tv Squawk on the Street CNBC February 14, 2018 9:00am-11:00am EST
>> oh, that's going to be a problem. >> can you wish him a happy valentine's day? >> anyway, it is time to go. we are down to one more look 250. oh, it is 160. wait until 4:00 to make any determinations make sure you join us tomorrow "squawk on the street" is next ♪ good morning and welcome to "squawk on the street," i am david faber along with jim cramer and parol quintanilcarl h korea with the olympics, carl quintanilla. the numbers at least if you are long this market, it looks a lot worse. >> futures already coming back lets take a look and see how the markets in that part of the
world. you can see a mix picture and generally not bad at all our 10-yr note year is moving higher >> that's stagflation. give me a stagflation guess and tell me it is the end of the world. crude continues to sell off a little bit lets get to our road map this morning. it does start with rates shock the question of course is it going to prompt the feds to raise rates at a faster pace the report says futures are at a lower market that'll be three straight days' gains right new. how about this >> taco bell turn around
the core rate minus food and energy rose 3% that's the biggest increase in a year data shows retail sales fell unexpectedly in january. they were down .3% and that's the biggest pull back we have seen in 11 months. all of which leads me to you and what you think about this and what it means for our market and not just today -- >> right >> any negative or positive is obviously going to be radically in flamed by the vix issues. we know there is hold the line on 10-yr we are going to really panic and when i say panic meaning that you will have the accelerated decline of the vix showing its hands. nine ticks down bonds, nothing electric yet
we have been up for a couple of days and the volatility is back. we are due for a pull back, that's how crazy things have gotten no volume. >> here is a quick read. lets see, combination of higher cboe is what's impacting futures negatively it is the higher inflation that many macro investors focused on last week. even as consumption slows, it suggests higher rates. >> it is a head win for multiples. >> we forgot ever since this started the amount of money that companies have gotten in because of tax reform is staggering. i keep on hearing the earnings per share is not up. how did pepsico raise the dividend so much and clorox. and apple gave a statement yesterday, we can do anything we
want with dividends. the narrative is really this, the companies are making a lot more than we thought what will jay pal do that's becoming this gain that we'll have to play until jay pal does something >> what is endless >> we are trying to push the boulder up and it comes back down the thing that eats our river. >> everything is in play here. >> there are two inflations and lower prices >> right >> when you look at the actual break down and nobody does because it is really boring, maybe leaiesman does it we are betting on fresh eggs, ste again, we got to be worried, don't forget the fresh vegetables which we know broccoli is really good food,
that's down 1.2% >> i know energy is not a real component, you pick this apart, well, jim, why didn't you pick it apart when it was lower the answer is i chose not to do it then. >> as you do the question then becomes okay, what's an appropriate multiples for stocks given everybody's expectations >> the answer comes down dramatically but no body rae realizes that? >> from two weeks ago when we are at our highs >> yesterday's trajectory, we would say 19 times it is a fluid situation. so then we can get a guy on air, didn't that what happens in the second or third week of 1987 when you had that up the longest. if you want to keep drawing any analogy to that, the fast
majority of people we bring on tv are bullish >> oh, i don't think so. most of these strategies, come on the youtube generation, david, on the one hand but on the other, all right, so when they're on youtube, youtube does not screen those people for crypto anger david, come on, things ar are -- you cannot change on a dime like the market apple was up two bucks before this number came down. did apple's valuation change that much over night >> no. >> those people were saying i got apple at a cheaper price >> we are watching the futures here >> should we be afraid interest rates -- >> we are coming back. >> interest rates just went down in the 98 seconds with ef bee h
talking. i am not playing this game, it is an alien game, not a predato game where we are all going to die. we should use this to pick our spots to buy what we want and sell any list. >> got it. >> yes >> buying when it is low and selling when it is high. >> buying stocks online and pick it up. >> there you go. >> i am pretending to be stupid as a lot of people who talk. i am not going to make a judgment based on the fact that interest rates just went down dramatically since -- 907. do i buy apple >> yes >> shannon, do i buy apple ask those people, should i buy apple over there are we really going to playthi
game how about the cab driver who says listen, i got biotech, did you hear that guy the other day? >> no. >> can we just pick stocks based on what the company is worth >> we'll do that we spent a lot of time talking about stocks >> we got the ones that pan p'sk paniking right now and we have other people that says listen, i take a 497-year perspective, it is too early to judge me if my judgment stands, i am a genius in the year 2025 -- >> from soft bank, 300 yields. >> i want somebody to fix my fax. that's all i need. >> did you know that nvidia was up 10 and down 10. i have been taking pictures all
morning. did you this i jensen wong looks at that and say damn, i must look at cryptocurrency and hock tan pulling his big meeting. >> no, i don't think so. lets get to carl quintanilla, get to pyeongchang covering the winter olympics, so much activity theies there fo uo catch up on. >> you will be hearing shaun white's name all day today. the first u.s. male to win the same individual event in three olympic games in the winter. he was 19 when we won in toronto and he's now 31-year-old
the u.s. is now only the second country to do it norway was the first the 50th gold medal was dan jansen remember that name the other story is the wind gusts of 50 miles per hour over here for a while forced a temporary closure of the olympic park where we are police helped clear the area and it has forced the postponement of three our four now alpine ski races, women's slolam was pushed back >> you have two runs so we get up in the morning expecting to be able to go and pretty much the only thing that can really delay us is terrible surface or wind >> bear in mind some of those alpine skiers are already going
75 miles per hour downhill any gusts in the 50 could be dangerous. if there is a change in the wind direction from moment to moment, that could give one competitor a tail wind and another one a head wind it is unfair to have them in these conditions i heard next door to us says the wind is going to be rougher maybe not so much tomorrow but into friday so we are hoping it does not continue and rehavoc with some of these schedules, guys >> does it affect with the halfpipe of shaun white? >> not at all. he did basically a twirling himself all the way around and upside down twice and basically unprecedented. it does not look human, guys >> no, it does not
he never done it in practice or never really tried it of what i read, is that true >> i think that's right. he had injuries when he was trying to push the envelope before and just found that his confidence, certainly 1440 have never been done before it is incredible to watch. >> amazing >> it looks like it is photoshopped >> it does, it looks like a video game carl quintanilla will be joining us throughout the program and looking forward for him to get back, too. >> it is once in a lifetime, you got to go. >> he's lucky to be there. >> we head to the open of 18 minutes. >> you got to think long-term. >> we got a lot more "squawk on the street" from post 9 when we come back. oh, and there's the closing bell. (sighs) i hate missing out missing out after hours. not anymore, td ameritrade lets you trade select securities 24 hours a day,
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niccol has been chosen to turn around chipotle which was hurt by food problems dates back in 2015 can this guy get it doigoing? >> i worry about the situation >> which is? >> when you talk to the executive chipotle before, 500 people got sick during the terrible year of 2015. it used to be food with integrity. lets consider, this is what they're always talking about what's in a beef burrito, it has beef, water, and cumin and oregano and bailey what does taco bell have i am glad you asked. beef, chellilly pepper and suga and onion powder and natural flavors including smoked flavors
and cocoa and sodium -- i don't think you will like it, lactid acid >> what's the point? >> they rallied against taco bell for years but they never mention their name they don't like taco bell the franchise model. they don't like taco bell even the ethos of taco bell >> got it. >> so culture class potentially. >> this is a man who knows how to get food fast to you cheaply. what did chipotle stand for? he's actually known for it
>> your point they're not consistent of the ethos of the company. >> i don't know how to reconcile it >> our food is cheaper than you realize. who ever talks about other than this man, niccol they have to result it in favor of lower prices and franchises and growth international which chipotle have not been able to do this is a staggering pick. it is everything that it stands for. am i clear >> okay, well there is some overlap there. >> all right >> i am trying to focus out
bui billy on the bridge. >> that's the best line in the whole show, the whole movie. >> i never saw it. >> you never saw "predator." >> i don't think i can work with you any longer >> i have never seen "predator." >> the governor of minnesota is in the damn thing. >> really? >> get ready for your "mad dash" will you please? no more movies i have not seen count down to the opening bell we got ten minutes tomorrow, we'll have an interview with boeing's ceo. doubled since the beginning of last year. >> i see you and match you at 10:30. take a look at futures more squaw"squawk on the street.
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all right, we got five minutes before we get started on this trading here on this hump day. lets do a "mad dash" here. fossil 44% of the shares of fossil is so short still one more horrendous figure because these are the guys that could shot shoot stable. i got news for you, they could shoot straight one word defines fossil and that word is wearables.
that's what saved the company so immediately what do you do when you think of wearables >> apple get these numbers. people think wearables mean nothing for apples the stock is higher now. get this, they are talking about right now of a $17 billion business 2020, $32 billion. apple is the leader in wearables. >> that's what fossils say about the wearables. if you want to buy apple so badly right into the teeth of this bond sell off that will do with the inventories and higher medical expenses sorry, geico, rise in insurance for cars >> fossil did come in 24 cents above estimate >> i was in their store at times square >> i did not buy anything.
i walked in there with my daughter to look around. it was a nice assortment >> you are doing the bonding. >> we were killing time. she was going to her show. >> killing time. >> you like that >> nothing gets past you as we count down now, three minutes to opening bell. what are you focused on on the key of how this market is going to operate in the coming eight or seven hours >> historically what we would have liked in this environment is jp morgan investors have to raise rates. jp morgan has that $100 billion lined up for broadcom. >> they have a fortress balance sheet. >> that was not in the interview. >> no joking around here if we are going to be whipped
around by the vix which was inspired today by the futures and as well as treasuries, i want people to sit there and think about what stocks they wanted to get that they have not been able to get this could be the fable's retask that so many are waiting for i want people to recognize that this is part of the course and enters a couple of big gainer days people will say midday it was a short cover rally. david, i have never been ever seen a market that went up and did not start with a short couple of rally including the move of 16,000 >> you are not afraid of 2.866 on the 10-yr that does not scare you. >> i am not immune to this i can see it can happen. >> that can definitely happen. i just want to prep people there
are more to it and the futures and the vix and 2016 sell-off that we had before we took off i am trying to add perspective, david. >> any particular sector of the mar market that you think is unfairly hit that's down >> it is the most difficult thing to crack >> that does not seem right to me >> why not >> its got the tail wind of currency which matters you have an fda even though they have been saying some issues of pricing. what they're going to do is i think boom, expedite drug approvals. >> you do? >> against the overall death star approach to drugs the consortium of jp morgan and amazon >> yes, that's going to have an impact you hear the applause building,
a lower opening based on what the futures are. at the big board by the way about to do the honor ringing the bell or valentine's day. get those flowers. >> i just ordered them >> over at the nasdaq, scholastic >> we were big red dog, when my daughter growing up, clifford. >> do you remember t"the wiggles? >> different generation. >> do i miss those days? >> i miss it when they're little >> where were you? >> i traded. it was a big day
>> it was ill advised. it was ill advised, david, because of what was happening but for the long-term like a lot of people come on, it was a home run. yes, you have to think long-term. the doctor turns to me and said what else do you like her, i had my daughter coming out, whatever, it is a little too graphic there and a little more information than you need. >> my wife has not watched ever - >> hey, you know, today is a big meeting between broadcom and qualcomm >> it is important hock tan joined us earlier this week the man who's behind the $82 a share bit. they're going to be meeting later this afternoon >> can you be a fly on the wall, david? >> i have asked to moderate but ta ha they have not taken me up on that i thought it is an appropriate time for me to be in there with
everybody. >> are they asking for rational? >> i say chances for progress are unlikely, would you? >> discussions >> i mean given he says best and final is 82. >> no hell or high water how about the 8 billion? >> not that big? we'll see where they end up today. you don't want to prejudge these things >> maybe it will be a meeting and maybe it will go an hour or be done in four minutes. >> will they use the nuclear poison bill and say guys we'll pay 130 for nxpi if you don't get out of this room >> it is not coming up they're still waiting for nxp and the chinese. >> the meeting took place yesterday for broadcom, the day previous for qualcomm. everybody says their meetings go well that's what they always say. >> well, we had the big interview. >> we'll see how today's meeting
go goes >> i keep on hearing that your friends at alibaba is having a good quarter >> bob is up 1%. >> go through the cpi, did you think apparel gotten expensive are you kidding me >> i can go online and order underwear right now for a fraction of what i paid six months ago >> is that right do you not go to tx maxx anymore? calvin klein is different. >> i stop going to tj. they had a change at the top you are going online now for your under garments. >> yes, that's fancy i get it the same day with these things, not that i need it that
day. same day underwear >> will you look at this, the market is coming back. suddenly the vix is more important than treasuries, david. you have to get the vix' defender on, immediately, they're rieligious >> vix defender, what's that >> it is in the fifth amendment. the bond continues to take down. at what point do the bond transcends the vix >> 2.878%. >> we take it 2.9%, we are going to have a step down. i suggest that people walk away for a moment and see if we get that if not, you are fine >> what kind of way is that to live >> are the machines on that? >> it is all the machines, i am trying to interpret what the machines are going to do if you ignore them, you ignore
the quick three-week history that we have been having here is a name, no, facebook, up 1.4% >> really, nobody uses facebook like what mark cuban said yesterday. you saw facebook dropping two and twitter going up facebook is facing a significant pressure, some say their business may not be in any way hurting their pressure >> i would like the same pressure in their life that they have >> they did not handle russia well >> who handled them well, tell me >> well, they did not get in front of it. they have been playing catch up all the way. >> they sure did i wish they would come out and say we have a russian task force.
>> they should be saying, we are human beings, checking politicals to see whether they're crypto factious. >> is pursuant not a factious? >> elected by whom >> by the ones that run taco bell >> you want an update for cvs and vaicom >> an update on where this thing stands in terms of the talks between the two companies. not too much to share here they're hoping it will go differently than last time where they never got into an offer that was made by cbs or viacom management teams on both sides
are more engaged on friday, the ceo of viacom met with cbs, they went over numbers. the numbers, that can be tough, the special committee have yet to meet from either sides, there is no offer, they're doing due diligence request for information, the two gentlemen will be meeting and on friday, they did that for a number of hours. i guess, jim, the question will come back is you know viacom, the stock went up unexpectedly >> because some so-called journalist said something. >> also, they were talking about a strong second half the numbers radioiight now cont to be an issue there is a lot of open minds in terms of getting a potential deal. >> why would moonves want to do that >> cbs is down 8% this year.
>> it is >> you know les does not like that >> sure, a number of reasons and continuing to speculate on certain things >> wow >> i have to tell you, it is so different from everyone else reporting. i guess because they don't want the facts to get in a good story. >> there is a hope that they have something to say, a deal and hand of what's called the next six weeks or so due diligence and requesting information and exchanging number, we'll keep people updated to that. >> apple is down it was up nicely in pre in part of the wearables, tim cook s, ss he's going to return capital a reminder of the old days and now it is forgotten and people look at treasuries and just saying we got to sell apple because we got down 13 pitch on the 10-yr. interest rates up 13%. >> prices are down 13%
but, david, we are in the grip of treasuries, if we do take it at some point at 2.9 on the run 10-yr then you are going to say what we are doing. >> i have not asked you, do you have a prediction of what rates will be next year? >> i think it is going to be more tamed than people realize >> why >> because of bezos. >> they keep oncoming at margins everywhere >> i mean there are too many things you can do with technology that unfortunately, people, let it being able to make a burger with two people or whether alexa controlling your home entertainment or checkers >> checkers? >> we are not talking about nixon's dog, are we?
>> checkers? >> checkers, the people that check you out of it. >> oh, checkers, not the game. >> that's an amersazon thing bezos and his nice big guns are going to sit there and he's going the stand there and say no >> where ever the gross margins are, he goes hospital supplies we all know a lot of people think routinely and medicare would tell you that. he's like -- he's the grim reaper, david, of hospital supplies and the grim reaper of autoparts. did you see barnes and nobles number yesterday >> i have not looked >> mcdonald's is interesting here chipotle is up $30 what does that tell you about the need to have ingredients
that are inexpensive and a dollar meal. >> this guy is going to go in there, we win and you win, fast food wins. do you remember last night >> a big shareholder >> you cut me off, dave, i do have 30 ingredients in the beef. >> i don't want to hear them i am note a taco bell customer. >> you still go to chipotle? >> well, we got curling. >> that's like shuffle board on ice. >> this is the business i have chosen i had to give you one of those. >> from? owe ye oh yeah, from the god father bob pisani is on the floor
>> we are three days into the recovery, looks like we are moving down again, coming to gravity a little bit is tom mcclellan, remember how this whole thing started. on february 7th, we got better than expected and jobs report, we dropped 665 points in the dow jones. that's what started all of this. it is true volatility exacerbated on monday. this was fundamentally driven of concern of inflation and this morning, we had cbi a little higher than expected on the core we dropped 400 points and covering a little bit. you should get a clear indication of what the market cares about right now. we moved a thousa1000-point
remember, they're talking about loretta mester of the vice chair. banks are doing a little better and industrials and materials are down 0.4 and now 0.2%. >> utilities, we are down 11%? and energy is just an ugly shape. remember we were heading towards $70 on oil we just dropped below $60 today. that's some of a weakening picture for oil goes and stabilize, take a look at the xle, this is your energy atf oil went up a month ago and as we hit the top oil, it has been straight down and that's a real drag on the s&p 500 recently
as for where we are going today w e are ro we are rolling into a new vix future contract. the cash vix is down february expires and if you look at that 19, now we are in a normal curve here. we had the situation where we had a dramatically elevated cash recently the futures have been significantly lower. the front month now, the cash rather is still a little bit higher but getting a little bit more normal in the curve in terms of where we are with the front month contracts here i just want to move on and talk about the fundamentals, we are 70% through the earnings season and numbers are continuing to holdup we are close to the best numbers that we are seeing in earnings and revenues almost 15% of earnings growth and revenues are up, generally, it is going. what we care about is 2018
earning trends, that's holding up very well estimates are rising for all four quarters. this is unusual. the analysts, the number starts to come down, they start cutting the number because they're optimistic we have a new trend. we had a bit of corrections, stock prices are lower, that's bullish for the stock market the old trends of what we had, they always cut the numbers. stock prices were higher that was a problem, everybody says stock markets are higher. we have no idea this is going to bottom out for t david, back to you >> thank you, bob pisani on the floor for us of course, we are staying on top of another volatile session right here on wall street. take a look at the movement of treasury >> no buying anywhere.
>> no volume >> oh, no volume >> i ask people get off margin i am done. >> on the all important 10-yr note, we got a lot more "squawk on the street" right after this. [fbi agent] you're a brave man, mr. stevens. your testimony will save lives. mr. stevens? this is your new name. this is your new house. and a perfectly inconspicuous suv. you must become invisible.
[hero] i'll take my chances. everyone has a thing. that binge watch over the weekend thing. more checking-in or checking out things. that triple-double thing doing it yourself or tagging a friend thing. more revolutions in the making thing. that play like a girl thing. that four-legged friends thing. at&t gives you more for your thing. more entertainment, internet, and unlimited plans. more for your thing. yeah, that's our thing. so that's the idea. what do you think? i don't like it. oh. nuh uh. yeah. ahhhhh. mm-mm. oh. yeah. ah. agh. d-d-d... no. hmmm. uh... huh. yeah. uh... huh.
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david, i smell a deal. the problem is smell is not the same as get one. the numbers here are strong. >> that's a very good 10% which we did want to know for people this morning having a strong quarter. you strong quarter. remember, sometime back, omni come and pub lilicist, that fel apart. >> talking to sema this morning, don, this group is kind of doing much better. and i'm bringing this around to if you reported earnings during this period, even though hilton missed the forecast, the stock is up, that's because the ebidas is up. you get the report in a day where you have the treasuries going the wrong way, and people
are sort of stuck, and say i have to go buy these companies because the numbers are so good even though the commentary is vix,vix, by the way is going bulls way. and treasures. and so this tremendous tension, and in individuvit tus is up, d. can i tell you it's stupid and revolting. nothing is happening my dog isn't up yet. >> lloyd flynn had something to say earlier on msnbc earlier this morning reiterated his concern take a listen to mr. blank fund. >> obviously the supply side view is it wasn't at full capacity and so this they are putting a little more on i would say from my point of view that wouldn't be the move i would take if the fire is
roaring and the coals are caught, i don't know i would be spreading lighter fluid on it, especially if i might need that lighter fluid later when the coal started to die out. because at some point you won't take rates much lower than where they are now not necessarily with these deficits come up with another stimulus plan, et cetera so like to have some things in reserve. >> jim, this is not an uncommon concern. >> no, consensus. >> raises here but it is a real one treasury busy selling lots of things to finance and deficit in terms of dollars but gdp and this year and next year given the tax cuts and the revenues annie elimination of the cap from deal last week. >> no one is thinking of growth. i think that's a pro growth could help this and maybe. >> it could. >> but the point he's making if you actually have a recession
and need to call on huge deficits. >> i thought he was saying buy charcoal, by kingsford, i think i was talking about buying kingsford there, the ones have lighter fluid in there rksz so therefore i think that's the takeaway. >> you sound like carl about clorox. >> we have to get a dura on that panel. >> we'll work on it. up next, we have stock trading with jim "squawk on the street" coming right back s to the oil markets and gold markets. okay. i'm plugged into equities - trade confirmed - and i have global access 24/7. meaning i can do what i need to do, then i can focus on what i want to do. visit learnfuturestoday.com to see what adding futures can do for you.
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i don't know anything that takes organic, but anything organic, but they can do a deal. >> baloney. >> my baloney has a first name david, i have to know is anything really for sale we had pepsi. >> in this >> it has to be friendly. >> it has to be friendly conversation for another day we'll have to make a quick tease here. >> and on olympics womens curling. >> you have to get it in. >> i'm not on enough some like to have mugs on tv. >> and jan hatzius, he'll talk about inflation, economy, maybe we'll ask him about the fed. i don't know keep ihe t re
back we are live from new york stock exchange we are here with michelle caruso-cabrera the yield will be on 2.889. >> should we have a siren that goes off no. >> nosirens. our work begins this morning with inflation fears jumped 5% in january well above market expectation. >> stocks falling investors worrying about rate increases. and talk about ceo goldman sack economist. >> and taco bell investors seemed pleased with the move, but as jim said a
little while ago in last hour, it could be something of a culture shock. >> and it will be. just also announced problems with airbus. not great for united states. >> we'll get to that let's first get into consumer prices jumping much more than forecast sparking fears of inflation. our economic reporter joins, steve. >> thanks. major data in favor of the inflation. here's the data michelle was referring to up.05. your view isunchanged. in fact, if you look at the inflation over time, which you can see is year-over-year rates, pretty stable, core has drifted up a little, but remains below 2% let's see where inflation is hot. you can see gasoline prices
surged, some may go away. transportation, 1.7. commodities 1.1% medical care up 0.4% that was also a surprise to the upside real quick let's look at wherein inflammation is not. a couple places where it declined airline fares declined, new vehicles down 0.1% not everyone though is on the run away inflation train some insist it's under control jan i thought this was interesting, i don't see how apparel food or any other measure can be inflationy in 2018 retailers starting with walmart will give back the tax cut in price. and delivery charges no supply constraints. that's his view. this will give ammunition at the fed to give rate hikes this year, maybe one more
unemployment falls more if committ economy is true. but still under discussion, guys. >> all right thanks very much, steve. >> for more, let's bring in goldman sachs economist jan h hatzius. do you agree >> that's our view we also have four hikes this year and next year markets moved in that direction. but still somewhat more to go for 2018 and 2019, i think there is still quite a lot more that can be priced in there. i mean, i don't think that inflation is going to rise sharply above the target but we are getting closer to the target and the economy is still growing very strongly from a starting point of full employment or maybe even a little bit beyond full employment. so in that environment i think
the fed is going to keep doing what they've been doing, is tighten once a quarter. >> nothing you saw today that changed your over all opinion? >> no. but i rarely change a lot on one inflation report. >> thank you for not changing. >> there are of course ta lots of one-off factors it was pretty solid even away from apparel and motor vehicle insurance, but these things do jump around. >> look, shelter costs, jan, we can't put up as many houses because zoning not so great. but food is temporary. medical unless someone comes in like bezo to solve it, but what i want to ask you is how did the narrative change so quickly? was it the labor department number made it good is no longer good, what changed so all we started thinking about is the
ten year ticking and the vix because before we talked about tax reform when you were at goldman, are the people really come up to you say and say, listen, jan, i can't focus on stocks, i have to focus on vix >> i do think people overreact to individual pieces ofdata. i think that was true last year when we had the weak inflation prints in the spring and i think it's true now. what i like to tell people is ten years ago i felt like i was doing my job i into you th i knew that the year to year was 1.5% now i don't feel i was doing my job unless i feel it's 1.2%. >> would tell me the process has gotten ridiculous and you do have to take a two year, three year, four year, five year view? >> or i think you need to use a large number of data points, not just one inflation series, but more broadly, you know,
information about the real economy, about wages, about inflation, to figure out where the macro economy stands when i do that, i think it is at a point where we are at risk of overheating, so i do think the fed needs to lean against that, but that doesn't change much on basis of one print. >> so you talk about what's going to happen on the shortened when the federal is going to do. what do you think is happening on the long end. you said don't panic over a couple of data points. but what do you think is going to happen to the ten year yield because that has direct impact on stocks? >> we do think there is upward pressure on the long end as well we've been in a very low yield environment partly because the term premium looks quite low the extra pickup that you get over short term rates, and i think the path of short-term rates is still under priced as we discussed so i think that will push long-term yields higher. >> to? >> by the end of 2019, you know,
we say 3.5% or so. so we don't have a huge spike, but i do think there is upward pressure. >> just strikes me, just going to 2.89 freaked out the stock market i mean, 3.5 at this point would also sound scary based on the volatility we saw over the last week. >> i think a lot of it is speed of moves rather than the levels. when you have a big move in a short period of time people are more focused 0en that and worried about that. >> jan, i started at goldman, 30 year was at 13, and thought it was the end of the world, went down to 7. why does that magnitude, why doesn't anyone say, wait a second, 3 is not the end of the world, because we were at seven or 14? and what industries are being
hurt because you look at carmax, they are being hurt but the rest of the economy, come on, these are rates we wanted to lock in four years ago, we were thrilled about it >> i wouldn't be too worried about the economic effect of this financial conditions, we have an overall financial conditions index that has tight end of course over the last couple of weeks. but really just taken us back to where we were in december. so that puts things into perspective i think in terms of the growth impact. >> is there anything that you pick up here from the weaker retail sales number though and this idea that you could son receive bly have fed tightening as the market slows? >> even after the downward revisions we had in late 2017, still quite a solid trend, about four tenths for the core number per month over the last four months of 2017 so having a somewhat weaker number is not that surprising. the other thing i'd say is the
fiscal stimulus, the reduction in tax liabilities, that doesn't really hit until february, march, so i do expect pretty strong ends to the quarter. >> so these websites now thrown around this war stagflation, that ridiculous? >> yeah, i think. >> if you think 1917 for sure. i do think incrementally in the coming years we won't have the sort of growth we've had in recent quarters without really running into the constraints so we need to see a slow down there. but this is not a word i would use. >> button. >> steve, easterbrook and this fellow you just went to chipolte get the burrito down from 7 to $4 a lot of this has gotten granular we are looking at the basket and say wait a second that clothes inventory that was not because there was excess inventory over christmas. i want you to tell me, jan, the
obsession, do you go to your people and say, listen, we are too obsessed, things are fine? >> generally i tell them don't get obsessed over one data point. i think i've said this plenty of times on this program. >> i know you said it a bunch of time i kind of liked it. >> stop obsessing. >> you did it while you were here. >> it was all you, jan. >> is this cohen versus bla blankfein? is this the great tight collision we've been hoping for? >> i don't want to. >> i want you to get personal. it's like blankfein versus bridgeford. >> thank you jan is from goldman sachs.
>> predator versus. >> let's get to carl he's at the winter olympics in pyeongchang, south korea hey, carl. >> hey, that was spicy, michelle obviously shawn white is the headlines as we see him dominance in snow board first u.s. winter event three times half coming in fourth in soe soi this has been about gossip and an apologized for that on the today's show there is no indication, guys, if this has any berg what so ever on those deals for sponsors. speaking of sponsors, visa is major sponsor here at the games. they have been a global sponsor of the olympics since 1986
they have exclusivity over any credit card retail here at the games. and to show you how much they are getting for their money, we take you to the super store. >> welcome to the super store. out of all the companies sponsor the spliek gameolympic games, nn has more than visa this store in rio, $15 million just at the physical site alone. even a store within a store. north face hasten ientire store north face, and pyeongchang slogan here. sweet potato sticks, lollipops, pyeongchang chocolate. not everyone is going to need a stuffed curling stone but they might need some hand warmers and if you are not going to pay for it with this, there is only one
way to do. jim, i know you love to talk visa,they sold it in 2009, goes through 2020 globally mcdonald's and coke pay as much as $100 million for four year cycle, winter games and summer games but companies often spend about three times that much marketing that partnership also, visa which sponsors coke, proctor, make up half top sponsor level, about a billion over four year cycle all of those deals are up in 2020 so it's going to be interesting to see which ones decide to renew and which ones like mcdonald's for instance start to piv pivot some of their marketing dollars anywhere. >> boy, i'll tell you, some companies that hasn't said this is the greatest marketing brandsing. but you know what, carl, these people that are core cutters
watch these games in another form, you have to reach them from even though i know it's out of fashion, allegedly with google and facebook, i don't know how much that branding still works. but how much of the karma is they can't cutback because it's like opiates for them? don't they like the tickets they can get to the biggest customers? i'm not kidding. >> of course. >> it's hard to get tickets to the events visa has so many tickets, carl. >> it's true and to your point i think behave already broken the record for the amount of streaming hours that have come out of nbcu although more than half of households have watched pyeongchang. 59 million households, 110 million viewers. that's pretty good number. by the way, markets in denver and salt lake, it would appeal
to this in winter. >> kwwhat else is on? >> you know what, carl, i need a stuffed curling. >> you need one? >> yeah. >> all right i'll go to the store right now after this. >> he does he brings good gift books. he did from, where was it, brazil >> you did not get a bikini? >> i did not. >> that's so much information. >> carl, we see you in a little bit. >> see you soon. >> when we come back, chipolte burrito boss, the man getting ready to take over the company, and why the stock is up 15%. getting another look at stocks we did open down, but are now positive on s&p, "squawk on the street," we'll be right back
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something that chipolte is making priority this year. but, juim, when talking earlier about this, you talked about potential culture clash. >> yeah, taco bell is known for speed, technology, to get it to the customer t as in expensively as possible with edgy ad campaign chipolte is known for taking time to get it right, with ingredients that are natural and organic that have very few of the kinds of things i read in the first hour that are on the label, not to franchise because you want control obviously taco bell is franchised and make it so it's quality control. on conference call they talked about how great taco bell is doing in russia and brazil so these are the exact opposite. and i think everyone at taco bell who is mid level is saying oh, my god, are they going to
challenge us and everyone at chipolte is saying, are you kidding me, you got the guy from the culture that we've hated and had been instilled for years to hate. so, yeah, it's a culture clash. >> they want basic supply chain management and how to keep the stores clean enough to people don't get sick. >> he's known for efficiency and getting the job done but you know what if you want that, go take someone from mcdonald's. >> remember mcdonald's was the seed money for chipolte. >> i see someone in the future perhaps nicole will come and answer questions. >> i also think ceo throughout this remarkable ceo is also part of the food with integrity moment you have to hear brian nicole come out food with integrity i highest priority not deal meal, bloom oty, one of the great website campaigns but
not what chipolte is known for. >> food with integrity. >> spotlight. >> which ones. >> >> we'll find out financial related stocks in focus. so joining us with etf spotlight. >> okay, with integrity, maybe, let's talk about stocks skittish in early trading interest rates across all maturities on the rise in response to higher prices indicated by cpi data. over the course of several months, it was narrowing of the difference between long-term rates and short term rates that had a lot of traders attention so that called yield curve was flattening that had impact on bank stocks conventional wisdom is banks tend to do better when difference between shorter and longer term rates. as financial related stocks are going to be huge focus leadership right now in today's
market as we get back to green territory is many coulding out of the financial sector. and a couple of industry specific funds are out performing on otherwise, at least for now, lack luster day have you the spider s&p bank up by around close to percent, right now percent at this point. also the spider s&p 500 up by similar amount as you can see there. both funds have been more actively traded as of late given all of that recent market pull back also traded a little more than 10% of average daily volume over the last 60 days just so far so pickup is happening right now in trading volume. interest rates continue to be a focus. and these bank related etf for traders also may mean that traders don't pay as much to the yield curve will do so in the future so, certainly, a couple of etfs to watch. >> okay. and we will do that, don, thank you back at our head squatsers when we come back the new ceo of
match book, mandy ginsburg, she's going to join us, tinder app. plus as stocks hit all-time high yesterday, remember that came out of iac give you another check on stocks at this hour almost an hour into trading. you can see where we are up on all the major averages, after we started significantly down "squawk on the street" will be back right after this.
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mandy ginsberg can you explain to us how many millions of people have relied on you >> it's incredible we have tens of millions people on our apps across the country it keeps growing. >> i think you have to tell me about this a lot has switched to gold can you tell us that gold. these are two terms the younger generation swears by. >> what you are talking about is how you mon tarize on continue ge tinder gold is simple you get to see who has liked you. which is probably the human driven curious things. i want to know who is interested in me. we launched it not only as separate sub description product but priced high and it's been a real win for the business.
>> so the likers know when they like somebody who bought the extra level of visibility? >> what happens on tinder is people are swiping and you are not sure who likes you with this likes you feature, you market as gold, it's interesting because you get to see who is interested in you. >> but do the likers know? >> yes. >> so tinder added 540,000 subs in the fourth quarter. is that growth only continuing to grow? can you continue with that rate? >> well, i mean, when we introduce a new sub description product to millions and millions of people, you definitely see ebb and flow you see tons of feature get exposed so it will come down a bitd so we are seeing tremendous growth. >> is tinder the most of the businesses you own >> we operate 38 brands globally, tinder is biggest growth and we also are seeing global expansion with tinder. >> let me ask you, i'll put this
as kind of family way to put it, there seems to be i think a skism. you have some of the people who use your product for what i would say is a very special one off evening. and others who have done long-term relationships. given it's valentine's day, one night stand versus long-term relationship >> this is romance day, come on. >> well, a lot of time think long-term. >> one can turn into the other. >> that is true. >> how many? >> so i'll tell you a lot of our users find dates, marriages, and you look up the new york times marriage section you'll see this as well. so they use it for variety of reasons. i think in the u.s. alone, 10% of relationships started on apps now it's over 30%. so happening here. >> mobile, mobile. >> and what's happening here is
now transcending across the globe. where there is a lot higher stig math as that erodes we think we'll grow those markets fast as well. >> you say have you 45 grands, can you really do the dating community 45 different ways or is that region like tinder australia? >> it is region. for instance we have great growing in japan pairs which is serious. a brand in u.s. over 50 called our time it's really about market segmentation one size does not fit all in this category. and the portfolio does make sense. >> i remember talking to dillard already a couple of years ago for tinder largest shareholder. you can walk into a bar because geographic location as well. is that the case you can know everyone around you avoid conversation and be on your phone? zblu want to match people relevant to you. you don't want to match 50 miles
away especially in ha place like new york city. so provide you relevant matches versus destination but not telling you who is sitting next to you. >> has isc given you plans >> at this time stocks are doing well, and business is doing well spinning off in history, but at this point we feel pretty good where we are. >> i need to ask you about affinity groups. talking about olympics seems like there are people in particular places, particularly people who are in a foreign country, where you get a spike of user ship. >> yeah, i mean, four years ago in sew chi we saw the olympic village blowing up and swipe rates increase, not just athletes, but people coming to the olympics, and seeing it again 600 swipes in the village of the olympics right now. >> one of my associates wants to
thank you you because he met his intended through your app. he says you have to listen the way it works, we are gold members, almost sounded like amazon prime not bad. congratulations for you to knocking the cover off of this. >> thank you. >> and jim thanks to you for sticking around. we get extra half hour of cramer time. >> thank you for letting me speak. i think at home they like that. >> they do jim cramer everybody. >> love you. mean it a lot. >> yeah, sure you do love you too happy valentine's day. >> same. >> sue, take it away. >> i'll. and i love jim kramcramer as wel happy valentine's to you one person wounded in a shooting outside the national security agency at fort mead that's according to the associated press. authorizing surrounding two handcuffed people after a black suv ran into a barrier outside
the maryland base. foreign minister signing an aide agreement in amen, to almost $1.3 billion until the year 20226789 at a news conference tillerson was asked about u.s. relations with turkey. >> turkey is still an important nato ally of the united states they are still an important partner the region for us. and we need to find a way to continue to work in the same direction. we are committed to the same outcomes in syria. >> prime minister netanyahu dismissing police recommendations to indict him on corruption charges he called the allegations full of hole like swiss cheese end quote. he says his country remains stable that's it. let's go over to jackie for the report. >> good morning jackie. >> good morning sue. you can see crude oil is erasing
losses on the back of this report building crude oil of this and we have arise in production 10.2 billion barrels a day but two bullish factors lending support. exports almost 5 million barrels a day. and also stocks they were down 4 million barrels a day. so traders and investors are balancing. you can see trading at $59.. back over to you guys. >> thank you, jackie, at headquarters up next we'll go back to carl at winter olympics in pyeongchang. "squawk on the street" will be back right after this. >> it's called street, try to imagine a street devoted entirely to coffee
love affair started as a coffee festival and all driven by the local water which is said to be clear. they call it sue con sue which means water flowing between rocks. >> you might ask how all these shops stay open, mostly mom and pops but to give you an idea about the obsession. this is coffee and tea magazine in korean. multiple blends from across the world. this one is themed greek it's called santa rin oo. but a couple of bars down a coffee with a theme of finland and down is aispn and canada
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>> so if you are just tuning in and looking at the markets, if you tuned in last after the inflation data came out, you might want to wonder what happened 8:30 stronger than pektsed knocked the stuffing out of the future, went deeply negative after being positive but take a look at your screen seemed to shaken it off. and the nasdaq higher by 60 points gains anywhere from quarter of% to more than dwrthree quarters a% so much for that, david. >> as we say at the open, don't pay any attention right now to where futures may lead us. because inevitably it seems, michelle, it changes very quickly. let's get back to carl in winter olympics in pyeongchang, south korea. carl. >> you ask a south korea what
they have on their phone for apps, it has banking and payment and maps and direction it's actually on thes list of top ten global messages apps but we wanted to know why kakao is such phenomenal. >> it's an app more popular in facebook in korea, kakao it's called and more than 90% of phones have this downloaded. many may know it as messaging text to provide emoji. but provides mobile media, and it has recently caught their attention, they invested ceo tells us the first time he met him. >> when i went to chooina last
year, i met jack mau, because. >> this internet giant has more than 50 million active users and first profitable messenger in the world because emoji business is booming. it's characters and stores continue to grow around south korea, selling stationary, and even cupcake zbls it is public trades on the cosby. in addition to this, some. big stakeholders including tpg and ten sent and it is a reminder we talk about facebook and google as these global big guys, which they are, but still wedges in various markets around the world where messaging at least can be pretty provincial. by the way, the koreans love their mascots so some of these kakao animals, this is little
moussey, and this is little ryan, i know it's not a stuffed curling stone, but maybe something like this. >> yeah, sure. i'll take it yeah they are cute. i was impressed that app can do so many things banking, and get you a taxi. >> yeah, i think it's the transportation, the mobility, and the payments, and the emojis and the messages even there is various rules in korea about government data satellite data which is one reason why there is google maps you can use google maps here, but if i wanted to find direction toss dri directions to drive around the country through google directions i can't do that for that you have to go to kakao, so that purpose of the app makes it powerful here. >> i bet. >> thanks, guys.
>> as we go to break, don't miss tomorrow 9:00 a.m. eastern time, dennis mullenburg will meet with us take a look at this hour, we are back up on the markets after a lower open we have a lot more "squawk on the street" right after this today, smart planning is helping the new new york rise higher than ever. as the world leader in unmanned aerial systems, we're attracting the world's best talent to central new york. and turning the airport into a first-class transportation hub. all while growing urban areas into vibrant places to live and work. across new york state, we're building the new new york. to grow your business with us in new york state,
visit esd.ny.gov. to grow your business with us in new york state, what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley a bright spot in the connection. >> message about the economy this is somewhat encouraging
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gentlemen. good to have you here. barry, let me start with you you wrote this you were right what do you think happens now? >> it's difficult to say the s&p has bottomed at the average which is follow up note to that. one of the concerns i have is there a directional change in bank policy and i can list a half dozen reasons why there is directional change so we'll shop around here for a little while today's reaction to news flow is yes the retail sales disappointed maybe they acrossed each other out but i do see the fed tightening steadily and taking it away over the next year. >> are you not willing to call bottom at this point but brian already did. he said on monday we hit bottom. brian, do you think that's the case make the case? >> well, bottoms are a process
we try to provide goons and to reta guidance i don't care about 200 day moving average i care about stocks. and we believe that the valuations have come back down earnings growth hasn't changed gdp hasn't changed you know what's interesting, a year ago consensus was worried about inflation. six months consensus was worried about inversion. now the opposite is happening. and now consensus is worry guess what consensus is always worried. and they don't do the work anyway so they need to work on fundamental perspective and think about investing longer term bull market is very much alive you have to picture spot. >> what about the rhys in interest rates, do you disagree with the consensus directional change in central bang policy and what it might do to the
markets? >> we disagree with what it might do to the market again, do the work if you go back and look at prior market cycles when the economy is improving, interest rates are going up that's a good thing. if the economy is improving, earn iengs will improve. the problem with the market is people lack perspective. i'll quota line from cool hand luke, what we got here is a failure to communicate no one knows how to invest anymore. we forgotten how to look longer term we are more worried about where the puck is right now. we are not worried about where the puck is going. we have to start looking forward. the american economy continues to improve we are transitioning from bad news is good news to good news is good news we need to take a deep breath and fundamentally position. >> brian, you would think the market is down 40% the way you are talking. things have been pretty good, haven't they >> no, the way that the media and consensus and short termers
are acting were acting like the market is down 40% this is normal correction. this is very positive. fundamentally nothing has changed about the market this is an opportunity to add the positions longer term. >> brian for bonds versus stocks. you expect we're going to see them rise over the course of the next year. how do you view asset allocation in that new environment? >> i mean, i follow the two ds, direction and delta. i think the fed has embarked on a more significant tightening cycle. we had a significant amount of dollar weakness the past year, that offset a lot of what janet yellen did the last year whenever you have this much fiscal stimulus, $300 billion, on top of tax cuts, you'll start to see the fed lean against that we have already entered the tightening cycle
you come off 2% treasury yield as recent as labor day, talking about a significant delta for yields that's what you discount rate your earnings on so we're looking for higher discount rate capping out the gains. as to what the s & p does, i think it has a hard time getting past the january 26th high maybe by third quarter we do, by fourth quarter we could fade. >> what are you projecting in terms of yields when you talk about the ten year, what does that imply, talking about discount, i mean, a lot of people talked about multiples. what are you willing to pay for future earnings based on what you expect to be higher yields >> when you look at the discount rate we use, it is a modified fed model. some use junk yields in the past you could use treasuries, now mid grade corporates is the way to go after the financial crisis mid grade moody's yield went from 4.7 beginning of the year,
4.1 now, spreads widen as they widen, put a 5% rate on earnings, you find the s & p would cap out, despite strong earnings because of the large change, change in baa yield off sets change in earnings. it is num rater denominated. >> bottom line choices where you want your return, what risk you're willing to bear as we look forward guys, thanks so much >> thanks. let's send it to john ford, see what's coming up on "squawk alley. >> stocks off their highs, netflix coughing up big bucks to snag ryan murphy from fox. is this going to work for the b business model we dig into that on "squawk alley.
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led by shares of chip related stocks also notable is facebook which is right out of the gate on an otherwise bad start. keep an eye on the stocks, guys. back to you. >> we will do that thanks over to jackie deangeles with a look at gold. >> 1352 was the session high, about $20 pop because of the inflation data we got this morning. gold traders, commodity traders in general will use these assets as a way to hedge against inflation. you can see not just gold moving, commodities are higher including copper back to you. >> thank you we have more ahead on the markets. "squawk alley" coming up next. don't go away.
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good morning, it is 11:00 a.m. "squawk alley" is live. ♪ ♪ good morning welcome to "squawk alley." with me, david favor, courtney reagan we are going to get to south korea in a few minutes first to the news. prices signaling inflationary pressures are rising and raising concerns the fed will hike rates at f