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tv   Squawk Box  CNBC  January 13, 2016 6:00am-9:01am EST

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>> live from new york where business never sleeps this is squawk box. >> good morning, everybody. welcome to squawk box here on cnbc. i'm becky quick with joe kernen and andrew ross sorkin. the american petroleum institute says u.s. crude stocks fell last week dropping by 3.9 million barrels. of course with all the gains oil prices up 92 cents to just 31.35. brent crude up at 31.74. take a look at the u.s. equity futures. they're higher as well with dow futures up 43 points above fair value. s&p futures up by 7 and the nasdaq up by 20 after gains yesterday. >> let's tell you about the other big stories we're watching this morning. president obama delivering his final state of the union address
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talked about the growing divide between america's political parties. >> it's one of the few regrets of my presidency that the suspicion between the parties have gotten worse instead of better. i have no doubt that a president with the gifts of lincoln or roosevelt might have better bridged the divide and i guarentee i'll keep trying to be better as long as i hold this office. >> nikki hayley gave the gop response and addressed the fear factor in american politics. >> it can be tempting to follow the siren call of the angriest voices. we must resist that temptation. no one who is willing to work hard, abide by our laws and love our traditions should ever feel unwelcome in this country. >> and john harwood is going to join us with the health of the economy. also we have a couple of things
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to watch for the fed's monthly beige book out at 2:00 p.m. eastern time. this tracks economic conditions in the regional districts. also at 2:00 p.m. we'll be getting the monthly federal budge state and the chicago fed president are both speaking about the economy today so we'll watch what they have to say and then there's the lottery. a fever pitch. the powerball jackpot hit a world record. it's now worth $1.5 billion. the odds of hitting the jackpot are 1 in 292.2 million. i got $40 on it. we got another $20 worth of tickets. if you want to know how to protect your winnings and minimize your tax bill when you win, tune into tonight's jackpot special on cnbc at 7:00 p.m. >> 10 u.s. sailors detained by iran have been released and michelle joins us with the latest. >> u.s. military confirming what
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we already heard from iranian state television that the 10 sailors have been released. they actually left on the two vessels and when they were detained last night when y'all went to bed we knew there were ten sailors that had been detained. the united states said they strayed into iranian waters because of mechanical issues. there was back and forth overnight. this could have been a very tense situation between the two countries because the u.s. had said they were going to be released today and yet we were hearing reports out of iran from the leadership there and members of the leadership that they were considering investigating them for snooping. that they could have been spies. so bringing to an end what was a very tense diplomatic situation for the last 24 hours. >> they were in iranian waters though. >> that was the report. the story was the same coming out of both sides. there was a mechanical issue with the vote. >> the second boat went to help out and both of them strayed
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into the iranian waters. >> and then there were conflicting statements coming out of iran but then by this morning everybody seemed to be on the same page. >> might have been eight lot of behinds the scenes stuff happening. >> you think? >> you would imagine with the iranian deal and state of the union. >> absolutely. >> and there's hostages still there and in the past if they have an opportunity to grab a few people they don't always release them right away. how long was that one time? it was like 480 days or something. >> 1979 into 1980. they released them the day that ronald reagan became president. >> this deal is expected to be finalized on friday. >> we're waiting for -- they had to take key steps and then in theory we are within days of part of the sanctions being lifted. one is related to their nuclear program which would release hundreds, i think it's more than a billion dollars worth to the iranians at this point which would be incredibly helpful.
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>> tough time to be holding on to people you have captured. >> exactly. if you want that money any time soon but to joe's point what really happened and what both sides tell us who knows. >> a week or so ago, 1500 yards. >> we learned about that but it happened in late december. we have video of that but that seemed very provocative as well. shooting unguided missiles near u.s. aircraft carriers. >> there's still a lot of rhetoric that comes out from the spiritual leader about us and maybe it doesn't translate perfectly but it's always like. >> but you get the drift, right? >> you do. but great -- >> you say the spiritual leader. he is the leader, right? his word is it. >> we're going to punch you in the mouth which i think was the latest one. >> before we call for your death
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and -- >> i'd love to go to iran. >> this is not enough at this point. wait until the whole thing just really gets -- >> no, i think there's stories to be done there. >> you're pitching this. >> oh yeah. >> you are. >> absolutely. >> about the economy. >> yeah. >> there's so many european companies that made clear they want to do business there? are there opportunities? should u.s. companies get involved? there's still a lot of sanctions in place because of the ballistic missiles and terrorism sanctions as well so it's not that easy. >> it would be nice to hear of the much more positive view of america. >> much more pro american population in iran compared to other parts of the middle east for sure. >> thank you. >> see you later. let's get a check on the markets this morning. the futures are indicated higher. yesterday the dow was up by 117
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points and the s&p gained 15 points butting a little bit of stabilization back into what has been some pretty volatile markets. you can see this morning that the dow futures are down. and the nasdaq up by 15. in europe you'll see that in the early trading there there are also some green arrows. you're looking at gains of about 1% for the dax and the ftse. the cac is up 1.4% and in italy up by 1.5%. overnight in asia we saw that the nikkei was up by 2.8%. that's getting back all the losses from the day before and then some but the shanghai composite was down by 2.4%. >> it was a lot and it was at the end of the session too. it was up from most of the session and just sold off at the end. >> hard to think that we're out of the woods when it comes to china. we'll be watching the markets closely. wti, very briefly dipped below $30 yesterday. it is up this morning to 31-22
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but people watching that closely as well. >> that was the same day that you see some of the articles written. $10 oil. >> yeah. >> don't discount it. >> putting a little fear factor in. >> i like it. >> you like it? >> yeah why wouldn't you like it? >> it wouz worry me what got it there. >> hey, $2. >> it's only a supply story. >> you have been saying that for two years. >> the transition to get there is the point. >> did you see united saying part of the reason that their earnings were hurt was because people traveling in and out of
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houston in one of their hubs was down because of the oil business being down but i can't think that would overwhelm lower energy prices for them. >> i would like the cold fusion but apparently that didn't work. but that would be unlimited free energy for everyone. >> how about unlimited fision. >> you can do cold fusion with water. that's splitting and fusion is putting together. you need nuclear material. >> let's take a look at the ten year note. the yield fell to 2.08%. that was the lowest level since october. the yield picking up today to 2.126%. check out the dollar at this point it looks like the dollar is up across the board and yen at 11824 and gold prices at this
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point. it's 30 cents an ounce. chief executive officer. chief investment officer and portfolio manager which has $4.7 billion on assets under management. also joe is portfolio strategist at richard bernstein advisors and welcome to both of you. how are you feeling as we get into this year and have seen the pitfalls along the way for the market. >> so i'm feeling pretty positive about europe an more specifically japan. less so on u.s. equities. we think that, you know, the four dds that dictated markets n 2015 which is debt deflation, deleveraging in the emerging world, disparity in central bank policy and the dollar will continue to dictate markets in
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2016 and that leads to us to overweight japan and europe. >> you don't like u.s. stocks even with the discount of 5 or 6%. >> we like u.s. stocks in defensive sectors like telecom and drug retail sectors. what else do we like in the u.s.? those would be two high conviction areas. insurance which tend to out perform when corporate bond yields are arising. >> sure. >> joe, how about you? what do you think these days? what do you think of the u.s. stock market? >> i wouldn't discount the u.s. after the start to the year i think the u.s. is setting itself up for either number one a massive trough or recession. look on the recession nary side and you see jump bond yield
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spreads are sounding alarms. there's a number of financials whose stock prices have fallen below their book values which means they're trading below their break up value and those are warning signs but on the other side of the equation, does this feel like a recession coming in the united states? i would say no. we still have a healthy yield curve. we have a consumer that's getting better. we talking -- you were talking earlier about gas prices at 1:29 a gallon. that's very pro consumer. so we look at the market and say odds are we'll see profits from recovery here in the next quarter or so and that's leading to much better stocks or environment for stocks in the u.s. >> having said that what we're hearing already in the early part of earnings season is not all that comfortable. csx saying for 2016 they'll be hurt by a weak global economy. united airlines even though they should be having wonderful days because of the low energy prices
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talking about how traffic is down from one of their hubs i'm surprised by the tone of the early earnings reports. do you think that's because the ceos at this point are not feeling confident and comfortable but things will turn? >> it could be and we're about 5 or 6 quarters into this profits recession here in the united states. and a lot of companies with foreign revenue and they have been taking it on the chin over the last four or five quarters because of the strong dollar. energy was a real big problem and if you look at the energy in the s&p 500 it's weight has been cut in half so the write downs that energy companies took a year ago. they're massive. they're still going to face write downs today but they're simply not going to impact s&p earnings quite as much. so there's still the head winds out there and the bottom line is when you look at the u.s. consumer or the u.s. economy the first and most important variable in looking at gdp in
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the u.s. is the consumer. and argues for more jobs, higher earnings and things like that. i think those positives more than offset the head winds from the early reporters. >> you brought up the strong dollar as being a continuing head wind. >> so i think that one of the problems, part of the argument, they're great points but the bullish argument is a base effect argument that relative to a bad year it won't be as bad and i don't know -- i can't see, you know, one of the stories is the potential impact from wage pressures. clearly the december number was flat but that was primarily a result of a calendar quirk where the survey results fell outside
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of the december 15th payroll. and you have continued strength in the dollar and additional head wind from increased wages. and we see the profit strength and earnings strengths outside of the stress outside of japan. >> thank you both for coming in today. >> thank you. >> and you. >> that's nice to see you. coming up when we return we'll talk about president obama's economic and social vision for america. highlights from what he said at the state of the union next. late swrer a house call and we're using the smartphone app pager this morning to summon a flu shot right here to the squawk set. i have not had any flu shot and i'm going to get it right here physically in front of everybody. we'll see how it goes. >> you waited until january. >> we're literally paging
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somebody on an app. they're going to show up hopefully during the next hour and apparently i'm going to be stuck. >> deep muscle. that's the buttocks. >> we can do that too. >> we've seen your ugly feet with that guy. >> right. >> well -- >> stick around. >> stick around. we're coming back with a little -- >> you guys aren't going anywhere. ♪
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sports freaks. x1 from xfinity will change the way you experience tv. welcome back. time for stocks to watch. mixed quarter for csx. earnings beat the street but revenues slightly short. profit hit by a short and a weak global economy will weigh on its results in the coming year. yum brand says it's china same store sales grew last month. same store comps grew while the same measure at pizza hut dropped. watch the shares of chipotle today. the fast casual chain is scheduled to present at the conference at 1:0 eastern.
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it dropped below $400. the median average price range is down from 767 just three months ago. and in squawk sports news, the rams are headed back to los angeles. on tuesday, nfl commissioner roger goodell announced that 30 of 32 nfl owners approved the franchise's relocation from st. louis back to los angeles. the rams will temporarily call the coliseum home and will eventually play in a new facility in inglewood. it's about ten miles. i think it's basically south of downtown l.a. and the chargers, the san diego chargers have a yearlong option to join the rams followed by the raider ifs the chargers decide not to the raiders could end up back in. l.a. so it's a state of flux at
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this point but it's a big market out there. it's just that you have to drive in practice where you probably miss the first half trying to get there. >> or the day before and camp out. >> or camp out. they have one of those tailgate -- >> all night tailgate party. >> let's get to washington. a day after president obama last night calling on the american people to fix our politics in his final state of the union address john harwood joins us with more details. >> this was the most relaxed state of the union address we have seen from president obama. he knows he's not going to get a lot done with this republican congress but he doesn't think he's going to get nothing done. in particular he pointed toward the transpacific partnership, the big pacific trade deal. possibility of criminal justice reform and to that end he had nice words for the new speaker of the house paul ryan who the white house believes they can work with. >> mr. speaker i appreciate the
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constructive approach that you and other leaders took at the end of last year to pass a budget and make tax cuts permanent for working families. so i hope we hacan work togethe this year. who knows, we might surprise the cynics again. >> now the president had a different tone toward people running to succeed him. in particular, donald trump. he didn't mention truch by name but he took aim at the argument about immigrants and the threat they pose to the u.s. economy and national security. >> immigrants aren't the reason wages haven't gone up. those decisions are made in the board rooms that all too often put quarterly earnings over long-term returns. it's sure not the average family watching tonight that avoids paying taxes through offshore accoun accounts. >> now the president proposed a variety of steps to try to make the economy stronger for average
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people. he talked about higher minimum wage and paid leave. these are things that will not happen any time soon on this congress but he did say on the basis of what happened with the 292,000 jobs happening. the long streak of private sector jobs growth that the united states economy is better than any in the world at the moment. anybody that tells you the u.s. economy is in decline is peddling fiction, andrew. >> one of the other things that's interesting is that he's taking on -- how many years are we away from the financial crisis? 8 years from the depths of it in 2008. he's still talking about the financial crisis. he says food stamp recipients didn't cause the financial crisis. recklessness on wall street did. why do you think she's still hammering on that when there's other issues that seem to be facing us? >> well look one of the reasons the recovery has been slow is when you have a financial crisis in addition to a huge recession
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there's a large overhang of that. the american people haven't forgotten or moved on from the issues. it fuels the ang we are hear from people like donald trump. you go out on any presidential campaign appearance now and people are going after those at the top that includes wall street. that includes wealthy individuals. those are targets for bernie sanders and hillary clinton. >> but the conversation moved to what you just said. it moved to one about inequality this in this country. >> that's related to the wall street conversation. >> yeah. but to me it just seemed not tone deaf, it just seem off point in a strange way. >> i have to tell you, andrew, going after wall street with reference to 2009 is the opposite of tone deaf in today's economy. this is something that is very residence nant with the ameriwi.
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these are arguments republicans could make as well. >> i thought he was pivoting back. anyway, john appreciate it. joe, you have nothing to add? >> no, i just like watching you two guys discuss. i found that very compelling. i was trying to a little bit channel you, actually. >> by saying the real issues now are inequality. >> no, that the focus on wall street -- >> god bless him. i'll let you and john kick things around. you won't see on any other media out lets those points raised. why do you spur me on? i'm minding my own business. >> when we come back this morning we'll talk about oil prices rebounding after they
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briefly dip below $30 barrel in yesterday's session. joining us next, a read on where crude is heading and how it factors into the equation. we'll get that from matt smith. ♪
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welcome back.
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to squawk box on cnbc, first in business worldwide. you saw the breaking news we just flashed this morning and iran aparentally released the 10 american sailors that were detained after they were caught in the country's territorial water. the u.s. military says the sailors were not harmed and were picked up by a navy aircraft. we'll talk to colonel jack jacobs at the top of the hour. you wonder whether we're seeing the best behavior here. >> yes. >> there's a lot riding on this, more than a billion dollars to their economy. >> but it doesn't stop some of the other bad. there's still actions. >> days away from something happens. >> and the missile tests could cause sanctions. >> maybe i'm being naive on this but i think this as good as it gets. this is the best you can hope for.
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>> still a couple of days left. we'll see. friday? >> friday supposedly. sometime this week we're thinking. why don't we get a check on the markets? u.s. equity futures indicated higher. dow futures are up by 25 points. that's about half of the gain wes had seen earlier this morning. s&p futures were up by 5 and the nasdaq is up by 17. overseas in asia, japan gained back all the ground it lost the day before it was up by 2.9%. the shanghai composite down by 2.4%. these are not the massive gains we've seen before but as joe pointed out earlier you're back below 3,000 and a lot of the selling came at the end of the session. in europe this morning you're also seeing some green arrows again off the highest levels we saw earlier. the dax is up by .8% but the cac in france is up by 1.25% and the ftse is up by 1%. >> a closer look at crude
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prices. oil rebounding after it briefly broke below $30 barrel for the first time since 2003. it's below 30 which means it had a two handle. a 20 handle. joining us now, matt smith, clipper data director of commodity research each time we see a new number or a new handle matt we think that, you know, it was surprising, people said 30s but no one really believed it and then it got into the 30s and quickly went all the way through the 30s and got all the way and broke under 30 and into the 20s. what are the chances that when we see some of these forecasts that seem hard to believe like $10 oil, will we see a one handle in your view ever again in the history of the world? 17, 18, 19? could that happen? will 20 happen? >> by all means it could happen, joe.
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it seemed out landish that we would get down to this level but by all means we could drop another 5 or $10 here. we're seeing a bit of a bounce today. we started 2016 by selling off 7 consecutive days and we drop 18% granted that's only $7 or so. now we tested the two handle here and the weakness is really going to come over the next 3 to 6 months as the market looks to rebalance. the potential for us to move lower is in the near term and then eventually the lower prices have really got to start to hurt producers. not just here in the u.s. but when you're getting down to sort of below $30, that's the lowest cost production across a lot of the world and so really at some point there's going to be some rebalancing. >> people miss what the low point would be for causing pain and for people to stop producing and i think it was supposed to
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be for awhile they said 50, 45, 40. so now you're saying below 30 is where there's definitely enough pain where people stop. i don't know. these are all false bottoms. >> well, the thing is u.s. production specifically has been so resilient. we started 2013 at 7 million barrels a day of production. 2014 we started at 8 million barrels a day. 2015 we started at 9 million barrels a day. now we're getting close to 9 million. the eia predicted yesterday that we'll get down to 8.4 million barrels a day in the latter half of this year. should we see that then we really are going to see some support coming into the market. the only one thing backing things up is the double wammy. not only strong productions but inventories at record levels too. we still have this overhang or
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dush i don't know of inventories there to stop any real rally too. >> we need to know when we have definitely overshot. low 30s seems like it's, you know, the pend you lumbar swings so far where it's not based on anything. for the product that actual day but now all the later years are now they have all come down, haven't they? i mean going out to 2020 now. that's come into like $50 or below. that used to be what people hung their hat on that it's going back up but now those have all come into much lower numbers. >> it's incredible. look out at 2016 here and there isn't a monthly price above $40 and you have to go out beyond 2020 to see prices above 50 and this near term phenomenon is a longer term phenomenon. that's what the market is pricing in. i would temper that some what though with demand growth going
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to continue to come through each year but not only that we're really going to see production coming off line in terms of these projects that we're invested in a number of years agatha have come to fruition now. the ones not being invested in now so we'll see this production coming to market in 2017, 2018 and also the geopolitical perspective. the market is very complacent about that. you have sort of these proxy wars going on. both saudi arabia and iran are fighting in syria and in yemen. you have oil infrastructure being attacked in libya but the market because oversupply is there and inventories are strong it isn't really particularly concerned about that and that could be the black swan to push prices higher from here. >> okay. all right, matt, thank you. appreciate it. >> thanks, joe. >> we'll be watching. coming up, smartphone app pager brings back the house call. we summoned a nurse to the
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squawk set. to give andrew a flu sot. can't you get a nasal thing that doesn't hurt? >> maybe we can do that. >> andrew is going to get a needle. >> in one of my cheeks. >> left or right. >> i'm going to go left arm. >> you're bog to go left arm. >> don't do it to your right arm. and we're going to talk to the company's ceo next. >> i may be playing tennis later. >> yeah. is at a what you call it and a programming note tonight at 7:00 p.m. on cnbc a special event, jackpot. the richest lottery ever. we'll break down the dos and don'ts. if you actually win. so if you bought a lottery ticket and you might win you have to know what to do with the minute. this is a must see. you have to see it. just in case you win. which you probably might. so you're a small business expert from at&t? yeah, give me a problem and i've got the solution.
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♪ back to squawk box. i'm a little nervous here. i have been putting off my flu shot for months and it's not too late actually. you can order it actually. right now straight to your home or your office. pager is an on demand doctor app. that brings physicians and nurses to your home. hotel or in this case right here to the set. so here to give me a flu shot is the nurse and we also have the ceo of the company and
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co-founder of pager. i can't roll the r so we're going to do a shot right here as we talk about this business of yours. when did you start this company. >> 2013. >> may 2013. >> so a little bit more than two years ago. >> was this inspired by uber to some degree, not the whole sharing income but on demand economy. >> the whole on demand trend but mostly by something that's very come machine in france. i grew up with house calls and really wanted to launch that here in the u.s. through technology. >> is this going to go beyond the flu shot? is the idea that doctors if i'm sick will come and visit with me? >> the reason we started the company is we need to do urgent care on demand. so the flu shot is one little piece of it. we really deliver care. i mean, doctors for anything urgent care. >> i go on the app and say
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what's wrong with me and someone will come to the house. >> you're sick, you go to the app. chat with you and you chat way nurse and then we connect you to a doctor that will come treat you in your home and teleconsultations. we can potentially treat you over the phone and e-prescribe you. >> that seems like a cheaper, easier, faster option but the idea of a house call seems expensive. how much does it cost to have someone come to your office or house. >> so it's $50 for the first visit and then $200. >> that's not bad. >> do you have any reimbursement? do insurance companies pay for this? >> it's coming in the next couple of months. >> and you think they will. >> yes. >> they'll pay for the 200 or just the 50? >> well, we hope that -- the goal in the long-term is to be as affordable as any other care
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alternative. we want to be an affordable option. >> i'm thinking park as good going to cost -- just the physical cost of you coming here, you do this all day? >> yes. all day. >> where are you parking? don't you have to pay for parking? >> i take the subway or ubers depending on who requests a visit. >> but most of the metropolitan areas right now. >> yeah. we do a lot of flu shots for our pager for business program. so we do a lot on sight at the office. >> we'll get the shot. >> you guys keep talking. how big is the needle? >> flu shot. >> i want to make sure, i don't
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know. >> we have little areas here. >> we can go left arm. >> left arm as good as the muscle? >> it's as good. >> i'll bet you i can break the needle. >> i don't think -- well, we can try it a guess. >> do you want to try it. >> okay. >> do you feel -- is this any harder to do on the air for you. >> there's no pressure. >> no, this is completely normal and fine. >> have you had a flu shot. any severe reactions in the past. >> no, no medicines. i'm taking vitamins. >> vitamins are good. >> is that a normal size. >> what is?
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is it a big one. >> that's not the size of the needle. >> oh my god. >> andrew don't listen. >> i'm not looking. i'm not looking. come on. >> and that's it. >> we're done? >> we're done. i'll just put a band-aid on there. >> we don even need a band-aid. >> you'll get a pager pband-aid >> can we do this next year? >> sure. >> what's the latest we can do it in the season? was this it? >> this is not it. you can get the flu shot any time usually from october to may and it will be effective. >> how ineffective is this years? >> you can't predict. this years is better than last year but every year it's different. and they just look at it. >> it's never better than 50%. >> we never really know the effectiveness but it's the best way to protect against the strain coming this year. >> well done.
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>> you were dazed. >> when we return, giving president obama a progress report. political analysts join us right after to debate it. hardest job in the world. that's why i'm here. can you... i can offer advice from the accumulated knowledge of other educators... that's wonderful but... i can tailor a curriculum for each student by cross-referencing aptitude, development, geography... sorry to interrupt. but i just have one question: how do i keep them quiet? (pause) watson? there is no known solution.
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at ally bank, no branches equals great rates. it's a fact. kind of like working from home equals not working.
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numbers look pretty good, how's it on your end dave? oh, the numbers look so good. dave, dave's on it. president obama describing a rapidly changing economy in last night's state of the union address. >> anyone claiming that
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america's economy is in decline is peddling fiction. now, what is true, and the reason that a lot of americans feel anxious is that the economy has been changing in profound ways, changes that start the long before the great recession hit, changes that have not let up. >> joining us now, the white house director under george w. bush, cnbc contributor, and also joining us, the founder of the gloefr park groupment doesn't happen often you get the last go-to of an eight year presidency, but when it does, typically, we already sort of moved on in focus. i am. i'm focused on the next chapter of u.s. history, and it's a
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little bit of a swan song, a look back, and i don't know, i wish there was something we could -- maybe tpp is the only thing to do, no corporate tax. >> there was not a long agendab last night, certainly, and implementing that at this point is impossible for him. you're right. the country is consumed with what's coming up next. >> i thought that, you know, the ocogestablishment republicans sort of controlled everything, all the, you know, all of the -- so far, until people are feeling the burn in iowa all the sudden, feeling the burn in new hampshire, and i don't know whether the wall leading to the south is what it used to be, and millennials, people under 45, 2-1, a burn, can you imagine bern versus trump? is that possible? what world are we living?
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>> highly unlikely. >> i know. i just asked the question, and it's will be on morning talk shows. frustrated and angry, but democrats as well. both bases of the party want their leaders, you know, to move left and right, and we're seeing that play out in the process, and they are stoking this right now in the early phases. they are standing up saying we're not going to take the establishment anymore. i think the president's speech last night, which he always gives a great speech, but he did it earlier, and he really is trying to insert himself in the process. he's trying to say, wait a second, i'm sti relevant. i'm going to set the tone for the party, for the countrym,)5ñ well, but for my party, the tone and debate. >> the third party to run a candidate too? talk about how both democrats and republicans are in a bit of disarr disarray, and the establishment
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is being left behind. >> we have that conversation every time there's a presidential election k right? at this stage in the process,÷n sarah's appointment, you have the fringe on the right and left, that's a lot of conversation you hear, and it's odd, but you're right, the president of the united states has to struggle and find moments to breakthrough the noise. it's the only platform for that. >> on the one hand to not ignore the problem spots in the world, but maybe not as much is tone deaf, but you were in the clinton administrationment i roosevelt or a lincoln that has done a better job of bringing less rank to the political scene, and he said, that's my regret, i have)f:ç not done eno to bridge it, but you've done
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quite a bit. >> he rose his hand last night, remarkable saying -- >> saying he had not fixed it. >> went a long way towards saying he played a part in that. i thought that was important. but reality is, and the country, a third of the speech was spent talking about the need to have politics to get things done here. most americans look what's happening in washington and think, how is this working for me? what are the people doing for me? i do think that there was an element not just of the swan song and establishment building, but this was a guy trying to breakthrough the clutter right now which is happening on the left and right, and those were his words from the speech so that the people in the middle who ultimately make this decision, right, arejb4 going t have nominees, and it's the people in the middle not already persuaded right now who ultimately decide who the next president is. that's who the speech was directed to. >> 43% approval rating, is that
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a death nail for -- not death nail, that's not a word, but makes it difficult for hillary clinton. >> makes is incredibly difficult. you can argue now he's a drag on the democratic nominee because he's just not popular enough to help sort of get them over the finish line. he should be at 50% if the democrat is going to win, and he went a long way, i think, last night in trying to, as mike said, level set and set the tone for the democratic campaign in the fall, but -- >> running in?z,÷ november, so saw me, and michael. >> well, i think hillary clinton is the democratic nominee. i think republicans are going to nominate a mainstream candidate whether it's jeb bush or chris christie, one of them. >> i agree, it's hillary clinton and then let's watch for who finishes second or third in iowa and who finished first or second in new hampshire. that person could be the next nominee. >> all right. flr
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. state of the nation's economy. >> any claiming america's economy is in decline is pedd peddling fiction. >> reaction to the president's state of the union address and what investors should take away straight ahead.:óz >> and getting rid of your cable provider worth we have a guest who says you want to think twice before cutting the cord. >> end joying the years. >> what about a little fun, people. >> sharing strategies for how to live a longer, healthier life in the second hour of "squawk box" begins right now.
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live from the beating heart of business, new york city, this is "squawk box." welcome back to "squawk box" here on cnbc, first in business word wide, i'm andrew with becky and joe, and investors will be buzzing this morning about president's address to the nation last night. his last state of the union speech as commander in chief. >> anyone claiming that america's economy is in decline is peddling fiction. now , what is true and the reasn a lot of americans feel anxious is that the economy has been changing in profound ways. changes that started long before the great recession hit, changes that have not let up. >> coming up, discussing the
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speech and race for the white house. look at the futures right now this morning, the day after. i don't know if they are moving off what he said. probably not. dow up 20, nasdaq up 16, and s&p let's catch you up to speed with the headlines. fed rate policy clues could be coming today, and boston fed president, a voting member of the fomc this year, has a speech later this morning, and fed released that the region by region assessment of the economy is at 2:00 p.m. eastern time. shares of metlife jump in the premarket trading, examining a spinoff of the u.s. retail insurance business because of the currentúmregulatory environment. i don't know if this is why, but a sticky situation, one way not to be claimed if you break it up? >> that's one of the conversations. >> considering a variety of approaches including a sale or initial public offering, and the stock is up 5%. personal computer sales fell to the lowest level since 2007
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according to ibc. 276 million computers were shipped last year. that's down 10.4% from the prior year, and that comes amid increasing news of smart phones and other computing devices. >> so you get a pad with a keyboard, that doesn't count, right? >> yeah. >> semantics thing. >> even phones. >> i know. this world. anyway, apart from geopolitics, investors watch a handful of earnings, and we are joined now, by the global market strategist at jpmorgan funds. verall s&p prediction? i love every this week talking about negative growth. i love when analysts say that. that's decline, right? one word. aren't i fancy. is that the same thing, negative growth, decline in earnings? >> that is true. >> will there be a maximum number that's down? >> for q4 or year?
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>> q4. >> i think it depends on what you look at. we look at reported earnings. >> and? >> and we've had actually that measured decline since last year. >> every quarter. >> every quarter since last year. without making adjustments to them. >> okay. >> sop÷n- as a result, this q4 n easier comparison, and as a result, you chart a positive number this quarter already. >> do you think investors care about comparing it as an easier comp? still an absolute level not vere exciting? is that lessening the impact? >> i think it matters, somewhat. >> it does, yeah.@q( >> just mathematically it matters if all the sudden your earnings a positively growing, but we need improvement as well, and that's what we expect over the coming quarter in 2016 of this year.
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very important to see stability in variables like the dollar and energy for the year. >> do you have a total for 2016 figure for the s&p? >> so it's really going to, and you say this a lot, but it's going to depend on earnings growth coming through. predictions right now, i think, are a bit lofty. >> what are they? >> looking at the standard and poor measure is 18% growth. cf1 oeasure is 18% growth. trying to figure out on this level of the s&p, what the multiple is. >> what you would get to in terms of the level of the s&p? >> if you give me an actual number of earnings for the year for 2016, and then i'm going to -- >> so it would be around ytñ$12. >> that's not that bad, the multiple is reasonable. >> yes, it is. >> unless you make 105. >> it is reasonable, but still think it's a bit lofty, let's say. >> what's the real number, you think? a whisper number. i won't attribute it to you.
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115? >> &6t3qq' you and me. >> just between you and me in the room. >> yeah. >> we would say it's reasonable to expect a growth of much closer to 10%. >> that would be an absolute number of what? >> so let's say an absolute number of around 120 would make more sense. >> at that point, what happens with the market valuations? >> so, at that point, we think we can get a little bit expansion in the multiple, but it's not lofty either. getting us a little bit closer to 17 times maybe. >> it's a great -- there's no reason to think we go to 12 times earnings, for, you know, as we said many times, you know, expansions don't die of old age usually, but for a reason. who knows. >> i think that's a very valid point, gloom in the market now, and to turn negative on earnings and market as a whole, you need something here in the u.s.
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>> what's up -- what can you guarantee me is up double digits? which sector? >> we can't guarantee that. >> health care? >> we would stick to a lot of the same things as last year. >> which are? >> secularly health care. >> yeah. >> it's not a one-time play, but a long term story and stories from last year again as well, so consumer wins, but, again,tj÷ selectively, just like we talked last year, as well as certain areas of financial sector as well. >> and the worst will be oil, energy again? >> i think energy as a whole as a sector is still under a lot of pressure. >> yield curve, financials, no trading? they won't be great either? >> no, we think there is hope for financials. >> really? >> a lot of volatility helps with the trading revenue, but other than that, thinking broadly, the increase in rates has an effect on the financial margins, and that's an important thing to keep in mind. >> okay. all right. thank you. >> thank you. nything? you.
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are you all right? >> totally fine. >> that did nothing to you? >> nothing. >> arm doesn't hurt? >> not yet. tomorrow it will be sore, right? >> i don't know. and, you know, sometimes people get -- you know, i -- i'm, like, superstitious about the system. i like my system. >> you don't get a flu shot? >> i don't like it. >> i want to see if you get any type of, you know, sometimes people feel feverish the next day. immune reaction to it. all right so far? >> some get sick. >> that's what i'm talking about. >> i hope i don't. >> prevents 20% -- only works 20% of the time, get sick anyway, and that's what i'm saying. >> coming from a man who had the flu this year because he was too scared to get the flu shot. >> i got it from work. >> no. i did not get it. i have not been sick because i did get a flu shot.
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>> the whole time. >> talk about iran. it's released american sailors who it had detaped for violating territorial waters in the gulf, rattling nerves days aheadñ]]ç the expected implementation of a nuclear accord between teheran and nuclear powers. joining us more is jack jacob, and, colonel, we saw what happened last night. we saw the quick release today. given the situation and how close we are? >> i didn't expect any other outcome. possible it would last longer than it did. people said they were releasing right away, which they did. i thought there was libel to be something of an internal battling in iran between the hardline hardliners, a lot like our hardliners, a deal with the united states, is terrible, we cut a terrible deal, don't deal with these guys, they are awful people, look how they spy on us
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and so on. i thought there would be some kind of disagreement internally and it would last a little bit longer, but they were released too. and the boats too. well, they were small boats, so they took pictures and got all the information they possibly can from the little patrol boats, but, no, they released them quickly unexpectedly. >> is this a sign of better relations or as good as it gets with the sanctions almost being released? >> late of both. i go back to what i said about the internal battle. you got moderates like the foreign minister out front trying to get out from under all restrictions that have been weighing on iran, and the way to do it is to be a bigger and better part of the international community, and the other guys saying, no, no, keep them isolated because everybody else stinks. they are really bad people.
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one balance, this is a sign of easier relations and perhaps a slightly smoother integration in the international political and economic community, but like everything that happens in iran, it's liable to change in a moment's notice, but so far the good guys to the extent there are good guys there, prevailed. >> we know that part of the reason the negotiations happened is because iran's economy was being crushed by these sanctions. when things improve, assuming the economy is going better, people feel better, there's not the inflation that's been there, and consumers feel relief, do you think that helps in terms of our relations, or do you think that takes the pressure off the hardline hardliners? >> once the pressure's off the hardliners, that they lose influence, but the other argument is you're highly motivated to then tighten up
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again because life's easier, and they are not suffering terrible country. what has to happen is the united states and rest of the west have to keep up the pressure. there has to be a protocol ensuring things we demanded in exchange for loosening things up are the things delivered. that's going to be about impossible to ensure, but we have to keep up the pressure. >> the president last night in the state of the union address talked about the battle with isis. where are we at this point? he said that isis is not something that's going to be the end of our civilization, but he said it posed a huge threat. >> human threat, particularly to the allies, because as much -- we're far away, but there's a lot of people, friends, allies, and political stability in the region. >> germany. >> and in europe. i mean, you see what happens
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when you miscalculate about the good intelligences of people coming from war torn areas in this kind of environment, and now the population turning against merkel and so on, that is going to continue. i think the problem with isis is just a manifestation of the enormous change that occurring in the region, and i think there's going to be more turmoil, not less, and we're always going to be at risk from these guys. our problem is that we do not have a strategy in the region. i mean, we just -- i'm reminded -- i may have said this before, but bears repeating that plural, tsaid one time, talking to his buddy, and he says, look, we ought to go out and get ourselves a nice -- good british food, andqhnix he says, my dear
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british don't have íokcuisine. they only have the food. we don't have the strategy. we only have the tactics, and until we have at theñ]/ nationa command authority level, a motivation to get some real strategy, we're going to be at risk. >> jack, thank you so much for coming. >> thanks for having me, happy new year, and e got the flu shot, and other than the terrible cold, i feel great. >> so you got the flu? >> what's the point? >> well, i'm only 20% the size of a normal human being. >> correct. coming up, we have a debate brewing about whether cord cutting works, and whether ditching paid tv pays off in the long run after the break, and new technology in science breakthroughs proving life in the lucky years. the man who treated steve jobs, he's going to join us to talk about how you can live a more enjoyble life. that and more in a moment.
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what's going on here? i'm val, the orange money retirement squirrel from voya. we're putting away acorns. you know, to show the importance of saving for the future. so you're sort of like a spokes person? more of a spokes metaphor. get organized at
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welcome back, everybody. households in the united states cut the cord in a fast clióvij by 2018, one in five people will not be paying for cable or
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satellite television. traditional media companies trying to cash in on cord cutters and cord shavers. dish and time warner among the providers slimming down and launching television packages that don't require cable boxes. will the power of choice andpoúe cost of content catch up to consumers in the long run? joining us now, laura martin, thank you for coming in today. >> thanks. >> we have to fess up we are owned by comcast. all of that aside, when i start looking through what happened with some of the costs of over the top and different things, going to cost more to get all the things i'm watching now on a cable program. you've done the math on this too. >> one of the things consumers find is when they pay a $70 bill, they have 300 channels of cho7ásj so the minute "walking dead" comes on, you turn the channel, and the problem with over the top, cbs all access is $7, hbo, $10, they add up.
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wrestling, $10, and you get $10 a channel the minute you are over the top. >> we talked about the idea of ala cart for a long time, something consumers are in favor, because they don't want to pay for channels they are not watching, and 300 channels, 250 that anyone does not watch. >> skinny bundles, 20 channels for $20. hulu is $8, netflix, $10, more channel choice, but the problem is you can't get all the new shows, and you can't switch channels if "duck dynasty" comes on. >> when you have on demand, hbo, you have on demand hbo, you go right to that, and now you don't have comcast -- >> i do. >> you have comcast? >> yeah. >> so the movies, now, you look at any movies for premium that's on, you know, any of them, showtime, all of them, you hit
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it, and you start it. >> my viewing experience right now, i mean, i can afford it, so maybe i'm different, i guess not everybody can have full premium, all that stuff, but i have net flick, can't get any better than this right now. i don't think. >> 400 new shows. it's better because there's new programming coming on right now, and every single channel is making a new original. >> i don't want to give anything back. >> right now, most consumers add because netflix. >> has your gamble been the economics that people don't really cut the cord? at the same time -- >> it is happening. >> it seems to be happening. of course, the younger people who say i'll do -- they have amazon prime for shipping purposes, if you will, wubundlen netflix, and i'll get the news from the interpret, and sports,
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i'll go to a bar or my friend's house, and you do -- i mean, i hear that. >> tv and dish is the one with 20 for $20 including a lot. they say the kids won't pay for channels at 21 and 22, but come 23, that's when they enter the bundle. there's stepping stone bundles from a cord never to, oh, i have a kid, by the way, you want to add kid stuff to that skinny bundle? pay anotherjri$5. they don't know what they are missing. >> unless they have a skinny bundle. >> like an alcoholic. going to go to a bar every time you watch -- there's never a day goes by where there's not t@pso. go to a friend's house or a bar every time? >> super bowl, and there are people -- >> there are people who are not sports fanatics. >> i'm not either usually.
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>> no, but you are into sports watching. >> not every day, i would say. but there's people who don't do that. >> you being that, given the dramatic -- >> avid though. >> i can't go to a bar every time i want to watch an nfl game, no. >> you can't, but people can. i can't go to a friends' house. >> how social do you think television is, right? "walking dead" all the rage, you have to be able to talk about it whethersu7you're 15 or 25. sports, there's fantasy leagues, brown beating people who didn't do as well as you over the weekend, but a lot -- so, a lot of it, you know, you really want to give it up? >> are you saying it's an investment call? saying it's not the death nail for -- >> it's not the death nail. by the way, all the netflix money goes back to the contact guys in the television ecosystem, right?
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we just did a piece showing that youtube got 7 million views and $7 million. there's no money on the digital platfo platform. it all goes back to the guys who run television. >> thank you. coming up, steve harvey moment at a restaurant just down the road from cnbc's headquarters in new jersey where if you were lucky enough to go to the lunch with the boss, you go to this place. tears of joy turned into just tears. that video after the break, and as we head to break, this is where oil is trading at this hour, up 71 cents, almost 3.5%. we'll be right back. ohh ah ah aflac! aaaaf-lac! ta-daa! he's not a very good magician.
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he paid my claim in just one day. one day?! shh! how does he do it? in just one day, we process, approve and pay. one day pay, only from aflac.
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power ball on everyone's mind right now. the average person is 46 times more likely to be struck by lightning. still fun to dream big, unless, of course, you're a new jersey restaurant employee who mistakenly thought they won over the weekend. the staff in new jersey hear the power ball ticket for last
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pool, and gathered around as one read off the numbers, erupting into screams of joy when it was a perfect match for their ticket. one reported he quit the job after becoming a multimillionaire, but they didn't realize it was the winning numbers from wednesday so no winning tickets were sold. all right, guys. >> this is a restaurant we all = visit it. >> sad, sad. >> anyway, tonight, you're not going to want to miss this, at 7:00 p.m. earn time on cnbc, a special event, richest lottery ever, counting down, lines are7 long, odds of winning longer. breaking down the dos and don'ts if you dream big and do win, what you can do to show off. you got to live out the dream.
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check it out. >> you think we need to say b -- with a b, people make mistakes, million, or trillion? could have been. million wouldn't be as exciting. >> i get a royalty every time. >> that's what i thought. exactly what i thought. >> there you go. >> you need a billion shirt. when we come back, reaction to the state of the union address and race to the white house. washington watchers joining us, and weighing in straight ahead. in the meantime, check out the u.s. equity futurmwn indicated higher this morning after gains r(t&háhp &hc% dow up by 43, s&p up by 7, and the nasdaq is up by 22.
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here on cnbc, first in business worldwide. among the stories front and
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center, mortgage applications jumped last week according to the mortgage bankers association. purchase applications, and refinance registered double digit increases. delta past united to be the second largest u.s. airline measured by revenue passenger miles. american airlines remains no. 1. iran released ten u.s. navy sailors after detaining them yesterday. sailors were not harmed and is investigating circumstances that led to the detention of two navy patrol boats in the gulf. >> the virsion of america, cuts on the economy, politics, and the war or terror. >> let me start with the economy and a basic fact. the united states of america right now has the strongest, most durable economy in the world. i think a thriving private sector is the life blood of our economy. i think there are outdated regulations that need to be changed. there is red tape that needs to
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be cut. it's one of the few regrets of my presidency, that the suspicion between the parties has gotten worse rather than better. when politicians insult muslims, whether abroad or fellow citizens, when a mosque is vandalized, or a kid is called names, that doesn't make us safer. i forewarned as terrorists before them. if you doubt america's commitment or mine to see justice is done, just ask bin laden. >> joining us now to break it down, the former senior white house adviser to president bill clinton and currently a ceo, and tony, former deputy white house press secretary to george w. bush, and now a partner at strategies, and to you, tony, on the other side of the aisle, you
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can do the response, if you will. anything in the speech that gave you hope of any sort of coming together over at least the last year here? >> well, i don't know about coming together. actually, the response, because you mentioned it, i thought haley's response was newsworthy and a good response too. i mean, look, there was a lot in there for the president to talk about, i mean, obviously,mented to remind people he was commander in chief, and try, in miss way, to set the record straight on the economy. the problem is he's speaking to a deeply skeptical electorate right now where the most in the country feels they are on the wrong track. delivered the speech well, but i don't know he convinced a lot of people right now. at this point in the presidency, been on the national stage giving speeches for eight or nine years, people start to tup you out a bit too. >> right. >> john, how much do you think it was about setting up the next
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election? >> well, actually, since tony mentioned the response, i think there was a coming together last night. the coming together was against the message, if you will, that you have to make america great again, and you know whose message that is? i think president obama was saying america is great, and no one should say america is not great. you have the strongest economy in the world. we are the most powerful nation in the world. the real question is how we're going to share rewards of that greatness in a way that enables us to continue to motivate people andc move greatness forward and whether or not and how we actually use greatness and power in the world in order to keep the world a safe place. it was interesting to me that she and obama were both agreeing on that point. what did you make about the comments about the divide in the country? >> well, the biggest issue we have right now in the country, and it's seen in the primaries
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and both parties is that the nation, the country, the people are losing faith in our fundamental plan about self-governance. we don't have an official religion in america. our official religion is our belief in we the people. >> he was not taking responsibility for this. he was just -- >> well, he said he regretted he has not been able to do more, and he said he's going to keep trying to do more, and he said, by the way, maybe i'm not great enough. if we had a roosevelt today, it would be different. he said in app interesting humble way, maybe i'm not up to the task, but i'm going to keep trying. >> i was going to say, yeah, my thoughts on that, too, though, i thought it was telling that he noted it and regretted it, but i don't know if it was;-éux the polarization among people right now. it's really what is the source of the divisiveness. people have different views on a lot of issues, so while we want
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agreement, it's hard to bring it together. and speaking to the relationship with congress, and it struck me, whenever i see him enter the congress, one of the criticisms of the president was lack of personal relationships with members of congress in walking down that aisle, you get a sense that some of the people meeting him for the first time. that is a regret of the white house. >> i want to pivot for a second, turning to the race for the white house now, showing that donald trump holds a slight lead over cruz in iowa, and bernie sanders now taking the lead over hillary clinton for the first time in the hawkeye state. guys, what do you make of how this is turning out? is this representative of anything more broadly? >> all right, so, look, there's frustration. there's anger. there is cynicism throughout the country about exactly what we saw last night. they see those who are in power, not feeling as though they are representing their interests.
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there's of uncertainty about the change economically and socially, and people are feeling fragile, but -- >> establishment democrat, is bernie going to take the nominati nomination? >> i don't think so. i think the better candidate, hillary clinton, who really is the candidate who ought to be leading us in uncertain times i believe will be the winner, but, look, i think this is a race. no one ever said it wasn't going to be a race. >> the establishment gop guy. >> i am. >> he's not my guy. he's not anybody's guy. i think he's just a disgrace in the race, but, look, to the point they are, you know, tapping into really deep seeded, really deep seeded in the country right now, are real, and i'll tell you as, you know, an establishment republican guy, i don't really understand it very well, and i don't think anyone does either. i think that, you know, we see these views, and we see the support for >,5
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talk and see where they are coming from, and it really, really is just a distrust, skepticism, and real anger with washington. it's not often based on facts or based on a view of the complexity of the issues we are dealing with, but it is real, and we have to figure it out quickly because, you know, this could be a really disastrous election. >> if it's bernie and trufmp, what will you do? >> find a third candidate. mayor bloomberg? >> i don't know. it would require someone with the resources to -- >> that's where i would be. >> only a month or two before you can announce a campaign? >> look, i do have optimism that some of the other, you know, the candidates who i find more attractive are going to be able to close the gap and make changes, you know, it is a long
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race. there are opportunities in later primaries to build up electoral votes, make it a long, extensive race for some candidates. i think that is possible. that's what i'm optimistic about, but if you tell me we get to a convention and we're looking at donald trump and sanders, i'm fearful for the country, and i'm looking for another way to make a change. >> don, what are you going to do? >> well, first of all, it's not i can't speak to the republicans, but i don't think sanders will be the democratic nominee. >> okay. leaving the conversation there, guys, great to see you. appreciate it. >> thanks. coming up, the author of "the lucky years," the doctor sharing his practical and actionable guide to living a longer, healthier life by taking advantage of technology and recent scientific discoveries in health care. here are the futures at this
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hour. you know, a little bit higher up, not much of a bounce of what we've been seeing.
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seeking partners to bring the self-driving car to market,
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this is ahead of the detroit's auto show yesterday. last year, reports that turned out to be unfounded said the tech giant was close to a sovt ware and mapping technologies to help them safely navigate streets. >> to help technology, personalize medicine, and new means of prevention, people live longer is the topic of dr. david's new book "the lucky years," how to thrive in health, and joining us now, thank you for joining us. >> thank you, great to be here. >> yesterday, someone mentioned that the average life expectancy for someone in new york is 83 years. which is pretty amazing. there have been a lot of technological improvements in medicine, of course, but just staying fit and watching what you eat and not smoking, i mean, those are probably the most
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important things to do at least give yourself an edge, right? >> sure. those are big ones. there's a lot of other things to do including the flu shot you got earlier that are very beneficial. we got to focus on that prevention. we were not designed to go into our ninth and tenth decade. evolution said after 40 years, we take food, housing, we actually don't help our community. so in order to go that far, we have to tweak a little bit. >> that's the question. the question is whether we can just prevent all illness that keeps us from getting to old age or whether we extend old age. i want to extend old age. >> i think they are one in the same, and we want to live long and live quality. >> you're not going to live past 120 no matter what you do. could be a way of doing that too. >> first let's getting to living with 90 with quality. >> a lot of people do with quality. okay. you say, we have to edit our
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genome. what's that mean? >> not edit the genome, but there's technology now, science magazine call it crisper,mfe"ñ can change one of the 3 billion letters of dna. >> right. >> china, they changed an end bree yo, and they made malaria resis tent mosquitos. >> predisposed to some disease, we change that, or do we change something that causes general ageing? >> i think, look, there's potential, but it's also, if you have a cancer, i can change a t cell to attack the cancer. we can change disease. there's a lot of potential with technology these days. >> this is what we hope for, anyway, but -- >> so we're seeing it now. therapy works. jimmy carter effect, 90 years old, skin cancer, a death sentence years agoing b ingago,s alive with a new treatment. >> how do we make sure we're not all senile or have alzheimer's
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or dementia? >> we look at the data. big data's going to save us in the short run. an amazing study came out showing every year you delay retirement, you reduce alzheimer's by 3%. you retire at 85 instead of 65, that's 20% reduction there. the closer you lived in, the cognitive supply. we need quite time at night. if i have a dog that snores, i put the ear plugs in night because i can't kick her out of time to recharge itself. simple things like that have a staggering impact on the long run. >> what are the worse things we are doing right now? new year's resolutions, exercises, eating less. >> i love this as we sit down now, by sitting. sitting is the new smoking. if you exercise at the gym, it's great, but sitting for five hours a day is like smoking a
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pack of cigarettes. >> what? >> i hear people say now they want to be at standingfe-4ñ desl day, treadmills, and people say it hurts your back. standing up for five hours, your back is broken. >> standing desks have no benefits, but treadmill desks do. not all day, but five minutes an hour. steve asked, do you want to go for walks, health benefits are real, and if you're doing a business negotiation and you walk and you know when you turn left or right, and they don't, it gives you the advantage. he had multiple ways of looking at things, and -- >> how about keeping life interesting? how about, you know, into the '80s, and '90s, you know what i'm saying? taking any supplements, or are they dangerous? >> testosterone studies did not
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improve libido or muscle mass, increased the rate of heart attacks. >> what do you do then? stay in shape? >> keep your brain -- get uncomfortable. self-driving cars, our brains were designed for recognition and physical at the same time. driving is good for us. i don't want us to dumb down by having a car drive everywhere for us. too much to drink or stuck in traffic on a highway, self-driving cars are great, but not for every day. >> i agree with that. >> make yourself uncomfortable. >> you got to -- staying in shape, obviously, and getting sleep, in which, we get up at 3:45. >> make it regular. doesn't matter how short it is, get up and go to bed at the same time. >> why is that? >>ñ your body strives for regularity. >> four hours a night, i'm not able to -- no matter how regular -- >> go to bed earlier. shocking concept. >> talking about 8:00, if you have a wife and kids.
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>> well, i do -- the morning show from l.a., so i do it, you know, three to four, go to bed at 9:00. >> every morning? >> a couple days a week. >> five, believe me. >> we had a guy on yesterday, bullet proof coffee, coffee mixed with butter. it's something -- >> it's good. >> something that adds or takes away keytones from the brain so there's no appetite all day long. >> that doesn't make sense. >> what does it do? >> the notion of a simple way to cure these things -- >> it's to not be hungry. >> do you think coffee and butter is the way to do it? >> as of yesterday, yeah. >> and, by the way, i didn't want to eat anything. >> maybe it's the effect, but we liked it. >> i don't think so. >> why? >> if you like it, great, amazing thing about fad diets, you can't -- >> carbs, really, what we all want to eat. >> not that they are bad for
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you, but too much is bad for you. it's moderation, a bad term in today's world, but that's the key with this, try to stick to moderation. >> that's the diet i can live with. >> this transformed by view on diets. remember, artificial sweeteners when they came out? perfect food, hit the sweet tooth, but they did not ab to be. >> they taste terrible. >> they gave them to 20-year-olds, and then we had markers of prediabetes. interesting. then.x# they gave them antibiot. no diabetes. they changed the bacteriaz.ll ie g.i. tract. microbinome is important. this is true. when we talk about diet in the future, we'll be manipulating the bacteria in the gi -- >> i want to find a skinny person and get their -- >> poop.
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>> that's right. you got it. that's it. i don't know how it affects your genome or with you. >> so disgusting. so, the one thing about a lot of plays, though, it's hard to control are all the variables. we assure red meat leads to high cholesterol, leads to heart disease. a lot of things are changed and revised. wine was going to keep you live longer, and now it's going to kill you or it's not. >> right. the challenge is -- >> data changes. >> no. >> they are not controlled. you don't know. >> that's the problem. they are not driven by data. there's statements by people, i'm sure, this is good. >> and cascades -- must be true, seeing that other places. >> exactly. this is the era of big data. we can see the great study of red meat, taken out of context, but up to three servings of meat, no health detriment at all. if you have a hotrw2z every day,
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processed meat every day for 20 years, you raise the rate of colon cancer of 1%. >> right. you're sure that leads to that, every other possible reason for that? >> you're not going to have a hot dog every day. >> it's hard to -- >> you're right. people eat a lot of hot dogs, sit, do all kinds of things, but with data, errors go away. that's the message we learn from era of big data. we can start to laook at data i a new way. >> we have to go to break first. >> david, thank you. >> thank you, guys, very much. >> it's called "the lucky years," and when we come back, is the tide turning for yum in china? sales boost for kfc right after this.
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stocks this morning, apple interested in any potential time warner spinoff. the new york post reports the company's interest stems from the possibility of apple's launching a stand alone streaming television service. disney announced they are opening a new shanghai theme park june 16th following five years of construction. it was originally expected to open last year. yum on the move as well. check out the stock. the restaurant operator reported december same store sales in yum is in the process of spinning off the china business,
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but stock's up by 3%. >> coming up, chief investment officer and head of global fixed incomes in the next hour. back in a moment
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green forstocks, futures higher, nikkei and nasdaq snapping a losing streak. what's on the agenda for fixed income and the fed in 2016? john viner of goldman sachs asset management is the special guest. >> the nfl goes back to l.a. rams of st. louis, and the decision is leaving one high profile ceo on the sideline. >> power ball fever. >> the chances of winning, 292 million to 1. >> so you're telling me there's a chance?"yt yeah! >> the jackpot having the nation dreaming big. the final hour of "squawk box" begins right now.
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live from the most powerful city in the world, new york, this is "squawk box." > . welcome back to "squawk box" here on cnbc, first in business worldwide. we are now less than 90 minutes away from the opening bell on wall street. the futures right now have. about where they are, and as you can see, the problem today, we -- fair value drks up too much yesterday, wish we were up 77, but up 63 fair value, so up 14. price of crude, though, partly responsible for the good sessions we are seeing over in europe on the boards, crude is rebounding after dipping briefly below 30 yesterday, in the 20s, 29 and change, but backáh%d to c 31.14, up 2.25%, sounds like a lot, would have been at $100, but that's just 58 stcents now.
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>> okay. phil lebeau is joining us from the motor city. phil? >> new guidance that they raised guidance for 2016 minutes ago. we heard from mary bara for 20 as much, gm expects to earn between 5.25 to 5.75 a share, an increase, and they are increasing stock buy back up to $9 billion as they spend the 2017. it's quarterly dividends has been increasing by 6%, now at 38 cents a share because of the success in north america for general motors and because of what's happening in the other key market, china. just a few minutes ago, mary talked about how general motors is dealing with volatility of the chinese market. >> they demonstrated the capability to respond to a volatile market, size the business right, and we do have,
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you know, as the market continues to ma sure, we do have opportunities with sales and financing, so we are positive on china and recognize slower growth and more volatile. >> guys, one last note. the question of gas prices came up in the briefing from mary 0aa and her executive team. they expect gas prices to stay lower for longer. they are not giving a price range, but they expect gas prices to be.l lower longer. that's the story here, back to you. >> amazing, phil, five times earnings is where the stock is. i guess the street figures, yeah, they can do that every year, no problem. they won't screw it up again, and then you got five times earnings and a yield of almost 5%. you still can't give it away. that's showing you how it's a cyclical business, and you just -- you just can't guarantee it's ever going to be ever just repeatedly earn $5 a year.
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there's no trust whatsoever with the average investor. >> and, joe, remember, you have raised guidance from ford yesterday, all of this speaks to the strength of the auto market right now. ñ phil? the market multiple's 17. >> we've talked about this the last couple years. ask gm executives, they say the al do is post profits. >> 5% yield, trust us, we know what we're doing. we won't mess it up this time around. thanks, phil. >> right now, we have top news to tell you about. sailors were aboard in the gulf tuesday after they were in iranian waters. no slow down in the hunt for mortgage applications.
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they served 21% and average mortgage rate declined to 1 preponderate -- 4.12%. also in the countdown to the power ball drawing, talked about it all morning, it is on. winning numbers drawn tonight, 10:59 p.m. eastern time, jackpot at 1.5 billion,39y and ahead of that, to protect your winnings and maximize the tax bill when you win -- >> maximize it? >> minimize it. minimize it. >> not me, i like to maximize my tax bill. the rest of the country wants to minimize it. >> freudian slip. >> the jackpot special here on cnbc at 7:00 p.m. >> yesterday, it was majority leader. >> right. >> just because you hope for november -- >> you know me, i want to give all the money to the government. >> maximize taxes.
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>> the low ttto -- >> they say they want to pay more do everything they can to pay less. >> that is true. >> all right. goldman sachs released the forecast for fixed income this morning, hoping in on the high yield space. china and dangers of easy money. we are joined on set with more by goldman sachs asset management with more than $400 billion assets under management. thanks for coming in. 2016, what happens? what's the key headlines? >> frankly, one the big surprises i think for 2016 will be that high yield bonds have decent returns this year. i think it's going to be -- it's going to struggle to have another negative year. >> i thought default ratí"p you expected to pick up to above average levels. >> no defaults in high yield
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since 2009, so rates have been low, and looked like this year it would change. we estimate 5%, but if you look through that, two-thirds is from the energy sector. we know what's going on there, but if you look at pricing right now, you price assets, those energy related high yield bonds at deeply discounted prices so you have to think about -- you can't look at what's the default rate, the yield, but think about, well, what's the price? what's the recovery? there's rifts in the sector, but there's 85% of the high yield market not exposed to priced at around an 8% yield right now, and that component we think we'll see another year of 2% default. >> okay. when you look beyond that and look at the implications, i guess, the big question, what happens with central banks here
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and around the globe? >> personally, i think there's too much pessimism right now, so much discussion around recession, global recession, recession in the u.s., and just threw up 300k on payroll, that's not a recession, and now there's a focus in china and oil prices, and we do think that the u.s. economy can withstand these shocks and not big shots. >> helped by lower oil prices -- >> well, that's the thing, like, that was -- when oil prices tank, that's about, well, there's positive and negatives in this, but it's a net pottive, and now the oil price falls, and it's bad, oil prices up like today, oh, everybody's feeling better. >> we'll get 3% in years, get four rate hikes by the fed, all this happens? or will it all be keyed on inflation, which stays low? >> well, i think, look, inflation is going to not going
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to hilt the target this year. you know, the fed's game plan, i think, look at the forecast, i think they really do believe they are going to do four moves this year, and that's probably a utcome, and relatively high probability. the market is not pricing that in. >> you bet your life by the end of the year? >> i don't bet my life on interest rates. >> 20 at the end of the year, i wouldn't pass out. >> i wouldn't be shocked by that. it's been picky. with everything going on, you know, interest rates, treasury yields have not been moving. >> i know. >> i think the fed continues to move rates higher this year, and whether it's four, clearly, they are focused on so-called financial conditions, which is, you know, aka, the stock market. >> what's the hope for you? these are big, big issues. we didn't know about the refugee issue or immigration issue, is
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there hope economies pick up a little and yield drives over there? is there? >> well, there's hope. in fact, data from europe is decent. things doctor are okay. issue with europe is the tremendous amount of slack. we had slack, but we took the last five years working it off, and now we have close to no slack in the labor market. in europe, you still have, you know, double digit unemployment rate, not in germany, but other places, and that needs to be worked off, so we are optimistic on the growth outlook, but not on inflation coming up any time soon, and, no, we don't think interest rates go up, you know, german tenure at 50 basis points looked like a decent investment, doesn't seem on the face of it, but when short term interest rates are deeply negative, perhaps going more negative, and the central bank is not looking at raising rates for probably at least four years, that's actually going to be an okay investment. >> so if you don't see the central bank there raising rates
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for four years, does that keep a lid on things here for what the fed can do? forget inflation, but what it's done to the stronger dollar? >> look, i think it is definite ly factoring into the fed. the mandate is focus for the u.s., and it's a relatively closed economy, but the dollar going up by 25%, there's real impact, and if not for that, we are at already higher interest rates, so, yes, that is a factor, but we,axo don't think the dollar has a big leg up. remember, you know, right now, we talked about four moves. that's getting us 1% higher. they are not high interest rates, but sound like it because we had zero for sung. >> are you convinced? >> i think it can happen, but what's going to have to happen there is that the fed has to be right on the forecast, which is another year of not great, but
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above trend growth, call it something about 2%. the labor market has to, you know, not roll over, not look like a pretty good bet, but you also have to have markets corroborate that, and that means stock market can't, you know, have major correction, the dollar can't have a major uplift, and those things are reasonable bets, but -- >> just because one's not high, if europe's negative i know one's not high, but generally speaking, it's 50 basis points. á you know, valuation in curren currencies is not a great trading signal, but when things are out of whack from a valuation stand point, it matters. the euro is a cheap currency right now, and you see that europe built a significant current account surplus so there's more money coming in than going out because you have. they are benefitting from that from app economic perspective.
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even though, clearly, in the short term basis, relative interest rates matter, but so does valuation, and so we actually don't believe, you parody, even if the fedirgññ ra rates and ecb is lowering. >> john, thank you. >> thanks for having me. >> worried about next week. >> i'm not. >> you'll be fine. >> never. >> the last time -- >> the big money. >> big shock was before we went over. >> my money is the company's money. you're right. i worry. i worry a lot. coming up, the product startup in 2015, meeting the ceo of technologies, how they are solving problems for the world's rams going to california.
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they can wind up with two. we'll talk about it at 8:30 a.m. eastern time. you, too, could move to california if you win the powerball. tonight at 7:00 p.m. eastern time. in new york state, we believe tomorrow starts today. all across the state the economy is growing, with creative new business incentives, and the lowest taxes in decades, attracting the talent and companies of tomorrow. like in the hudson valley, with world class biotech. and on long island, where great universities are creating next generation technologies. let us help grow your company's tomorrow, today at what's going on here? i'm val, the orange money retirement squirrel from voya. we're putting away acorns. you know, to show the importance of saving for the future. so you're sort of like a spokes person? more of a spokes metaphor. get organized at
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a speech this morning, and details. >> thank you. the boston fed president said that future rate hikes from thele from reserve require gdp growth at or above the potential market of 2%. he said recent market declines, though, raise questions about global growth and domestic u.s. growth, he said, could be slowing, and the fed should, quote, take seriously downside risk. he's a well known dove on the committee, and he talks about global weakness presenting downside risk to the u.s. economic forecast. he talks about rates needed to be low for the next several years in order for the fed to hit the 2% inflation target, pointing out that core inflation
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is clearly moving away from the 2% target,
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next guest, uses predictive analysis to solve problems for the world's biggest industries like construction, aviation, mining, rail, and more. they give insights to run more efficiently, and joining us now the found enaer and ceo of grou and i don't know if we had you on -- >> first time. >> we should have, like, you're behind. and what i love about the company that you started, it's win of the sort of the great profitable unicorns that have been a midwest, not a valley company, but an industrial company in the midwest, and so we were just looking here on eft here, leading the industrial revolution. you are trying to do that for everybody else. >> well, w are partnering in a unique model. i refer to it as collaborative
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disruption that we're basically ñ all over the world, solving problems. data comes from sensors, and our software delivers value by optimizing and minimizing down time, and delivering safety. we deliver answers by collaborating with major leaders in industries like rail and oil and gas, energy, construction, a mining, and more and it's exciting. >> this is like the jawbones for the industrial -- >> well, in a sense rs here's the reality of industrial, not just america, but world, multiples more information, many data from that that can be used, but 1% of the data looking at the oil rig, 1% of the data is read and values derived from it. what's the opportunity?
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boards and ceos, 85% say they need to find a way to create value through data, less than 10% are. there's a disconnect. >> what do you do? differently? how does that change valuation? >> opportunity both around normalizing, extracting, normalizing the data, number one, but put it on a platform to deliver data realtime. why is uptake different and solving better? entrepreneurs with speed, agility, building software, and privatizing solutions with the data and insight. >> i'm sure smart, but i'm missing it. break it double. >> sure. a for real example, something you showed somebody they were ass. >> in the locomotive and rail space, they're 250-plus sensors on the average locomotive, and
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we take that data from the locomotive, goes to the cloud, in the software, and we deliver back to the operator and the operation center of that railroad, data right now about what might break and when. that way they can fix it rather than waiting until they're in the desert, breaking down, costing hundreds of thousands of dollars an hour for a break doudoup down in a scheduled event. >> it's just taking care of it >> wear and tear in. >> the sensors not only capture data around basics, but humidity and vibration. >> you remember one said that would fail, and it didn't, meaning it was messed up, and they turned it off. you remember that? >> i have to watch that again. remember?
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>> industrial, talking about the innovative dilemma. this is the industrialist dilemma. there's been three buckets of value that industrial companies can work on. one is making stuff. second is selling parts. thirds is servicing the bp1stuf. i believe the battle ground in this century is on predictive insight that comes off of that stuff. the best take advantage of the data and best suppliers of equipment in the spaces are the ones that find a way to create value, and they will win, and they will win that value. >> what do you do? >> so at caterpillar, again, this collaborative disruption model, we are leveraging the data, the insight that caterpillar uniquely has as iconic leaders in the spaces they are in, but our customer is catalyst customer. we deliver to the customers of
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caterpillar and competitively to the customers of other brands. >> i can understand if they want to do this themselves, but aren't there -- caterpillar, you can't work with others, right? >> again -- p is it -- platform, you say, well, if you have our data, you have the other guys' data. >> the as poegt is that, ultimately, we create value for the users. now, the partnership, this collaborative disruption is that we're partnering with, you know, not every leader, but generally one leader, one or two leaders, generally one, in a space because that's the magic to me, combining entrepreneurship, dna of speed, agile da, and data science that can be cultivated by entrepreneurs and delivering it. >> thank you so much. >> thanks for having me. >> wow. all right. i got 10% of that. it's enough for me, though. coming up, we head to the nfl owners' meeting in houston. more when "squawk box" comes up next.
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when we return, we have some platinum portfolio picks, place plus, los angeles rams back, owners approve the move, but st. least is not the only loser. we'll talk about that next. also at this time, there's millions of losers waking up and finding out, yep, you still have to go to work. there may be a few winners tonight, and that's why the nation has powerball fever, update on the jackpot next.
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now as we break, look at the u.s. equity futures. up by 50, picking up the steam, and s&p up by nine, and nasdaq up by 22.
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>> welcome back, american from neutral to buy, as a result of stocks volatile, and management is up willing to take strategic actions to unlock mor value. equal weight to overweight with apple, strength in the cloud market among other factors. becky? >> general motors is raising the 2016 earnings in cash flow guidance. the autojure maker's also increg stock buyback plan by $4 billion to $9 billion, and hiking the dividend by 6% to 38 cents a share meaning it yields 5%, and joe has thoughts on that. >> well, i, you know, do the math. 5.75, trading at 31 with a 5 % t
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yield. you can't give it away because it's very prospect, still, it's -- very cyclical business, and -- >> we heard from mike jackson last week saying -- >> we're doing it again. a lot of incentives, and they never cut back on production, and now it's going to be 18 million forever. they don't downsize. >> mark said this week, look, our incentives this december was the same as last year. >> yeah. >> as. noted many times. markets have. on a wild ride, u.s. stocks down more than 5% so far this year. that's when they came back a little. opportunity for vin esthers? joining us, the top stock picks for 2016, a member of the "squawk box" platinum portfolio, right there, pretty amazing, and the celebrated actor, i i think
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he looks like edward norton, doesn't he?v9: no pressure -- but you changed, you can have cash this year. >> i heard that. >> you decided to raise any cash? you think you want to stay fully invested? >> i'm staying fully invested. i think there's the biggest disconnect in between, you know, what you hear from companies and what stocks are actually trading for. i mean, look at the market last year. the top tenm]6p of the s&p up 1 top temperature of the 500 up 17%, and bottom four was down 9%. can't be just ten companies doing well in the united states. there's a major disconnect out there, and that's what we look for at hodge's capital, the disconnect we see out there.
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>> people hear that, and that's not a bullish indicator how narrow the winners are. that's the time you should be in cash, but the other 90 need to catch up with the 10%? >> we exactly say that. >> really? >> you're talking about general mean, the market's saying they -- earnings are not sustainable. where is it going to trade? >> yeah. >> three times earnings? the downside is limited there, and the upside, i think, is pretty tremendous, and while you wait, you make 5%, but there's a lot of -- we make about 3,000 company touches a year, and the store, i mean, the economy's not great, don't get me wrong, but there is growth out there, and there's opportunities, but,u6p market is totally discounting that. >> gm is not a pick. what's your picks? >> no. right now, end link, a midstream processer. it's been thrown out with the bath water with the other mlps.
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there's a real difference. first of all, they have a great management team, great company culture, one of the key things we look for in hodges capital, but they have a relationship with devan ensuring they don't have the risks of a lot of other counter party companies. they've -- 95% of their contracts arebased, and stocks from the mid-30s down from 13. know chance we don't believe of a dividend cut, 12% -- >> it's 12 now. >> yeah. >> 12% yield. no chance of a cut, really? >> they have ample cash flow, but it's been thrown in like all the other ones. >> all right. >> you know, no need for equity raise because they have the cash flow to cover the dividend. they've again on record not cutting the dividend. tremendous opportunity there.
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>> great. let's go over the others, three left to talk about, right? do you remember? >> capstone paper, corrugated paper company, great industry veteran, a likely acquisition, candidate, trading at nine times earnings. earning $2 this mex year, stock's around 19. it's a very inexpensive stock, likely acquisition candidate. other stocks are eagle materials, which is a cement and wall board company. we think there's $10 pique earnings, highway bill helps their business. trading five times pique earnings, we believe. we have weather issues here in texas, which, i think, already factored in, stock's gone from 110 a yearcdi ago down to 55. there's a tremendous opportunity we think long term in eagle, and then horizon pharmaceutical trading very low multiples. we think growth growth, trading
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around eight times earnings. you know, very misunderstood. just thrown in with the valeant situation. there's disconnects out there and opportunities out there. i don't know what the market's going to do, but i see a lot of great companies very much on sale. >> yeah. you have the benefit of going in now. i don't know if you owned these for the last year or two, might not be quite as appealing, but these all look like they've come down -- if they do rebound, there's a lot of upside, i guess. we need a decent economy at some point. we need a lot of help. >> need a commodity bounce for those to work, don't you? >> somewhat. somewhat. you know, we do price in the fact oil could be lower for longer. >> yeah. sq >> you nknow, that's what the market's telling you already, oil lower for longer, but in doesn't not take into account you don't necessarily need a
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rebound in oil for these things to work and for these earnings to grow. you buy growth stocks at less than ten times earnings in three when you buy growth stocks that have these growth rates and are not paying market multiples, that's a great risk-reward >> okay. yeah. maybe. i think it's like a fight club. no, no, that american history x. remember that? >> you don't talk about fight club. first rule, you don't talk about fight club. >> that's right. that beard you got -- >> i'm not shaving until oil goes up. >> you're not? >> i got a ways. >> you might look like that guy on "making a murderer" remember when he got out first time? >> yeah. >> sap that clause. thanks. go to cnbc pro on for
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the latest on the platinum portfolio and additional analysis from our managers. nfl owners meet in houston approving the rams' move to los angeles. we are joined now with the latest. >> thank you. there's a lot of big money decisions to be made. we know the rams are coming, but where will they play? will another team join them? there was a series of votes into the night last night, like electing a >/:pope. owners were grabbing dinner, more billionaires in one building than in #xjxdavos. they got the 24 votes needed, and it came down to who had the better stadium. the winner privately funded sports come plek that rams' owner wants to build in engel woot wood with a see-through roof, would be the largest when it opens in 2019. >> i think it's the greatest complex in the world, and it's the vision, and the ownership
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supported that. >> it is a difficult process, and as roger said, it is bittersweet.e/2fâ8k we understand the emotioni ins involved of the fans, and it's not easy to do these things, they are purposefully made hard. >> reporter: they voted down the plan for the chargers and raiders, but each of those team gets the new stadium as folks in san diego and oakland come up with something or the chargers have up to a year to join the rams. if they decline, the raiders have up to a yeared to do the same, and they can be a co-owner. >> i'm going to look at all our options, and i'm going to take a little bit of time here, but, you know, we do have some options, so it's difficult to say right now i'm doing this or that. >> we'll see where the raider nation ends up here. we'll be working really hard to find us a home, and that's what
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we're looking for and for our fans and everything else. don't feel bad. we'll get it right. >> reporter: losing out, disney's ceo who led the carson project and was hoping for a po post-disney career in the nfl. what happens this fall? will the chargers play in l.a.? don't know yet. where will the rams play? >> probably the coliseum where i first cwm my first nfl game roman gabriel and jack snow back in 1970. i was like a minute old. back to you. >> yeah. that was the l.a. rams, right, and then the rams, and then -- st. louis cardinals went there. so messed up, but -- >> played -- >> one thing is the same, the bengals, did they -- did you see that, jane? did you see that? i'm -- and she wonders why i don't follow that dr. >> i did. >> the team remains nameless.
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>> we have visitors from since gnat -- cincinnati. >> lucky to have mike brown still, awesome. thank you, jane. >> go rams. >> that's like a musical chairs. >> back to the stadium for three years that theyí.-< hated, but in 1980. >> wait until they get that going in l.a. i love l.a. >> yeah. >> write a song. small businesses out with loans to help on deck telling us about a new partnership with one the world's largest banks, jpmorgan, and don't be these guys, they match the perfect lottery ticket to the wrong night's drawing of powerball. tips we have from the chairman coming up in a built, and don't miss tonight's jackpot special at 7:00 p.m. eastern time right here on cnbc.
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jpmorgan using on deck capital to make loans to the small business customers, and joining us this morning -- >> thanks for having me. >> great to have you. tell us about on deck and deal with jpmorgan. you know, you've been trying to disrupt their business, and, effectively, now that you partnered with the kind of company that you were trying to disrupt, how did you get your head around doing that? >> yeah.
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you started, we tried to change the way traditional banking model was going to a braank, waiting four weeks, and many moved offline to on line, and we thought small business lending would be that industry. we built the company for eight years to have the track record to partner with someone like them out of business. i thought that was the goal. >> felt we like we we are extending the market for credit. look how a traditional bank is set up, more than the million dollar loan than the $50,000, andven jp morgan say there's a pain point there around smaller dollar loans to smaller businesses. that's what analytics are designed for. >> tell us about this. jp morgan, one of the things business market to some of the degree were new rules after the financial crisis, no? >> you know, that's potentially a part of the issue, but it's funny. when we started on deck, it was the end of the last credit boom so it was a market always
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structurally underserved whether it's the loan size, lack of good data, or we thought they created an opportunity for us to build a new company. >> and so in the future, when we think about who loans to small businesses, who is making loans? i mean, can -- when you think about loans broadly, do you think your platform is used for all sized loans, not just small business? >> well, we historically focus on small business. we created fico score, credit worthiness of the consumer, there's no widely accepted score for the credit worthy-of the small business, so we have the on-deck score, fifth generation, loaned $3 billion using the scoring met dog, so we focus on the one industry, a lot of opportunity in small business, but more broadly, there's a marketplace lending industry springing up. folks work on disrupting asset classes, and it's indicative of the partnerships you'll see
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>> do you think, ultimately, the big traditional banks disdisrupted by this model? do you think they end up trying to partner like yourself or buying people like yourself? >> yeah. i think you nailed the three different options there. build, buy, partner. there's no doubt i think about the top 20 banks, some try to build the technology. our message to them has been, look, we have an eight year head start, invested hundreds of millions of dollars in this company and other asset classes have done the same thing, so banks are risk averse, get in the market quickly and ñúheasil we don't want to put a lot of money into a project that may or may not succeed so the partnering model as help lender mature, like jpmori gain, invest in data client, it, not the cool parts of the business. >> speak to the regulation issue. >> sure. >> because when you were not part of a big bank, i assume the regulations were quite different. >> yeah. we're a non-bank commercial l d
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lender. we're regulated like an invoice company, not a big consumer commercial bank. as we partner with major banks, regulators look at the relationships, subject to additional level of scrutiny on the bids, but we are prepared for it. >> just a partner of the bank, can you, under this deal with jp, go off and partner with wells or bank of america? >> you know, we're intensity focused on getting the jpmorgan relationship live and scaled up and discussed other partnerships we have with folks like bank of montreal, and we worked with number of other banks in the past, but at the same time -- >> they are carving out certain areas? >> you know, we have a lot of opportunity in our business to partner with both nonbanks and banks, but, again, we are focused on the chase relationship, you know, because the skill and opportunity it affords. >> are you independent years from now? >> building the business to be
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independent for a long time. >> thank you. jim cramer checks in with his take on the today's market news. here's the futures now. still up? 50 on the dou, up 70 now and going up throughout the morning.
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>> jim cramer joins us now. we're up, europe was up let's say tonight china goes down 5%, oil up a dollar. what does the u.s. mark do tomorrow? >> it's entirely linked to oil. we care about the chinese currency. if the currency were to go down big and the chinese stockmarket. it conceivably could offset oil. this market wants to see us pay for more oil, wants to be able to to say, hey, listen, if oil is good the world is good. it's a counterintuitive kraesz world. you know it has been four months. we can't bug it. >> it really has. oil goes up 20 cents, we get a little firmer. >> we rallied big yesterday, oil did not stay down to $29 and
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there's just a whole theory developing, there could be major bankruptcy, major dividend cuts. the company, themself, that use oil are really not saying anything good ab it. so it's very difficult. all one sided. all we hear about is watch freeport and chesapeake. no one ever says, you know what, people are going out, spending moral the retail. i think the latter is not accentuating. burlington, burl, you see what happens. if the companies talk a little more positively about what they see, it would change the oil him if oil spikes 10%, we will have a big rip roaring rally, leishman talked about, his view becomes more of the majority. >> whenever you miss a big move, it's like god i hope that happens again in my lifetime so i can do it. there are some values in commodities and oil, it will never be like this again i don't think? >> there are a lot of companies
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not doing as badly as people think and their balance sheets are actually pretty good. i was looking at the high yield for a lot of the oil companies. some are able to survive this price without a problem. it doesn't matter. they all trade in index. they're all going to be thrown away. i agree, there is values in technology i can't believe when you mention that, people say, i'll buy tech stocks. only if oil goes to 34. >> when we come back, tonight's powerball jackpot is now, get this, $1.5 billion. that is a world record. up next, time to crunch the numbers to give you a leg up on the millions of other would be billionaires out there. "squawk box" will be right back. .
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. >> the countdown is on, everybody is trying to get lucky tonight. the powerball jackpot gives you a leg up on the odds. is there a way to give us a leg up on the odds though? >> there is a little way to get a leg up. here in mid-town. we see a steady stream of people coming in, most buying pick i quick picks.
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the other thing, they buy lucky numbers. think about 7, 17, 27, think about birthday, all the numbers less than 31 and less than 12. you don't want those numbers him if you peck those and you win, you will be sharing those numbers with a lot of other people. at least you'd win, eric. >> at least you'd win, you can control what will happen in terms of the numbers that come out from the lottery. you know what other people are going to do. which helps your expected value. go big and bold numbers. 32, 36, 40. things above 41, that are not lucky numbers him go for 13, it's unlicky, you won't have to share it. that's how ugueth get a little extra expected value. >> some people do the numbers from lost. >> you don't want to copy that, though. >> the lottery numbers from "lost." real quick, we got to go.
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the you keep all the money or keep it as an annuity in. >> you keep all the money, you don't want to be a predator of the state in case they don't have money to pay you back? in there like puerto rico want tonight, 7:00 p.m. eastern time, special event, jackpot, we break down the dos and don'ts if you actually want to win. we'll see. >> that does it for u.s. today. have a great day, everybody him see you tomorrow. [ music playing [ music playing ] >> good wednesday morning. welcome to ""squawk on the street."" at the new york stock exchange, pre marks trying to build on yesterday's late afternoon bounce a. 2350u things working in gold's favor, including trade data. europe is higher despite a weak industrial production number. oil is higher as well after just breaking 30 yesterday. our road map begins with oil


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