy gut check with td ameritrade. ♪

senators chuck schumer and bernie sanders say it is time to limit corporate stock buybacks in a "new york times" op-ed this morning. they will introduce a bill that will prohibit a company from buying back its own stock unless it invests in workers and communities first, including paying workers $15 an hour and providing 7 days of paid sick leave. they also go saying including things like that so there may be some other things interesting, jim certainly something that bears watching as we move into the political season presidential season as well. and goes back to this larger issue of the role of the corporation in society. >> yes >> and what does appear to have been a change over the last 40 years towards a more of a focus on shareholder returns and shareholders being by far the largest most important constituency they always seem to cite the

'70s in the '70s, there wasn't global competition. >> a lot of unions. >> yeah. a lot more unions. that said, you and i have talked many times about buybacks being important, but not necessarily indicative of why a stock goes up it is part of capital allocation, yes. one would think it would be very hard to legislate away company's ability to choose its own actions when it comes to capital allocations but it can enhance the bottom line and obscure i did think of viacom, for example, what is significant deterioration, and also help help some potential ceos, their comp is tied to earnings share. >> absolutely. i go through all of the major conference calls and there isn't anyone who says, you know what, we're going to not buy back stock because we have so many opportunities. it is the opposite we have only a limited number of opportunities to grow.

and what we don't have we will buy back stock limited opportunities y s ties . what i thought would be more corrective is a little more homework by schumer and sanders and adopt the one, one, one, the pledge that benioff has where your employees give money to community, the exacts give money to community, they give time to the community. if you adopted the one, one, one pledge you would do what they said i think a lot of people should do it. if you ever get a chance, you should google the -- it is basically the mission statement of companies they all have mission statements usually short. and marc benioff says the business of business is improving the state of the world. now, that is antithetical to so many >> so many do you really want to see legislation that tells corporations what they can or can't do in terms of allocation of capital >> i think what you can do is say, look, benioff has developed -- i once met with president clinton and said i

think we ought to -- i got a plan, before i was in the media, where if you lay off people, they should get a little bit of stock. because when you lay off people, stock goes up. and he listened to it. he said that was a great idea. and that would be terrific and what an idea, really fabulous and then i had a diet coke with him and never saw him again. that's fine. said it was fabulous but you go and you suggest that benioff's right and then you look at -- >> that's not going to happen either, though. >> they don't seem to know -- >> the corporations are under pressure from activists, conceivably, if they're holding cash it is not going to change their approach to capex. are they going to start to spend more if they spend less on buybacks >> one thing that was a big issue is if we refund the money and companies don't spend on plant equipment and employees, we shouldn't have done it. but they did they did it is just that maybe -- >> listen, tax reform, by the way, these are the same companies that were inverting, in other words, moving foreign jurisdictions to lower their

taxes. we argued many times, it is a global field in terms of competitiveness, and if you want to keep them here, you're going to have to basically lower rates. we have done that. the hope was, of course, that would result in substantial increase in capital expenditures that's not clear >> there are some that would have done it nucor has done it. >> come on it is not clear -- >> great for shareholders and unless you have a benioff-like mission statement, you're supposed to make money for shareholders. >> going to keep going this debate is going to continue to rage. capital gains taxes. >> i don't understand why they're different from ordinary income other than rich people get a lot more -- >> a debate to be continued. but certainly one worth watching up next, jim's mad dash as we count you down to the opening bell here is one more look at futures as we get ready for trading nine minutes from now from post nine at the new york stock exchange that rocking chair would look great in our new house. ahh, new house, eh?

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each day, brings new possibilities. that's why you need a partner dedicated to helping your company reach its goals. u.s. bank -- the power of possible. ♪ all right, we're about to get started with trading here at the nyc. not before we get a mad dash in here where are you headed >> really interesting, cisco, really doing amazing things. this is a quarter, check back to where nelson peltz got involved, it is a kind of a spur, they like the peltz input what is important here, david,

the restaurant group has been very weak. and yet these guys, of course, they cater to restaurants and food service they seem to be a great way to be able to play restaurants and patrons even though labor costs, mentioned even the mcdonald's call, had played havoc with the restaurants. as a matter of fact, restaurants probably had the worst price inflation of any workers and a lot of that is, frankly, minimum wage, but also there is a high correlation between immigrants and those who work in restaurants historically a lot of the jobs -- there are not enough people who want them. a lot of the jobs, i got this from of all the places, uber freight, that uber is attracting so many people, and the -- and the grubhubs, those are better jobs than working at restaurants. you're bidding that employment pool sysco may be a way to play people going out, there aren't as many people going out because of video games, domino's pizza,

netflix. >> people not going out, raising labor costs, people not wanting the jobs. >> but then sysco, they own the food service business in this country. it is a very streamlined company, very, very good company. but, look, wages from even more than hotels, the wages from restaurants are mentioned -- the brinker call last week, david, chili's, that was a wake-up call here is where the inflation really resides in the economy. so keep that in mind otherwise we did not see a lot of -- so far have not seen a lot of inflation in corporate numbers. >> yeah. speaking of inflation, as we get ready to start trading here, one day out from -- one trading day out from the jobs number on friday that was quite strong, the ten-year trading right around 2.71. >> we will analyze the costs, we have low rates, sorry, senator

schumer, people buy stock. then a short base. i point to clorox, where i joke about how well run it is and it has that high multiple but it is going to open up 7 a lot of people felt that clorox was going to say, we have to guide things down, we're not going to be able to do the 4, we have to do the 3, they didn't count the new products introduced benno dorer is on "mad money i "tonight and the supplement business, which is doing so well probiotics business, he's gotten into a lot, into the clubs, now the big chains like walgreens. remarkable job, benno. rite-aid. >> do they still have -- >> kings ford wasn't that good it is just a very well run company. >> the applause building here at the new york stock exchange. going to get started with trading. about 25 seconds or so from now. we'll tell you who's ringing the

opening bell, as you can see, of course, back at our headquarters, real time exchange about to show a little more red perhaps than green here at the big board, variant medical systems, and at the nasdaq, china consul general celebrating the chinese lunar new year, the year of the pig. we haven't talked about china as all. 30 minutes in, not one word on the -- >> no new s on trade talk. the health care business, including ge's health care business. >> chinese markets closed all week they take it very seriously. >> they do have a total shutdown for the new year and that always hurts numbers. then we have to explain, yeah, i will point out las vegas sands yields 5%. >> does it really? >> yeah. i think that's a company that is a very, very well run company, my friend went back and forth

this weekend, really, really kind of struck at how that has always been the level to buy las vegas sands. it is clearly down because of trade talks. we have not talked about goldman and potential clawback to partners that's what happened with robert maxwell buyback years ago. and it was a private company >> okay, you were referring to robert maxwell, who jumped off -- goldman was a private company during the maxwell fiasco now no longer. it is only the very top of management that potentially will have -- >> exactly and it has to -- i think that stock may be down on that. that's a wrong read. the right read is to say, shareholders won't bear all of the losses and that is -- there will be losses this is even -- even though they have a letter from the prime minister, the government themselves, did not distinguish

themselves, we have not followed that story nearly enough >> there are a number of stories that really are worthy of closer attention, but require a great deal of reporting as well. >> that's what it is >> we have not spent that much time on qualcomm and the ftc case they had the concluding arguments, we won't hear from the judge for some time. but there are many who believe that that could not go well for qualcomm and then potentially even jeopardize the u.s. in terms of 5g, if in fact, it were not to go their way. qualcomm says the government failed in so many different ways to make its case >> the tenor of the court, the judge matters, is that you really would want to, if you're qualcomm, try to get a settlement and always this thing, does apple want to settle with qualcomm and they don't. >> no, apple is not -- >> they want a trial.

>> this is the ftc but it is all wrapped up in the same argument or larger argument. >> 5g is important very good article today about how we decided to really derail huawei's 5g and there are -- it is over in the brooklyn district is this case the huawei case. there is such a -- there are so few people reporting on business news the old days, 15 years ago, we would be camped out at the brooklyn, listening to or trying to get information from the brooklyn u.s. attorney because this is such an important case against huawei but the alternative, nokia not that good, and, yes, qualcomm doesn't compete in that world, but qualcomm is our hope to stay ahead -- >> of huawei and 5g. if there is a setback in this court, it could be seen as a significant setback overall in terms of 5g.

that is one perspective that qualcomm would be happy to share. >> anything on starboard today or is that later in the show >> let's go to starboard now the activist fund run by jeff smith. called jeff, he did not return my call. they're figuring in a couple of different things, first is papa john's, of course. which we have kind of covered here and there $1.2 billion company, had a lot of controversy still 31% owner, but he comes in, that is jeff smith, and starboard with smith getting investment in terms of refer or convertible. the stock is reacting positively jim, all i've got there is that it is not about cutting costs. it is about reengineering a path to growth. >> well, i'll tell you, you -- this does clarify who is running the company. i think there is a lot of people who were thinking -- deposed ceo, it is very positive for them but, remember, they have taken a

step back versus domino's, and even pizza hut the turmoil hurt them. >> i'm not a customer of any of the chains frankly given -- we have -- >> my wife is making pizza friday night. >> is she getting any got at it? >> the problem with making pizza, it takes more than you realize, so you need a little bit more help. and you really have to have a franchise model. and my wife's not franchise. >> i can expect a good meal when i go. >> oh, i think best in brooklyn, but we haven't had david portknight, we haven't had them come and verify our pizzas, but we have gotten good reviews. >> on starboard, another stock that is having an impact on potentially is this bloomberg report that starboard took a stake in bristol-myers. >> so big. this is so big.

>> well, again, mr. smith has not returned calls what i can tell you is a couple of things here remember we talked about this, the large spread in this deal between, of course, the price that is 50 bucks in cash and one share of bristol-myers, celgene trading below that spread. there is not nearly as much money in event strategies for lack of a better term as there was previously so you don't have as many funds atacking that spread but it stayed large in part because of the continuing enduring belief that, well, somebody will come along and try to get the deal voted down, possible a bid for bristol-myers. i've heard nothing on either front. bloomberg reports that starboard is in there. the company has not heard from starboard. i can at least share that. >> they have not. >> there has been no conversation a lot of people are focused on the fact that the nominating window closed for the board, but frankly the annual meeting would be after the vote. so that's not as important

starboard is, you know, it is a large activist fund, but not that big it has so many different things going on to take a significant stake where they would actually argue against the deal who knows. remember, go back a couple of years, actually november of, i think, '16 when rockwell -- '16 or '17, when rockwell collins and utx, a story that starboard had taken a stake there and might argue against the deal nothing came of it. >> i look at this. when you look at the merck quarter, one of the best of the pharma, maybe the best of big pharma, pfizer was not bad, it is keytruda, the biggest drug ever, and that's against bristol-myers drug and there is chance that optivo will head but

the street turned against it they look for a company that they can boost earnings with, that they believe they have something in the pipeline, celgene, people feel that celgene is one product like abvi i like -- people feel these are two narrow companies optivo and ref la mavlimidrevlia fantastic pipe you don't know about for celgene. people think it is bad for bristol. that's why everyone is so excited. i disagree with that. >> i know you do there are many who do think they got a good buy here in terms of at least when they bought and the multiple they paid for celgene, the deal will be creative right away. many datas i think i termed it in some way two drunks holding each other up so, yes. >> when i was at jpmorgan health care conference, i think you laid out a very good case. >> you're a believer. >> yes, i am a believer. i think bristol is a challenge company and this takes the

pressure off bristol has a number of good drugs. they do not have enough to be able to make it so people are excited about it this idea is, david, i think more putting bristol in play >> yeah. >> we both think that's -- >> look, i could be a supporter. >> any interest out there -- first of all, it would be hostile in nature. >> that's ridiculous. >> very hard to imagine. pfizer does not seem interested at all. >> at all. >> pfizer -- pfizer had a -- the merck call, exceptional on animal health, by the way. which is -- >> beyond keytruda. >> yes, eli lilly from 89 to 116 when they announced the spin of elanco pfizer fantastic, a lot of people are hoping, including me, that frazer would announce they would spin off their animal health they said they featured their animal health as one of the good reasons to grow. look at eli lilly.

the last five points, the business has been very good. they bought locxo. a lot of deals i keep hearing about in the biotech business but they haven't hurt. a lot of people are saying j & j has to do something. i disagree with that. >> you do. but this theme you mentioned, which is buying growth by buying a biotech, paying a high multiple, the market cap numbers may not be -- even if it is 10 or $12 billion, that's a theme that we continue to hear we're going to see more of. >> targeting cancer. there is an endless bid under alexion pharma that they somehow, you know, just -- and what happens is the analysts stoke it, david. they say, this would be a good fit. this would be a good fit what a good fit is a new drug. okay that's what you want differentiated results from a new drug so i like bristol. i think the combination is very

good lilly just massively good and merck, wow advi not so good too dependent on a drug a lot of people are coming after. >> the biggest drug in the world. >> you see the ads, you watch an ad on the super bowl, in 16 weeks this drug is much better than humira. you're seeing the most important ads are the ads against advi. >> yes as we await alphabet earnings tonight, it is moving up interesting, apple is now up 6.7% year to date. >> on nothing. on nothing i hope people that they'll make an acquisition -- >> wait, wait, wait. i said apple. >> i switched apple. >> nothing >> the last ten points are up because they didn't -- the stock -- the company's product line didn't deteriorate. now, the buyback i believe is back in place. an article about how they stayed away we don't know how much they bought in january.

i think they ended up buying a lot in january once the stock was down but i think what matters is this watch health care. justified keep focused on watch and health care. they think that the way to differentiate from the cell phone is the watch, there are 2 billion watches, you know, really bought every year. and the health for afib, which is j&j and the help for congestive heart failure, if you get some sort of handshake, it will be big, i emphasize that to the company, who do i think i am i'm someone who is interested. >> i want the health care costs. >> the f.a.n.g. complex, the one that you named netflix and facebook are by farthe best performers both up about the same 26, 27% for both >> that again is year to date. we're talking about a little more than a month. >> i think netflix is still water cooler stock when carl was here and i said, it is all about new netflix, i don't know, have you watched "bird box," it becomes the talk

and netflix is just producing things that we talk about. do we talk about the things that come up from america's most watched network? >> is that cbs >> i think "big bang," on its 140th year >> they did have -- >> cbs, i'm yawning at the product line now except for -- >> "twilight zone" on all access did you he see that >> that looks good it is all me too disney will be one of most important stocks >> without a doubt >> espn plus has to be good. >> we have so much to learn about on disney. the deal itself should be closed maybe by the end of this month >> okay. >> the fox deal. i talked a lot about the rsns, we'll see what develops there, whether they would consider going to a sponsored spin for them, for example. that's a story for a day to come >> i think that -- >> i'm told i got to move on. >> the most important call of the week >> moving on >> no. what bob iger -- >> yes

april analyst meeting. >> yes he may keep his cards close until then. >> to the bond pits now, check out with rick santelli, significantly warmer chicago >> yes definitely a much different climate today a much different treasury market today as well. look at a two-day of 2s. a bit more aggressive since the data friday. it wasn't just the employment report we have had some fresh data playing catch-up, more today with factory orders and durables, but not bad. and indeed even though certain numbers like chicago pmi and the big national association of purchasing managers, number for ism, all of these, university of michigan weren't at the top. they're just below the crown of what was just an unbelievable run since the end of 2016. but all things considered, the economy seems to be doing better how do i know?

treasury rates just popped right back where they were for the most part. look at a january -- early january of ten-year. we had 15 sessions in a row that closed in the 270s 30-year bonds, more like 19 sessions and the low 3%. we have gained those back in relatively quick now even though the yield curve hasn't steepened a lot, the fact it is not flattening and widening out a bit is interesting as you see on this three-month chart. getting close to 20 basis points of separation. maybe the most important issue is we normally see rates moving a bit higher going into fed meetings and employment reports. this time the tell was rates and the dollar softened up it is now after the day to day it did better, it is backwards investor sentiment regarding the economy and central bankers in general has changed a bit. look at the bunds, one week of bunds doesn't look anything like treasuries here they sit under 20 basis points always look to mario draghi to see the weak link in the central

banking chain with japan and finally two-day of the dollar index, once again, making a b-line for 96, rates firm, stocks stay pretty firm and all that is actually fairly intuitive from an economic standpoint for a change. david, jim, back to you. >> okay, thank you, rick rick santelli in chicago. now back to or over to bob pisani he's got more on what's moving this morning on the floor. bob? >> good morning, david happy monday, everybody. a mixed open, a little bit three to two declining to advancing stocks we had help, look at sectors from tech early on nvidia, qualcomm was up, microsoft was up banks are flattish materials generally having a tougher time and nergy oil was near $56 about two hours ago and just dropped down dramatically at 2 1/2 month high. energy stocks are lagging right now. the good news is the market internals are terrific we have just had a fantastic four weeks or so here. breadth of the new york stock

exchange is not the old historic highs in september, but not far from there buying power, how much buying pressure there is in the market, terms lowrie uses, increasing. the selling pressure, the amount of shares coming in to sell every day has been decreasing in january. volatility, vix is at 16 and change that's near a four month low here is the bad news, the market is kind of pricey now, and expensive. how expensive? well, it depends whether you think we'll get zero earnings, zero percent earnings growth, or 4% or 5% first quarter earnings up 8.1% on october 1st today, down to 0.5%. debate is do we get negative earnings growth for next couple of quarters? so far that's not happening. the numbers have been coming down here. schumer and sanders, david and jimmy mentioned the editorial on buybacks, that generated a lot of discussion over the weekend and i think the important thing that is out here, put up the

corporation, where do the profits go their claim is very interesting. i'm trying to verify all the numbers. they cherry picked some numbers here 2008 to 2017 they claim 53% of the profits went to buybacks 30% to dividends and imemplplying capital expenditures at 17%. that's a high number i'm trying to verify all of that it makes it difficult to argue for the buyback scheme the buybacks have, with the exception of a few companies, not dramatically reduced the amount of shares outstanding and the reason that has happened is because the companies keep adding options on the front end to that. so put up that shares outstanding. we have about 300 billion shares outstanding, the s&p 500 for years now. it hasn't changed all of that much some companies like ibm and exxon and apple have increased their shares outstanding they're buyback monsters, i call them for the vast majority of s&p, the shares are the same because of the options that keep being

added. this makes it difficult for the companies to argue there is all sorts of benefits from reducing from the buybacks themselves finally, the ipo market is opening up again this week significantly. this is going to be the big, big year there is a legendary year 1999 and 2000 where we raised almost $100 million they have been trying to get over that for 20 years the question is whether they can do it this year with over 200 companies including uber and lyft sitting out there we'll talk about that more in the 11:00 hour this could be the big year, david, for ipos. a lot has to go right to have that actually happen back to you. >> it does i remember those years well. man, some of those perspectives were fantasy fantasy. >> handle that amount of supply, no 350 deals brought during that period of which there are about four companies >> that are still around interesting stuff from bob on buybacks too apple also tends to skew it

because it buys back so much stock. as we head to break, let's look at this morning's top performing stocks on the s&p. guess what, there it is. clorox, jim. >> yep for real 9 bucks. >> "squawk on the street" will be right back. be right back.

up next, a look at the performance of faang so far. alphabet reporting after the bell

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my name is tanya, i work at the network operations center for comcast. we're working to make things simple, easy and awesome. welcome back time for trading. >> i was going to go over the cloud king possibilities but they're all bogus, i think instead i focus on negativity. there is an outfit, very, very small outfit that's evolus and they have been approved out of nowhere as a competitor to botox. allergan is down again it is the thing where no one is stepping up and saying let's go buy the company. >> yeah. >> no, you think that if celgene

is going to run off, maybe somebody buys allergan they seem to be downplaying their major depression drug. that didn't happen i thought they would -- we'll talk much more about it. >> before the music gets done what, do we have on "mad"? >> david, i've got clorox is the best of the day and it's the most technology oriented remember, it's based in san francisco. >> you got him focus today and he's got the ceo. "ua oe a lot moresqwkn the street" coming up for you after this - our markets are currently experiencing the longest bull run in history, so now is the perfect time to ask yourself, do you have wealth insurance. you know i made a good living, playing games on television,

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welcome back to "squawk on the street." the news has come back we're looking at our november read on factory orders expecting up 0.3 down 0.6 but down 0.6 is just as far down as our last look which was much worse at minus 2.1 so sequentialally there is improvement and downs down minus 1.3 following up 0.3 finally -- that was -- durable goods, take out our midmonth

read which this happened to be up 0.8 and replace it with up 0.7 so basically lateral but that does sequentially follow 4.3 which is our final october read and if we look at cap tool goods nondefense, this was down 0.6% this is our seed corn of the future we want to improve. down 0.6 is what the midmonth read was so stays the same you have to go back to march to find a bigger down minus 1%. our biggest most recent read was up 1.5 in july pretty much misses rates backed up one basis point but several basis points higher than we closed friday. sara, back to you. >> rick, thank you rick san tell la good morning welcome governor abbott back to "squawk on the street. david faber is here and karl on assignment taking a look at the markets,

the nasdaq is positive today the s&p and the dow lower by a little more than a quarter percentage point stocks are coming off a very strong winning streak, best since november 2017, highest close is friday since december 3rd. where our road map a muted morning for stocks the dow slips after six weeks of gains as investor await more earnings >> senator schumer and sanders calling for limits on corporate buybacks what that might mean >> the brady/belichick ear r the patriots beating the rams in the lowest scoring super bowl ever two titan nfl agents will join us. >> market is on a six-week win streak will it last is the worst behind us starting with elizabeth liwith our first panel. this is a power lineup welcome.

so liz ann, what's your take we had a historically strong january. where does that lead us? >> about a year ago, a little more than a year ago we moved our equity sackty cal recommendation to neutral and emphasized the benefits of rebalancing that would come with higher volatility so at the end of last year with the near bear market we got in the s&p that gave you an opportunity to use rebalancing to bring you back up to whatever your normal equity allocation is and i think there is an opportunity to make sure you're not getting out over your skis on the upside a lot of what conspired to hurt stocks, certainly tighter financial conditions, the strength in the dollar, many of those have eased but still have a lot of questions that don't yet have answers not least being trade. >> you're still sounding a little defensive

jill, any more opt mivenl in your outlook for 2019 after we got a big fed u-turn and encouraging news on the economy? >> we're expecting upside to equities and have 2900 target on the s&p for year end i think earnings growth should still be supportive and having a decent earnings season coming in better than we expected. so overall we think 5% earnings growth looks reasonable. sentiment has room for improvement so overall valuations have come down, not as stretched as they were a number of months ago, the data has obviously friday we got supportive data so we're still looking for upside to equities but think it's important to pick your spots within the equity market >> yeah, we'll get to that in a moment but wanted to get your top line take on the market. >> look, we were down 20% in december, peak to trough and recovered about 13% of that. we think the next incremental 5%

or 10% on the upside will be more volatile. on the horizon not only the february 15th u.s. ginni deadline, a deadline and fed in march and, of course, somewhere in the back is brexit as well so a lot of walls of worry to climb over the next few weeks. >> liz ann, even for now maybe assume the floor was the december low, i guess i want -- everyone asking what the ceiling is in that environment, right? last year we had 20% earnings growth in the stock market went down this year 5% could be enough to support the market provided the fed remains patient and risk taking is there and we can rebuild the valuations but how do you see that playing out? >> well, two things. you had a couple things happen last year, obviously fed was tightening monetary policy, financial conditions were tightening, all of those tend to put downward pressure on valuations so that was the reason we saw the p/e

contraction. for q1 it's only 1% which is sub the rate of inflation. if you're in line with that you're in negative real earnings growth terms at least in the first quarter of this year and i think although an earnings recession -- economic recession has been pushed out i think there is a chance of some semblance of an earnings -- i'm not sure that's built in the good news, a lot of things have reversed such with looser financial conditions, less tight monetary policy that's putting upward pressure on valuations this year so it's a little mirror image in terms of that overall push on valuations >> mona, how much do you expect earnings growth to -- >> ours is 4% to 6%. if you have that growth, some modest multiple compression again this year and then maybe a 2% dividend yield on top to liz ann's point some of the

head winds are reversing, think about the dollar which is the head wind for global corporations think about even the chinese slowing growth, slowing economy that could start to reverse if we see some of the fiscal stimulus measures kick in later this year so there is room for optimism as we head towards the second half of this year >> jill, you mentioned that sentiment has come back. it certainly was way too pessimistic given the's in december, it seems how much more can we rely on that seeing short-term measures where people are feeling good about the markets again. is that a key factor or no >> right, well, i think there's certainly more room for equity sentiment to improve when you look at what wall street strategists are still recommending as the recommended -- still sub 60% so certainly more room for improvement and for allocation to equities. i think what's going to be important for the earnings backdrop is we're watching guidance closely and everything with trade, you know, so far you

have seen earnings weaken a little bit but it's still better than average usually corporate set the bar low in january and we're tracking a little better but we have seen cap ex guidance come down with companies that reported so far seeing capex growth and a couple percentage points where it was below last quarter. if it started to fall off a cliff if there is just continued uncertainty around trade and global growth that poses risk to some of the sectors like tech and industrials that we do like right now but are seeing a bit weaker in terms of guidance due to some risks. >> my only question, liz ann on your cautious posture, are you not encouraged by the fed's complete change in policy, in tone, in flexibility around the balance sheet? haven't we learned over and over in this bull market when the fed, you know, provides relief or something that the market wants, usually it's a buy?

>> you do, absolutely, tend to get a pretty decent rally when you see it go into pause mode. if they are successfully engineering a soft landing here, mid-1990s-like, the december low probably holds but if the reason why they're able to pause now is because we will continue to decelerate into a recession starting sooner than i think what consensus believes, then that's the type of scenario where you're more likely to retest lows. i just think you have to keep in mind that the fed opted to raise rates in december and that was p p pre the december jobs report it's hard to convince me that the fed can stay in pause mode so this is a possibility they could have another hike in them this year. >> yeah, certainly a risk. where do you want to be? you mention you have to pick your spots carefully >> it's interesting. we wrote this report last week

mentioning if you think about the average financial services professional, the biggest age cohort right now is your 30 something financial services professional and many in the industry, you know, the financial crisis was the biggest event of their careers to them financials might look uninvestable they're used to an environment where momentum and growth stocks are outperforming and not value. but we think that you can see an environment of higher volatility this year which is an environment where you don't want to be in momentum stocks we think higher growth stocks, certainly they have risk there as well. so we tend to like stocks that in an environment where we see a rising cost of stocks generating cash, high free cash flow and stocks high quality. which tend to do well when volatility picks un. it isn't the same as low beta stocks, financials, for example, have some of the best earnings while earning stability within

the s&p 500 have substantially reduced their leverage so that's one sector we think looks much better than it did going into the last prices. >> and, mona, just before we go, where in the world would it make sense because obviously the rest of the world let us down into this tailspin. where do they leave us >> one thing we've been talking about is the barbell approach to the global economy on one hand remains the u.s. which is probably still the best on the block but the other hand of that barbell is em effectively and china which should benefit not only from some of the chinese stimulus we talked about but if the dollar doesn't have same type of rally it had last year em tends to benefit. from a valuation perspective those economies look pretty attractive here so we think it's truant o prudent for investors to have exposure to that side of the world as well. >> more and more popular views thank you very much, ladies, for joining us, liz ann, jill and mona

>> thanks. up next cracking down on buyback, senator schumer and sanders taking on corporate america saying there needs to be a limit on buybacks. jim stewart will join us to describe that. look at the top stocks to watch on the s&p "squawk on the street" right be rit ckghba alpha seems more elusive today. is it because so many go after it the same way, chasing after short-term returns? instead if getting caught up with the crowd, the investment managers at pgim take a long term view. uncovering opportunities for alpha across public and private markets, while anticipating unforeseen risk, has powered our rise to a top ten global asset manager. partner with pgim. the global investment management businesses of prudential financial, inc.

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i believe that people who make lots of money should be taxed for it and should not be relieved of responsibility because they have the money, the resources and the wherewithal to get around the law, to basically take advantage of the law. i just want fair taxation. >> what i want is billionaires to stop being freeloaders. i want them to pick up their fair share >> that, of course, was house financial services chair maxini waters and elizabeth warren to cnbc last last week. alexandria ocasio-cortez also proposing a rate of 70% and senators chuck schumer and bernie sanders calling for a crackdown on corporate buybacks. joining us to describe this is jim stewart. jim, welcome >> thank you

>> they are separate issue, buybacks and marginal tax rates, but there appears to be a mood among the democratic party where is this coming from? >> aim astonished how this caught fire and seems to become like a key issue in the upcoming campaign i completely agree as i've said on the show many times that everybody should pay their fair schaeffer and i think the key word is fair the rich should pay their fair share. none of these proposals seem to recognize is that the rich are not paying their fair share. now, they're not paying the 39.6%. we have someone in the white house who still hasn't released his returns but as far as we know in some years paid 0% if we made the exissing code fair we would raise a lot of money and rich would be paying a lot more let's put that aside suddenly we have these bold is a way to put it proposals to raise it to 770 and regular buybacks

and impose requirements on corporate managers i feel it's groundhog day. it's pretty close to it. we've been down this road in the past we've had 70% rates. we had higher than 70% rates other countries have tried it as well. >> they said there was not nearly the income inequality in american history from the '50s to the '80s that there is now. so much of this is an attempt to address the growing grab >> yes, but to me that almost cuts the other way the problem in here when we tried to raise marginal rates is just like now, the rich didn't pay them the super rich had loophole after loophole after loophole. i mean, surely somebody can remember what it was like in the late '70s before the reagan tax reform all those shelters look, the wealthy are going to get in there and lobby and

legislate. the loopholes always start and pretty soon the top payers aren't paying anywhere near those marginal rates >> in other words, always find way to skirt it. >> they always find ways that's the u.s. history. if they don't find ways, they have the wherewithal to move somewhere else that's what happened with france, france raised it to 75% and had to chop it back to 45 because everybody was moving to another country. >> but this is also the premise of the alternative minimum tax way back when when they said, look, find your way out of the income tax rates as they're defined but you'll pay fixed percentage of what you make in a given year same applies to middle class. >> the same problem happened with the alternative minimum tax. the very wealthy work their way out of it. they didn't pay the alternative mix tax because there were so many exceptions. guess who paid that. frankly, people like me, you know, i guess you would say middle class, you know, earners

who most of it is earned income. they ended up having to pay it then there was a huge backlash because that wasn't fair easy. so easy to make it fair. now, let's look at this corporate proposal again this is basically legislators saying we know better how to deploy corporate capital than the managers in the business now, let's look to history again. where has that led people when government officials decided they're the ones who can micromanage. they're talking about exactly how much to pay people, how much benefits to give them but they can't do share buybacks. >> right, forcing capital allocation decisions on corporations seems to be not a particularly smart way to go but there is this theme, jim, as well of the changing responsibility of a corporation from what was seen as sort of more benevolent back in the '60s and even '70s who cared for their workers more and their communities to those solely

focused on shareholder returns. >> i agree and i think that pendulum has probably gone too far. who should be correcting that? should it be the government or should it be the shareholders them service themselvs? the government is not very good at doing this. i totally sympathize with the issue that fairness lies at the heart of this. there is a widespread concern about income inequal and i embrace that we could have a much fairer tax code and didn't get it in the trump -- >> capital gain faxes too. >> you could maybe even lower the top marginal tax rate. raise capital gains, close loopholes and generate more revenue than we are now. another problem with taxing people who make over 10 million or 100 million, whatever it's going to be, there aren't that many of them you're not going to raise that much money

symbolically maybe we'd all feel better if we're whacking those few people and say you can't keep all the proceeds but let's put that aside the way to raise a lot more money is take the very broad base of affluent people who are not now paying the 39% that seems to me so easy but i guess it isn't flashy. maybe doesn't get the populist headline but "all the money in the world" for raising revenue but can do it in a fair and efficient way. >> what is your prediction as to the politics of this do you think they are going to win over americans that the left candidates that are proposing these types of measures to end inequality do you think that will work? >> i would have said no a few weeks ago but after this proposal, the 70% proposal came out and now a wave of similar very redistributionist ideas, it seems to be catching fire with a certain segment democratic party, you know, not just the rank and file but kind of the

elite academic. >> interesting that schumer is linked with sanders. schumer, the senator from new york linking himself on his corporate buyback. >> i'm not making any predicts and looks like tax policy is going to be a big issue and a very aggressive -- i don't want to sayal cal but redistributionist approach my concern if you really examine some of these proposals they're not going to redistribute very much and they're not going to do much about income equality you to have get past the headline and get on the real impact on who is going to pay it and you could go through there and eliminate. do you think the real estate developers will give up loopholes? i haven't heard anything about that in this debate? >> jim, good we knew you'd have opinions on the topic. thank you for joining us on a monday, what a treat, jim stewart from "the new york times." the patriots hold the rams to three points in the lower scoring super bowl in history.

two titan nfl agents will join us to discuss it

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etf spotlight time don taking a look. faang set to report after the bell. >> it is that time alphab alphabet shares outperforming. they're up about a percent it all statements from the google parent company getting ready to report earnings like you said after the close it's one of the big reasons you are seeing that communications services sector outperform on the day so far funds focusing on that comm services sector is what you'll want to watch and being influenced by the overall picture. vanguard, that ticker vox as $1.3 billion in assets and the spider communication services etf ticker xlc also one of the bigger sector funds has 4 billion in asset as well as smaller funds like the fidelity msci, ticker fcom

it's only got 295 million in assets but still one that will be influenced as we head into the afternoon's big report options traders, guys, already pricing in what could be a 4% move in the stock up or down based upon the results, 98% of analysts tracked by fax set have a buy rating on google shares, alphabet shares. the average price implying 20% potential upside, sara over to you. >> a lot of love for google. see what happens after the bell. thanks. when we come back, reversing course oil prices slipping after hitting the highest levels and tighter supply outlook taking a look at major energy. within the overall mark, then, though in technology, big stocks like apping, microsoft and adobe keeping the nasdaq higher making tech the best performer on the 'lbeig bk. 'lbeig bk. wel rhtac

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good morning, i'm sue he rear r the u.s. and its allies are increasing pressure on maduro all recognizing juan guaido as that interim president and thousands took to the street over the weekend in dueling protests both for and against maduro. a bud light ad in last night's super bowl is sparking controversy. the corn growers association criticized anheuser-busch for boasting it doesn't contain corn syrup and tweeting american corn farmers are disappointed in budweiser. netflix numbers were down during the game according to a tweet from the company which said viewing was down 32%.

"glass" topped the weekend box office with $9.5 million in ticket sales it was the third straight week atop of box office for "glass. you're up to date. that's the news update back to you, mike. >> thank you very much. swift moves in the oil market crude oil slipping this morning on a stronger dollar the venezuelan crisis, opec cuts and u.s./china trade war some of the factors affecting oil to to help break it down we're joined by the global head of commodity research at citi ed morris anything to make of today's poll in crude oil obviously we used up a lot of good news on supply cuts and maybe increasing speculative interest in january. what's driving things at the moment >> i think in addition to the strengthening of the u.s. dollar which you mentioned there's some tracking of movements on pipelines pointing to a

potentially big build so that's why most of the sell-off in wti has dragged down brent those are the two in a move -- move reasons for the day at least. >> in terms of where we sit with the price is this a new trading range we've developed right now? how do you think the supply situation is going to shake out? i mean how big of a swing factor, for example, is venezuela? >> so, we have a couple of things on the swing side one is the actual fundamentals and the other is positioning of investors in the market. the investors are basically out. volatility has no means disappeared and remembered volatility every year is a good $20 to $25 between low and high and december was the nightmare for the world where the swings were $50 at a low, 86 at a high and 68 for the average of brent

so we're not out of it there's no real range that we think is going to halt trading for any length of time and think the markets will get tighter as we get through a q1 largely because the cuts that saudi arabia has already implemented is taking oil out of the market and oil from libya and canada and have higher demand than people expected. largely because of the polar vortex both in europe and in the u.s. so looking for prices to be rising higher in the 6 oswell as we get through the quarter we think there's going to be a soft patch largely because of demand but there are risks to q2, obviously a lot less demand in may than february but on the other hand we have these moving parts, venezuela is one where we know at least a half of million dollar rebarrels a day and have the u.s./china trade talks and in the middle of march on the

17th and 18th opec meeting in azerbaijan to think about where they're meeting on the 17th and 18th so a lot of things in the market before the may 4th, 5th time when the u.s. waivers on sanctions for importing countries of iranian crude taking place so we have plenty of potentially moves in the market, a soft patch in the spring but then we're factoring in all other things else equal higher prices through the end of the year with brent averaging in the mid-60s probably hitting 70 during that period of time. >> okay, so modest upside relative to the last few years, i suppose, is that enough for u.s. production to be stimulated is there going to be confidence in investing in new domestic production around these levels >> sure, we know that there are a whole bunch of companies that are projecting lower than they

previously projected investments but the investments are still up year on year the really interesting thing that's unfolding in the oil patch particularly in the permian basis we have the super major there is in both exxon and chevron, exxon being the number one driller in the u.s. at the moment it's looking to raise their regularization and accounted for more than they did five years ago. they're already responsible for between 600,000 and $700,000 a day of production and that number will be growing by the hundreds of thousands as the year goes on, unless wti falls significantly below the 50 to 55 range, we think actually the spread between that and brent will tighten as the year goes on, we think that's enough to keep production growth at a good million dollar rellsbarrels a d.

then the 65 to 70 but that's kind of enough to get the u.s. producers as the year goes on to increase their capital allocation so it's going to be an accordion as it's been in the past but the accordion will not go negative as it did in 2015 and '16. >> wti brent spread $8 a barrel, thanks very much ed morris, appreciate that big news today in the world of finance, the man wildly known as the bond king is retiring janus announces retirement of bill gross he'll manage personal assets and private charitable foundation. of course, well known for founding pimco, total return fund had many, many, many good consistent growth years. less solid performance recently.

>> really pioneered the way of investing bonds. >> now would argue is no longer the case gunlock is considered a bigger figure when it comes to bond -- >> he's not the only bond king in the world. >> but in his time, though, he was absolutely the man >> and charitable. >> all right when we come back, the brady/belichick era. two agents are here to discuss it shares of xerox. excuse me, clorox. they're surging. >> they headache bleach. >> yes, thank you. and kingsford charcoal did you know they make supplements too? >> yeah, they also make some food products like soy-based soy schaus. >> we'll keep going. trying to one-up each other on all the things clorox makes. they beat expectations and revenue matched forecast the company's bottom line got a boost in profit margins. jim cramer will speak to the ceo

today on "d moy,mane" benno dorer. we're back right after this.

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time to get to the cma group in chicago and with rick santelli for the santelli exchange in let me john recommend john sylvia. thanks for joining me. >> sure. thanks, rick >> you know, econometric problems is what the fed has been trying to do for decades. many of the old standbyes between unemployment and inflation, how housing should react with movement in interest rates, how does the balance sheet react? how does the economy react to the balance sheet? some of these are new issues some are old ones that haven't tracked or adapted well. what shoulds fed do? we certainly have a new pragmatic outlook and leader at the fed. your thoughts? >> well, the economy always

evolves, rick. it changes over time and you're right we went fruit phillips curve to stagflation. we went from monitorism to what happen to the monetary aggregates and now you've seen a couple of key points one, the fed has continued to lower what it thinks is the neutral interest rate in the economy. and second of all whatever that change in interest rates is, we've had some of the incredibly low interest rates we've not had a big housing response so when you put it all together, the yeah, the model is always changing and evolving and policy has to be flexible to deal with that evolution >> you know, i think -- i still say, john, the biggest risk i see above and beyond all the issues central banks have had to juggle is juggling the policy implications of other central banks. as all central banks have turned into monsters of the universe, i don't even begin to understand

how we could model mario draghi considering many of the things he does has never been done exteex to the extent they've been done. >> how do we insulate the magnitude of the effect, particularly when you're thinking about the bank of japan trying to control that yield conduct, trying to keep their ten-year at essentially a zero rate how do you look at the credit markets and spreads when the european central bank buying and holding corporate debt so, for us, it's a matter of minimizing those influences but you're not going to prevent them and for someone in the investment markets it's very difficult to price the debt and the equity independent of an evaluation of what central banks are doing. >> absolutely and just read today, john, that negative

interest rate instruments are on the rise in the eurozone once again and they're on the move rather quickly your final thought, i still read mario draghi thinks negative interest rates have been working for him. it's good policy can you finish up on your thoughts on negative rates for all the young central bankers watching right now >> well, again, we've not experimented with this before. but second clearly when you look at the u.s. treasury rate at 2.6, 2.7 and people talking about the natural or longrun treasury rate, that rate is really driven in part by what the bank of japan and the ecb does >> excellent, john, i agree with everything that you've said. if we can only find a way to pinpoint that into the bites of a computer, thank you for your time mike santelli, back to you. >> rick, thank you so much let's sent it to jon fortt with a look at what's coming up on "squawk alley." >> five years ago today one of

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welcome back to "squawk on the street." stocks mixed with the s&p 500 and dow moving slightly to the down side while the nasdaq holes on to gains and as you were discussing before oil prices dropping sharply sending the s&p energy sector lower on the day with big oil names like exxonmobil, virginia rear lone and chevron among the biggest laggards energy sector up 12% so far but it's still down around 11% over the course of the past 12 months and 18% off its highs of last may. energy certainly a sector to watch. now i will send it back downtown to you at the new york stock exchange back over to you. >> thank you. you can call it the same old story different chapter for

supe super bowl liii the game's only touchdown came with seven minutes to go and would put the patriots up 10-3, a score from which they never looked back. with their takeaways and predicts joining us from atlanta, drew rosenhaus whose list includes rob gone c-- gronkowski and saquon is in yours -- he won something. todd gurriel let me come to you first, kim. offense, huge games and scores what, plains it. coming off a super bowl last year where it was just an forecast shootout and season that was just fun to see it go

back to basics and how defense won the game >> you think it was fun to see i mean, it wasn't that much fun to watch. >> it was the multiple the chess match, though, so that's what made it interesting and fun. >> match. that's what made it fun. >> what are your thoughts? >> you have to give credit to the greatest coach in the history of the nfl, bill belichick, and the greatest player in the history of the nfl, tom brady two people have never dominated the nfl like belichick and brady. last night, belichick's genius was evident against an up start offensive genius in the rams head coach, sean mcvay give credit to wade phillips, the defensive coordinator, he did a great job for the rams defense. six championships between belichick and brady is stunning in a league full of parody

these two guys have dominated at an unprecedented level in a competitive industry i don't know that anyone can appreciate the greatness of those two men in this field. >> is that a good thing for the league that the dynasty continues? i know that the patriots themselves make a lot of the fact that they're kind of hated, they insist undervalued. i wouldn't think that necessarily plays out. do you always want to see the same teams dominating? >> love the patriots or hate them, you have to respect them as a sports fan, to see what they have done almost two decades of sustained excellence, i think watching the historic moments, like drew said, bill belichick and tom brady will probably go down as the greatest duo in sports history. i love to see it as a disclaimer, though, i am from new england i enjoyed watching them play the last two decades >> todd gurley is a client of yours.

why didn't he play more in the championship, conference championship and super bowl? >> todd is the top consummate team player so it is just about putting the right guys out there to win the game, to give them the best chance to succeed and todd was just, you know, coaches make these decisions, todd was happy to do what the coach thought was best for the team to give them the best chance to win. >> so he's not injured >> look, it has been a long season, players have bumps and bruises coming out of it todd will get evaluated like everybody else, see if anything needs to be addressed. >> is gronkowski going to retire after this game? >> i don't think anybody has the answer to that except for rob. my advice to rob would be to take plenty of time to think this through he considered it last off season and decided to come back to play and that was a very good choice.

obviously winning a championship rob is a sure fire hall of famer and in my opinion the best player that's ever played his position, tight end position so if he retires, no one would doubt him. i, for one, would love to see him continue to play he has been a joy to represent as great a player as he is, rob is an even better person he's such an incredible guy. >> drew, what about the ratings? we're getting early numbers. looks like a ten year low for super bowl ratings do you think it is because of a low scoring game i don't know, half time show, there were a lot of complaints, throwing his shirt up in the air, the ads were kind of boring, what do you chalk it up to >> i think the ratings had to do with the fact it was a 3-0 game at half time that's i guess the second lowest scoring game ever at that point

and the lowest scoring super bowl yes. there's a direct correlation, but overall the ratings were superb, and while it was not the most explosive super bowl, for those that enjoy football they could appreciate all the greatness in the game. >> kim, another young player jerod goss got shut down very well, any idea on where his value goes from here, great to have a super bowl under your belt at his age, but maybe what would your advice be at this point? >> i think stay the course to get where he was last night at such a young age is inspirational. he can use it as motivation going into next season he is one of the bona fide superstar young players in the lead led by guys like saquon barkley, baker mayfield. they're all exciting to watch.

i think they're part of why the viewership has boosted back up, having new superstars on the rise has been exciting to watch. >> drew, gronkowski's future aside, brady and belichick will be with us how long? how long are they going to keep going? >> as long as they continue to do well, why would they stop i mean, brady is still the best in the business. he's got that offensive line we represent his left tackle, trent brown. during the playoffs, he was barely hit he was healthy for most of the season there's no question that he says he is having a great time. why stop as far as belichick, if you don't hate him like i do, in my opinion he lives for this. he is one of the most dedicated people i've ever come across i can't envision him doing anything else.

i think he would be bored to death if he retired in my perspective dealing with him i wouldn't want to speak for him, but this is a man that eats, sleeps, lives football along with his family. he happens to have his family involved with coaching, his sons as well. i can't see those guys going anywhere for the next few years and i hope they don't. they've been a joy to work with and watch. >> we may be in store for more conversations about who won the super bowl if that's the case. thanks to you both drew, kim, thank you >> thank you >> all right sara, are you talking super bowl at all? >> probably a little of that the ratings is a big question to dive into. but we have earnings after the bell and a key one, alphabet or google, set to report. see if the tech rally can continue, netflix, facebook doing a lot better after their earnings, and the call on

recession. remember, david rosenberg one of the few that said 2019, you're going to see recession data and the market is not moving his direction he will join us to tell us whether he still has conviction in that call, the chief economist there at glusk gluskin sheff. >> that does it for us on "squawk on the street. "squawk alley" is up next. don't go away.

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