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tv   Squawk Box  CNBC  January 31, 2014 6:00am-9:01am EST

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good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with andrew ross sorkin. we're both here at cnbc headquarters. joe, however, is reporting live from the nfl house in "new york times" square today. he's going to join us with today's game plan in just a moment. but first, today's top business stories. we start with the markets this morning. look out. u.s. equity futures at this hour are indicated sharply lower. you're looking at the dow futures down by 137 points below fair value. s&p futures are off by about 16 points. and the nasdaq is down by 30 points below fair value. this is all coming after some volatility this week. yesterday, you saw the markets up pretty sharply. the dow was up 109 points. the s&p saw its best day since december 18th. but this is par for the course these days. a little bit up, a little bit back. we'll see where things take us through the course of the day.
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again, those dow futures down by 137 points below fair value. the month is wrapping up today and so far, the stock market is down about 3% this week. we know that old adage, as january goes, so goes the year. that statistic has been right 62% of the year. we'll see if that holds true for this time or if this happens to be you're looking at a correction at the beginning of the year. we saw so many gains as we ended last year. take a look at the treasuries. the ten-year note is at this point yielding 2.674%. so below 2.7%. so we'll have to watch this closely. in europe today, stocks are lower in the early trading. among some of the reasons listed, eurozone inflation data missed expectations. you can see the biggest decliner there is the dax in germany, down by about 1.3%. as for asia overnight, it was a quiet session. trading volumes were very thin because of the chinese new year holiday. that had shanghai, hong kong,
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south korean markets closed. the nikkei finished down for january, more than 8%. we're thinking 4% declines are bad news. look what happened to japan. that makes it the continent's worst performance. >> we have a couple headlines for you, three big ones. google, earnings missing the mark in a very big way, but quarterly revenues beat the street. ad growth outstripping a steel decline in prices for its online ads. gene munser is going to join us with his take on google in just a moment. amazon shares were hit hard in extended trading quarter. results falling short of expectationes and the company offered a weak revenue outlook. during a conference call, amazon said it may increase the cost of its popular prime subscription program by $20 to $40 due to higher fuel and other shipping costs that will hit folks like
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myself. people thought they were going to do really well over the holidays, at least on a relative basis. we're going to do more on that story in the next half hour with an analyst who covers amazon. then there's microsoft, the company is now close to naming satya nadella as ceo. co-founder bill gates might even step aside as chairman. i still can't get over that. >> that was what everybody said, nobody wanted to be a ceo when you have a chairman with such big ideas and so much power. >> he's still going to be on the board, but i would assume that's an interesting dynamic for that to happen. nadal la. this news started to leak out yesterday. and you're seeing its stock up slightly.
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steve balmer said if i'm going the leave, the reason i'm going to leave is we need to bring in a new voice. >> new blood. anywhere you get there, new blood, potentially. potentially. >> right now, let's head down to new york and check in with joe. joe, good morning. are you watching the markets this morning, too? >> it's january 31st. we are down 4% at the beginning of yesterday's session and we got back 20 s&p points, which got us back, i think, 1794 or something. >> but we're going to give it all back this morning. >> and be back down 4% on the opening, it looks like. i was watching, more concern at the top of the show. andrew, were you in my spot? were you standing on my mark? >> i was. yes, i was. that is true. >> hard shoes to fill, no less, too. >> don't ever do that again. >> you wait until you see who we
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put in your chair today. >> i'm in andrew's spot today down in new york. >> i know. >> middle west high. i also heard you say, andrew, i couldn't help it. tech titans. i heard from, from my spot. anyway, i -- >> just as a tease, are you going to do the toboggan in the middle of times square? >> i thought about that. everybody has done it. i'm not following all these other schmos. >> oh, come on, have a little fun. >> it's a morning show. >> i've seen all the other -- >> i've seen all the other morning show guys do it. >> that's what i mean. i'm going to follow them. no, what i am going to do is show you where i'm standing. i'm on the ninth floor. i came up to the eighth but i'm on this balcony at this prestigious place called the nfl house where you have to be a -- i don't know where i am, actually. you have to be a current nfl player or a former nfl player. it's a great place to hang out.
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there's pool tables down here. those are ottomans that are like xlviii. i don't even know how to pronounce it. do you know how to pronounce it, mac? if you mess this up, i'm going to throw you over this balcony, which i've heard recently. anyway, that is for super boel xlviii. sometimes times square has been renamed today super bowl boulevard and 14 blocks of it will be shut down starting at noon for all the different outdoor activities which won't include me on that toboggan run. i might try a field goal. you can try to kick a field goal through the uprights. then coming up later, we have a lot of the big mucky mucks of the nfl. a bunch of owners, the new york giants owner john tisch, eddie johnson, the ceo of the new york
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new jersey super bowl committee, kelly. also bob kraft will be joining us. i don't think woody and kraft will be on the set together. that's a friendly rivalry. the patriots didn't quite make it, but they had a great season. you'd have to say that the jets had a much better season when it was all said and done as they expected at the beginning. >> true. >> but we will be -- obviously, the super bowl is a huge cultural event. i think $550 million for this area. so it's something that we want to cover, but we are -- i daresay -- i'm not going to say it. many eyes are going to be on the markets today, which -- what happened? up, down? >> this is the new normal. it's volatility. i was looking everywhere to try to find a reason for it. there is not an instantaneous clear answer. turkey was there yesterday. we change our mind on turkey about 13 times a day. >> unless the currencies get
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worse. well, i'm here. you guys focus on the serious stuff. i'm going to do football today. >> xlvi-is that 48? >> yeah, that's 48. yeah. i always except trying to pronounce it and someone told me it's roman numerals. it's not like english. >> i've got it. it's tough to read in the prompter, though. >> i'm going be really disappointed if you don't do the toboggan run. >> i'm not doing the -- i read like eight -- i'm not following steve ducey on the -- i'm not. i'm just not going to. >> you can do it your own way. go face forward. >> maybe do it at the en, at the end of the show. we will see joe slide down the thing. >> no. >> you can wear a football helmet and go face forward. >> i'll think about that. i might shoot some pool. that's about as athletic as i'm going to -- >> it's not nearly as dangerous, but okay.
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>> it's not dangerous. i saw normal people going down. >> you're just afraid. >> i resemble that. >> it's cold. >> it is cold. i'm in a vip place. i'm very comfortable here. >> i hear that. joe, we'll check back with you. >> are you going to keep the blazer on the whole show? >> it's no blazer. yeah, i might. i'm going to see. the markets are down, this is serious. maybe i'll keep it on. >> you like an nfl announcer there. lieu good. >> thank you. chris collinsworth. >> there you go. he's the man. >> you know, i saw marino yesterday. >> oh, did you really? >> i was down here and talking to contino and others. i'm telling you, marino is a monster. i asked him to come on. he's doing cbs. i know him from a lot of things. but he's doing cbs this morning. he's been on "squawk box." he hits it a ton. anyway, go ahead, take it away. >> we'll check in with you in a
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little bit. in the meantime, let's get the global markets report. let's take a quick look. dow futures are down by about 142 points below fair value. again, there doesn't seem to be a clear reason for this overnight, other than anxiety that has crept into the markets and brought volatility with it. multiple times through the day, you're going to see these swaps back and forth. but there is not a great sign as we head into friday, which is the last trading day of the month. january has been hit pretty hard. the dow looks like it's been down about -- markets are down about 3%. with these losses this morning, you're looking at declines of about 4% for the month of january. oil prices, you'll see wti is down by about 42 cents. 97.81. the ten-year note is still yielding below 2.7%. and the dollar this morning, obviously, a very volatile place, the currency markets. the dollar is up against the euro at 1.3533. dollar is down against the yen at 102.38.
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probably we should take a look at the turkish lira. you can see how those others are trading. also, let's take a look at gold right now. here we go. emerging currencies, you can see the turkish lira down a little bit this morning. argentine peso, up barely. so not massive moves. in the ukraine, the currency there is up by about 2.5%. gold prices this morning, indicated up by 0.2%. $1,245 appear ounce. karen tso is standing by in london. karen, the action there this morning? >> thank you very much for that, becky. as you can see, a lot of red across the screens here. investors still concerned despite the moves by many of those emerging market currencies to try and calm some of the sentiment. it's made not much difference here today. investors still taking money off the table. the data points have been fairley decent. we've had eurozone december jobless number at 12% in december steady from november.
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i've had the best reading on uk consumer confidence in about six years. it's made no difference to the markets. the stoxx 600 still down 0.8%. one in positive territory is household goods. this is because of the luxury sector. we've had moves out from lvmh. it shows some stabilization. it is right at the top of the stoxx 600 today. the sales are up 3.7%. if i could just throw one more set of numbers at you, if you take out all the volatility on acquisitions and exchange rate fluctuations, sales are up actually 8%. so showing that there is some stabilization in the luxury sector and not so for investor to do, a little bit of a u-turn, consumption out of developed markets. even though consumers forced less cognac, it was the americans by hennessey that boosted the numbers. it's pushed up numbers in rival
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companies, the likes of ma, karen. let met send it back over to you. >> thank you for that report. we're going to talk about google for a moment now. their fourth quarter revenue beating the street's expectations, but earnings falling short of analyst predictions. gene covers that company for piper jaffrey. good morning to you. >> good morning. >> you seem not to be worried or upset about this at all. >> no. part of it is a shift in the theme, i think. and this is really -- the company talked about it last night. this is not about any metric. the metrics were generally in the right place. i think the theme that they're talking about is living with the user. and what that means is they're taking themselves out of the mobile versus desktop argument. they're focusing on being everywhere that you're at. cross platform, whether it's ios or android devices, tv, glass, your thermostat, your car eventually. and so the reason why we're
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optimistic today is more about taking a step back and getting out of the mobile versus desktop perspective and looking at google as a utility to your device and the questions over the next few years. >> i saw that in your note. what struck me as curious was the idea that somehow this was a new revelation. google is talking about itself differently, even though i think we all knew directionally this is what they were trying to do the whole time. >> we knew directionally, but from investors perspective, and the company had talked about that. they emphasized they package it different with this living with the user concept. but investors have been focused on these enhanced campaigns. and basically, that's this platform that's going to make it easier for advertisers to monetize mobile. and so i think it's -- it is an important shift, i think, for investors just to get off the enhanced campaign focus in more on just a broader theme in the
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broader ecosystem of what they're trying to accomplish. >> how much should we care about cpcs and click throughs? >> you've got to look at them in the context of those together. they're important, but together. the simple take is cpcs were a disappointment. >> i should have explained that or i should have explained it, actually. >> that's cost per click. it's what google gets paid for each click. those are down 11% year over year. they've been down for nine sequential quarters. but if you look at the paid growth, that's been in the 30% range for those same quarters. previous to those nine quarter webs pay clicks have been 18%. in other words, people are using kwoolg google more. the engagement has dramatically increased. they're getting paid less. but engagement is critical. >> gene, we have to run. just one last question on the sale of the motorola business. does that makes sense to you? are you disappointed that they bought it to begin with? how do you look at it? >> we look at it, investors
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really didn't care about it before. they really are not caring about it now. at the end of the day, google does a lot of crazy stuff and i credit them for getting out of it. it's probably the best thing. >> but you put it in the mistake category. >> it's more a mistake, yeah. it's a lot of work for nothing. >> thank you for joining thus morning. appreciate it very much. >> thank you. >> we're going to get back to joe in my hometown. joseph. >> i'm trying a lot of different way toes sit here. you know, these chairs. anyway, is this too casual, do you think? >> no. it's giving you a straight back, which is good. >> which is rare. it might try this for a while. anyway, football, you watch those shows, they're very casual. it's not about the messenger, it's about the message. >> yeah, but it's a practiced casualness. >> yeah. maybe. anyway, coming up, we're going to talk about nfl and its social game plan. we've had this guy on before to talk about who is in charge of
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all the league's sweettweets. digital media and everything in between. but something tells us it's all about the weather, but the worst case scenario. i see things that start with a four, alex wallace. it's like 40 degrees. it doesn't look too bad for sunday, does it? >> not at all. currently, it could have been a whole lot worse. we're lucking out this year with the super bowl in and around the city. here is how the forecast is going to shape up with the south, which has been dealing with its issues of winter. the pattern has pretty much set up where the cold air has been in place and that led to the issues with the wintry stuff around atlanta, birmingham. now we're going to watch the jet stream move forward. warmer conditions into the south. that's going to be good for super bowl fans. all right. we have some snow out there, though. moves from the rockies into the middle of the country inspect is going to be our next weathermaker as we head through the weekend. snow throughout the plains in the midwest. we'll have to see that
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increasing tonight. including chicago, eventually getting over towards detroit. tonight into our saturday, we'll be talking about decent totals. chicago could see 5 to 8 inches of snow. more "squawk box" back in a bit. >> announcer: before you hit the road, here is your traveler's check. heads up, business travelers. u.s. hotel rates are on the rise. the average price for one night reached a record $110 last year, according to str. so how much revenue did that mean for hotels? find out, next. (vo) you are a b. seeker of the sublime. you can separate runway ridiculousness... from fashion that flies off the shelves. and from national. because only national lets you choose any car in the aisle... and go. and only national is ranked highest in car rental customer satisfaction by j.d. power. (natalie) ooooh, i like your style. (vo) so do we, business pro. so do we. go national. go like a pro.
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back now with today's travelers check. how much did u.s. hotels make on room rates alone last year? $112 billion. this is "squawk box" on cnbc. once again, joe kernen. >> wow. >> thank you for that voiceover. that was nice. the nfl expanding its digital offerings with a new personalized video service. it's called nfl now. brian rollout, the cfo of nfl media. >> good to see you. >> good to see you again, too. >> we've got to talk about the new personalized service. and i know it was off camera, but i said so i can follow the bengals more closely and you
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kind of looked at me and said, well, if you want to. you didn't -- that wasn't for everyone to hear. but i know what you're saying, believe me, after another disappointing postseason. but how does it work? and then we'll talk about some other things. but what is it? >> what it is, we're really excited about it. it's called nfl now. and essentially it is a video service. so video clips, streaming video that you can get on any device. whether it's your smartphone, your xbox, whether it's your tablet. you go on, put in your personal preferences. in your case, you light the bengals, but you may also like the jets, you may like the cowboys. and you get personalized content served up to you from nfl films. we're going to do highlights as well as club content. as you consume more, you tell the app what you like and it's going to serve you up more of those things. we see what you start and what you stop. and depending on your behavior, we're going to serve you a customized content just for you.
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>> in addition to what we talked about the last time, are clips being tweeted out from different games that are -- that people need to see? is that in process? can i do that somehow? >> yeah. look, twitter is a big platform for us where we will push out to our millions of users on twitter highlights. whether the game is happening or it's happened before. >> are those customized or not? >> they're customized depending on what twitter feed you subscribe to. you may subskriep to nfl network, nfl films, we have different twitter feeds. but the difference between that twitter and what we're doing on nfl now is nfl now is customized to you. so you can't tell twitter you like the bengals.punish may get a bengal tweet and you may follow the bengals, but you may tell nfl now that you like the bengals and you're going to get those highlights and you're going to get the story of the '83 bengals from nfl films. it's more highly customized. >> any business that ignores digital or ignores the future,
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they do it at their own peril. but then again, i think businesses are suited for what they do right now. and i think the nfl and the video experience, this all seems like a way to augment the main part of the experience, whichist still going to games and watching games on a big screen tv. instead of just augmenting that, will it ever be bringing in material for anyone? >> well, i think digital brings in revenue, without a doubt. and it's some of the fastest growing revenue we have. >> fastest growing, but still minuscule, isn't it? >> relatively speaking. we make lots of money in traditional media, television and otherwise. look, we still think the best way to see a game is go to the stadium. we think the second biggest venue is big screen television. we think this content
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supplements and grows what you see, but what we really see is fans don't -- they consume more in addition to the game. they're there monday through saturday and in the off season. and digital really helps that happen. it empowers all of that. >> can you tell from -- i know i'm not an expert. things trend on twitter or whatever. >> sure. >> outside game, controversial, maybe they don't -- you know, maybe tickets aren't at records or read that some aren't, but can you tell whether this is going to be a huge success? i still think it will be because of the teams involved, even though this is nos not an east coast team. can you tell -- is there market research in there? >> we thought with the new york super bowl or about anything we can find on social media, it's a great barometer for what fans are talking about. it really is. what i think it's doing is it's replacing the living room couch when you watch a game with the conversation you have at the
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dinner party. and they're talking about the favorite teams, they're talking about the super bowl, they're talking about a lot of things. and twitter is not only a good business opportunity or social and general in digital, but it's a wonderful way to figure out what your fans are thinking and what they want. this idea for nfl now and video, i'd like to think we were smart enough to say people want video, so we're going to build this out. it was obvious we can see what they were doing on all of on these platforms. and then you serve them what they want. >> broadway joe, just broadway itself, it's here this year. >> yeah. >> is this having a -- you know, and times square i think makes it worthwhile to try it, right? try it once. it's not going to snow. it's going to be 40 degrees. people at home nostalgically remember these games.
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coming up in the next half hour, we'll have owners galore here. i could go to a lot of different games, couldn't i? anyway, john tisch, jets owner woody johnson and the ceo on of the new york/new jersey host committee, we'll talk more of these same issues with al kelly. and then we'll have new england patriots owner bob kraft. back to becky in the studio now. >> i saw that woody johnson is already there. some pictures tweeted out from there. so you have the guys lining up ready to go. >> woody now has his hat off, but he came in wearing -- i couldn't tell which football team was on his hat from the distance. >> really? was it the new england patriots? >> no, i don't think so. no, it was a -- >> the jets. a green one, right? >> yeah. if it's green, that's a subliminal seahawks endorsement.
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>> maybe it's money, a green money hat. >> are we happy? i'm happy it's here. what do you think, andrew? are you happy it's in your town? >> i don't know, actually. i want to see what happens to ticket produces on the weekend. >> i think they go up. >> i think a lot of people will come out at last minute. >> and it's about the 50 million people at home, anyway. >> right. >> joe, we'll talk to you in just a minute. in the meantime, we'll be auk talking about the futures. they are down by about 141 on the dow, s&p off by more than 16 points and the nasdaq down by about 30 points below fair value. no clear reasons for this, other than the continued volatility that we've seen for over a week at this point. we're going to talk more about that in just a minute. plus, taking aim at amazon. shares of the retail giant slumping after missing expectations. should you have fais faith in je
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i love this song. good morning and welcome to "squawk box" right here on cnbc. i'm andrew ross sorkin along with becky quick at cnbc world headquarters. the reason we're playing this, joe is reporting live from the nfl house in new york's times square today. he's going to join us with the men behind this weekend's big game in just a couple of minutes. new york giants co-owner john tisch. jets owner woody johnson and the ceo of the new york new jersey super bowl host company alfred kelly. but first, we have to get you caught up on this morning's headlines. we are watching the markets closely as we pri prepare to
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close the books on january. take a look. we had arrows here. eats getting worse. the dow would open off 153 points lower, nasdaq would open about 32 points lower and the s&p 500 would open about 18 points lower. mattel reporting results, that toymaker, very popular in the sorkin household, they reported fourth quarter profit of $1.07 per share. 13 short of estimates. mattel did announce a 5.6% dividend increase. among the stocks to watch today, shares of amazon, that stock down on weaker than expected results. joining us right now is victor anthony. he is the internet media analyst. victor, i saw one guy put it this way, amazon has gotten a lot of hall passes in terms of profitability. now investors want to see more action. is that how you see things happening this quarter?
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>> well, actually, margins expanded. i think the shortfall was with revenues. there was a lot of hype throughout the quarter. hype around kindle sales, a hype around amazon prime memberships. and they missed the consumptions by about 2%. but so is strong growth, nevertheless. >> but that sounds like you don't agree with the stock reaction to this. stock was down about $20. do you think that's that's unjust? >> indicating down 5%, i think there was a lot to like in the print. i think if you look at the north american revenues, those grew 26% year over year. that's roughly 10 points above e-commerce. growth margins expanded for the ninth consecutive quarter. north american media sales, those are strong, as well. a lot to like in the print. >> but why is the stock off? >> like i was saying, i think investors expected much stronger revenue quarter.
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and i think amazon right now trades really on a revenue multiple. >> do you think that amazon still gets leeway from investors, just in terms of always looking to build market share, sometimes at the expense of -- i know you said margins might sxraexpand, but sometimest they expect in terms of marketability? >> yeah. they see the vision and, you know, i think jeff bezos has no choice but to invest against the master shut of retail over the internet. >> although the company did say they could be looking at expanding or raising the price for prime to an additional $40 to get that. maybe that's a sign that amazon itself is ready to start reaping in some of the profits. >> could be. fuel expenses as risen, transportation costs has risen a lot. amazon prime members have risen
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a lot. i think with the raise, if they do it, that would bring in another $600 million in revenue. >> but do you think they're trying to make a profit on those people all of a sudden? i always thought that they had to lose money on me. >> i'm a prime member and i just went back for taxes to figure out how much i had bought online because i have to pay the state sales tax on it. i only spent $350 on amazon last year. i couldn't believe it. i expected that i had spent thousand .thousand and thousand of dollars. >> i don't want to tell you about my bill. thousands and thousands and thousands of dollars. but i'm assuming that the $48 is not going to make some of these people profitable. >> it's $40 extra, another $8 to $10 a month in totality. it doesn't break the bank i don't think for most consumers. >> do you think a time of prime people will back out? >> we'll have to wait and see.
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but like i said, you know, it could -- >> what did they say? >> they say they haven't, which is surprising. but i guess they will do it before. they have tops of data, they have shifted price owes prime in the past. they have a general idea how consumers may react on the data they've seen in the past. but like i said, you get video for free. that's costly, as well. i think that's probably part of the decision, as well. in totality -- >> how about the tv piece? so i have it in on my tv and it's available to me, and yet i don't -- i don't think i ever used it. >> i think they do a poor job at marketing the service. if you look at it, there's a lot of really good content on amazon prime video. they do a poor job. i think they need to market it more. >> your price target? >> $450. >> thank you very much for coming in today. >> thank you very much. coming up, this week's
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pre-super bowl activity, they're all taking place in new york. but coming up, we're going to head to the stadium in our o'clock own backyard, new jersey. as we head to break, take a look at the futures as we mentioned earlier. red arrows across the board. the dow looking like it's off about 175 points. we're coming right back in just a moment. liking your flat rate shipping. fedex one rate. really makes my life easier. maybe a promotion is in order. good news. i got a new title. and a raise? management couldn't make that happen. [ male announcer ] introducing fedex one rate. simple, flat rate shipping with the reliability of fedex.
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welcome back, everybody. our top story this morning is the markets. if you haven't seen this already, look out. the u.s. equity futures are under quite a bit of pressure. at this point, dow futures are down by 175 points below fair
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value. nasdaq is off by 37 and the s&p foourch future is off by more than 20 points below fair value. a lot of big gains yesterday. you're giving more than that back today. but it has been a lot of up and down sessions and even during the trading sessions over the last week or so, you've seen a lot of up-and-down volatility. if you take a look at the ten-year note, this has been what's driving a lot of it. the bond market under pressure. 2.656% on the ten-year note. now back over to joe with what he has been doing today in new york. >> yeah. actually, the bond markets rallying, right? >> yields down, the price up, right? >> that's horrific, you guys. what's happening. i'll be back monday. 180 points now? and that's giving -- the s&p is giving back everything it gained yesterday and morning. so we'll be do you know down more than 4% after this. too much to hope for this closing up for january, isn't it? that would be the turn around
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of -- that will be like -- >> an 8% poi00 point rally toda what you need. >> that would be like that denver game. >> anyway, coming up, look who i'm here with. we're putting this big game together. we've got big mucky mucks in the city. giants co-owner john tisch, woody johnson and allen kelly huddling together right now to talk about all the last-minute preparations for sunday. we'll have more "squawk box" and i'll also share with you whose signatures are on this baby right now. not many touchdown passes, but billions of dollars. >> well put. mine was earned in korea in 1953. afghanistan, in 2009. orbiting the moon in 1971. [ male announcer ] once it's earned, usaa auto insurance is often handed down from generation to generation.
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they're crazy. it looks like at least the weather is going to be fine. and they warm up, in fact, for the big game on sunday. let's get to dominic chu, standing by in the meadowlands outside of metlife stadium. i had no idea that you had a meteorology background, dominic. do tell. >> my meteorology background is only going to go so far as to
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say it could be near 50 degrees at some point on super bowl sunday. so the weather is not going to be as big of an issue as people thought. also concerns for people, there is a lot of security all around us right now. there are upwards of b around 4,000 law enforcement officials that will be part of this joint effort to secure the stadium. we had to get through numbers and numbers of new jersey state troopers just to get here. but when it comes down to it, this is a huge event, not just in items of the overall viewership, but the security environment, as well. so there's a huge amount of effort being put into this. the nfl has contributed about $10 million to the effort of the finance or protection of the super bowl and, of course, the economic back is huge, as well. when you talk about the super bowl, there are helicopters flying above the stadium. joe, there will away 10-mile no fly zone being enforced by fighter jets in the air as well as black hawk helicopters. so a lot of security going into this venue.
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>> ten miles, that would include where i live, i think. that's going to be interested in and of itself. thank you, dominic. our next guests are responsible for bringing the big game to the new york area. joining us, woody johnson, go chairman of the super bowl host committee, owner of the new york jets and owner and ceo of the johnson company. not the johnson & johnson company. anyway, john tisch, co-owner of the super bowl giants and al kelly, ceo of the new york new jersey super bowl host company. so much of this has been written -- they're all based here. did you get a warm thank you for bringing the game here for all these guys grouching about whether or not it's going to work out? >> it's typical the ladd last
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couple of weeks leading up to the super bowl is that the greenhouse grouses are going to start. it's an estimate. it's either higher or lower than that. we know it's going to be a big number. >> and merchants. today is the area benefits fro this? >> i don't think we know yet. certainly you're getting critics, it sells more newspapers to say something negative. you pick up the times, the journal today, talk to people on the street, the sense that we get, people are thrilled that the super bowl is in new york and new jersey. there is a buzz in the air. you walked around this area last night, and it was electric. this is the heart of times square. this is the heart of united states -- the crossroads of the world, joe. it's all happening right here. >> al, we have the giants, we have the jets. baltimore is not very far away and new england isn't very far away. correct me if i'm wrong. there's been 47 super bowls. is this the first one here?
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>> first one here. >> that's 2%. we can't try this? it's not worth a shot. >> the game has been played for five decades. it's about time it's in this marketplace with about 1/16 of the league here. it's about time. we'll show people this is a great places to do it. maybe it ought to happen here once a decade. >> i've been to metlife stadium. it's great in and out. that makes it difficult, though, because of the security. but isn't the orange bowl -- don't the same things happen there on any given day? >> i think metlife stadium is actually pretty easy to secure because it's so open. >> you can't park there. normally you can drive up and get a pretty decent parking space. it is more difficult to get to the game. >> it's a level one security. that's the highest security rating of any event after 9/11. >> who wouldn't want that that's going to be sitting in the stadium you want that. we've lost almost 20,000 spaces. only 11,000, 13,000 spaces left.
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don't drive. take mass transit, a bus. >> the state of the nfl as owners, obviously it's a pinnacle every year. not a pinnacle, but obviously it's more any given year than the previous year. there's not too many businesses you can say that about, are there? >> the nfl continues to grow its product. always looking for new ways to distribute the game itself, the images of the game. commissioner goodell and his team do a very good job. the challenge today is how do you compete with what goes on in the stadium versus sitting at home with a very large tv where you're not inconvenienced by traffic. that's what they work on, how to ensure when you're sitting there for three hours, you'll experience an event that you'll talk about for weeks with your kids. when you say i was at a jets game or a giants game, it was a great sunday. >> it has nothing to do with the
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weather, nothing to do with the, paing situation. they'll all be sold. there won't be any empty seats in this stadium. >> no. >> what it depends on, you can't control which teams -- i think you got lucky. russell versus peyton. thank god sherman lost it onn erin andrews. he's like miley cyrus. he grew up in compton and went to stanford. >> 4.2 average. the best offense against the best defense. what better matchup could you ask for? >> let me get to something that was out today and i don't like talking about negative things. but we still worry about the safety issues involved. now there's a study out that i guess people that are a little bit more well off don't want their kids playing football which kind of makes me think -- football players do pretty well.
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can we make it really safe so that no one worries -- we're doing all we can. >> i have a 7-year-old. he plays football. i think, yeah, we can. roger goodell has spent a lot of time on this and there are techniques called heads-up football. we were just out in brooklyn at a high school. keep your head out of the game. don't plow through with your head. keep your head up and tackle that way and block that way. and we're taking it all the way down to pop warner. so through college and high school down to pop warner. the proper technique, get the head out. >> equipment gets better. >> equipment will make some changes, but it's really in officiating and training the players. >> i don't think it's hurting the game. if you lurch up with your head toward somebody else, it's clearly -- >> when you have a receiver that is vulnerable, you shouldn't be able to hit them in the helmet with your head. >> they're still vulnerable half
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the time. al, what's this controversy with volunteers versus -- what happened here and you had to pay some guys? >> what happened is after the major league baseball all-star game, major league baseball got sued for not paying volunteers which to me is crazy. the essence of the definition of volunteers is you put your hand up and say i want to help you. that's what the country is based on. but the league decided to not utilize the volunteer core we had put together, and so we still are utilizing 8,000 or 9,000 people in bright yellow jackets around town who are at airports, hotels, tourist locations, out on street corners helping people figure out where to go, welcoming people, answering questions. the league has hired temporary agencies to fill the roles at the game and on super bowl boulevard. i think their hope is they can go back to using volunteers. it's the essence of how many
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sports, including golf is based on, volunteers being able to be available and helping out on each hole. that's how these sports are able to give a lot of money back to charity. >> it was broadway joe. we're on broadway. >> you're broadway joe. >> who do you like on sunday? >> i like the team that's going to win. you know me. >> who do you think has a better chance? peyton is amazing. >> peyton is amazing. but i'm an nfc guy. >> russell wilson -- a contrast in styles. you have the classic peyton manning pocket guy versus russell wilson who is a read option cram bler, new way -- >> how can it be a blowout? will you sign this. i got goodell, mcnair, john tisch -- >> you got me already. we're talking football but we'll have much more on the futures when we come back this morning. that's where our priorities are.
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but it is super bowl.
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welcome to this special edition of "squawk box." joe is not in the house. he's inside the nfl house, getting ready for the big game and the ad game. bbdo ceo will get in thuddal with this year's must-see commercials. plus big game, small business. reality tv star bill rancic and intuit ceo brad smith unveiling the winner of their very own super bowl ad. and is the market due for a 15% correction? one strategist explains why this could happen. this second hour of "squawk box" begins right now.
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good morning. welcome back to "squawk box." i'm andrew ross sorkin along with becky quick at the world headquarters of cnbc. joe is reporting from super bowl boulevard in new york's times square, hanging out with some of the big owners. our top story, the global markets are under a lot of pressure. i want you to take a look right now at the futures because we have read arrows across the board. the dow looking like it would open close to 10 points down, the nasdaq about 42 points down and the s&p 500 off about 23 points. it's gotten worse literally over the past hour. you should also take a quick look at the ten-year. what's going on here? the ten-year at 2.66. we'll have a lot more on the markets and what this all means in a moment. let's get through some of the
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corporate headlines this morning. maybe applying a little pressure, but the emerging markets overnight, overseas. shares are sliding. they reported quarterly profits well below estimates and an operating loss as it invests its in its distribution network. google this morning also missing bottom line estimates. revenue exceeded forecasts as the company sold significantly more ads though at lower prices. it's var busy day for economic numbers. here is what we're going to have. personal income and consumer spending out at 8:30 eastern. chicago purchasing managers index ahead at 9:45 on "squawk on the street." at 9:50 we'll get the final january reading for the university of michigan consumer sentiment index. of course, there will be some folks trying to get that about two seconds earlier than everybody else. becky? >> back to the markets this morning. among the global headlines,
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india's central bank governor slamming what he says is a breakdown in global monetary coordination. at issue is the prospect of the continued fed taper threatening emerging markets. the fed hasn't mentioned anything of what's happening in the emerging markets, but the emerging markets are watching it closely. joining us is chris rupp key, the chief financial economist at bank of tokyo. and with us from minneapolis, jim paulson, the chief investment strategist at wells capital management. jim, what's happening this morning? >> well, i think we've been quick not having any kind of pullback in the market for some kind, becky. we've been quick to label anything a crisis. we latched on to the as a crisi dovetailed it with fed tapering. i think it's creating certainly some turbulence. who knows? it could go on for a while as well. i think this isn't the big correction yet, becky. i think if anything, we may be in the process of bottoming here
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over the next few weeks. i just don't think the market is facing as many hurdles as we seem to think. the bond yield at 270 this morning or thereabouts, it's been there for six months now. it's nothing new that the market has to digest. valuations are average on p basis, the multiples have come down in recent weeks, it's not excessive. i don't think we've had excessive optimism over investor exuberance. i think the big elephant in the room at the end of the day is going to be momentum in the united states economy. it's pretty good. we just yesterday found out we posted the second consecutive quarter gain of 5.1% in private sector real gdp growth. private companies are growing -- i think if we continue to print good numbers in the united states, the market is going to forget about emerging markets. the last thing i'd throw out,
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becky, i think a lot of investors were left on the sidelines last year under allocated equities and looking for an entry point. i think we're going to find, if the market stays down and starts to show bottoming, a lot of new buyers coming into the market. >> jim, let me just ask you that. you sound very san ginn about the situation. decline of nearly 4%. would it surprise you to see a decline of 10% or better? >> no. we certainly could. we had a long run in the stock market. we're overdue for a construction at some point. it wouldn't be overly surprising to get a 10% correction, becky. i suspect when i look at the character of the market and what's going on, this isn't it. i think we're going to maybe rally higher this year before we get a 10% correction. but it wouldn't be surprising. >> chris, how about you? jim points out we have seen some momentum in the u.s. economy. if you look globally, the emerging markets are showing real signs of stress and central
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bankers around the globe, also, showing some concern. >> it's interesting, just yesterday we got 3.2% gdp at the end of the year. that bodes well for u.s. growth in 2014. i think you're right. what we've seen happen this morning is eurozone inflation is quite low. the dax index is now down, last i saw, 1.9%. so the u.s. economy seems to be doing okay. there's a winter chill out there. the employment report next friday is probably not going to be that great. but events beyond our borders now are starting to have an impact. if that makes our stock market go down -- i was kind of troubled by the fact that the european markets went down on this inflation number they have over there. some of the ecb members have said inflation there is going to run .8, .7 for a while, three or four more months. they're not necessarily going to
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do anything at next week's meeting. but i think people are -- that are hearing there's some sort of deflation out there. deflation is equated with -- is equalled -- it means weaker economic growth. so it will be interesting today in our own reports coming out. we do have the feds own number, core pce inflation, core pce deflator, running about 1.1%. that's too low for them. that's going to come out at 8:30 this morning. we're not expecting a big change in that. it's still running 1.1. it's one of those things that tells the fed at least -- well, bernanke is leaving today. it tells the fed there is an out put gap, maybe there is some deflation, disinflation out there which is too bad. we're almost scared of our own shadows here. i don't really think there's a legitimate deflation risk. >> is there something to be said for what this indian central bank governor is saying. he says international monetary cooperation has broken down,
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industrial countries have to play a part in restoring that. they can't at this point wash their hands off and say we'll do what we need to do and you do the adjustment. do they have a valid point or not? >> it's too bad -- well, i mean, they can't coordinate policy from country to country to country. >> i think his point is that we were doing that. during the economic crisis we were coordinating with the major central banks around the globe and everybody was bringing down rates at the same time. >> for me, i hear what he's saying and it's too bad that qe has done this. the fact that they're withdrawing it now makes the money flow back out some of of these emerging market countries. it's too bad that's happening. but for the u.s. here i think we need to disengage and start the exit process. today when the dow is going to open up down close to 200, it's not the right day to talk about disengaging, but it's too bad that the fed -- they fought inflation for too long. they're going to fight unemployment for too long. >> so then the argument that
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they did this so perfectly -- for the past three months we've sat around saying, ben ber nan keerks he seems to have gotten it right. over the next six months, are we going to change our mind about that? >> we could. >> not that we shouldn't get out, but how we get out. are we getting out too early, getting out too late? >> the recession ended in june 2009. you know that. i know that. this fed has continued to ease longer than any other fed. i think they should start getting out. today is not the greatest day to talk about that. the stock market does gov what they need to do. but, yeah, i'm kind of concerned about the economic numbers after a shoot out the lights quarter, maybe it will come off the throttle and be only 2%, 2.5, 2% in the first quarter. >> chris, thanks for coming in. jim, thanks for joining us. again, your message to investors
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is we could potentially see a bigger drawdown, but you don't think it's necessarily warranted? >> i don't think so, becky. one of the things i like about this is the discussion we're having. i think the market as a whole has been quick to label any kind of crisis in the emerging world as back to 1997 asian currency crisis again. we've been quick to say, oh, boy, we're waiting forth the fed taper and we knew it was going to be disastrous. we're quick to suggest that we're going to have a correction for sure. i like that. i like the fact that the majority of the sentiment is, oh, we're really going down. if we had more people saying this is a buying opportunity, it might be riskier, but i think the fact there's so much negative sentiment around it, i think it looks like a buying opportunity to me. >> jim, thank you. we'll talk to you again soon. coming up, we're going to continue to try to make sense of the selloff in the futures, plus a ton of tech news in corporate headlines. yahoo! is saying it attempted a
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hacking attempt on e-mail accounts. we've got that story. it is friday, that means the latest edition of the talking squawk blog. read about super models, emerging markets and you can also get a collection of henry youngman jokes who i have discovered this week in my old age. the address we have joe in times square. a lot more coming up on squawk. back in a moment. to manage your money. that's not much, you think except it's 2 percent every year. does that make a difference? search "cost of financial advisors" ouch! over time it really adds up. then go to e*trade and find out how much our advice costs. spoiler alert. it's low. really? yes, really. e*trade offers investment advice and guidance from dedicated professional financial consultants. it's guidance on your terms not ours that's how our system works. e*trade. less for us, more for you. go! [ male announcer ] it's chaos out there.
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it is an ugly morning today on wall street. you can see now the dow futures are indicated lower by about 175 points below fair value, s&p off by 20, and nasdaq off by close to 40 points. after yesterday's markets, it's been a huge give and take. on the whole it has been down. you are looking at stock markets, if you open at these levels, down by more than 4% over the month of january after major gains. gains of 30% for 2013. >> talk about an ugly morning. also some ugly news in the corporate world or in the tech world actually. yahoo! saying it's now detected a coordinated effort to gain unauthorized access to yahoo! mail accounts. the company believes they were attempting to attack the accounts using credentials from
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another company's user database. yahoo! doesn't identify the company. so many of us, including myself and i imagine you, use the same password on multiple accounts. you have an e-mail account. >> maya hoo account got hacked about six or eight months ago. >> the problem is you need a different password for all of them. true factor authentication which you can get it, which means they'll send you a text every time you log in from a new computer, it will tend you a text and gives you a read-out. those people are protected supposedly. you can try that at home. in the meantime we'll get back to joe who is hanging out in my little city. mr. kernen. >> i'm going to change my password. i think i'm going to go with henry youngman. >> i've been tweeting with the son. >> henne, henne, henne.
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it was in the prompt. henne. it's a tough morning. >> the relationship i have with the prompter is a challenging one. >> all of us, believe me, andrew. i was 11234. do you think i should go 4321. >> or 1111 is a popular one. >> 0000. >> 5555. >> a lot of times you need a letter in there. mine is very strong. when i put the latest one in, the thing kept going up, up, up, up. mine is very strong. >> in the future, by the way, for those of you with iphone 5s, you just use your fingerprint. >> it doesn't always work. my fingers when they're cold, it can't read them. >> or if you've had them sanded down or removed, your fingerprints. >> trying to hide my past, yeah.
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coming up, the super bowl is this weekend. i would think stock traders would not have us so preoccupied with this big selloff. they could care less that we're trying to be in a good mood for the next game. anyway, coming up, the add game within the big game, bbdo has a few clients putting up the big bucks to be part of this just iconic thing that we're all going to -- over 100 million people will watch on sunday. ceo andrew robinson will tell us what to look for. time now for today's aflac trivia question. which country has the highest youth unemployment rate? the answer when cnbc "squawk box" continues. yeah, he's clean, boss. now listen to me, duck. i have an associate that met with, uh, an unfortunate accident. while he's been incapacitated, somebody's been paying him cash.
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>> announcer: now the answer to today's aflac trivia question. which country has the highest youth unemployment rate? the answer, greece. 58% of youth between the ages of 15 and 24 are unemployed. this is "squawk box" on cnbc. once again, joe kernen.
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that sounds spaghetti western like, doesn't it? "the good, bad and the ugly." super bowl ads come with a hefty price tag. $4 million for a 30-second spot. let me say that again. $4 million for a 30-second spot. even at that high rate, ad space for the big game sold out two months ago. joining us is andrew robertson, ceo of bbdo worldwide. thanks for joining us. we're personally acquainted. first time you've been on the show. good to see you. >> good to be here. >> you're from south africa. >> zimbabwe. >> exactly. good. how many commercials does bbdo has in the show? >> we have a minute and a half for butt light. 30 seconds for m&ms and kick start and mountain dew diet in the immediate pregame. >> will you like them?
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>> i can guarantee you're going to like them or you can have your money back. >> can you tell us -- don't tell us. >> i can't tell you. >> it's basically spread amongst all the agencies. >> everybody's got a bit. >> what is it about the super bowl. when i look at -- we've talked about what makes it so special. people think, it's just a bunch of guys. you've got to sell a bunch of beer. women are, what, 50%? >> nearly half the audience. 46%, they were last year, 46% of the audience. the thing about the super bowl is it doesn't happen anywhere else like this. there's really good data that shows for a lot of brands, a lot of categories. fame, having your brand talked about is a really big driver of sales, especially categories where people buy frequently from large repertoires, having your brand talked about drives sales. >> they know that. >> there's fantastic data on it. the super bowl gives you an
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incredible platform for that, getting people to talk about your brand. a, because they're north of 100 million people watching it. that's a lot of people. >> what do you think -- >> the president had 33. we're talking about 110 last year. 110 million people watching. what's more, they're watching in groups, so it's real easy for them to start talking about your brand. on top of that, they're all on social media. >> see, i'm not a smart man and i don't like social media very much. i've been dragged kicking and screaming into it. but if talking about an ad makes it much more powerful, i quickly deduce, what about this twitter stuff? that must be huge. you can't monetize that as twitter, can you? all these people are getting the benefit of that without anything -- >> that's true. that's weak for twitter but good for the advertisers, good for the clients.
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last year there were 265 million views of commercials on youtube from the super bowl. 250 million views. 80 mill one of them were before the game. those are big, big numbers. >> that's big money before the game. you don't know how many tweets. >> i don't know how many tweets. >> probably going up 40%, 50%. >> got to be going up. i was looking at some data yesterday. the mentions -- we track social media, the mentions are running about the same level as last year. >> quite simply, there is nothing else like this for people trying to sell their product. >> if you want your brand talked about, you want your brand famous which drives sales, this is a fantastic platform. >> the olympics does it, too. >> the olympics does it on a global basis. this is obviously u.s. only really. but the olympics is once every two years.
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this happens every single year. >> getting it talked about and having groups watch it and having agating all these 100 million eyes, that's all great. but what do the ads -- when you're thinking about when, what do they need to contain to really cause someone to either switch or get off his ass and actually go buy something? >> on the one hand, it's fantastic platform because you've got this huge audience and you've got this audience gathered together in groups. that's the good part. the tough part is you're up against really strong competition. >> how do you avoid spending millions of dollars with an ad that -- >> it's not worth it unless people do something. >> you can get brand recognition, but you want -- >> if your brand needs recognition in order to sell, that will help. >> but there are different ways you'd design the commercial depending on your goal. who are some of your clients?
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name a few. are you allowed? >> at&t, ge. >> pepsi? >> pepsi. we do a lot of work for pepsi co. yeah. >> stick around. we'll have a bunch of other people coming around. coming up, we'll speak to jetblue ceo jeff barger. >> the global markets are under quite a bit of pressure. you'll see right now the futures are still down about 140 points for the dow futures, down by just over 16.5 for the s&ps. this is off the worst levels of the day. dow has been down by almost 190 points below fair market value. emerging markets are still blamed. we'll speak with david wu and also strategist tom lee. squawk will be right back. mine was earned in korea in 1953.
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welcome back to "squawk box" everybody. wall street is poised for another big-time sell off at the hope. check out the futures. major averages at this point
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posting their first negative january since 2010, their first losing month since last august. right now dow down about 150 points, s&p under pressure as are the nasdaq. this is playing out in the european markets as well. spain is down by over 1% as are the ftse in france, the dax in germany down by about 1.5%. italy is the only stock market there showing gains, up by about 74 points. emerging markets have been the biggest concern in recent days. let's check on their currency. the tour kish leerp rah is down once again today. gains for the ukrainian currency up by about 2.5%. >> for more on the currency markets and just about everything that seems to be going on now, david wu from bank of america merrill lynch. good to have you here on what seems to be a crazy morning already. before we talk about currencies, you look at this whole sort of global landscape. what is happening? >> i think what's happening is that five years after the fed
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embarked on qe, the united states explored most of its problems to the emerging markets. if you look across emerging markets, they looked healthy at least on -- >> what do you mean exported our problems? >> five years ago, u.s. had a large current account deficit. now it's small. the current account deficit is sitting with the emerging markets. five years ago oovps the u.s. had issues with the loss of competitiveness. five years into qe with the dollar near its 40-year low, u.s. very competitive whereas most emerging market economies have lost competitiveness. >> you would think the emerging markets would be in favor of what makes the dollar stronger. >> that's true. the process is going on for five years. the last five years the u.s. going through this deleveraging process. as a result of qe that leverage has been building up among the emerging market.
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>> is that because they've found their homes -- >> that's a definite site of qe. >> walk through sort of the winners and losers in all this. >> i think the winners are united states, no question about it. i've been writing about the u.s. is not only the most improved economy in the world in 2013, u.s. is probably in the strongest economic position for 20 years. >> is there no argument to be made that we've lumped every emerging market together as if they're one bad neighborhood altogether? i have to imagine there are some bright spots. am i wrong? >> the truth is we know emerging markets is 75% china. emerging markets are either indirectly exporting to china or directly exporting to china. yes, there are exceptions like mexico. mexico is one of these countries where it became investor's darling last year. mexico is getting hit as well
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because it's too crowded to trade. >> david, you're saying this is because of the fed and the policies. if you talk to people who are fed watchers or others, they'll say it's not the fed's policy. you say it is. you watch the markets and say this is all fed policy. >> absolutely. no question. this is why i think the whole issue about qe, i think people are too quick to jump to conclusion. it's been a good thing. maybe a good thing for the united states. i think in the long-term whether it's a good thing or not, i think the verdict is still very much out. >> you're not convinced this is going to be -- for the united states, do you or don't you think this will be an easy process for the united states? that's what we've been watching. you look at the ten-year, and right now when it's sitting below 2.7% for the yield, that tells us there are a lot of problems al lochk the way that maybe this isn't going to be smooth even for the united states. >> that's why it's so extraordinary. coming into this year, volatility across all markets was near historical low. people thought tapering was going to be a non-event.
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that's where the market was extremely complacent. qe plays such a big role, i think the market is underestimating what it means when it's withdrawing. it's funny. i think the markets are finally only now waking up to what this actually means. i think from that point of view -- i'm not saying -- the weather has not been cooperative. people have been concerned about the weak daft that in the u.s. which i think has to do with a very, very cold december and january. i think one thing, they're tapering on the back of strong u.s. data. the fact that data has actually taken a turn for the worse, i think that also has been weighing on the stock market for sure. >> how do you think this correction goes? i know you're rates and currency guy. if you look at the markets in the u.s. broadly? >> i think u.s. economy ultimately, i think fundamentally is very strong. i think there's good reason to believe that i think ultimately we'll come through this one. we'll make that adjustment. i think it's going to take a while. it's probably going to take good three or four, maybe six months.
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>> 10% down market in the meantime? is that a 5%? what does that look like? for those at home trying to figure out do i call my broker this morning, do i hang tight, buy on the dip? what am i doing? >> listen, in 2005 and '6 during the fed tightness cycle, hiking 25 basis points every meeting, the s&p never had a correction more than 7%. you have to assume that if we have bigger than 7% correction, the fed is probably going to stop. from that point of view, there's going to be a limit as far as how far this thing can go down. >> david, thank you for being here. for more on this morning's market selloff, tom lee of jpmorgan joins us on the phone. tom, your thoughts on this? you have looked at a lot of this. do you continue to think this is a buying opportunity? >> yes, becky. i think there's a lot of nervousness, and when people are nervous and they're position squaring, it doesn't tell us
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we're going to turn on a dime, right? but the fundamental story for why stock should be going up which is a global recovery, the attractive relative value of equities versus almost every other asset class and the fact it's underowned, that hasn't changed. i think investors need to be patient. in the past whenever you've seen sell-offs like this, they've always been opportunities to buy. if they're wondering what's going to make them comfortable that stocks will go higher from here, there's a lot of things pointing to an eventual rally. i know this sounds ironic, but the reality in the ten-year yield, for instance, is actually very good news. it shows you the fed has a lot of credibility. they've been telling us tapering is a tightening. so we've seen bonds behave. gasoline -- i think a lot of viewers may not be aware of this. gasoline has dropped to a point that it's down five cents for the month. that's almost a 17-cent variance from what it should do. that's real spending power. when we look at positioning
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data, we think a lot of the risk reduction is more than 50% of the way there. which means we're only a couple weeks away from -- everyone is finishing their liquidation and then the market turns. i know everyone is nervous about em. we actually have a global call for a client this morning at 8:00 a.m., that's clearly the debate, whether or not this is going to snowball from here. >> that's interesting that you bring it up. you said this and jim paulsen said this earlier this morning as well, you think we're only a couple of weeks from things turning around. just in the last week or so, we're talking about down 4%. if this goes a couple more weeks, you could be talking about a correction of better than 10% to 15%. does that sound feedable to you before things turn around? >> i don't think we're going to go down -- when everyone is calling for a 10% correction, that means they're positioning for it which i think it means improbable that we'll go down
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that much. i do think this's a chance we're doing a decline like last year. by the time we're down six or seven, it feels horrible. but the reason i don't think we're going to go down as much as ten is the high-yield market is behaving. high yield has led equities. high yield before every 7% to 10% correction has widened by at least 50 basis points. it's only 33 basis points of widening. unless we do it in tandem which hasn't happened in the last four years, high yield is telling us there's risk reduction, but it's not the snowball that's going to take us to something worse approaching 10%. i think we're within a couple percent of the bottom. >> tom, joe has a question for you as well. joe? >> question and a comment. i listen to tom a lot. what makes a lot of sense to me, tom and you guys, if the market is eventually headed back up, let's say that it is, the market doesn't give you a 10% or 15%
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discount to buy -- it's like going to a store where, no, you're only going to get five. we're not going to give you prices that are that good. that's if it's going to head back up. if we really are headed into a serious, either a large correction or a bear market, it's trying to get people to buy the dip so they can ride it down. if we're eventually headed form -- if the trend continues, usually the market goes back to where it was before you have a chance to act or before you have the guts to step into it. the other thing i was thinking of, if they were to exit qe and nothing happened at all, it was just clear sailing, that would scare me i think. that's just too easy. that's just too pat. this is conjuring up so much fear and skepticism, i almost think it's healthy. it's not going to be that easy,out can't do this. the fact that -- i hate saying "the fact." i usually try not to. what tom said about a correction
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not being something that is so telegraphed, i think -- give it a couple weeks and we should be okay maybe. i don't know. right, tom? >> i would agree with you, joe. i think that's absolutely right. the dialogue and what i'm hearing from clients has shifted to the idea, hey, we're -- this is going to snowball. this is at least a 10% correction. when people are convinced we're going to have a big decline, we're probably close to the end of that decline. and i agree with you. if the fed had begun tapering and the markets -- like it completely ignored it, i think we would be questioning if the fed had any credibility. >> i remembered the other thing you said, tom, with the action in the ten-year, it's clearly not tightening. this gives them breathing room -- the last time we got worried when they were exiting was we were going to 3.5%. suddenly they're exiting and we've got the opposite worry that maybe we're slowing down.
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that gives them room to maybe tighten when you go down to 2.6. >> the housing date that that rolled over is because of higher rates. as interest rates come back down to levels we haven't seen for months,ist ooes going to have the opposite effect and bring affordability back. a lower ten-year rate is a benchmark rate. it's actually going to act as stimulus as well. >> tom, thank you for joining us today. >> thank you. happy friday. >> if you had to pick one number, looking at stocks for the year, what's your call again? >> i think it's going to turn into a solid year. i think we'll end at least at 2075. >> that means buy the dip now. >> yes. >> think how great it would be to buy it down 15%. thank you, tom lee. up next, the captain of jetblue
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airways joins us to talk airline trends. also, getting to the big game and how the super cold winter is affecting business. also some new spots at reagan that jetblue got. then, the winner of "the apprentice." great hair, bill rancic. he's a row gain spokesman. he's teaming up with intuit and giving small business a chance to shine this super bowl sunday. that story is just ahead. we'll be right back. (announcer) scottrade knows our clients trade and invest their own way. with scottrade's smart text, i can quickly understand my charts, and spend more time trading.
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david, the friendly skies in
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new york. it says that in the teleprompter and in new jersey. that's united airlines, is it not? who wrote that? >> that is the old logo. >> don't walk off the set. it's be angry at that. hold on. let me read the rest of this. it will be a little more congested than normal around the super bowl. more flights have been added to accommodate the additional travelers. david barger, ceo of jetblue joins us. andrew robinson from cbdo stays with us. one of the things that's been happening. i don't know if it's good or bad, analysts, people, the airline industry is a place to invest. things are going great. you made your name when all these other guys were floundering like southwest. is this okay for you? >> this is great. by the way, the friendly skies, this is what advertising and marketing is all about. >> i like the new united. >> exactly.
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my dad was a pilot at united airlines. a lot of affection there. this is an excellent time for the airline industry finally. >> what changed? >> first of all, look at all the bankruptcy. now the consolidation that's taken place. now we have a healthy industry and leaders who are focused on return on capital for our owners. >> you really don't wish you still had a bunch of fat, unwieldy sloth competitors? >> sounds like a football team. not really, because when you think about it, it's so hard to compete against those companies that aren't focused on the bottom line. now when we look at the health of the industry, the tide is raising all ships. we're now, i believe, either the fifth, sixth largest airline in the industry, somewhat by default. but an awful lot of running rooming. >> a nimble competitor makes you better and competition is good for the entire industry and for customers. >> especially if you're focused on returns for our owners.
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every c suite is focused on the bottom line. the united states, way ahead of what's happening in europe and other parts of the world as well in this industry. we're really pleased. >> you've managed through the weather situation? >> weather changes. >> is it material yet? >> in fact, we had record earnings that we announced earlier this week, $168 million net, highest ever in our company's history. we're quite transparent. this first week of the year, $30 million pre tax impact to our bottom line. these storms are just continuing. thankfully the weather this coming weekend is quite balmy, all things considered. it was a $30 million net for us in terms of the first week of the year. >> that's the ultimate one-time item. next year it could be too hot to fly or something. who knows? >> it's amazing, because it's hurricane or super storms. it seems like every year there's this huge event that takes place in our route system somewhere. it's a big world.
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>> what about reagan? you've got some new slots or won the ability to open, right? >> yes. we earned the right, anyway. at this point in time the i.'s aren't dotted and t's aren't crossed. we've been attempting to fly at that airport since we started flying. >> dulles, a connecting flight when you go into dulles. >> going from jfk or white plains? >> reagan today we go to florida, puerto rico and boston. the new flying, we'll see where we end up flying. >> yu can go to 12 different places with this? >> i don't think we'll do that because you add frequency into the market. so probably some new cities. listen, you look at the new orleans of the world and those cities. more florida, probably some new york as well. reagan, in addition to bwi, in addition to dulles airport, it's just a nice -- it works for our geography. it's been really difficult to get into that airport since we started flying. this is nice.
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>> that is nice. thank you david. andrew, you're leaving. one of yours is schwarzenegger playing table tennis, bud light. >> yes. >> one of your favorites? >> yes. >> we'll be watching that. we'll see you again onset. hope to see you, david, out in englewood. >> always a pleasure, joe. andrew and becky, we love you guys. >> really? >> you're on channel 15 on our airplanes. >> cnbc and jetblue, i think that helped, being able to watch your money while you're up there. anyway, not much of a good day to watch today. it's gotten a little better, has it? >> not really. >> i guess comparatively speaking. that's not saying a whole lot. up next, we'll take a look at what's happening with the markets. also talking about a small business that gets a big chance with the super bowl thanks to the software company intuit, and the winner of "the apprentice" bill rancic. in the meantime, right now the dow futures are down by 151
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points. believe it or not, that is better than we had been. they've been down by as much as 190. nasdaq off bi31. quad box will be right back. sglfrnlths [ male announcer ] we don't just certify our pre-owned vehicles. we inspect, analyze, and recondition each one, of a genuine certified pre-owned mercedes-benz for the next new owner. [ car alarm chirps ] hurry in to your authorized mercedes-benz dealer for 1.99% financing during our certified pre-owned sales event through february 28th.
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. welcome back everybody. the sewell bowl is prime time for the world's biggest brands. this big game contest is
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offering one company a free 30-second spot. the winner is goldie-blox, a toy company inspiring the next generation of female engineers. joining me is debby sterling, the founder. brad smith is the president and ceo of intuit and bill rancic is winner of "the apprentice" and spokesman for the company. you've been telling us who some of the finalists were. >> it's been quite a journey. it's been seven months since i was here in the beginning. we've watched tens of thousands of small businesses apply. we narrowed it down to the final four. america voted. here we are with goldie-blox. i think her life is going to change on sunday in a big way. >> tell us first of all how you came up with the idea for goldie-blox? >> i studied engineering at stanford. there were very few women, and i wanted to change that. i found that construction toys really inspire kids from a young age to get interested in building and math and science. with all the dolls and princesses out there, girls were
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really missing out. i set out to create a toy that would get girls building through reading stories with goldie, the girl engineer. >> did you play with tinker toys, legos? >> i was a doll and pony and dress-up girl, i'll admit. i didn't know what engineering was until i was a senior in high school. for me, this is the toy i wish i had growing up. >> it's inspiring. we loved it when bill brought it on to show us everything that happened to it. congratulations. i think it's fantastic. brad, what does this do for intuit? >> actually our mission is to improve someone's life so profoundly, they can't imagine going back. for 30 years we've been the champion of small businesses and consumers and accountants. this is a chance for us to put all small businesses on the world stage and to highlight one that inspires all of us to show us how much opportunity there is to change the world and to change an entire generation. >> bill, you think that is what
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made america vote for goldie-blox, just the idea this is an inspirational one for women and girls? >> no doubt about it. it's double win. obviously her business will be recognized. after sunday it's going to be in a major way. she's also going to be having a major impact on all the young ladies out there who want to get into engineering, who want to get into construction, in that field that typically isn't acceptable. >> debby, what are you going to gear up? get ready or not, here it comes. come sunday, you'll have a flood of people coming in. >> even just entering the program has had an impact. we're in over 1,000 mom and pop toy stores, toys "r" us and we just launched in target. we're gearing up and we're ready for it. >> when did you find out you were the winner? >> we found out about a month ago. >> what's happened in the past month in terms of orders and production? i assume you had to change the whole scheme? >> we started ramping up as much as we possibly could.
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it's been hard. we can't make enough toys fast enough. >> this could be the next cabbage patch doll. remember that? >> i remember cabbage patch dolls. >> debby, we want to congratulate you once again. we have two girls at home. we'll be checking this out, too. >> where will you be watching the ad from. >> intuit, quickbooks is throwing us a huge viewing party. >> our whole company will be there, all 15 of us and my parents are coming, too. >> what quarter? >> third quarter. >> we're going to keep on the lookout for this, debby, congratulations. bill, come back to you. brad, i want you to come back and talk not only tax time. >> we'd love it. >> and mint. we've got to talk about mint. >> love that as well. coming up, we'll talk about the global market selloff. it is bad out there. plus, check out shares of walmart. this is not going to help the situation. the retailer saying moments ago its guiding fourth quarter earnings slightly below the low
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fargo who is expecting a 15% correction. >> the final countdown. ♪ >> ben bernanke's last day as fed chairman is here. we're going to take a look back at his legacy and how he changed monetary policy. and we are gearing up from the big game, live from the nfl house in the marriott marquis. new york patriots owner bob kraft joins us to talk about the business of football and who he thinks will win on sunday as the final hour of "squawk box" begins right now. welcome back to "squawk box" everyone. first in business worldwide for cnbc, i'm becky quick along with andrew ross sorkin. joe is in new york at the marriott marquis, home of the nfl house. it's all part of this weekend's big super bowl. we'll have more from joe in just a minute including special guest bob kraft, the owner of the new england patriots.
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>> first let's get to some talk about the markets because we are in a bit of a sell-off before the markets opened. global stocks under pressure. among the reasons cited, a drop in jury row zone inflation, raising questions about the recovery there. and concerns over the emerging markets. dow looks like it will open down about 166.5 points. the s&p 500 would open down close to 20 points. and the nasdaq would open down close to 32 points. that's moved around a little this morning. at one point we thought down on the dow almost 200 points. take a look real quick at european stocks. see what's going on there. you'll see the dax is off about 1.5%. the cac is off about 1.3%. so not a good situation. ftse off about a percent as well. >> in corporate news, watch shares of walmart. the retailer saying guiding fourth quarter earnings, slightly lower than the low end of the prior guidance. the company says closings in brazil, china and india are
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impacting earnings. for the 14-week period ending today, walmart experts walmart u.s. and sam's club to be slightly negative to the prior guidance provided in the third quarter reports. walmart says food stamps cuts and bad weather have hit sales. you can see shares are down by about 1.8% this morning. walmart is a dow component and that's going to add some additional pressure to stocks. the dow will tank by as much as 15% before it begins to make new highs. that is according to our next guest. rick man senior is the head of traeting at wells fargo. rick, we'll start with you. you're calling for a decline of 15%. why? >> a couple of reasons. first back in the fall, we were sent some charts from a friend of ours comparing the 1929 crash and the five years leading into
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it to the most current five years in the dow. they lined up awfully similar, but a little kind of not ready yet, but the chance we were going to see something potentially line up. we think potentially december 31st time very much lines up with the peak in september in 1929. first off, we're not looking for a crash in any way, shape or form, not looking at 50%, 90%, anything like what ultimately took us to the 1932 bottom. the first decline was 15% or so. we think given what's going on in the marketplace and here is the other part -- the other answer to why it's likely happening now. in 2013 all portfolio managers who hedged up various times of the year all essentially had losing trades by the end of the year because we closed on the highs. so all hedges didn't work. they came into 2014 basically saying this is anecdotal evidence from so many people we
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spoke to that we're giving up the idea of fetching. it cost us a ton last year. as behavioral strategists, when we look at the possibility that there's some similarity to 1929 and the fact that so few henls are really out there now. in fact, we even heard that some heads of major hedge funds have told their pms, do not hedge. >> you really think that's the case? a guy who is a long-term hedge fund strategist or hedge fund manager over a long period of time -- not just somebody who just opened shop, that they're going to throw their strategies out the window when it doesn't work for a year or two for them? >> we've heard stories already there's some long-short books that are so skewed. >> i have to agree with him. there were two people in davos who suggested they were long in a really bad way. remember the last few days of last week there was a bit of
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capitulation -- >> if that's the case and you're right, rick, they're going to be wrong again. this will be the time they should have had their hedges and they're not going to have them in place. wrong on the way up, wrong on the way down. >> that's the point, becky. last year people weren't long enough. at this point we think the marketplace is overly long and so confident that the market cannot possibly pull back. they're on edge. we heard seven to one, even nine to one. i'm talking people who you have on your show who run hedge funds, well established people who have told their people do not hedge up. >> let's ask ryan. ryan, you don't think we're even in for a 10% correction. what tells you that? >> that's right, becky. the one thing we really like is how quickly on a 4% drop there's this worry. rick brings up good points about the correlation to '29 and now. the hedges thing, it got me thinking, we had 8.4 million calls on the vix.
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the s&p 500, that's their multiyear high. to me, maybe not everyone is hedging. that tells me there's still potentially a lot of people hedging. on this 4% drop, look at the poll that just came out yesterday. the first time more bears than bulls since august of last year when we were worried about going to war with syria. the bears are surely in control right here. i think this could have another couple percent at the most and it could be a buying opportunity. i do agree sometime this year we'll have the 15% correction. i think it will be more in the summertime. you look at historically the second presidential cycle is usually when it happens. >> rick, let me ask you this, you think this is a 15% correction, but not like what we saw in 1929. >> not at all. >> is this a buying opportunity if you do see 15%? >> most likely. we're thinking the dow can get as low as 14,000. the s&p a decline of 10 or 11%. at that point, yes, but not
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here. 1800 dow, we're not interested. 1650-ish, yes. there's still a chance things pick up the second time of the year. we get past some of this overboard nature of the market. we could still see 1900 plus. >> if ryan is right and you're waiting for the 15% pullback, you may lose your opportunity if there's a six, seven, 8% pull back. >> that's correct. one of the things in advantage to being a trading strategist and not a fundamental analyst, if we see something shift over time, if models line up differently, if we think there's a better chance when we get some sell-off, there's enough reasons to go, maybe we don't have 15%, we get 10, 12, we might say it's time to start coming back in. >> then you've got to come on about the day before you decide to tell your clients about that. the question i'm trying to figure out is, at this point do you wait or do you dollar-cost-average in?
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>> i always think of 2013 as the year, every time there was a dip, if you bought, you won. you won because there was the fed put. now the fed put is not there. now it's less clear than you win every time. >> the question is there enough momentum from the company to keep things running and are corporate earnings going to be enough -- >> if you're a kid who gets allowance from your parents. you've maybe got five bucks a week and we're still going to give you allowance but cut it back to three bucks a week, that in my eyes is a tightening. that kid is going to alter his spending habits. that's no different than what's going on in qe now. there are people out there on the street who said this is not tightening, it's just a reduction of how much they're giving. i think psychologically, if you've set a benchmark level at 85 billion bucks and you get used to it and cut it down 207 5rks 65 and lower as time goes on, that will affect how you spend. >> haiyan, how about you jump in on this, what do you think
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happens in terms of is the economy strong enough, do earnings pick up? what makes you think this is a pullback of less than 10% and stocks push higher? >> all in all when you look at the economy, gdp, 3.2%, we continue to think the economy is on better footing than a lot of people give credit. every earnings season we come in and there's a lower bar and we beat that lore bar. so far we have had that first negative reaction. let's take a bigger look. last year the s&p was up ten out of 12 months. we were up the last four months of the year. some time of correction in january makes sense. wurn thing we did at schaffer, since 1960, the six worst januarys, the rest of the year from february to the end of the year were actually higher. when january is extremely weak, if we drop big again today, down more than 5%, it's not always a sell. there are positives out there. >> that's a statistic i had not heard before.
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that's one we're going to watch very closely. anyway, ryan, thank you for joining us. rick, thank you for coming in. let us know if you change your mind about that. joe, we'll send it back out to you. >> okay. very good. thank you. coming up from the nfl house in new york, bob kraft, owner of the new england patriots. we've gotten a lot accomplished already, bob, as we continue with free agents. >> you're telling us how we allocate our money. there isn't a better financial adviser on all fronts. >> thank you, bob. we'll be right back as our countdown to super bowl xlviii continues. tdd#: 1-800-345-2550 trading inspires your life. tdd#: 1-800-345-2550 life inspires your trading. tdd#: 1-800-345-2550 where others see fads... tdd#: 1-800-345-2550 see opportunities. tdd#: 1-800-345-2550 at schwab, we're here to help tdd#: 1-800-345-2550 turn inspiration into action. tdd#: 1-800-345-2550 we have intuitive platforms
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welcome back to "squawk box." it is looking like a down day. the dow looking like it will open down about 188 points or 186 points now. nasdaq would open off about 34 points lower and the s&p 500 would open about 22 points lower. a lot of news overseas and overnight.
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but we have new news coming in this morning. walmart shares will be trading lower as well, though they're off their worst levels. that retailer saying its guiding fourth quarter earnings slightly below the lower end of its prior guidance. closings in brazil, china and india are impacting earnings. as for the u.s. comps, walmart expects sales to be slightly negative to the guidance it had provided in the third quarter report. walmart says food stamp cuts and bad weather have hit sales. now, let's get back to new york and times square where joe is hanging out with a very big interview ahead of the super bowl. joe? >> walmart came back a little, andrew. that's a little better. let's keep our finger crossed. i don't like hearing 15%. who was that guy? i don't know. we have opinions, too, right? we're allowed to think. >> it's good to have competing ideas and things where things are headed with it. let people fight it out. >> good to stir up some angst
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and shake up the complacency. super bowl xlviii is expected to break the tv viewership record. bob kraft, owner of the new england patriots, ceo of the kraft group. thank you for coming in. >> great to be here. >> you know i love peyton, but my sentiments on that -- another afc championship that went the wrong way as far as i'm concerned. >> remember the family, that's important that you keep those strong roots going. >> and i lived up there -- i was thinking about the nfl in general. it's higher highs every year. but just to give you some accolades, i remember the old patriots when i lived up there. they had the old logo, and nfl was big, but something coincided with your getting involved with the patriots, everything sort of blossomed in the nfl, you look at what happened with the patriots as well. i'm trying to give you credit.
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i don't think you can take full credit but league blossomed with the patriots and with you. >> the people that came before are sweet. when we bought the team, it had been in business 34 years, had never sold out. i used to go down there because the game wrs blacked out. the fans, when we bought the team, the fans have been tremendous. >> there was talk of moving it to hartford. >> st. louis. >> they didn't know where to build the stadium. how much were you on the line for? >> $350 million for the stadium. all the land, all the infrastructure, we're pleased to say we have the only privately financed stadium with no personal seat licenses. that's because of the support we've gotten from our fans. it's been tremendous. we're pretty proud that we were the lowest in the standings when we bought it. we have the best won-loss record. this is our 20th year of ownership. we're pretty proud of that. >> more than coincidence. >> the fan support has been
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unbelievable. >> more than a coincidence. can you tell me for next year -- welker, that was tough, gronkowski, your best defensive back, a lot of stuff happened. what do you need to do for next season? >> the good news is, we're i believe the third youngest team in the nfl. people don't realize that. we have a great young crop of players, we're still privileged to have tom brady and vince wilfork and gerard mayo, core veterans. i think we have the best coach and quarterback in the nfl. >> brady's arm looks -- people that know say it looks as good as it's ever been. i think you get better -- >> i just tell you, all week this week he's been in the stadium working with our offensive coordinator, josh mcdonls to see what they can do to improve. there's a great focus. when you get so close, we're in that championship game and i'm
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proud in the 20 years we've owned the team we've gone to nine championship games. unfortunately when you lose, the rug comes out and you have this empty feeling. >> you got to come down here and be on "squawk box." >> and seeing you and saying hi to becky and andrew back at home base. but it's a horrible feeling when you get that close. and we know in a few days one of the two teams remaining are going to have that sick feeling that i still have. >> two great teams. new york, new jersey -- i say new jersey. but there's two great teams here and great fans. it's the big apple and we're on broadway. this is exciting. >> governor christie has done a good job making sure everyone gets reminded it's in new jersey. >> to rich jokes. >> a group of us really wanted it here and helped lobby for it, the super bowl here.
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after 9/11 we want to send a strong signal. i personally like cold weather super bowls. i think some of the most memorable games the patriots have played in have been games, the last game ever played in the old stadium, the tuck rule game and adam made that great 43-yard field goal which i think is the greatest kick in the history of football. and the fans remember that game. and the game where bruske intercepted a ball and took it on the end zone on his knees, and everybody -- in new england the snowballs go up in the hair, not thrown at people. >> bob, that's what i wanted to ask you about. this whole idea of the cold weather being such a scary thing and now everybody is second-guessing and some saying it's never going to happen again, that to me sounds crazy. i think it's going to be great. a great turnout with the fans. i think the people at home are going to love watching this.
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would you bring it back to the cold weather again even if things get a little dicy this time? >> oh, i think so. i think our fans actually enjoy it. i know if you want to have a weak time you want to be in a great climate. this game was made to play in the elements. i think that's part of the excitement. our fans will never forget when they've been in a game where the elements have a role. >> and the people at home, too, feel like they were there. >> the ratings definitely go up when there's snow. i think we've seen that consistently. but we do have to care about the fans in the stands. i know up in foxborough our fans really do love it when we have the elements. it's a competitive advantage. >> a lot of stars aligned. elway, peyton back after all the neck surgery. who is russell wilson? where did he come from? unbelievable. it should be great. we had rollout bond earlier, the
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digital guy. jonathan, that's his deal. >> he's the digital media committee. this nfl now, for fans who can't get enough, this is a way for us to go over the top and customize what our fans want, whether on mobile or connected devices, whether it's, nfl films, the individual team sites or people interested in fantasy. and we'll customize what's right for the individual fan. and i have to give jonathan a lot of credit. he helped drive that with the commissioner. >> how much more can -- how many more games can be televised before it's too much, do you think? >> that's a very good question. we do believe less is more. i'm privileged to be chair of the broadcast committee, and i think we've done a pretty good
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job in the way we've managed our contracts. we're going to have one new package which is a thursday night package. we now have a certain number of games on the nfl network. we've put it out to bid all of our network partners. it's actually the first time we've only had one package, and all our partners are bidding on it. it's a very competitive package. >> you don't know because the idea of sunday night, it has exceeded every possible expectation in terms of buzz and great games and what it's done for the prestige of the nfl, right? >> well, we're happy that nbc has the number one prime time show. it's "sunday night football." frank and al and chris, they've done a great job. >> we'll be here until 9:00 and have some more people to talk
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to. love having you here. >> great to be here. >> joe and bob, thank you. we'll get back to you in a few minutes. when we come back we'll focus more on what's happening with the markets. u.s. equity futures are under extreme pressures this morning, near the lows of the day. the dow futures down by 210 points below fair value, s&p off by 24 and the nasdaq is down by 40% below fair value. we'll be back to talk more about it. ♪ ♪ [ tires screech ] chewley's finds itself in a sticky situation today after recalling its new gum. [ male announcer ] stick it to the market before you get stuck. get the most extensive charting wherever you are with the mobile trader app from td ameritrade.
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we get a look at ben bernanke's legacy as fed chairman. we'll figure out what's happening with the markets. this is the last trading day of january, and it is not going to be a pretty one if things look like they do right now. dow futuresality their weakest levels of the morning, down 220 points down, s&p down by 25. "squawk box" will be right back. "squawk box" will be right back. [ male announcer ] it's chaos out there. but the m-class sees in your blind spot... ♪ pulls you back into your lane... ♪ even brakes all by itself. it's almost like it couldn't crash... even if it tried. the 2014 m-class. see your authorized dealer for exceptional offers through mercedes-benz financial services.
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welcome back to "squawk box." personal income for the month of december, unchanged. spending up .4. so unchanged and up .4. last month we had up stoin 2. that remains on the income side. the spending, we all raised our eyebrows last month. increased up .6. it definitely seems as though we're seeing spending, not too much on the income side. pay very close attention. i can quickly go through the deflator numbers that are a bit of a surprise. month over month is up .2 as
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expected. much bigger than our last look. deflator up year over year up 1.1. also as expected. but against the backdrop of .9. if we look at the core year over year, personal consumption expenditure, it's up 1.2. so these numbers are a little hotter, but they were expected, but hotter in the form of history. now we're going to go back to becky on this very, very, very interest rate sensitive equity debacle friday as it develops. >> no kidding, rick. i want to hear from you quickly what is happening. it is hard to pin down why the futures are down, what's happening with bonds, what's hang wi happening with currencies. >> you have storms that are perfect storms and some that are not so good. i think losing horsepower in china. liquidity being taken away -- maybe that's not the catalyst, it's a litmus test and investors tend to do things in a big way. i think the currency adjustments
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are better now than the way they were. they're all floating for the most part. i think the key here is don't lose sight. as much as everybody wants to look at things like economies and deficits, in the end, interest rates of good high quality sovereign, there's only one thing that matters. the lower stocks go, the bigger a crowd is going to love treasuries than five weeks ago, wouldn't have adopted them on a bad day. >> all right. rick, thank you. i love that explanation. that may be the best one we've heard all day. we'll see more of you a little bit later so you can continue to tell people what's happening in the pits. again, rick santelli. as if there weren't enough room for investors to digest what's happening. it's the last day for ben bernanke. janet yellen is taking over. steve leisman is here with a look back at how the cnbc monetary contender changed monetary policy around the globe. >> ben bernanke leaves office having changed central banking
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and markets forever. also with global market volatility offering a troubling oh men of what it could mean to unwind his full throttle response to the nation's worst financial crisis. >> i believe that when the history books get written, the innovations that were made in this crisis will be recognized as changing the way in which central banks deal with financial crises. >> that's stan fischer, nominee for vice chair and leading monetary expert. allan sinai of decision economics says central banking won't be the same. here are some of the innovations of bernanke. he didn't invent them all, but brought them in, quantitative easing, buying massive amounts of bonds, economic targets for monetary policy, democracy, letting everybody speaking and making their votes count on the board and, of course, transparency with the prets conferences he put together. some of these bernanke did
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because he was mandated by law, others borne of necessity. but he's given credit of adopting strong policies early on. for some, his early response was not rapid enough. >> bernanke is being an academic. he has no idea! >> cramer. >> i've talked the heads of almost every single one of these firms in the last 72 hours and he has no idea what it's like out there! none! >> his forecasting to some left something to be desired as well. >> the federal reserve is not currently forecasting a recession. we are forecasting slow growth. >> we were, of course, in the middle of a recession right then. when the facts about weakness became clear, bernanke brought rates down historically quickly, to 5.25% and then to zero. when he ran out of interest rates to cut, there's the cutting he did. first he went there and then he
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went again to 2%, and then he went to zero. you can see the floor there on the right, well before unemployment peaked. when he ran out of bullets, he put academic theory to work pushing bonds negative, ballooning the fed's policy. when buying wasn't enough, he used forward guidance, convincing markets the fed would keep interest rates low for a very long time. history stands ready to judge bernanke harshly if the exits create a sharp recession or high inflation. some of that judgment could be playing out right now in emerging markets. a smooth exit by the fed would solidify his status as a legend in central banking. >> it's amazing watching what he's doing right now, watching with the tapering, there are a lot of people who say this is absolutely what needs to happen with the united states. the emerging markets are pushing back. head of india's central bank was out with these harsh comments saying, look, the fed can't do
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this at this point. they can't leave us with their mess essentially. >> he's one of the experts out there, a former imf chief economist. i think chicago is where he was for a while. >> we've had him on the show. >> you guys all know him. i know him. i don't precisely know what policy he wants the fed to pursue. >> it's almost like just give us more time to get out of it. >> how long has the fed telegraphed. >> we talked to david woo who says we're in bad position because the dollar is at a 40-year low. >> i'm hearing joe. >> only -- in the past you've modified your opinions from time to time. i'm wondering in a nice way whether the markets and emerging markets have done enough now for you o to see a little bit of a linkage between tapering and what's happening? are you with us on this yet? >> i see a linkage.
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i see a linkage. >> what else is causing this? >> well, initially what people have been saying is there's a lot of different political things going on in these countries and maybe now. some adjustment is going to be essential here. you're going to have the markets adjust to tapering. you're going to have currencies adjust to tapering. the question is, is it a troubling adjustment. markets and currencies have to adjust down. where is the bottom here? >> you need something. if it went too smoothly, i worry building up an even bigger dislocation somewhere else. you need to know it's happening. i think the greatest thing is where the ten-year is. that gives cover to keep going. that's really solid. that it's at 266. they were worried about it going up, not down. >> i have a quick question for steve. we talked about the cnbc 25. bernanke versus greenspan, more influential in the 25-year span -- it's only 25 years you
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get to count. >> here is what one of the experts i talked to, i spent yesterday on the phone with all the leading guys in monetary policy in the country. they said bernanke changed central banking more in eight years than greenspan changed it in 18. >> i believe that's probably right. the question then becomes who had more influence on this 25-year period though. >> that becomes a mathematical thing. greenspan was around longer. one of the things that's -- >> voelker. >> he doesn't get a vote, joe. he's interesting to be out there in the peanut gallery, lobbing in his bombs. remember the list of things i put up there, the things that bernanke did, a lot of those are institutional changes, democracy, transparency. bernanke may have made the transition easier to yellen than greenspan, who came to personalize the federal reserve made it to bernanke.
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it's hard to say that on a day with all this market volatility. the transition could potentially be smoother here. >> we can only hope. >> the irony, andrew, he came in to depersonalize the fed. with all the stuff he did he may have personalized it in a sense where we're talking about a bernanke template. >> he did miss it on the way in. >> what do you think? you give greenspan more credit? >> i think in the past 25 years, more changes related to greenspan. >> he was around longer. >> he was around longer. a lot of things happened, the dot com bubble. >> the volcker rule, he's back. book ends. >> in his eight years bernanke did an awful lot. a lost what he did will echo around the world in stran banking and will echo in the next 25. >> we are doing a first 25, and i believe there is a second, sort of a future one.
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anyway, coming up next, the chief investment strategist at ubs is going to join us. plus much, much more from joe, the nfl house on super bowl boulevard in new york. patriots owner bob kraft with with joe right now. and "squawk box" will be right back. we still on for tomorrow? tomorrow. quick look at the weather. nice day, beautiful tomorrow. tomorrow is full of promise. we can come back tomorrrow. and we promise to keep it that way. driven to preserve the environment, csx moves a ton of freight nearly 450 miles on one gallon of fuel. what a day. can't wait til tomorrow.
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make it happen with fidelity active trader pro. it's one more innovative reason serious investors are choosing fidelity. call or click to open your fidelity account today. welcome back to "squawk box." take a look at the futures. red arrows across the board. not a very good morning. we're looking like the dow would
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open down, off at least 200 points. 204 right now. nasdaq down 38 and s&p would open down about 23.5 points. joins us from new york is michael ryan, head of ubs chief investment. a lot of people are confused waking up this morning. an awful lot of volatility, a lot of big down days, too. what would you tell people is happening. >> what we're seeing is growing pains. we went through a period in the last couple years where we've been focused on double dips. now listening to different dynamics play out. the growth is stronger in the u.s. i think the growing pains are playing out unevenly across the globe. i heard i think steve talking about the fact that there are political issues going on. that's no question part of it. don't underestimate the impact tapering is having in putting pressure on these markets as well. >> growing pains makes this
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sound like a good thing. a little bit of a rocky start. you're still going to get taller at the end of the day. the market still going to go higher? >> i think they will. let's assume we close down where we're starting today. we're down so far for the start of the year about 4%. not a great start. keep in mind that's off the highs. we had a big run in the third quarter. we still think the economic recovery process continues to broaden and deepen. take a look at the fourth quarter gdp. that's a positive sign. earnings are coming in,. our concern is over the volatility in the market. >> let's bring in jim cramer. you've been out there telling people slow and steady and stay the course on these things. you still feel that way today? >> very much some when we see a market where everyone is fleeing and it could be based on german retail sales or eurozone inflation, i say let's find good stocks to buy, find a hard look and chipotle will only be up 20
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instead of 50. facebook, if it comes back to the 50s. people are talking about taper or no taper. the fed should be selling bonds, not buying bonds. it's the yield curve that's the problem. the panic seems pretty good, viable opportunity. >> jim, what do you think about walmart today? they're warding about their guidance for a lot of different reasons. part of it was that food stamps are down and that's hurting them along with bad weather. >> food stamps, unemployment benefits actually is playing havoc in some parts of the country. i think walmart has lost its way for some time and not as much of a bellwether as it used to be. amazon is a little more interested in profitability. if you want something cheap, you buy it with amazon prime. walmart has lost its edge. people want to buy walmart like they want to buy target. i look at these and say maybe there's something secular going on. they seem to be mott the places
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they want to shop. the problem is there are people who don't want to see anything other than accelerated growth. they start talking about profitability, the big growth guys would lose interest. look, we can sit here and say, look, this is really bad. it's the yield curve. it's bad, it's europe. we can say, there's a lot of companies reporting great numbers. maybe we should buy them today. >> mike, you agree with him? >> i do. one of the things, you get periods of volatility and there's a tendency to take advantage of it. we'll commit to the places where we see the best growth. we're not yet fully en vested in the emerging markets, but we see some opportunities there as well. we still think europe is going to be a story that plays out over the course of the year. i agree with jim, stay the course here. >> michael, thanks for joining us. >> jim, we'll see you in a few
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minutes at the new york stock exchange. >> all horse sense. i like what i heard. when we come back, more on the global market selloff. the patriots' bob kraft talks about the big business of the nfl's big game. stick around. we'll be right back. we got adt because i walked in on a burglary once. the physical damage was pretty bad. the emotional toll was even worse. our daughter had nightmares. what that robber really took from us was our peace of mind.
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welcome back to "squawk box" this morning. a number of notable market moves this morning. we've been selloff of u.s. equity futures ahead of the open this morning and it does not look good over 200 points down. and the ten-year note, 2.655 falling to the lowest level since late october. coming up, the prediction for super bowl xlviii. and don't forget, it's friday. that means the latest edition of the talking squawk blog is up you can read about supermodels, emerging markets and henny youngman jokes. that address is walk well another great thing about all this walking i've been doing is
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all right. let's get back to our guest host bob kraft owner of the new england patriots chairman of the broadcast group for the nfl and ceo of the kraft group, and it's all about what we're seeing today, tapering and what it's doing to the stock market. even with your fan base, you're privy to what's going on in this country and we need to fix some things. >> you know, people like ourselves are doing well. i must weigh in, by the way, i think ben bernanke by far -- oh, in the last -- what he did in '08, it's helped people like us to make some money but we need to kick butt on both sides of the aisle in washington. we're not creating jobs in this country the way we should and i'm really concerned about the middle-class and the working class, that the kind of potential social unrest we have everybody doesn't get a piece of the action. >> how would you -- >> i'm not seeing the leadership in washington -- >> from which side? >> both sides. we have to find a way to build
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bridges and put america first and we're not doing that. and people -- you know, our unemployment seems to show well. i mean, we know gdp in the third quarter was 4%, 3%, in the fourth quarter, we're looking at 3% this next year. but the people who really need work and jobs are hurting and a lot of people have left the labor force. they aren't out there. and there are fans, we see them, we talk to them. we try to relate to them. and we have to let private industry come with their entrepreneurial efforts and let the government step away a little bit. and -- >> yeah. >>-- let us do our thing. >> that's what -- one of the points i make and nobody cares what i say. but, you know, the president wants to help, wants to help the middle-class, wants to help with jobs. i understand that. but it's not on -- it's on business shoulders. he can do that by helping
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business help people. >> if you look at what's going on out in silicon valley, it's tremendous what technology are doing, but they're eliminating these middle jobs, so there are a lot of jobs that are going to be displaced by the great things they're doing for our economy and we have to work together to incent private companies to do the job creation. >> for the kraft group, what kind of economy does it feel like? a 3% economy? >> our packaging groups our backlogs have been very strong. we look at this as a good year but we're becoming more and more efficient and doing things to cut our operating costs. but we need -- we need the government to work with business in partnership to create new jobs. that should be the number one focus in this country. and then a lot of good things flow from that and we're not doing it. >> there's long-term and short-term answers. >> we have to think long term. >> we got to think long term and
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train people to do -- be ready for the jobs we have in energy which i know you think that's going to be great, too. >> well, we're going to be self-sufficient as a country by 2020. there's manufacturing jobs that come back to america. there's a great number of opportunities, but we're really competing against the rest of the world. we have to get our act together and we don't have it together. business and washington just aren't doing it. >> would you -- becky? >> i just want to ask you about what's happening in the markets. the sudden concern about the emerging markets, the idea that the fed tapering could be really impacting things greatly there. do you think that's the case and do you think it's a long-term problem? >> no, i don't. i think it's a temporary problem. i know our business -- our business is really booming in the emerging markets. and i really think it's a temporary thing. andconcerned by it.
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>> as far as the packaging goes. how closely does that align to gdp? >> pretty much. >> 3%, we are in a 3% world? >> yeah, but our backlogs are even stronger. we're surprised this early in the year we have the kind of backlogs and demand -- >> do you do minimum wage, is that something you think helps or is on the margin or -- >> i don't know how anyone can live on the minimum wage, so i'm all for increasing it as long as it is not a disincentive for people to cut back like a lot of the big food chains like mcdonald's and everything. i think it impacts them. we don't basically hire people at minimum wage, so i'm probably not as well versed to speak on it. i find it hard to believe that someone can live on $10 an hour, so my heart and sympathy is there. >> all right. so, we only have maybe 45 seconds left. what should we look for on sunday? you'll be watching closely i guess. >> i'll be watching.
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well, it's kind of hard to root for one of the teams, i mean, i love wes welker and i love pete carroll. i only hired two coaches pete carroll and bill belichick and, you know -- >> so, your allegiances are torn a little bit. >> yeah. and peyton is such a great story. i mean, he's a miracle man, what he's done, and the rivalry he and tommy have. i think tommy's number one, but he's coming up, you know, they played 15 times and tommy's won 10. so -- and they're going to play each other next year up in foxboro. >> give me a name, then, seattle or denver? >> i'm completely neutral. >> we just got back from switzerland i'm a little bit of a socialist now. i don't know why we call it football when it's throwball, soccer is -- >> very good. very good. >> thank you. >> great to be with you here today, joe. sorry we didn't host you up at our house. >> do you know what -- >> please, god, next year.
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>> please, god, next year. let's have a better afc outcome. anyway, back to you. it's been fun. we'll see you next week. >> it's going to be great. we've been watching -- >> becky -- >> we want to have fun in new york, stay for the rest of the day. walk around and see what's going on. >> toboggan. >> the futures are a mess right now and it's hard to say what will happen at the end of the day. >> have a great super bowl weekend and we'll see you on walk boston red s"squawk box" o. "squawk on the street" is next. good friday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer at the new york stock exchange, faber is on assignment today. we'll close out the month of january with some fierce selling at the open. walmart is warning for the quarter and the dow is on track for the first losing january in four years. the ten-year yield down to its lowest since october


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