tv Squawk Box CNBC February 4, 2016 6:00am-9:01am EST
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 along with joe kernen and andrew ross sorkin. we've been watching crude prices. they've been extending their gains this morning after yesterday's 8% rally. that's right, 8% gains yesterday. late yesterday, venezuela's oil minister said six oil producing countries support convening an emergency meeting between opec and non-opec members. that's according to a report from iran's oil ministry's news agency. crude oil getting a boost also from the weaker dollar. andrew? >> okay. a couple top stories to tell you about this hour. here's what's going on. the ecb president mario draghi speaking at an event in frankfurt overnight. among the headlines, draghi says there's no reason for central banks to resign their mandates simply because everyone is being
affected by global inflation. he argues the risk of acting too late on ultra low inflation is greater than that of acting too early. draghi suggested a wait-and-see stance could lead to a lasting loss of confidence. back here at home, computer failures taking down several irs systems yesterday, leaving the agency unable to process some taxpayer returns. the irs says it's a hardware failure and that they have started repairs, but some systems will remain unavailable until later today. taxpayers can work on their returns but can't submit them until the system is up again. the agency still hopes to process 90% of refunds within the three weeks of filing. and sumner redstone, we've been talking about him a lot in the past year, has officially stepped down as executive chairman of cbs. the 92-year-old media mogul expected to be removed as executive chairman of viacom later today. shareholder pressure has been mounting as many have questioned redstone's health and ability to lead the firms. he's been absent from annual meetings and earnings call and
is currently facing a legal battle after his former companion challenged his mental capacity. we're going to talk to an analyst about all this and impact on the stocks. >> we are just one day away from the january jobs report -- >> come on. >> that's right. one day away. jobs friday tomorrow. just yesterday we had an all-star cast on "squawk box" weighing in on the markets and the economy ahead of that data. larry fink, bill miller, and lloyd blankfein. >> i do believe this represents value today. equity markets are properly priced now. i think they were a little high. >> when prices are high, it makes me a little nervous. when prices are low, i feel good about that. a market like this, i really like it even though it drives people in my office crazy. >> there's certainly not zero growth, but frankly, i think this negative sentiment is not justified by the reality in the
numbers. >> joining us right now is pimco's managing director and global strategic adviser. gentlemen, welcome to both of you. thank you for being here today. richard, what do you think? is this a situation where things feel like it's gotten a bit of an overreaction? >> i think so. the year got off to a rocky start with nervousness about china. the fed hiking, people concerned by how much. i think we've had some positive news. you had dudly acknowledging the fed is paying attention to this data. you've also seen the adjustment in the dollar. >> what about you? >> i'm pretty positive on the markets. i think if you look at the breakdown of the market, and we've talked about this at length, some of the stocks are down 20%, 30%, especially in the areas of consumer discretionary where the consumer is the one that's going to benefit by lower commodity prices.
i think the opportunity there for investors long-term is really good right now. >> some positive news. feds noticing just how weak the economy really is. there's no way they're going to be able to raise rates in this economy. so that positive news that the economy is awful spurred stocks higher. that makes no sense. it's perverse. >> there's a bit of that going on. >> they're paying attention. they won't raise. things are so bad that you should buy stocks. >> well, i think we're in a 2% economy in terms of real growth. i think that the markets have been in that model now for several years. >> it did make some sense though. >> 2016 is going to look like 2015. >> it's a sad state of affairs. >> if we say, okay, they're not going to continue to rise while every other central bank is adding stimulus and the dollar becomes weaker as a result. >> it becomes a relative point.
>> i'm sorry. what was that? >> it's a relative play. you have negative interest rates across the world. you can't raise rates here because it puts you into a deeper recession. >> some of the market moves yesterday were stunning. you saw the ten-year field fall to 1.77%. these are things mark has talked about, but it's amazing to see them happen in one trading session or two. >> psychology can change. i'm in the camp where i think we'll get rate hikes later this year. we're not going to get four, but i think we're going to get more than zero. >> are we priced in at zero now? >> as of yesterday. >> unbelievable. >> i think so much of this has to do with the commodities. you were talking about correlations. you see stocks selling off when oil goes down. in the short term, it doesn't make sense, but as a long-term investor, when the markets turn, they'll turn fast. >> although, watching yesterday, the idea of wti up 8% and the
idea that russia and iran and the rest of opec are all going to get together and no one is going to cheat on those. is that believable? >> and if the saudis aren't around the table, it's no the clear what the rest of them can do either. >> i think the market is looking for some straws right now to say, okay, what's the bottom of oil? if oil keeps going down, more volatility, more selloff. if you get oil coming back, which again i just find really interesting because you would think it's such a great tail wind for everybody, industrials, consumers, countries. i think longer term, that's positive. >> the other thing is china's on vacation for a week. for the next week, we won't have to look at headlines about the currency. there's not going to be any bad news out of china for at least a week. >> new year, is that it? >> must be. lunar new year. >> year of the monkey? >> i'm not following it that closely. >> you don't know what year it is over there? you came in here not knowing. how many different years? do you know? >> 12, aren't there? >> i don't know. >> monkey, horse, pig, rooster,
snake. >> i like monkey. i don't know why. >> you know i love monkeys. i still want to have a squawk monkey. >> you can't wear a white shirt if you have a monkey in here. it'll throw poop at you. >> i've wanted to have a squawk monkey on the set just to throw darts, to see if the monkey could do better. >> he thinks it's safe to have monkeys come in here and throw darts. >> they're going to get osha in here, joe. >> let me ask you, you point out that china is closed right now. what happens in a week when they open up again? are you confident things are on the other side of this or could we see more volatility? >> i think a big challenge in the markets is that, you know, china is trying to do a complex maneuver, and they're not communicating it all that well. you've got the uncertainty about what they're going to do and about how they're explaining it.
that's likely to continue for some time. at least for the next week, that's not a headline. >> we are looking at a strong economy for the u.s. right now. some of the numbers have been concerning. we're going to get the jobs report tomorrow. we could fall below 5%. so that makes people feel pretty good, i think, in an environment where they don't think the fed will be raising rates. >> i think the issue is how sustainable is employment, how sustainable is housing, how sustainable is autos. we think it's actually pretty good. even if you plateau at these levels, you still have strong growth. but the market is telling you this is kind of an all-time high and we'll be declining pretty rapidly. if you're if the former camp of things are going to be okay, this is a great time to be invested. you just won't see that growth we saw before. but 2% growth and good margins and low commodity prices, that's good for the markets. >> do you have to be selective? >> absolutely. you've got this huge dichotomy in the market. you look at industrial stocks, consumer sector stocks, transport stocks. they're all trading at 30%, 40% discounts to the market. you're talking eight to nine
times earnings. >> you'd tell people to buy transports? >> we like the airlines at this level. they're making a ton of money, but they're being priced in as if travel is going to stop and margins are going to drop. >> what about the railroads and some of the transports that have seen a dropoff? >> the fundamental is there. the supply is more oil and gas based. i think when you're talking about more consumer travel and talking about corporate travel, that's where i would go. >> bill miller yesterday got to me. >> the airlines? >> no, in general when he was saying, i may be silly, ubut i like buying stocks when they're down. if you think that eventually we're going over 20,000 on the dow, 16,000 is like a lot better than 18,500. apple at 500 billion is a lot better to buy than at 800 billion. >> totally agree with that. >> unless we're going down
forever, if it's ever going back up, you should be shopping. >> same message we heard from larry fink and from lloyd blankfein. >> you find the short-term mentality. i have to get out before the bottom. but then you can't find the bottom. it's a question of finding the stocks, finding the sectors. there are so many of them just beaten up. it gets uglier because liquidity just isn't there. >> richard, how about yo u? >> we're focused on credit. markets paint with a broad brush. obviously the energy sector has been hammered by low oil. we think this is a very good market for security selection within investment grade credit. that's the focus. >> thank you both for joining us today. great to see you. >> corporate news but also stocks to watch. i like this story.
gopro shares plunging after reporting a loss. this used to be a $90 stock. it's worth a billion now. used to be worth 10 billion. this company figured out a way to attach a camera to a helmet. who could possibly ever disrupt that technology to have it actually fixed to your helmet? >> the argument at the time was that they were a lifestyle brand, they had all this free content. >> it's a media company. they were saying they were not a gadget company at the time. >> when the monkey misbehaves, you're the one that's going to have to take care and clean the cage and everything else. and discipline the monkey. they do other things too. >> i like nick, by the way.
>> but you see what i'm saying? should it ever have been more than a billion-dollar company? >> i told you this story. i had a guy ask me if he should invest in gopro. i said, i don't know, but someone will figure out a way to put their iphone on their head and that'll be that. then i felt like an idiot as the stock went to 10 billion. i thought, man, did i miss the boat. >> no, no. they attach a camera to a helmet. >> i'm just saying, it was the entertainment idea. >> is there a patent on attaching a camera to a helmet? >> i think there is, actually. >> i think there's another way to do it. >> tape? >> becky is right. she's interviewed nick a handsful of times. >> i think nick is an incredibly brilliant guy. >> cool name. if he ever goes into porn. nick woodman. >> the argument at the time was this was going to be an entertainment channel and people were sending in these free videos. maybe that hasn't panned out.
>> all right. yum. you know we have buffalo wild wings on. didn't something happen yesterday? >> there was an issue of salmonella. >> norovirus. >> you're right. >> she's bringing food. vrchts for me and the monkey. >> yum results came in mixed. revenue missed consensus. the owner of pizza hut also announcing some executive changes, appointing an interim cfo. same-store sales better than expected. that benefits from strong results out of kfc in china. and royal dutch shell reported a nearly 60% drop in fourth quarter profit. people knew that would happen because it matched expectations. it shows you, you know, how earnings can move around. you can use them at your own peril. put a multiple on earnings and next year they get 60% less. 2015 income of $1.94 billion was the lowest in 13 years.
the company vowed further changes to manage through this period of low oil prices. >> let's get a check on the markets this morning. looks like the futures are a little stronger this morning after a big down day that turned into a big up day yesterday. it was a big swing for the dow, which was down by almost 200 points before it rallied to close up by 183 points. that's a swing of almost 4 purks points during the trading day. s&p futures up by 7 1/2. the nasdaq up by 21. and europe this morning, you'll see that at least at this point it looks like there are green arrows there as well. italy up by 1%. the ftse up by 1.2%. the dax up by 0.4%. the cac up by 0.3%. in asia overnight, looks like the shanghai composite was up by 1.5%. the nikkei was down by 0.8%. oil prices, this was the one that everyone was watching yesterday as oil prices were up by 8%. you can see wti this morning is
up by another 0.6%. brent, which was up by 7% yesterday, is unchanged right now. let's take a look at the ten-year note. this is another one of the markets that really saw some wacky moves yesterday. you saw the yield all the way down to 1.77% during trading session yesterday. that yield has picked up to 1.9% this morning. and the dollar index was down sharply yesterday. it hit its lowest level since november 3rd. at this point, it's down against the euro once again, which is trading above 1.11. gold prices spiked yesterday. they were up by about 1.25%. this morning, up another $6.10. coming up when we return, we're going to talk about sumner redstone stepping down as executive chairman of cbs and viacom's board expected to replace him as chairman today. we're going to talk to an analyst about this developing
story. and mark grant says a recession is coming. his portfolio advice is coming up on "squawk box" when we return. opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances. all across the state the economy is growing,arts today. with creative new business incentives, the lowest taxes in decades, and university partnerships, attracting the talent and companies of tomorrow.
say ailing. i understand. but 92. >> he's young. and he wants to live forever. >> he wants to live forever. we all have health issues. 92 is pretty -- i'm impressed he's held on to it for this long. his company still owns the lion's share of -- >> 79%. >> so does he have to agree to this sm. >> i think he did agree. >> that's cool to be 92 and to finally say, okay, maybe i'm going to slow down a little bit at this point. anyway, viacom expected to do the same later today. cbs and viacom were split. stock jumping nearly 10% at this hour. joining us now with more, anthony declemente. senior media internet analyst. anthony, i got the same question for you all the time. >> wassup? never gets old. >> you know why? you don't like it. you say it lowers the -- so.
>> it raises the tenor of the conversation. >> in the rundown. >> anthony, never let him know your weakness. that's what i've learned over the years. >> just keep it up. it's never going to change. >> doesn't bother me. >> it doesn't? then we're going to stop. so what's up? what do you see happening? >> so the bottom line is sherry redstone had the right to succeed her father as nonexecutive chairman of both cbs and viacom. there was an agreement she struck with les moonves. we suspected all along she's been a fan of les. he will succeed her as chairman of cbs. so really the bottom line is a tale of two different companies. cbs, you have continuity of leadership. les is a well-respected executive. he'll be chairman, president, and ceo of cbs. very clear. at viacom, almost the opposite. very unclear here. they'll have a meeting today as
to whether or not felipe doman will continue to be the chairman. she's basically said she wants somebody to be chairman of viacom who's not affiliated with the family matters, who's not a trustee of the redstone trust. she wants somebody independent. could it be somebody who is an existi inin ining director of t board, who's not a member of the seven redstone trustees? maybe. but it's really hard to know. it's really unclear. you have this war behind the scenes. >> do any of these companies get sold? is there a deal to be had now? >> so there are a couple of questions we continue to get from investors. could the trust put viacom-cbs back together the way it was? i think that's unlikely. i think you'd have to have a full and fair premium for that to happen. so that's unlikely. you'd have to have individually the boards approve that. could viacom be sold?
you'd have to identify a buyer. they face structural head winds. cable tv ratings are down. it's really hard for us to identify a buyer. i think cbs can operate very smoothly, very successfully independently as well, although people will talk about cbs and time warner potentially getting together. but the point is that anything that happens from an m&a perspective has to be approved by the boards of directors of those companies. the trust cannot force m&a on either of these companies. then you also have -- in media, you have to remember who's going to run the new company. >> that's what i would say. if you don't think it's going to be felipe, who do you think would be somebody who could run viacom in its existing state? >> it's hard to any. it's one of these situations where unlike yahoo! and twitter, it's a closely held company. we don't have activists that can agitate for their person or somebody that comes in. >> although, gamco owns 10%.
they've expressed concerns in the past. >> but they're really a minority shareholder. through the nai stake, the redstone trust controls both. again, what sherry has said is she wants somebody who's independent, who's not a redstone trust trustee. >> basically, she doesn't want felipe. >> or another member of the viacom board who's one of the redstone estate trustees. >> we keep thinking about all of these guys as sellers. could any of them be buyers? do they ultimately need heft? >> viacom, you could argue that. the more networks you have, the more negotiating leverage you have. we all know viacom is in the midst of this contentious renewal with dish network. 13, 14 million subscribers. if they can't renew that deal, that becomes a risk for viacom as a company. can they solve that by buying something? you know, i don't think it's simple or easy.
i think what you have at viacom is as you have the strife of management and leadership and turnover and uncertainty, it affects the performance of the company. you could have -- you know, you could have other executives departing viacom. >> let me throw out an idea to you. is there a digital player that wants to be in this space that isn't? does amazon say to itself, maybe i like nickelodeon, maybe i want to own it. take it out of the new york centric or hollywood centric media landscape. are there potential players? >> i think it's unlikely tech would buy viacom like apple or amazon or alphabet google. they look at their companies as aggregation platforms that they don't need to pay big money to license or own content. and we haven't seen that, right. you would say it's more likely somebody looks at viacom as this
generates a lot of cash flow. maybe it's somebody like a bain or tpg. >> private equity. >> but look, it's a closely held company. anything that happens would have to be approved by those seven trustees. so i think it's more likely that you have uncertainty and it's going to play out in the press. it's going to be very kind of, you know, unseemly for now. >> comcast staves off cord cutting. nation's largest cable company. comcast added 89,000 video customers. comcast able to defy logic that cord cutters are increasingly abandoned pay tv. plenty of fat bundles. i mean, what do you think of that? >> it's true. >> you said sell everything and buy netflix? >> i have a buy on comcast. >> you better.
>> right. >> you better, young man. pretty amazing. up over $3 or something. something else i wanted to say to you. i don't remember what it was. but thank you. >> thank you. >> oh, mario is going to be on, gabelli, on "halftime report." in this case, he's got a lot to do with the viacom case. >> mario's whole position on this is he wants to make sure if there's m&a that his shares -- he owns some of the super voting. he wants to participate in that premium to make sure no one just comes in and takes out the super voting stalk without him coming along for premium. >> maybe it's rich greenfield i need to give some grief to. he's the guy that would sell everything but netflix. >> rich is a big netflix fan. >> sort of everything else is going to stezero. >> sort of.
>> tiramisu? >> what did you say? >> different. >> one is an italian dessert and one is a french term. >> meaning equal or -- right. >> so you like that. you don't like twassup? >> i like terms of phrase. not beer commercials. when we come back, new trouble in flint, michigan. why home buyers are having trouble getting loans. plus, find out why baseball player jose conseco went on a twitter rant about the bank of japan. >> love that. >> right now as we head to a break, take a look at yesterday's s&p 500's winners and losers. this just got intere.
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that's reached them. front page of the "wall street journal" of some citizens holding up tap water from flint, michigan. we know how terrible the situation is. there are thousands of children who have been exposed to massive amounts of lead poisoning because of the water system. some officials there tried to cheap out by going back to the flint river instead of paying a higher price for other water. now there's some new trouble that's coming out. the residents trying to get out, just sell and leave and get away because they can't drink this tap water, are having a tough time trying to give out because lenders are saying they will not give mortgages until a buyer can offer proof there's no contamination at the property. as a result, nobody can get out. it's not surprising. you can't imagine as a new homeowner you want to get into this situation. it just shows what an incredible trap this is for people who are already in a pretty depressed area and suffered for a long time after the auto industry kind of came out of its hay day. it's outrageous that some gross
incompetence from officials could lead to this. >> they're under enormous pressure across detroit and outlying areas. remember when they couldn't have the street lights running in detroit at one point when the city was in trouble? we take for granted a lot of services, but it's nice to be able to run government effectively and have their tax revenues. it's a self-defeating -- you know, the more the services decline, the more people leave. >> these last people are trapped in this situation. it's terrible. the other thing is these people are still getting water bills, being charged for water bills that are eight times the national norm. >> can you imagine turning on the tap and wondering? >> and your kids. >> another story to tell you about. your friend, you love her. taylor swift turning her likeness into a mobile game. are you going to be getting this game? the music star is partnering with glue mobile, the same company responsible for kim kardashian's top-earning game hollywood, which brought in $74
million in revenue in its first ten months alone. swift's game will be out by the end of 2016. glue mobile stock up. important to note this is a small market cap company. it's up 21% on that news. >> she's a great businesswoman. i wish she'd get to the point where it wouldn't be so uncool to come on. a lot of people don't want to do that because with all their millennial fans. some day. >> some day. >> some day we'll have her here. we can talk to her dad and get her on. he watches every day. he's a merrill lynch guy. >> we're going to work on it. >> and i have mixed feelings about this. i knew jose conseco. i know he's got some stuff in his past. he was really a cool guy as far as i could tell. he's allowed to chime in on negative interest rates. you don't have to have a ph.d. to understand if you're paying people to hold your money, it's
bizarre. he's tweeting last night about the policy move. i hope he's watching. we want all viewers. i said that earlier on my tease. >> i think we should invite him on. >> don't you think everyone should watch "squawk box" to understand this? how many butt lifts, clothing can you watch people talk about? the mindless morning shows. except for "today" and "morning joe." anyway, negative interest ratings in japan. who is advising japan? forcing banks to lend all. this creatings markets with even lower rates. a dumb move. bank of japan should call them willy wonka bonds. >> because charlie violated the rules. >> exactly. >> he had a gob stopper. >> you get nothing and you lose. remember bench used to play in our stock pick. >> johnny bench. it's relieving to see people talking about stuff like this. >> you want pop culture stars,
athlete, people in the world to know this stuff. >> athletes and golfers, guys like that, that don't have normal jobs, they might -- you know, they're eating cereal, they're watching something. might as well be "squawk box." >> they got free time. >> a lot of them play the market. >> a lot of them do play the market. all right. so we got that behind. i think jose was in the studio before because i have a bat signed by him. >> know him from golf? >> from golf. coming up, the global recession one man thinks is coming. so you better plan accordingly. that's according to strategist mark grant who will join us next. as we head to break, a quick check on what's happening in the european markets right now. up across the board. so you're a small business expert from at&t?
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getting to know you. getting to know all about you... get one-touch credit lock, plus your score and report at transunion.com. get in the know. welcome back to "squawk box." it's time for the squawk planner. weekly jobless claims are out at 8:30 eastern time with first-time filings for unemployment expected to hold steady at 278,000. also at 8:30, look for first read on fourth quarter productivity. coming up at 10:00 a.m., we're going to get december factory orders. dallas fed president and cleveland fed president speaking about the economy today. in europe, there's a bank of england decision due in just about 20 minutes. we should keep an eye on that. that's at 7:00 a.m. eastern time. on the earnings front, conoco-phillips reporting before
the bell. that's today's squawk planner. >> buffalo wild wings reported disappointing results. the company posted fourth quarter earnings of $1.32 a share, falling short of $1.48 that analysts expected. the wing chain blaming the holidays. they weren't anticipating there would be any of those this year. that makes no sense. we'll talk about it. that's just a throwaway line, blaming the holiday. what does that even mean? there's holidays every year. the earnings release did come hours after health officials announce they were investigating a gastrointestinal illness. >> that's why the stock was down. >> and ceo sally smith will get out in front of that with us. we're going to find out what we can about what the company knows. a single facility? >> it was a single facility from what i saw. it's just people are thinking of chipotle. >> exactly. >> let's talk more about china's
slowdown fears and tanking oil prices. it's been spurring an erratic start to the year for the marks. investors now getting concerned that a groelobal recession coule on the horizon. mark grant of hilltop securities, chief fixed income strategist there. what is it you see? what is it that has you so concerned right now? >> well, i think the numbers in china, and i can report most institutions that i speak with, think the numbers in china are inflated, meaning untrue. i projected the chinese growth rate around 2%. i know garry shiller projected a 3.5% rate. whatever the rate is, it is certainly not anywhere close to the official numbers. so you're also seeing this in terms of demand and supply for commodities. look at commodities prices. my other concern, and maybe as big a concern, is oil. i think oil is headed down.
cushing is within one month of capacity fill. i think we had a spike yesterday. we're up a little this morning. i think the direction is down into the 20s. >> you pointed out, by the way, this is a note you put out just two days ago, where you said you thought the ten-year yield would head as low as 1.75%. it almost got there yesterday. but we also have a lot of other market experts who came on yesterday from larry fink to bill miller to larry blankfein who said they thought this selloff was a little overdone at this point. how do you match up? >> well, i think there are a couple things going on here. the treasury recently announced they're cutting back on the issuance of treasuries. two, yields in europe, japan are so far less than american yields that there's a lot of money that
comes to america to get some kind of yield in sovereign debt. and three, i don't think that the fed -- and if they do something, it would be, my opinion, absurd -- but i don't think the fed is going to do anything for the rest of the year given the market turbulence they caused by raising rates. it wasn't the quarter of a point. it's that nobody knows what they might do next. that's caused a lot of problems. >> you heard, mark, that economic expansions do not die from old age. i know you have heard that. you also probably know that we've never really imported a recession maybe it's happened once. but there's been all these other breaks over the past 30 or 40 years. go to whatever global event you want to talk about. we've never imported one from china before. will this be like unprecedented if it happens this time? usually we can exist on our own. now we're so global that we're
tied in with everything? >> yes, joe. i think that's the correct statement. it used to be america was much more separate in its economy than it is. we have many of our large companies, certainly the s&p 500 companies, whose profits to a great extent are international, and the oil issue is true for the united states and it's also true for the rest of the world. so we're all alfected by this. . we just keep pumping more oil. the price, in my opinion s going to keep going down into the mid-20s. that's very deflationary. we're also going to see big cuts in dividends. we're seeing ratings downgrades already for moody's and s&p and the big companies. you're going to see geopolitical change that's maybe unprecedented for the last decades because of the budgets of the middle eastern countries
of russia, ven ezuela and so forth that can't sustain oil at this price. >> part of your thesis is that opec is dead. part of the reason oil prices spiked yesterday is because of this idea that opec and non-opec countries would be getting together. do you think it's a pipe dream? >> i think it's a pipe dream. i think it's a fantasy. i don't think it would make much difference. america has the can pacity becae of the change in technology with fracking and horizontal drilling, to produce much more oil than any nation on earth at the current time. as the technology improves, it just drives the price lower. there was an analysis yesterday where the cost of oil in the permean basin was at a 30% profit margin from today's price. it's also very deflationary to
have oil go down. i think when you add all these factors together, we're looking at some kind of global recession, partially due to what's taking place in the united states with earnings and with big oil. and partially because of the slowdown in china. i don't think it's 100%, to answer joe's question, that we're importing a recession. i think part of it is just what's taking place in the world, including in our own country. >> all right. mark, always good to see you. thanks for joining us today. >> you too, becky. any time. >> okay. coming up when we return, operation hope is the first ever nonprofit financial services network for underserved communities. founder and ceo john bryant will join us next on the mission to teach financial literacy to those who need it most. we're back in a moment. ♪jake reese, "day to feel alive"♪
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welcome back to "squawk box". some of the biggest names in business and government gathering at the annual hope meeting. chelsea clinton and jack lew. to continue its work as the first-ever nonprofit financial network for underserved communities. joining us now is john hope bryant. good morning. >> good morning. i like your description than mine. >> is that okay. >> fantastic. >> you got a lot of support and
companies. wells fargo. >> yeah. 3,200 delegates not 2,500. >> who is counting. so tell us about a couple of things. first of all to this audience who doesn't know about it what happened with the treasury department because we haven't talked about this yet. >> so cool. while we serve all people, more poor whites than everybody else, african-american poverty is a real thing we can fix. we figured it out. abraham lincoln 1865 after the civil war created bank called the freeman's bank. mission teach slaves about money. he's killed five weeks later. the bank falls into disrepair, 70,000 black depositors, bank failed. they never got the memo on money. today you look at ferguson, missouri, jobless ferguson.
baltimore where the riots were, jobless baltimore. every place where there's a riot it's a 500 score credit neighborhood. our mission to raise credit scores to 700 because black, white, red, yellow it's about having more green. we work with jack lew to rename the building where the bank was located. across the street from the white house. called treasury annex. you do a shot of this building once a week. it's been there for a hundred years. before that frederick douglass was a businessman before he was an abolitionist put $10,000 of his own money which is $20 million today. the bank would be $100 billion today. we asked them to rename the building, freeman back. he said we're not sure. you can't tell me treasury annex
build cigarette a sexier name. secretary lew deserves a lot of credit. january 7th forever more the first time thichbt a white house building has been named and it's right across from the white house, freeman bank building. we think that's a wonderful salute to history. we think it explains why black poverty exists today. >> what do we do about it? when you say we have to teach people what does that hasn't? >> nobody want as mortgage. nobody says give me a subprime 20% mortgage. they want to be a homeowner. if you don't know how to maintain a home you have a foreclosure. nobody want oscar loan they want a cool car. we have to get back to people's dreams. banks are in the no business not yes business.
we get the bank in the yes business by putting hope back inside financial culture of hope to get your credit score for 120 points. >> you make it sound easy. somebody with a 500 credit score doesn't check your credit. first thing we find, you got error physician you have a 500 credit score. we work you to resolve the errors. that's a pop of 40 point. we find a default you had, you were divorced ten years ago with joe blow's finance company. we'll give them 20 cents on the dollar if they remove it off your credit bureau and write a letter. that's a pop of 50 point. once you have a 50-point in your credit score yourself-esteem super. now we work with you to get that credit score up over -- >> how is your internship program growing? >> it's growing.
>> more corporate partners signing on. >> wells fargo, suntrust. suntrust is doing an ad on the super bowl that includes us. we're starting to mainstream this topic to build an economy for all. this freeman's bank theme is wonderful for us to say we want every bank to be a freeman's bank, every community tube freeman's school and promoting small business and entrepreneurship. so we can get more people on "squawk box" who look like america who are trading not in race but in class. the class of currency. and driving our economy up and our gdp. that's what you guys are about and what we're about. >> okay. john thank you. great to see you. our sister network msnbc was a media partner at the forum. >> when we come back u.s. stocks rebounding in concert with higher oil prices. we'll talk strategy right after
only 1% of college students are american indian. donate now, and help our numbers grow. ♪ the dollar tumbles pushing oil higher. speculation growing fed could hold off on another rate huge and rumors about an opec cut. we'll find out if this market is ready for a move higher from tom lee and jason trennert. >> tesla shocked shares 2k0u7b% in a year. with lower gas prices, skepticism is growing on wall street about the company's future. bob lutz joins us with his tesla doomsday scenario. >> knocking on the door step of spring. it's selling season with mortgage rates sitting at three years low despite the fed rate hike. is now the time to lock in that
mortgage and go house hunting. we'll ask the ceo of quicken loans as the second hour of "squawk box" begins right now. >> announcer: 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 worldwide. i'm becky quick along with joe kernen and andrew ross sorkin and the futures this morning are looking a little bit stronger although about half the gains. dow futures up by 32 points. s&p futures up by three points. nasdaq up by 12 and this comes after a day where the dow traveled about 400 points went from down 200 up to about 183. oil price is a big part of the story. energy prices this morning are up slightly. wti yesterday was up by 8%, this morning it's up another half percent to $32.39. brent slightly lower.
a slide in the dollar has a lot to do with where oil traded. this is the interexpeconnected. just crossing the wires the bank of england leaving rates unchanged. that was expected. here's what's happening. the new week starts with a number of key economic reports at 8:30 eastern time initial jobless claims and fourth quarter productivity. 10:00 december factory orders. also the house oversight committee will hold a hearing on drug pricing featuring two executives embroiled in controversy, former ceo martin shkreli will be and martin schiller will be providing testimony. credit suisse is lower after the bank reported it first annual loss since 2008.
>> gopro shares continue to tumble. wearable camera maker posted quarterly results after the dow missed expectations. sales plunged from the previous year and guidance for the current quarter came in lower than expected. the company forecasting current quarter estimates and appointed a new chief financial office per the company's stock has plunged for than 40% this year amid slumping expectations for sales. i think the high on this stock of 90. a billion dollar company that was $9 billion company because of wearable, i don't know, people get caught up in the excitement of the technology sometimes. you look at that. wow i'm going buy that stock. >> they have been hoping for drone sales, new camera on drones they were thinking. we'll see. >> all those things seem --
>> just attaching a small camera. the technology comes down to where, you know, it's not proprietary. >> they got there first and gopro video streams people were piling tons of it in. >> it is the end of an era for sumner redstone. les moonves is taking over the role. redstone will be moved out of the role of executive chairman. shareholder pressure has been building over time as many questioned redstone's health and ability to lead the firm. analysts say they don't expect the move to have an immediate impact on the company. >> fears of a possible recession have benton rise. can markets predict if it will happen. steve liesman did some digging
which bear markets lead to a recession and which didn't. >> a few weeks ago joe repeated a famous comment stocks have predicted five of the last nine recessions. we used data frl financial research firm. here's what we found. 13 bear markets in the post-war period each one of those denoted by a bear paw that's where stocks jumped from their highs and stayed there for a month. our test was a recession officially declared within 12 months of the start of the bear market? here's our results. it was just about spot on. markets have predicted 13 of the past seven recessions for a batting average of 53%. within two points of saying nine of five. each paw there precedes the gray area showing a recession.
but wait. samuelson used it to show how bad the economy is. the bear market is right half the time. the economy has a random chance of being in a recession one every five years. so it gives you a one out of two chance of being right which is significantly better odds and you can improve those odds. we looked in depth at the market. the average bear market adds 362 days. a bear market with no recession it lasts 192 days. a longer bear market is much more likely to lead to a recession which suggests, becky is thinking right now that the bear market itself may do more than predict recessions may help cause them. is this incredibly financially connected? i talked to economists lou alexander. he said samuelson would agree
it's useful information but he says the idea is part of a huge body much research in economics showing markets are simply much more volatile than the economy. you won't find all this volatility in stocks show up in the economy and that's why, by the way, the fed officials saying they watch the markets, they are important for policy, but they cannot respond with policy to every blip that's out there. >> bill miller was here yesterday and we asked him that are the markets showing some sort of predictive power. he said markets are just people. it takes somebody on either side of things to decide one way or the other. the markets as a whole don't necessarily know more than anybody else out there. >> my attitude is to take it very seriously when i see things move the way they do. and try to find an answer in the fundamentals because mostly the same information that's available to the markets is available to everybody. >> i like the idea of predictive versus causal. >> here's a funny note to the
whole thing. we used our test to go back to 1966 when samuelson wrote this. it appears in a "newsweek" article he wrote. he was actually wrong at the time by our standard. markets were way worse back then. there had been nine bear markets going back from 1966 and he only predicted three recessions. >> do you know how many times the negative wealth effect of the stock market selloff caused the recession? >> alan greenspan comes on this show quite a bit and talks about this. the importance of the stock market and wealth effect has increased over time. he thinks that the market outcomes are more consequential for both fed policy and kpeconoc outcomes in the last 20 years. >> joining us with more on all this, tom lee -- you know what? go back down. this is what it's come to.
you now do not need a last name. see that in the teleprompter. i'll go with that. there it is. i think tom is good. and jason is also here. hi, jason. chief investment strategist -- you say jason one word and you think oh, go, go, go. did that make sense to you, tom what steve just said and the recession risk right now is what, 10%, do you think, 20, 15? >> it's hard to say but, you know, markets are telling us when they decline it feels like a recession anyways. i think corrections or bear markets have the same feel which is, you know, buying doesn't feel right, selling feels good. but i would on your previous analysis what would have been interesting is that if you look at the long term yield curve i
believe it inverted before every one of those bear markets. >> i didn't look at that. that's my next little research to look at yield curves which are excellent indicators of recession. from what i can tell they don't give as much heads up as bear markets. >> the unemployment rate does not feel anything close to -- >> that's right. i think one of the messages from earnings this season has been companies don't see the same type of disruption that markets are feeling, but i think at the moment investors are doubting what companies are saying. >> are you bearish? are you worried? >> no. i'm not bearish. >> you think we're in a recession. think we're headed for one. >> i don't, no. >> you're just saying they are wrong in feeling that we're in recession. >> i can under how investors are really leary and cautious because the market has been terrible but this doesn't mean how markets will behave two, three months from now.
there's a lot of reasons to expect markets to do better. >> jason? >> the chance for recession are probably 20% to 25% unless there's a policy error. i have to say i think what's being reflected in the markets lately is there's worries about china, obviously. there's also worries about how policymakers will react. my own view, steve, is that the comments the other day were borderline irresponsible. the fed is look at three things. they are looking at labor markets, financial conditions and inflationary expectations. labor markets are good. but the other two signals are flashing red. and took a long time to get in this situation, take the fed a long time to get out. i don't think this is a good time to make custer's last stand in terms of now getting some sort of religion as far as -- >> just to recap, jason is talking about the kansas city fed chief who said yesterday or
two days ago, keep going on rate hikes. these blips -- he used the blips in the financial markets, the fed should just look past it. >> when you look at the markets broadly, it's not just the stock market you're looking at yield curve is flattening it's not invert but bank stocks are getting hammered. commodity prices are down. there's clearly some tension out there. i don't think there's a good chance of recession because of consumer spending and government spending will be supporting this year. by the same token, again if you make a policy error you could turn this into something much more ugly much more quickly. >> i think just myself i'm ready to sell all my live cattle and go back into oil. before it was oil at hundred bucks i was trading that into cattle making leather things and milk and steaks and it was worthwhile. now i don't want to graze any more. i think oil at 30 bucks is worth 30 bucks.
oil is worth 30 bucks a barrel. it is. am i right? >> right. right. >> what i'm saying is i think if that stabilizes a lot of these things, we start to see maybe it was supply and start to say the united states still is probably the best. >> even at $32. >> what do you want to hear from the fed? do you want total acquiescence and say we were wrong or can they chill and say we have time to do this. do they need to remove the threat of a rate hike. >> i don't want to see them compound a bad situation in the financial markets by making it worse. frankly the mistake is not necessarily they tell you in december is that they didn't tighten a year or a year and a half ago. i do this exercise when i go with my clients all institutional investors and i say how many people know who the secretary of the treasury is. if you get a group of 25 people
institutional-like investors there's three or four people that raise their hands. >> are you kidding me? >> yes. jack lew has been in the witness protection program. there's no fiscal policy. >> he's been on our show. >> it seems to me, we're overly focused on monetary policy. we're not focused enough on regulator easing to make monetary policy more effective. >> do the ben franklin. low oil prices. low inflation. pretty good economy in this country. got a possible change ten administration that will be less punitive towards business coming up possibly. what's the negatives? >> better interest rate environment. >> weak overseas global growth and we're going to break. >> thank you guys. >> when we come back you wouldn't know it was february here in new york city. it's going to be 54 degrees
today. in fact it's even higher than that already. it was 57 when i came in. weather like this is keeping natural gas prices close to 20 year loss. we'll ask the ceo of natural casscgas company specter natural gas how they are handling this. we'll be right back after the break. but i only had a salad. it was a buffalo chicken salad. salad.
welcome back to "squawk box". take a look at shares of c concou phillips. >> gas is bouncing around the $2 level and could hit two decade low. tough environment for the natural gas pipeline and storage company. joining us now the ceo of spectra energy. i know you just rolled out your three year plan. before we get to that talk a little bit about the four business lines that you have. >> sure. largely what we are is a fedex of natural gas. we pick up people's product and
deliver it. natural gas pipeline. utility business in canada. we've got a pipeline business in western canada. dcp is a voijoint venture with phillips 66. >> you would imagine everything we've heard from energy prices getting slashed in the last year or so made things much more difficult in your business. where do things stand? >> we're in a bit of a unique situation. we don't make money for 95% of our revenues on the price of the commodity. we pick up the product and get paid to ship it. >> fewer people willing to pay for that shipment charges based on how low price come? >> two ends of the pipeline. if you're a consumer of gas or consumer of oil this is a good thing. low prices actually stirred demand for that. you see that. our texas eastern pipeline that delivers here into new york city
we've seen record peak days along that pipeline in terms of volume. even this january which has been a warm january relative to 2014 or 2015, so there's two seeds of that pipeline. you see that in our three year plan. continue to increase the dividend. very stable. >> i'm shocked to see you raising the dividend. you're raising it by 14 cents. >> 14 cents a year. it speaks to the stability and reliability of the company you can put out a three year plan in this environment. the key is don't promise too much in the good times and keep it going on a steady state. >> part of what your three plan assumes what? >> $45 price of oil flat. 2.50 gas. 42 cent ngo. the key is keep it flat so you can see how the business runs. even with that you'll see us generate more cash and earnings each year. >> we talk about the benefits of low energy costs for consumers.
what does do it for big industrial players? >> you think about the different -- >> heavy metals. >> heavy metals, chemical plants. the gulf coast of the united states is going through a major build out of plants and you see those kick in 2017-2018 time frame. >> it hasn't hit yet. >> not yet. first you find product then you got to build the infrastructure and then the demand comes. that's a four, five period. >> you mentioned the volumes, the pipeline here to the northeast part of the country. your volumes how have they been from a year ago? >> all of our pipelines hit peak days last year seven to ten peak days. doesn't matter whether it's down in the south, whether in the northeast or even in western canada. western canada has had a tough time if you're a producer. our pipelines in western canada are full for the first time in ten years. >> who came up with 45? >> actually since it's not -- we kind of look at our models kind
of in the january -- in the october/november time period. consensus i think for this year is 45 if you look at all the bank. >> i wonder what work goes into that. it's almost a 50% move or maybe it's low. it's bizarre. we have no idea. i would think it's worth somewhere between 30 and 40. >> in the naerm itear term it's big mover for us. >> it could be 30 or 25. >> exactly. >> you are guessing? >> i would say we're trying not to predict where it goes. what we're trying to do is saying at the time you put your budgets together let's see how the business is doing. don't assume commodity prices will go up or down. what i do know those assumptions are wrong and still generate capital and cash flow. >> thanks for coming in. >> what about the chevy volt. how about all electric cars,
coming up tesla's worse nightmare cheap gas. stock is down close to 30%. former gm bob lutz is here to tell us why he thinks tesla could be in stall mode. but up next some very important changes at kfc. details after the break. >> announcer: time for you for today's aflac trivia questions. what telecommunications company is responsible for creating the first cell phone? the answer when cnbc "squawk box" continues. ohh ah ah aflac! aaaaf-lac! ta-daa! he's not a very good magician. 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.
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. >> announcer: now the answer to today's aflac trivia question. which telecommunications company is responsible for creating the first cell phone? the answer, motorola. welcome back to "squawk box" this morning. yum's quarterly results came in mixed. sales benefitted from strong results out of kfc in china. the company said they had earnings of 68 cents per share. sticking with yum kfc is
doubling down on colonel sanders as it prepares to reveal another actor playing the chicken king's founder. the chain is saying good-bye to the comedian who i never liked him but liked his colonel sander. he played the colonel in a recent campaign ad after that other guy did it for a while. kfc said it will reveal the new celebrity to play colonel sanders in a spot set to air during the super bowl pre-game. >> you know what, you love the commercials, i know. >> yes. >> i have no guess. >> betty white. >> betty twhiet be the new colonel. i think it might be ryan seacrest. >> board of twitter. i'm looking forward to seeing those commercials. >> and playing the new kfc colonel. >> kevin bacon. six degrees of separation.
. welcome back to "squawk box". earnings reports front and center. clorox reported a profit of $1.14 per share. household products raised its full year outlook. dunkin' brands baepting estimates by two cents. dunkin' increased in quarterly dividend. check out shares of victoria secret parent l. brands. increased its dividend by 20% to $2.40 per share and announced $2 per share. new data on job cuts from challenger christmas. heavy down sizing in retail and energy pushing job cuts to their highest since last summer. planned layoffs topping 75,000.
good morning to you. top line for us, the biggest places where jobs are getting lost, sir? >> well these are the highest cuts since last summer and they are coming primarily to two big industries are retail which we often see after the holiday selling season and then energy which we thought might have been slowing down, cuts there ebbed in the second half. here we see a big number in january. it suggests that the change there has not stopped. >> but the connection isn't there. there's a disconnect which is to say the view was if energy prices went down and we can understand why other jobs would go away retail would be the beneficiary. why not? >> it looks like retail is more a story about companies saying all right we continue to move to online, that movement is accelerating, it's been ongoing. we saw heavy cuts, for example, this last month from macy's.
they had a 25% jump in their online sales but their retail sales at bricks and mortar fell by 5% so they are cutting stores. >> in terms of the energy sector walk us through those numbers specifically states where everybody is getting hit -- i think we know where those are -- but how do you see this playing out through the rest of the year at this point? >> no question the southwest is hardest hit, texas, arkansas. there are other pockets of energy producers around the country. we saw 20,246 job cuts in the sector in the month of january. that was the highest in some time. halliburton, baker hughes, all the big oil producers of equipment are continuing to cut jobs. it suggests that the big oil companies, oil and gas companies are cutting production and exploration. >> before we let you go, do you think we're heading in to a recession. >> well, i think that there's a recession we can see now on the
horizon but you get there when you near full employment. at some point companies can no longer find full, the kind of skilled workers they need to grow their businesses. so we're not there yet. it's no longer something that's not visible. >> john, we appreciate your time this morning. thanks very much. see you soon. shares of tesla, we were talking about this sliding close to 30% this year. analysts in the last 24 hours again questioning model x deliveries as well as limits on demand for the popular model s. our next guest says tesla is doomed. here to tell us why he's down on the electric car company bob lutz former general motors vice chairman. he's also a cnbc contributor. bob, when oil was $80, $90 and garcias was $3 and $4 was the subsidy states had to give to make it economic viable thoen
b -- then to buy tesla. you don't have to be a genius to say the economic model might not be what it's cracked up to be. >> that's just very superficial. no question declining oil prices have impacted all electric vehicle manufacturers. but tesla's business model is upside down anyway. their costs have always been higher than their revenue. they have to get more capital. then they burn through it on the distribution model with their own dealerships is extremely expensive and consumes capital. while the car is excellent but the business has always been lousy. now it's super lousy because the generic demand for electric vehicles is down. and here's why this will kill tesla. because whether there's consumer demand for electric vehicles out there or not, the major oems like gm, ford, toyota,
volkswagen they have to build electric cars, a certain number in order to satisfy the requirements in about half of the states. those have to be jammed into the marketplace otherwise they can no longer sell suvs and full size pickups and the stuff that they really make money on. so that is going to generically depress the prices of electric vehicles. look at the new gm chevy volt which after the federal incentives cost roughly $30,000. done take a rocket scientist to figure out that gm is not going to make money on that. the true cost of that car is probably thousands of dollars higher. but the majors will accept the losses on the electric vehicles as a necessary cost of doing business in order to sell the big gasoline stuff that people really want. tesla does not have that option and you're quite right, the model x appears to be unbuildable with those automatic
doors which everybody in the industry always said would not work and sure enough it looks like they won't work. they've now pushed the model s out to 2018, it's not going to cost in the 30s. some of the analysts are finally waking up to this. i've been saying this same thing for over a year. finally waking up and saying hey this doesn't smell right. i'll tell you what, if i owned tesla stock right now, i just couldn't wait to sell before the bottom falls out. >> you're an old car guy and you're in that business and we've seen what those guys do. they get addicted, to you know, cheap gas and the rest of the world has moved to these smaller -- these awful little -- they look like they are buzzing flies when they go by when i'm in europe but they moved to those things and here we are right back where we started with the big gas guzzling climate change causing suvs and we want
them again because -- we never learn and automakers will make them and give people what they want. tesla people were saying you're a dinosaur and pushing us back into what will come back to haunt us again. >> look at for instance gmac, yukon denali with 6,000 pound, eight passenger, 470 horsepower on the highway i get almost 23 miles per gallon at 80 miles per hour. these things don't guzzle the way they used to. climate change, you and i may be at opposite ends of the opinion spectrum on that -- >> i guess you don't watch the show. which end are you on? which end are your on? >> i'm well-known for being a climate change skeptic. >> you need watch this show a little bit more. i've had 50,000 signed petition here that don't -- what was it, it said something like face the facts, blah, blah. we're on the same side there.
believe me. >> we talked about it. >> we have. still doesn't mean that if you get -- if you can't wean yourself from the big cars it seems that the u.s. auto industry could find itself in the same place it was before, i guess that's worry. >> it would only occur if oil prices come back up and fuel goes to $5 or $6 a gallon. the big pickups today are twice as fuel-efficient as they were ten years ago and this time i think with the possible exception of fca, but i think the large automobile companies are well covered. gm has the 200 mile range volt coming out. gm has the spark. gm has the new bolt which is even more advanced. ford is working on electric vehicle. mercedes is coming out. volkswagen has announced 300
mile range electric vehicle. as has audi. as has porsche. the market is going to be full of 300 mile range electric vehicles that the customer doesn't want and they have to be subsidized in order to sell them. but if oil prices turn around and they go back up, at least this time every major manufacturer will be prepared because they've got the electric vehicles ready to go. >> do you have a twitter account? >> a hat? >> a twitter account. >> no, i do not. >> you have an e-mail. i need to give people at tesla your e-mail. and the climate change people. i want your e-mail so they can, if they want to say something they can send it to you. >> bob don't give him your earn mail. don't say it on air. >> i won't tell anyone. bob is 83. so whatever you're doing, is it a work out regiment.
you eat a lot of bacon. how do i look like you at 83. >> i'll be 84 in five days. i picked my parents well. >> i guess that's it. i would lose it in arm wrestling and a lot of things with you. anyway appreciate it. thank you. >> thanks very much. >> i'm going to get his e-mail from one of the bookers because i'm not going field this -- >> there will be no mail because teslarians -- they get so mad if you say anything. >> you saw that elon musk yanked a car from a guy who was criticizing it which i thought was pretty cool. we don't need you as a customer. >> they are coal cars. >> when we come back this morning mortgage rates remain near three year loss despite the fed's move to raise rates. in fact mortgage rates have been moving down.
we'll get a look at the mortgage industry and quicken loans new super bowl ad with the company's ceo right after the break. every year, the amount of data your enterprise uses goes up. smart devices are up. cloud is up. analytics is up. seems like everything is up except your budget. introducing comcast business enterprise solutions. with a different kind of network that delivers the bandwidth you need without the high cost. because you can't build the business of tomorrow on the network of yesterday.
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box". for the first time in their 30 year history online mortgage lender quicken loans expanding in to the personal loan business, kicking off a new advertising campaign in style with their very first super bowl ad. bill emerson is the ceo of quicken loans. good morning to you, bill. >> how are you and drew. good to see you. >> before we get into the personal loan thing. when you think about buying a super bowl ad which i think you're paying something on the area of $5 million how do you sit there and justify that or do you say this will pay dividends throughout the year? >> we thought about this entire campaign of rolling out rocket mortgages. it's a campaign that started at the beginning of the year and building to this point. we've been raising awareness around rocket mortgage. this is our opportunity to talk about what we were thinking. so we believe that with the expansion of the country that will be seeing this ad a great opportunity for us to get the information out there and let
people see what's possible through technology. >> rocket mortgage, we should say is a product you have to sign up and get a mortgage that quickly is something to behold. how quickly do you think other competitors will be able to try to copy this? >> it's a great question. i really don't know. when you think about the entire end to end online on demand experience that we're talking about, data integration, being able to import income, asset information, property information from trusted third-party sources that's not easy to build. i think what a lot of people will do at the front end they will have a front page you can apply. >> bill, what do you see going on in the mortgage market right now? seems like prices have gone up. how long does that have. there are circumstances especially impacted by energy where they are not going up and going down in a big way. >> i think you're seeing positive signs in the housing market. we've seen year-over-year increase in home sales.
year-over-year in prices. always been a regional thing. certain areas are hot. west coast is hot. we got the oil thing going on. it's good to see it's happening. rates are actually lower than when the fed raised short term interest rates given all the stuff going on in the global economy. incredible time to refinance. incredible time to buy a home. part of the other piece what we're doing with the ad is to get people to realize there's a lot of people sitting on the sidelines that can qualify for are a mortgage and scared of that process. we're trying to get them re-engaged. >> we've been using the "r" word this morning. >> the "r" word. >> the recession word. that we're headed in that direction. >> there are probably smarter people than i am what's going on with the economy that can answer that. you've seen decent economic data as it relates to what's happening domestically. jobs still, i think, have an opportunity to grow even though
full employment is 5%. how many people aren't getting back into the workforce. so, you know, i don't know. i don't know if we're there yet. certainly as you see prices increase some of the stuff that's happening i can under why people are concerned. >> you're also holding a sweepstakes as part of the super bowl ad. what is that? >> push button gets stuff.com. what we're doing raising awareness around the super bowl ad and we're working on getting products out there that are american made products. giving those things away, living room sets. there's $100,000 give away to the grand prize winner to partnership off their mortgage or put it towards the purchase of a home. it's an awareness campaign of what's happening with the super bowl ad and rocket mortgage process. as we think about that and the rocket loans piece just rolled out for personal loans we're focused on this tech area in detroit and making sure we're raising awareness around that as well. >> we talked a little bit this morning about what's happening in flint, michigan, there's a
story in the "wall street journal" how mortgage lenders are now not agreeing to lend money to people who want to buy homes there unless they can get some sort of certificate promising that there's not contaminated water which obviously they can't get. you understand why a mortgage lender would feel that way but you're also in the area and chow what kind of damage these people have already suffered. >> i think what you're seeing is reality of underwriting guidelines that exist today. and a lender can only provide a mortgage based off of that underwriting criteria. i do think fha is looking at this problem and coming up with a solution because they realize what's happening in flint and how folks have been impacted in flint. >> okay. bill we'll leave it there. we appreciate it. good luck with the big ad and i hope your servers don't get overload but i guess you hope it gets used up a lot. >> that would be the good thing. >> when we come back the bad boy
of biotech heading for capitol hill. martin shkreli set to appear before the congressional hearing on drug pricing later this morning. will he talk or take the fifth? we have the details after the break. check out the futures. they have given back all of the gains that they built up earlier this morning. we were looking at the dow up by over 60 points above fair value. now it's flat as is the s&p 500. nasdaq up by four points. "squawk box" will be right back.
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former drug executive martin shkreli will be appearing before congressional leaders on capitol hill this morning. he was in court yesterday as he faces criminal charges that he defrauded investors and that was unveiled in december. i don't know what it is -- it is a smirk? the face just -- it gets me. meg terrell joins us from washington waiting for his arrival and the whole idea that he's somehow poster child is okay but not representative of the drug industry. so i chafe when i hear that. that face. he loves the attention too even though he's a villain. >> reporter: yeah he definitely seems to like the attention although martin shkreli has been the focus and the star witness of the hearing today. if you look at the lineup of who is expected to testify he's one of two ceos although a former ceo at this point. there are representatives from the fda and from thefa
pharmaceutical benefits association. so if you look at this lineup you can tell congress is trying to look at why this happened, these price spikes in pharmaceuticals and they are focusing on companies like valeant. as for martin shkreli they subpoenaed him to come to washington. he had to clear it with the federal court where he's going to go trial and actually he appeared yesterday. threw see him with his new lawyer who told reporters yesterday that he plans to plead the fifth here in washington even though the hearing today is not about the things that he's charged with. obviously this is completely separate. his lawyer says he's also ordered martin shkreli to stop talking to the media. so we don't know exactly what we'll hear from him today but it sound like he'll plead the fifth. his hearing yesterday they waived the right to a speedy
trial. meg, thank you very much. when we come back it's bean volatile session for crude oil. crude has been king off the opec dollar. we'll talk to ihs. summer redstone steps down as executive chairman of cbs. now the attention tourists viacom's board meeting today. "squawk box" will be right back. redsto
. happening now, crude prices swinging wildly on dollar weakness and opec rumors. the next chapter developing story in the world of immediate area sumner redstone out as cbs chairman. big question now what happens to viacom. >> food for thought. sales fall short at buffalo wild wings and now the popular chain is dealing with reports of a
nornor norro -- norovirus outbreak. >> announcer: 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. i'm joe kernen along with becky quick and andrew ross sorkin. two key economic reports are now just about 30 minutes away, weekly jobless claims and fourth quarter productivity and labor costs, that data is due out at 8:30 eastern. look at these futures again, darn it. they are up about 60 points -- >> oil is back down. >> oh, no. there we are. in the red once again but you
had to be somewhat impressed with yesterday although it's really up one day, down the next. triple digits up -- >> up 8% yesterday. >> eight is a big move. yeah. >> let's tell you about some stories investors will be talking about this morning. bank of england keeping its key interest rapist at unchanged at half a percent. they cut their growth forecast. also new report today finding layoffs surged last month, highest level since july. john challenger told us earlier this morning that retail and energy sectors handed out the most pink slips. martin shkreli will be appearing on a congressional hearing on drug pricing but vowing not to answer lawmakers questions. >> famous. what is he, 30? 32? >> famous? >> really. >> infamous. >> but at that point --
>> 32. he was born on april fools' day. april 1st, 1983. >> okay. >> few stocks on the move this morning. ensure met life missed estimates by 13 cents. the company is hurt by a strong dollar and lower investment income. warehouse retailer costco reported flat same store sales for the month of january below consensus estimates for a rise of .6 of a percent. conocophillips reported larger than expected loss, further lowered its capital spending for 2016 for the guidance and slashed its quarterly dividend to 25 cents from 74 cents which shows you, that's tough because you're in conocophillips for the yield and then i wat goes down. >> price of crude, oil prices are going down.
right now wti is back below $32 a barrel. down 38 cents to 31.90. the slump has oil producing nations feel the pinch but will the pressure lead to production cuts? joining us right now is the vice chairman of ihs. dan, yesterday the marked moved pretty substantially the oil markets moved anthony idea that opec and non-opec nations would get-together and agree to cut production. does that sound like a likely scenario to you >> not in the naerear term. this week the venezuela oil minister has been barn stormg around the middle east. the gulf producers, particularly saudi arabia, a key reason was as i was on a panel with the chairman a couple of weeks ago and he said we don't want to make a cut to make room for
other others. iran is athlethreatening to bri more oil to the market. >> the u.s. has the capability to produce so much more. do you think that's the case? >> the u.s. has become what we call the inadvertent swing producer and if prices to were come back you'll see activity go up. right now we've just redone our numbers and expect u.s. production to go down 600 to 800,000 barrels a day over the first half of the year because of this shortage of capital, but they could swing back but right now i think the likelihood of any cut -- if all the countries got together and said yes we're going to cut, you would see the market respond very strongly to that. but the key thing is that there's no trust there to make that happen. >> we spoke with boone pickens and he pointed out the number of
regs in the united states have come down to under 600 and come down rapidly. he thinks that's why you'll eventually see prices pick up towards the end of this year, that this is kind of what we've seen in the past. these are cyclical markets and they do follow supply and demand very closely. is this time different. >> this time is somewhat different because you have this whole new game in town called shale oil which can respond in a way you've seen. 2015 proved very resilient because people became mother efficient. you'll see lower activity and the market as boone says and others see, we see it in the second half of the year you'll see the market rebalance as long as we don't have a much slower global economy hitting demand at the same time. >> when you say rebalance what sort of things are we talking.
>> prices in the $40 to $50 range. >> that's very similar to what boone was laying out. $45 by the end of the year. >> right in the middle. >> what happens beyond that. will we be look at prices of $80 oil or $100 in the next couple of years. >> not $100 oil unless something dramatically politically happens. the industry is rebalancing to a whole different level of costs. but you will see activity increase as prices go up. mad dog ii was going to cost $20 billion now $10 billion. costs have gone down too. when prices do come back you'll start to see a pick up of activity but the other factor that's out there, becky, is that these big long term projects that are being postponed or cancelled they will be much slower coming back. >> dan, is there a day of reckoning for all of these
nations that rely on oil income to some extent? you think of russia, saudi arabia, is this something where they can with stand this and if they get back to 45 or $50 oil feel better about things at the end of the year. >> they will feel better but the phrase you used day of reckoning is the day here for these countries. can we make a deal like in 1998 or 2008. you take russia, oil was about 50% of their budget. nigeria 70%. this won't be over quickly. we got to get some kind of adjustment. you can feel this rising desperation in these countries. >> the "financial times" talked about how russia had been relying on oil income for half of its budget as recently as 2014 is now looking at privatizing a lot of different companies. is this type of extreme move you're talking about? >> that certainly that and it's
just a question of how do you privatize in this economic environment and are the people you sell your shares, to are they the chinese or gulf countries? but i think that's a bell that shows you just that this day of reckoning is here as countries try to figure out their budget, try to pull themselves out what's a deep recession. >> dan, thanks for joining us today. >> thank you. >> we're talking about oil and we mentioned conocophillips at the top of the hour. you know what it was yielding before, almost eight? almost 8%. >> i didn't see that coming. >> and fuddewhackin -- >> i looked that up. >> it was from ""alice in wonderland"." >> it's the dance he does after the jabber walk. >> i still don't understand what
that meant. i asked mark grant he offer and explanation and i still don't get it. i think he does it when it goes up too. >> fudderwhackin. we'll see johnny depp do it who is a pretty scary whitey bulger. didn't you like his eyes. what were those, contact lenses. >> the whole thing. did you like it? >> i like violence in movies. >> i thought it was good but didn't love it. >> couple other major, whitey bulger. >> i like it because it was shot in boston and same -- >> plus you were up there. you asked john kerry about that, he was the prosecutor. >> jack that other movie with leo. the departed was about whitey bulger. i don't know who i liked johnny depp or jack. couple other major energy companies posting results today among them royal dutch reported a 60% drop in fourth quarter
profit which was what analysts were expecting. trading higher in europe. stat oil topping estimates norwegian company announced it will cut capital spending but keeping its dividend steady in this case. >> among today's top big corporate stories sumner redstone stepping down as head of cbs. we have a look at what this may mean for cbs and the other company that redstone currently controls viacom. good morning. >> reporter: that's right. cbs les moonves has been appointed to replace redstone. cbs has split from viacom up 150%. viacom is up 12% over the past five years. sumner redstone's daughter who serves as cbs's vice chair turned down the role of chairman because of her confidence in moonves saying quote he's clearly established himself as a
creative and effective leader that understands the challenges and opportunities that's shaping today's media landscape. now the focus turns to viacom whose board is meeting today presumably to discuss whether 92-year-old redstone should be replaced as its chair. there have been p.m. reports philip dauman is interested in becoming the chair. shut sh but shari redstone said it is my firm belief that whoever may succeed my father as chair should be a leader with an independent voice. dauman is a trustee. we'll hear more this afternoon when the viacom board meets. redstone's resignation from cbs may have been prompted by medical examination of him on friday as part of a lawsuit from his ex-girlfriend. the results of that exam from
friday were sealed but the timing, all of this is certainly interesting. andrew? >> so, you think there's -- obviously there's some kind of family squabble going on here but you think this was forced by what happened on friday, that's reason this is happening today, it would not have happened otherwise? >> reporter: i think the timing is interesting. i've talked to various people who say it's possible that redstone's health either took a turn for the worse or that there were some concern about the results of that medical exam on friday. we have no idea what the doctor found. the timing is very interesting. then i've talked to various people who say that shari redstone has been working with her father for months and months to allow him to have les moonves replace him in that chairman role. idea is cbs success well run. very few questions about his leadership. viacom is a different position and perhaps more of a battle between shari and her father.
>> the other question i had, there was a suggestion the trust ultimately wouldn't be able to make a decision about whether to sell one of these companies if, for example they decide to do, twoibt board. if that's the case why wouldn't you want to have somebody from the trust effectively working as the chairman so they could actually make that decision? >> i have to go back and check my notes on the trust versus the board. there's a seven person trust. the board is very much connected to the family. if you look at who is on the viacom board in particular, there's been a lot of criticism of viacom's board for not being independent enough. i think that the reason why she wants an independent person running the company is because she wants to make sure that it's making the right decisions, both in terms of things like perhaps compensation, but also in term of deciding what should happen next to run a strong company. so the trust is looking out just
for redstone's interests because it's a trust of his assets, but the board should be looking out for tints of all the shareholders in the company. >> fair enough. thank you, julia. programming note tune into the "halftime report" today at 12:00 noon we have an interview with mario gabelli. >> david faber is that the board is meeting this morning. les moonves is a talented executive. to still have "survivor" on and to put that on with a straight face after 16 years -- when is the last time you watched "survivor." >> i haven't. >> he has no shame. how about "big brother." that thing. watching people in a house, like
talking about eggs or -- >> see now you sound like you're almost criticizing the voters for whom they like. >> if i would have kept any of them, "temptation island." so stupid. they are all stupid. okay, les. >> coming up, stock picks on tap. >> we're talking about 6 to 10 million people. >> joe is insulting all their intelligence. >> come up with something new. 16 years. find out why platinum portfolio member is betting on coors and buffalo wild wings missing on quarterly points. is andy griffith still alive? we'll talk wings and things with ceo sally smith.
revenue was below estimates. the company lowered 2016 guidance. the chairman of ralph lauren called recent results disappointing but he's confident about future. stock down 11.5%. >> oil prices and china slow down stressing out the markets. where should you be putting your money in these volatile times? we have the head of global equity portfolio manager. >> reporter: good morning and hello from super bowl city. >> you are very lucky. before we get into your picks, your sense of just where we are in the markets? >> well technically we think that the market is due for a bounce but we don't see any bounces being sustainable until oil prices stabilize. until then we expect a lot of this volatility to continue and that's why we prefer staying in the relative safety of developed markets.
>> no recession? >> we're not seeing a recession right now. in the u.s. you have a fed that's becoming more dovish. you had good earnings in the most recent quarter. the dollar is weakening and support from jobs and housing. the u.s. should remain in relatively single digit positive growth rates. >> let's go through your picks. number one on the list make your case, owens corning. >> owens corning, we like cyclical companies. time for cyclicals to take over ownership. it has a great tail wind. they make insulation which right now houses in 2016 require 30% more insulation than ten years ago. they make roofs and as housing gets older people need new roofs. they think they can double earnings and return 2.5 billion to shareholders in the next few years. >> all the stocks we're going to go through you're 12 to 24 month outlook is what for all of these
stocks? >> in terms of? >> the return, you know. do you think they will go up 10%, 20%, 5%, double? how are your looking at this? >> we don't give out price targets. all should have strong returns because a lot of stocks we like are sicyclicals. we like molson coors. we think it's miller time. they guided 200 million in synergy. we think they can do better than that. they can push the miller brand into different countries that they are not in already. they should have an 8% free cash flow yield and ability to earn $6 billion in earnings. >> what about viago. >> people think of viago as an apple play.
with the iphone 7 viago should have more dollar content. really we like them because they have a strong management team, acquiring broadcomm. we like their filter technology. with you can get it for about ten times earnings because they've been hit so hard due to negativity surrounding apple. >> great to see you. i hope you're getting tickets to the game and get a chance to see it. thanks. appreciate it. >> when we come back a round up of today's top political stories including a slightly smaller gop presidential field. and an awkward answer from hillary clinton about her connection to wall street banks. we have that video right after the break. [bassist] two late nights in tucson.
blew an amp.but good nights. sure,music's why we do this,but it's still our business. we spend days booking gigs, then we've gotta put in the miles to get there. but it's not without its perks. like seeing our album sales go through the roof enough to finally start paying meg's little brother- i mean,our new tour manager-with real,actual money. we run on quickbooks.that's how we own it.
>> this is johnny depp. this is what happens in the oil markets. we're trying to figure out what it means. it's a great dance. andrew you need to watch this because it's not a whole lot different than the moon walk. >> it wasn't johnny depp who did it. they hired a professional dancer. in read a whole bunch of stuff on it. >> there's alice.
the cat. that's what you characterize all the markets as fudderwhackin. >> every time the market makes a big move in one direction or another. >> i'm glad it's not dwer man for some horrific sex act. fudderwhackin sounds like it could be. >> reese's peanuts. be careful. gop field little smaller this morning. republican rick santorum suspended his presidential campaign and endorsed marco rubio. called rubio a born leader with an optimistic message. senator rand paul also suspended his campaign saying he's going focus on his re-election as a senator from kentucky. so two down.
still a lot of people that are in. people wonder about. maybe jim gilmore to some extent. nice man. good governor. not getting anywhere, i don't think. carly fiorina. what will she do? hillary clinton and bernie sanders are sparring last night. who can move further left at a town hall. they took shots at each other who can be the progressive leader of the democratic party. sanders criticized clinton's fundraising on wall street and this prompted this exchange between clinton and hard hitting moderator anderson cooper. >> one of the things that senator sanders points to and your critics point to you made three speeches for goldman sachs. was that a mistake? was that a bad error in judgment. >> i make speeches to lots of groups. i told them what i thought. >> did you have to be made $675,000? >> i don't know. that's what they offered.
you know, every secretary of state that i know of has done that. >> i don't think that's it at all. i commend her. that was the most honest and normal exchange i've seen in a while. let's go to -- anyway. he won't give speeches someone offers him $250,000 he doesn't give a speech. only from natural wildlife federation or something, anderson? >> coming up, we got some breaking economic news. enable ge that can help your company grow steadily and quickly. great job. (mandarin) ♪ cut it out. >>see you tomorrow. ♪
welcome back to "squawk box". breaking news, initial jobless claims for the current week, 285,000. that superfrom a slightly revised 277,000. so we're up 8,000 in terms of claims continuing claims. 2.25 half million. that's down a bit from the 2.273 million. maybe the most important number of all, productivity. that's what it's all about. minus 3%. we're looking for down 2%. last look, downgraded from 2.2 to 2.1.
fourth quarter preliminary, minus 3% on productivity. you have to go back to the first quarter of 2014 to find a lower level of productivity. remember, productivity, in my opinion, it's kind of like death. it starts to get heavy over time and it's hard to dig out. lost productivity easiest way to understand japan. hard to get it back and it compounds against you and relegates you to much lower growth. labor cost is the other side of that. they moved higher to 4.5% from 1.9 our last look. that's kind of close to expectations. we're getting closer to 190, 1987 on tens. why are rates going up? are things getting better? not really. growth seems to have caught up with the market in a very concise time frame. back to you. >> rick, thank you. steve liesman is here.
let's get your take. >> i'll ask joe if you want notice lead with claims being down? >> what will help the fed maintain its credibility in the best fashion? >> well, the decline in productivity is really interesting. >> just go with that. >> it's a big decline in productivity. it's fun, joe. it's fun. that's all the viewers have fun. i have fun. you have fun. >> okay. >> andrew may not be having fun. >> today i'm having a lot of fun. >> minus 3% is a big problem. rick is 100% correct. this is the most important number. it determines how we live. we have had a real downturn beginning about 2011 in productivity. and this, by the way, the upside of this we've been hiring a lot of folks. hours worked is not doing too bad. bringing on more people.
the productivity of the economy has been very lackluster. the claims number the 285 still consistent with decent job growth but suggesting maybe it stepped down. we were at this, nobody predicted the 292 last month although i have to say the adp number signaled the strength at 260. but being at the 285 level on claims suggest maybe 200,000 when it comes to the job growth which is still pretty decent. we're adding people but not more efficient. maybe we're not more efficient because we're adding so many more people. you have one theory out there, you have very efficient older folks retiring, bringing in some younger folks. >> stupid young people. >> stupid young people they have to get up to speed how smart some of the older people are or
were. you're seeing spending declines. how does your computer work, becky. how often is it not fast enough? maybe that cycle of replacing computers and making workers more efficient is lower. there's a lot of theories out there. one thing everybody agrees on it's a problem for the economy we have to watch. >> fed, a lot of wide ranging topics about the economy. let's deal with john riding. he's chief economist. one thing we came to grips with today it almost seems we're in a new era where globalization is, maybe we should have known this but all of a sudden we admit that it's not the u.s., just the u.s. any more because looking at our jobs data and looking at, you know, even gdp we shouldn't be thinking about recession at 5%. because the rest of the year is so slow two year is under two.
that's not -- if we were sort of surrounded by water we wouldn't have 2 we would have 5 or 6. can we import a recession. can that happen to us? >> we can, i think. practically recession risks more arise from productivity numbers because the other side of the productivity number which has been bad for several years now is rising labor costs adjustive productivity. >> it's our own problem. >> we have a supply side problem. the supply side isn't flexible enough. look at how much the employment rate has fallen. potential gdp growth is probably only somewhere between one and maybe on the high side 1.5% which is half what we used to. we're seeing slower growth numbers. >> what does that nene our viewers we have a supply side problem? >> what it means demand is slowest demand has been but private sector demand, consumer
investment has been rising at 3%. economy has been growing more slowly than that because as much as we're putting information work we can't meet the demand so we're actually exporting that demand overseas and importing more goods from abroad. now we're helped out by the fact that oil prices have been solo and we still import quite a lot of oil. the problem is the economy can't grow at the pace at which demand is growing right now. so it's not a case of -- we would import a recession if demand overseas was weak but u.s. demand is still stronger than our potential. >> i sort of do not 100%. what john is pointing out, simple numbers if i'm not mistaken, consumer spending growing about 3%. overall economy is growing maybe 1.5% or 2%. that difference is what you're saying we're importing -- we don't need it here. >> that's correct.
look, here's the problem. if we county raise productivity growth at less than 1% which is the trend over the last five years has been about .6% and we have pressures to raise wages, alibi we have pressures to raise wages politically and in the market, the unemployment rate at 5%, we have a labor cost problem. that labor cost problem is for american businesses. now american business can respond in one of two ways. they can try raise prices which gives the fed a problem if they succeed or profits get squeezed which gives us a problem not only in the equity market down the road but also gives us a problem ultimately for the expansion because the expansion killer is not what happens abroad, not importing recession, it's -- >> how do we get productivity up. do we need to work longer? we leave at 9:00. >> that wouldn't do it. robert gordon who is the famous economist from northwestern who gave us a speech in san francisco, the american
economics association conference titled winter is coming. and the basic gist of this is we've had the best america is going to do, the american century which he says was from 1870 to 1970 is over and his point is that there's nothing inside this thing that equals the toilet, train, the plane, electricity and all of those things that brought us out of essentially the stone age 100 years ago to today and there's nothing -- >> if you look at medical advances. >> he put up a chart about how much more it costs now to increase life span by a year. it's getting to be prohibitively expensive. there were days we did a big part of it cheaply and now the next year, the incremental price is very, very expensive and he says -- but the idea you didn't go out to fill your bucket with
water any more and now you have running water, it's very hard for this to beat that. >> steve the productivity growth of 1960s and early 1970s wasn't about indoor plumbing. that was maybe 50, 100 years ago. it's about factory systems, mechanicsization, mass production. >> and jobs too. >> the honest truth it's a mystery and nobody knows with productivity growth has been slow and nobody knows whether it will pick up or stay slow. if it doesn't pick up, the fed has a problem. very tight labor market, economic growth that is potential lly sub 2%. what does fed do. with -- >> we'll have robert gordon on. >> thanks john. >> coming up when we return
congressional hearing. he and his attorney said he won't be answering any lawmakers questions today. he plans to be pleading the fifth amendment. >> needs to get back to the frat for a kegger this afternoon. a bunch of sorority girls are coming over. do some beer pong or something. >> at least he didn't show up in a hoodie. >> yeah. could have. >> company have. >> two retailers getting hit this morning. kohl's cutting its guidance. shares of ralph lauren down sharply. revenue missing the market. lower 2016 guidance. chairman ralph lauren calling results disappointing but he's confident about the company's future. >> buffalo wild wings missing the mark. blaming weaker on same store
sales. the shares dipped after the bell april we're low for most of the session on at that report of an illness that sickened people in kansas. sally smith joins us now. i know kansas well. i'm wondering i didn't see the timeline or by line. where in kansas was this? >> sure overland park, kansas. so kansas city. we did have a report from the health department on saturday and voluntarily closed our restaurant, brought in a third-party specialist for deep cleaning and worked with the health department and re-opened sunday. we have not been conclusively linked with this but we take food safety very seriously so we're very proactive in working with the health department. >> when you heard it, though, based on chipotle, it's tough to run a restaurant chain -- you never know the source, you don't
know if you are the source. it's kind of a nightmarish scenario. >> we're waiting to hear more from the health department. there's a heightened awareness of food borne illness. we have very robust practices. our managers are trained in food safety. we emphasize save haven food handling and we have a hotline if there's any instance and we do work very closely with the health departments across the country as well as we have a third-party company that does all of our food safety audits three to four times a year. there's a heightened awareness there and we're working very closely in kansas city. this virus has been in the community for the last couple of weeks. so, again, not sure that we'll be connected with it. we're waiting to hear more. >> you don't have the local -- the chipotle, i think it's more
of a pr or was more of a pr thing. your supply chain is not the same. you don't use the same local suppliers. >> it's not. no. for example, our produce comes as a national program come through our distribution system. we have great food traceability back to every ingredient. so it is a different supply chain. >> so, okay. go back now to the overall results some shifts in holidays and things like that, but without that has it been soft at all and could you -- with gas price where they are, it should be pretty good times unless the economy is weaker than we thought. >> well, a couple of things in the fourth quarter we were going up over some very high comp store sales from the prior year. our 1.9% same store sales did not meet our expectations for the fourth quarter. we did have a calendar shift for
the holidays. we think we have a couple of opportunity markets. i think, you know, the fact that a lot of -- there were increases in retail in online buying, less consumers in their cars out at stores buying from home. our same store sales were positive in january. we're going up very high comps from prior year. but we think we got some great programs for 2016 to really drive sales. >> sally, when you say a shift from the holidays, halloween and christmas come at the same time every year. you mean they were not on weekends or what do you mean a holiday shift? >> for example, with christmas being on a friday this year that's typically, you know, a great sales day for us. versus thursday the prior year. so it's the day-to-day match-up when we have a calendar shift. >> that was the bigger problem. >> yes.
>> well, big super bowl for you i would think anyway assuming everything is fine, sally. then you got my favorite march madness coupling. also you don't need to send us flowers or anything but there's going to be five -- there used to be eight actually eight now there's two additional thursday night games. you saw on nbc we have five of them and better broadcast really than cbs for thursday night. so that will pack some people in. >> we're very excited about that. of course we're excited for super bowl. we sold 11 million wings last year. we know we'll beat that number and nowhere is sports more alive than super bowl at buffalo wild wings. >> we got some here. i want the hottest you got. >> joe, you better do our blazin challenge. we hosted one in san francisco and a local firefighter, blazin challenge. be on our facebook page later
today. we shot it in 360 video. so our guests will being right in the middle of that blazin challenge. >> i'll do that. the hotter the better. appreciate it. good luck. >> thanks, joe. >> who you picking in the super bowl? you don't care. >> i have a sister who lives in denver, so that's probably who i'll cheer for this year. >> tough, though. going to be tough. >> good game. i'm hoping for overtime. >> you always do. i've seen those commercials. >> of course. >> you've seen that. they skew it. thank you. >> speaking of overtime rutgers basketball went into third overtime last night. >> i saw that. >> collapsed at the end. but it was third overtime. >> you know who the first division i team to make it to 20 wins, very first one. >> who? >> xavier. >> i should have guessed.
>> it wasn't easy. i watched the game last night. st. johns. they looked much better. lost 13 straight. looked good last night. >> when we return changes at delta airlines. a new leader set to take theair. a new leader set to take control. jim cramer joins us with the stocks he's watching from san francisco. i've been called a control freak... i like to think of myself as more of a control... enthusiast.
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welcome back to "squawk box." making headlines, huh? >> yesterday. >> yes, yes, yes. delta airlines announcing its ceo richard anderson is retiring. the current president will take the job. he has been the current president -- >> a really big management, he's been his right hand man and a partner running there richard anderson is only 61. he is retiring on his birthday in may. >> he's going to stay as chairman. >> yesterday we mentioned that cbs picked up the reboot of "mcguyver" is he going back?
no confirmation. >> i told you mcguyver can do many things at one time. >> who would know about it? >> les moonves. >> you are obsessed today. >> the way it all comes back. now to cramer in san francisco. are you staying there for sunday? is there a method to your madness? >> no. i'm going to go up and see my daughter who lives in oregon as soon as our show is over friday. this is a great opportunity to see her because she lives so far away. >> i just thought about it. i can tell you something. if the eagles made it to the super bowl, you would probably be going this sunday. >> oh, yeah. my daughter would be coming down as opposed to my going up. >> i think you're safe there for a little while.
what's going on at 8:00. what are you seeing? >> i think that my old friend peter has a story, the front right hand column in "the new york times" about trillions of dollars in loans. you go one year back this day and look at the euro versus the dollar, you're going to find things are flat. how many companies told you europe is bad, the dollar. the story goes away right now. even though we've got a currency everyone thinks is super strong versus the euro, this week last year, 110, so let's not get too down. >> i try to figure -- looking historically, oil trades somewhere around $32 long term. the inherent value in what a barrel of oil produces seems to me, unless something crazy starts going on in the world, seems to me $30 is worth that much, the inherent value. maybe that's wrong.
maybe it is a commodity. don't you think 30 is something we can hang our hat on? >> it did trade down to $25, $26 where i think people will come in. if you look at conoco's numbers, you would be surprised. they are still producing a huge amount. if you go over occidental, they lowered the cost -- they had a good quarter. conoco was a dividend slash. the productions, it is good. and oxy has $11 per barrel production. i agree oil shouldn't be that much lower. airlines are using oil. phil lebeau has been reporting the gas guzzlers are being bought. there is a bad psyche to this market. every time we get something going, oil goes down and kills it. >> we were so willing -- $200 a barrel. it's probably worth that. we were so quick to believe the super cycle crap at $120 and now
quick to believe it can be $12. we are like sheep sometimes. >> you've got a beat on this market. i listen to you every morning. i've been spot on in all your comments from 6:00 a.m. today. it's fantastic. >> you didn't teach me everything you know, but you taught me everything i know. thank you. >> spot on. people should listen. today's big stock movers when we come back.
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from the courthouse to capitol hill. martin shkreli faces the house oversight committee on a hearing of drug pricing. that begins in a few moments. we'll bring that to you live. good thursday morning, welcome to "squawk on the street." i'm carl quintanilla with david faber and jim cramer in san francisco. weak productivity, elevated planes, eu cutting growth estimates, negative news from conoco, kohl's, ralph lauren and more and oil down a touch. pharma