Transcripts For CNBC Squawk Box 20180216

Higher again, it has been a sharp rebound from the lows. Futures up 90 on the dow 36 on the nasdaq just under 10 on the s p 500 dow closed above 25,000 again yesterday. How about asia a check on the overnight session. China is closed, right, for the holiday . Yes, the Lunar New Year the Chinese Exchange was closed except for the nikkei you dont believe it until you read it in the teleprompter. I would believe him before the teleprompter did you do fast moneyfast mont night . No, there is no fast money. I knew that i watch around the clock. I do. European equities to check on those as well. Lets see how we are set up for the session here there is the nikkei in japan that was the lone market in asia great across the board for europe strongest gains on the periphery. Italy and spain up about. 08 the tenyear yield, just under 2. 9 there, you can see the rest. 30year, 3. 14, the fiveyear, 2. 639 we were eigall waiting for tt three and didnt get it. It went the other way. You listen to rick. He will tell you in the past when we thought we were getting close again, it would go around. This time, it is not going to happen it is not coming back. Are you sure . What about 2. 6 . I dont know if we have the chart. You look at the economic surprise index it is rolling over which is the most predictable . It always does. It feels like we have to slide back down before we can start to decline what happens if jay powell is the slightest bit dovish everyone thinks he is going to be this hawk he is the first person that talks about a loweryielding tenure no one has spoken about it. All that talk about how they are watching Market Conditions that is a dovish thing to say. During the hours of preparation of work for todays show, we are having a manulife economist on on the 8th. You might be gone. He is saying that the gdp may have a one handle. For the First Quarter that would put us back. I would say that even though the comments of the fed officials were kind of giving a nod to the market, this is probably the first rebound from a sharp pullback where the expectations of what the fed were going to do did not get completely downgraded. We are still talking 3 or 4, 2. 5 or 3 he says they fixed the First Quarter. The fed has never changed anything they do based on what i told them. They actually started looking differently. There is some giveback from the hurricane and trade sblchlt did did. U. S. Regulators blocking the sale of the Chicago Stock Exchange to a group of chinese businessmen. They signed off on the bacon deal keep the ex chachange the move by the s. E. C. Ends a twoyear battle. The deal was proposed in 2016 and would have been worth an estimated 25 million. Japans government has rea pointed kuroda for another five dr yee fiveyear term for the governor. They appointed Deputy Governor easing advocate. On todays economic agenda, january Housing Starts and then Building Permits are out at 8 30 eastern a. M. Along with import prices at 10 00 a. M. , as for earnings, look for results from cocacola, kraftheinz, Campbell Soup and deere. Allianzs Fourth Quarter profit fell. The results came in shy of forecasts. On a positive note, they say pimco posted inflow for a sixth straight quarter walmart is in talks to buy a more nan 40 stake in Indian Flipkart this could value flipcart, an amazon rival, at more than 12 billion. Roach is buying cancer startup flatiron for just under 2 billion. Flatiron is backed by alphabet and taps into multiple data points in cancer cases to choose the best treatments. It stores billing data and doctors notes lets get to mike santoli now. The market has passed whatever tests we have had since that selloff we are three weeks from the alltime high. Two weeks before the big gut check started with the inflation scare, the market has been checking off a lot of things and responded to oversold conditions the s p 500 has been up more than five percent. We are at a point where i think the s p 500 is back up into a zone where it would be pretty logical for it to stall out. A lot of people focused on this area for a few reasons it is pretty close to the year to date flat level it is right at last wednesdays high a 50day average is here essentially, if the marquettekes looking for an excuse, stock valuations relative to bond yields have never been higher except for january of this year. Are we going to come to terms that we have something close to a 3 tenyear yield paying more for stocks and allow earnings to come through later in the year and make the market slightly cheaper . Thats bwhat we have to see. Volatility, it has been doing the right things it is below 20 right now you have to see that normalize more before you can essentially say this scare was over. If we keep rallying, we are going to talk about kelly clark son. Remember, the Kelly Clarkson rally. I said we have one punch down and then it gets rid of the complacency and we ral ly back up it is what doesnt kill you makes you stronger you are the first one to talk about Kelly Clarkson what doesnt kill you, make you stronger watch the breadth of the market. Some people are quibbling. This is not as quite as broad as the rally in january the fear is that the cta accounts and these risk accounts took over and they sold the market off, worried about the sniff of inflation and the tenyear they are responsible for rallying the market back so that could be the monkey in the they cut back and jump back she has a song. Thats one of the oldest, best known songs what doesnt kill you makes you stronger. She is fantastic. Thats her most wellknown song. What about the guy that does the dr. Pepper commercial . I dont know who that is. Is that the American Idol guy . Yes steve brasso is our guest host for the hour. What do you think is going on with the market . How seriously do we need to take inflation concerns a few of these hedge funds did get caught in the vol trade. So for the nearterm, i think that trade continues to unwind the 3 lid is on the tenyear. You think it is a lid yes over my 25 years on the street, you continue to see technology and other parts of the economy temper inflation fierce. So you would be a buyer i would flow Health Care Inflation has not been that high lately. It is such a munhuge part ofe economy. The whiff of that crosses all through health care. You dont think we are going to get another hot wage number cpi is not going to keep going up i think we are going to get another hot number i think there is going to be a lid on that tenyear we have been calling for a 4 tenyear for 15 years. At some point, it is going to go a little higher. I dont see that part of the economy getting the 3. 5 yield this year. I dont see it you start to ask if you need it to be truly an inflation story for yields to go up. Everybody talking about the supply demand with the fed tapering back and big new issuance when you look at cpi, a lot of that, everyone talked about apparel. It is a seasonality issue with supply issues. When you look at Energy Aspect of it, oil, where it spiked higher and then immediately, while we are counting the chips, it was already down 9 and it is rallying back now. These are transitory events. We are seeing a better economy and better job creation. There is going to be some Wage Inflation. It appears that the macro factors will overtake the micro factors. Technology is going to invade our entire life. It already has the largest parts of the economy, that will be tempered going forward. How come we are not talking about a Corporate Tax rate that went from 35 . That was the main thing we were all discussing 35 to 25 back to 1940s level. What kind of a tailwind is that . It is a good tailwind we are yet to see what it means for the economy. We have yet to see massive hiring we have yet to see that reflected in what the corporations are doing with it you are using way fewer workers to get way more productivity they have made the point that companies will invest tax savings into lower prices. There is some evidence that is happening in the Retail Sector that goes back to what you are saying maybe even Something Like this massive, st massive tax cut keeps a lid on inflation. In davos, we kept bugging them, what if it gets competed away exactly you dont simas sieee massive h. You are going to see wage increase and people get better jobs the thing that bothered me, that finally occurred to me, we have been trying to do this Corporate Tax reform for 30 years. The complaint that is we are doing it at the wrong time because the economy is already at a peek. The economy is doing okay. You finally have a chance to do it and you dont do it for the longterm. I totally agree what were we talking about 12 months ago about Corporate Tax reform now, it is a matter of, wait a second we were talk about longterm reform that made a lot of sense and still does now, it is 1 trillion the criticism is that it is keynesian from the people that love keynesian they just want to throw money in there. When the economy is running hot, you are supposed to pull it back we have gdp that is running higher i dont want to speak for the administration any were trying to say, we have been caught up in this anemic growth globally. Global growth has been ratcheting up but the United States growth hasnt been. Try it. Turn it up to 11 and see what happens. Thats why it has been interesting. I dont know your view on this we have talked about rates going up the dollar is so low the dollar index is at a fouryear low. Thats a little bit weird. You would think the dollar should be rallying, because Interest Rates are going up. What does that say to you . I have a thought on that. You are seeing a lot of money flowing into the u. S. Markets. I think this tax reform and what we are seeing in our temperatures, there is a lot more view that we are still the best economy, the best growth economy, the most capital formation. The number of Companies Going public will explode at the end of the year. I think that is bespeaking what the world is seeing. We are still the hub of the financial markets. I can give you 13 reasons why it should be really strong right now. Instead, i dont know if that weakness goes back to what we are talking about, the deficit issue. We also have a tenyear arguing whether it is going to be three or not. Germany and japans tenyear, look whats going on there the flip side of the coin t mark, thanks for joining us. Do you think the Country Singer is a bigger deal . It was not constantine marolis in the dr. Pepper. Can you wait until we go to break . Meanwhile, constantine marolis was nominated for a tony for rock ofages. Coming up, a look at the darkest parts of the global seafood trade. Between the ocean and the grocery seafood counter, there is a brutal reality that includes murder and slavery. Thats cnbcs special report that sounds horrible thats next. Mom, dad, can we talk . Sure. Whats up son . I cant be your it guy anymore. What . You guys have xfinity. You can do this. Whats a good wifi password, mom . You still have to visit us. I will. No. Make that the password you stillohave toovisit us. Thats a good one. [ chuckles ] seems a bit long, but okay. Set a memorable wifi password with xfinity my account. One more way comcast is working to fit into your life, not the other way around. Deere just reporting, the heavy equipmentmaker, posted numbers, quarterly profit of 1. 31, beating estimates by 11 . Deere also has raised its full year forecast due to the effects of tax reform and stronger demand in key markets. The average american consumes about 15 pounds of seafood every year a new cnbc documentary finds the crime from slavery to murder is often part of that menu. Our fed kemp joins us from singapore with more. Most americans would be surprised to know that 90 of the seafood that they consume is imported they would also be pretty surprised to know how rough a business that can be for the fishermen out there who are catching their dinner. Workers may earn just 10 a day. That keeps prices cheap for us it is tough, dangerous work. The industry has an even uglier side, slavery. Human Rights Groups say forced labor in the fishing industry is widespread this boat captain says it is Common Knowledge translator sometimes they force people to go to the boats and my boat comes ashore every day and people have to be willing to work. Where they do something to anger the captain or fail to perform, they are killed and thrown overboard most americans would be surprised to know that about a quarter of the wild caught seafood in the United States that we consume is in some way illegal. It is something that conscientious Consumers Want to know something about if it is illegal, ted, i wonder i didnt know that i understand the conditions can be pretty bad. They are going to have to do more to crack down on the supplier, right . Illegal can mean a lot of things it can mean slavery, something literally that brutal. It can mean using illegal methods to capture fish. We have gotten so good at capturing fish that the fish stocks cant keep up other times, it can mean that you have Illegal Fishing boats sort of trespassing on the waters of other countries and literally going in and stealing their economic livelihood, their catch. Ted kemp, watching the cnbc document tomorrow night oceans of crime. You had to tell us on a lent friday a lot of good options. I was raised catholic im now episcopal. It seems easier. If you can actually get in with a lower bar . Yes my uncle was a priest, a great guy. Dont look at me like that coming up, manufacturing in america is on the rise the ceo of Emerson Electric joins us he has a read on the economy as we head to break, a look at yesterdays s p 500 winners and losers each day our planet awakens with signs of opportunity. But with opportunity comes risk. And to manage this risk, the world turns to cme group. We help farmers lock in future prices, banks manage Interest Rate changes and airlines hedge fuel costs. 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At cognizant, were helping todays leading banks make better lending decisions with new sources of data so, multiply that by her followers, speaking engagements, work experience. Credit history. That more accurately assess a business chances of success. This is a good investment. Shes a good investment. Get ready, because were helping leading companies see it and see it throughwith digital. If you missed the show earlier, the song is for joe good morning, u. S. Equity futures. Last check, the dow was up about 100 points we have ten for the s p and 36 for the nasdaq up. We are watching the price for bitcoin, which fell back below 10 k after yesterdays rally it is still up 13 in the past week we have been talking tax cuts earlier. Now, we have got some guys that might actually know something about the effects and regulatory relief, whether it has boosted confidence in manufacturing. Lets bring in jay timmons, president and ceo of the National Association of manufacturers. I can imagine you are going to say it is good i want you to temper it. Pretend you are not totally vested in it you, david farr, Emerson Electric ceo i want you guys to go off. We still have so many sceptics you guys are biased, obviously can we get an analysis of what it has done and what you think the longterm effect will be absolutely. Dave has asked all of our 14,000 members to give some input on what they expect to do with the benefits of tax cuts it is not just tax cuts from last year. It is also the regulatory relief we have seen over the last 14 months we have story after story of manufacturers who are planning to invest, who are planning to hire, to raise wages and benefits the news has all been good i have not heard any negative sentiment. When you do the numbers, it is a small percent you have a whole side of the aisle calling it crumbs. I dont think they are in touch. The wind shifted back to manufacturers starting last summer as we started debating around regulations he is really focused on trying to make manufacturing a better place this is the first time people in my industry see an incentive to invest. We have not had incentives to invest we have had incentives to invest outside of america, joe. Thats the big issue we have someone that cares about American Manufacturing you said president clinton. You meant bill the meant the other one. There but for the grace that almost happened kidding. Fair and balanced. If you look at the cusp, they are starting to invest it is a service economy, farming, agriculture, never coming back. It is not important. There are 40,000 people in the United States in manufacturing. Manufacturing is great. We should make things here we can just because of labor and the difference in what costs are in different parts of the world doesnt mean it cant come back here we can make things does it make you finally competitive . It does to that point where everyone says you could never manufacture here does the 35 going to 20 finally make it more competitive for you to establish and thrive the way you once did decades ago . The answer is yes my main competitors are typically europeans. They have had a tax advantage for years. We have other ways we can arbitrate. With this tax rate, we actually have an advantage. You will see incremental investments in the United States this is one of the best places in the world to manufacture. The biggest issues we had were working this program with the white house and congress, getting this fiveyear window for depreciation we need time to reposition the workforce. We are going to have to change our workforce. The average age of people in my factories, unfortunately, are my age, joe in five or six years, they are retiring we need to figure out how to upgrade and upskill the manufacturing workforce to allow them to stay productive. As we make those investments, to be a little more auto nativmatie we will see 5 , 6 growth rate for the next three, four, five, years. How much is just geographic with companies that build things thats never coming back, is it . Obviously, thats part of it. What we have heard, in the middle of our state of manufacturing tour, two weeks, eight states, what we have heard is confidence and optimism in the potential for manufacturing. Right now, to daves point, we have 364,000 vacancies in manufacturing. That number is going to grow to 2 million by the year 2025 as dave says, we dont have folks with the right skills. Our job is to get education and government and business all working together it make sure we have folks like that you are going to see the european competitors shifting in they are going to have to produce. The Currency Exchange and ratios, they are going to have to shift if this stays and the dollar stays weaker and the investment period happens, you could see some shifting of manufacturing back and forth we shifted around from time to time based on whats happening with the currency rates. There is no reason it cant shift back we will be more productive as nation would you have been as bullish if it was a revenue neutral 27 that we ended up with are you really like the 21 . The 27 wouldnt have helped us we would still be slightly behind our major european players. That would not have helped us. We went from basically u. S. Paying 36 we are now down paying 22 people are worried you are going to buy back stock and get your earnings per share up, because you have some incentives. We do a Quarterly Outlook survey what our manufacturers said is twothirds said they were going to invest in new plants and equipment in the United States threefifths said they were going to hire new workers. Half said they were going to raise pay and benefits let me give you one anecdotal example. Everybody knows corey adams, the welder, from staub manufacturing. He was in the gallery during the president s state of the union address. Staub manufacturing, 25person workforce is expanding to 37 folks because of tax cuts. Thats a story we are seeing all across this country, whether they are large manufacturers or small manufacturers. It is pumping a lot more blood into the economy from the Large Manufacturing companies, the Global Manufacturing companies are going to end up with more cash the Capital Allocation is going to be key. We will be allocating more towards capital spending, productivity, expansion. At the same time, we will have more money to invest in acquisitions we will have a capital structure. The capital structure changed significantly. Our effective tax rate went from 31 down to 24 . Thats going to be normal across u. S. Companies we clearly want to invest. Thats what we are paid to do, to invest. Thats our first choice. We are sftill going to have a very liquid balance sheet. The drive is to invest we want to grow. We make more money by growing, not by buying stock back infrastructure, again, as devils advocate, we keep adding to the deficit with these things you guys are probably longtime republicans. The criticism is that you have abandoned the fiscal discipline. Now, suddenly, you might as well be a democrat. Democrats now are arguing they have always been very fiscally responsible. We are in this weird world it is like a busineizaro univere we absolutely have to have Infrastructure Investment. We are big fans of the president s call for 1. 5 trillion of Infrastructure Investment manufacturers are losing money every single day they are not able to get their goods to market. When people say this was too hot to do it now, is it too hot to do it now or do you think this is the right time everything. Is this the right time . It absolutely was. We have to get growth moving in this country we were stagnant for years we cant allow that to continue. You ask about manufacturing in america manufactures, made in america. We have one for everybody. This is our tour jacket, 2018. Can you stitch in a great here, make America Great i am not wearing that in new jersey ill tell you that much. Manufacturers are the ones that do make America Great bill clinton. The last president that had an interest in that. I said president clinton. I know you did. Dont say it again thank you. Coming up, another big night at the Winter Olympics in south korea. Carl quintanilla is going to join us live right after the break. Chief executives from wpp, Waste Management and quicken loans will join us to talk about the economy and their busissnees you are watching squawk box on cnbc proach remains. Global markets may be uncertain. But you can feel confident in our investment experience around the world. Call us or your advisor. T. Rowe price. Invest with confidence. And made it liberating. We took safe, and made it daring. We took intelligent, and made it utterly irresistible. We took the most advanced eclass ever, and made the most exciting eclass ever. The 2018 eclass coupe and sedan. Lease the e300 sedan for 569 a month at your local mercedesbenz dealer. Mercedesbenz. The best or nothing. Flexshares etfs are built around the Way Investors think. With objectives like building capital for the future, managing Portfolio Risk and liquidity and generating income. Thats real etf innovation. Flexshares. Built by investors, for investors. Before investing consider the Funds Investment objectives, risks, charges and expenses. Go to flexshares. Com for a prospectus containing this information. Read it carefully. Kubinska week one of the winter games is winding down. The competition is getting more intense. Carl quintanilla is joining us live between you and andrew, what competition . You mean the competition in the games, not in covering the games . Reporter no, no, different competition. Good morning, man. Good to see you. You mentioned it has been a rough day here for team usa in ski and snowboard. Not a whole lot better m mens figure Skating Short Program nathan chen, the 18yearold sensation, made mistakes in virtually all of his jumps, falls on the quadruple lutz. That basically ends his hope of medaling he came in as the only undefeated male skater of the year vincent zhou, nailed his quadruple lutz, for the First Time Ever in. Ali history. Four rotations from the outside of one foot to the outside of the other foot adam ripuppon, a much better skate. He collapsed with joy. Here is how the program looks as Short Program windes up. Rippon comes in seventh. Zhou12th and chen, 17th. They are not done. They are going to have the free skate. Between that and Mikaela Shiffrin and lindsey jacobellis. We were getting spoiled when the u. S. Was dominating in mens and womens snowboard. I dont know if you are done watching basketball but there has been a lot of activity i know you will want to see. One game tomorrow, i will have to come back to domestic viewing at 4 00 tomorrow is andrew not to digress did he arrive safely reporter he is on the ground did you pick him up at the airport . Reporter seoul is about three hours away you were too busy reporter im talking to you. He is in a car hopefully, he makes it here before the end of squawk. Did he ask you to pick him up did you say no or did you say take an uber reporter if he did ask, it hasnt gotten to me. I would have said no im kidding if you werent doing it, i would think you might have great job, q. You are going to be doing the rest of tochltd day. He will be tired reporter maybe out here, maybe you will see sorkin come by maybe he brought you some of his new cologne. I thought maybe it should be called billions, the smell of money. Reporter do you do it here, joe, or on the wrist i do it all over, everywhere, like my axe or whatever it is. I dont shower anymore you dont need to. Where else can you get this . See you later, carl. I think he just goodbyed himself. Security experts are gathering in munich for one of the biggest industry conferences in the world our hadley gamble is there with an interview with one of the top Security Officials in the Trump Administration reporter we spoke to americas top security with cybersecure. The white house blaming russia for one of the costliest cyberattacks in u. S. History it costs billions of dollars lets listen in to what he had to say we saw an indiscriminate attack against us. They used a cyberweapon launched in the dark, sprayed out, hit numbers of companies and individuals and caused damage to our economies. It stopped shipping from moving. It stopped companies from being able even literally to get in their buildings at times where the front door was computer controlled their phone ws were computer controlled and their communications around the globe were down. It literally shut them down. Thats unacceptable. Reporter this is the United States and europe directly blaming russia for the most costly cyberattack in u. S. History. This cost billions of dollars too companies globally, including fedex. What happens next . What kind of International Sanctions will be placed on russia it is interesting that this is the first time they have called russia out for this notpetya attack who is to blame . Is it the government for not taking of u. S. Corporates or u. S. Corporates for not putting in the security measures going forward. You cannot blame the victim whether the attacker is a nation state. They are hoping to hear from in terms of the corporates, is that they will be working together much more closely going forward. If they have named them, what are they going to do about it . Thank you very much. One industry riding the wave of economic growth, tax cuts and consumer optimism, it is the boat business. We are going to get a live report from the Miami International boat show. A quick check of whats rks. N ing in the europea maet well be right back. Mvo youre not doing work to help somebody, youre gaining something from meeting mr. Adderley. Its a calling to not only everybody in this neighborhood in miami, but to the nation how great we are. And how great we can be. Ill stand by you. Ill stand by you. And ill never desert you. Ill stand by you. Oh, thats okay got it rising tides lift all boats. Will the growing economy boost sales for boats. It works that way. Ive heard that, landon dowdy. Joins us live from the Miami International boat show. Pretty nice. Pretty nice. Raining here good morning good morning, joe thats right, were at the super bowl of boat shows here in miami with more than 1400 boats, throw in the accessories, you have about 3 billion worth of merchandise. The industrys had a pretty good run so far its on track for its seventh year of growth it has slowed a little bit according to Statistical Survey data, boat sales grew 4 that is down 5 1 2 from the year before a closer look at those numbers revealing sale of pontoon boats is up. 66 feet and up rose 11 in 2017, but a big boost for the boating industry, thats Consumer Confidence and tax reform, especially for the higher income taxpayers. The 1 should get an average cut of more than 51,000 at the recent boat shows in new york, dallas, st. Louis, they saw a 10 to 15 bump in attendance from prior years. Now does all of this recent market volatility mean rough waters ahead for the boating industry i talked to industry experts, analysts, to consumers on the ground here, they said, you know what, were not really all that concerned because the underlying economy is so strong there are parts that do benefit in terms of down turns the boat clubs, the boat sharing companies. Well be talking more about those and the high tech boats all later on throughout the day, joe. Back over to you. Wow yeah its fun to talk about those things so 66 feet. Are you a boat guy . No. No no. Why not no. Youre not a boater i can get you one. I like going out on somebody elses boat. Weve got a great captain will over here im sure hed love to take you out. Come on down its a long weekend. Its a lot of maintenance, landon youve got to keep the not only inside but it seems when youre out there, dont you all of a sudden you know, you just generate so much trash. Then the outside, you definitely need to keep the outside clean. You dont like the trash you generate no, i dont. You ever been on a trip in an rv its like, ew, the inside gets after that scene in the god father with fredo, i dont go on a boat anymore. I dont think those are the boats they have down there. If you dont betray your family, you dont have anything to worry about. The nervous type of laugh. We have all kinds of boats, yachts, 26 feet. Grasso, thats what you think of when you think of boats immediately. You think of someone getting rubbed out immediately. Landon, thank you have fun in miami. Thats okay. Thats good. Coming up, the ceo of advertising giant wpp is here, sir Martin Sorrell will join us along set. Hes a sir id love to be a sir im going to find out if you can apply for that or how that works. Then later, Waste Management ceo jim fish will join us on set we just talked boats talk to jim fish, hell talk earnings, taxes, a lot more. Squawk box will be right back. Stay with me, mr. Parker. When a critical patient is far from the hospital, the hospital must come to the patient. Stay with me, mr. Parker. The at t network is helping First Responders connect with medical teams in near real time. Stay with me, mr. Parker. Saving time when it matters most. Stay with me, mrs. Parker. Thats the power of and. But through goodt times and bad at t. Rowe price weve helped our investors stay confident for over 80 years. Call us or your advisor. T. Rowe price. Invest with confidence. Wall street pointing to a higher opening and they try for the best week in nearly five years. We have your full market setup straight ahead trash talk really wonderful idea what an incredible cell youve discovered. The ceo of Waste Management, the state economy and how tax recovery will help. Quiet riot. And a special cnbc talk about move in blockchain stock and why the companys ceo bailed on an interview with our network the second hour of squawk box begins right now live from the beating heart of business, new york city this is squawk box. Good morning welcome back to squawk box here on cnbc were live at the Nasdaq Market site in times square im kelly evans along with joe kernen andrew is on his way to the olympics are we going to see him . He might make it by 9 00. I dont know i hope so. He could face time on his three hour trip from seoul. From seoul in the car by himself. Must be cranky. That flight, you know what i mean well, its a tough one. Yeah. Id be cranky cnbc market analyst steve grasso is along with us u. S. Equities still pointed to another higher open. A five day stretch gains put the dow at 25,000. Were looking at a 70 point higher for the dow 32 higher for the nasdaq. Heres whats making headlines. Dow component, coke earned 39 cents a share in the latest quarter. Beat estimates by a penny. Revenue also beat estimates. Shares are up about 1. 4 premarket for coke its another busy morning for economic reports, too. In about 90 minutes well get january Housing Starts theyre expected to show a 4 increase also get january import and export prices. All of this inflation sensitive stuff have been a bigger deal lately economists looking for increases in both of these measures. Wynn resorts has given details of its separation agreement. Under the agreement wynn will not receive any severance or other compensation he also agreed to a noncompete clause for a period of two years. Wynn resigned from the company amid accusations of sexual harassment, which he has denied, but reportedly he could have walked away, guys, i thought it was something north of 300 million. So now it sounds like the company is saying that is not the case the shares are down about 1 premarket. Were still well below were above 25,000. Below the record highs in the stock market and a select group of stocks have a long way to go before recovering from the market malaise. Let me guess, dom chu. Youre right. How did i know that youre right. How did i know that youre right, joe youre clairvoyant. Its the year of the dog. Maybe you have this thing going where youre channelling all of the forces around you have a dog named bogey. I do have a dog named bogey because i make a lot of bogeys on the golf course. I thought it would have been albatross, eagle. You told me youre hurting me right now, joe then everybody expects im some kind of a crazy scratch golfer i am okay. Like a 6. I am, but thats not scratch. Dom, we all understand what the problem here is. You play 200 rounds a year and you want everyone to think that youre working, your wife knows. We all get it. I would say this. I would go for quality over quantity if i ever do get a chance some day to play in the at t pro am at pebble beach every year, then maybe i would talk. What does he mean by that, joe . I dont know. You saw the show that i do at 3 00 this the morning out there with bill murray its the bill bottom yes, it was all due to the pants, the bell bottoms. The bill bottoms. It was the bill bottom in the market anyway, we digress. We do digress we dont just talk about up stocks in up markets or down stocks in down markets we want to kind of show you the other side of the trade, so to speak. So we took a look in this rising kind of recovery that weve seen over the last few days whether or not there are still some stocks left behind we looked at the s p 500 turns out that 300 plus of those stocks in the s p have made a 52 week year or multihigh. 71 of those stocks are still now below 10 or worse or 10 or worse below their record highs or 52 week highs or whatnot. We wanted to give you an idea of the types of stocks that are still lagging in this marketplace overall. Take a look at some of these names because overall we are seeing at least a little bit of a reversal for some of these names, but mcdonalds shares are still 10 below where they were at their highs earlier this year home depot, a big part of that trade for the last year plus, the idea that Home Builders and Home Construction was doing really well. Home depot hasnt recovered quite as much. Its still 11 off the highs Delta Airline is still 13 below the highs. A couple of stocks to point out. Ups and ford these two industrial transportation related Type Companies are still now what some traders like to call bear market territory they pulled back by 20 or more just since their recent highs. Not everybody is yet participating in this move theyve seen off of the lows of the recent market selloff. These are the ones to keep an eye on it and see if they do at least having some positive momentum going into the next couple of weeks. If the markets hold where they are right now. We have seen a weakening a little bit in the last couple of hours. Back over to you dom, thank you. Youre welcome. Why did you show your dogs . What was the occasion . Its the year of the dog. Oh, and so you showed your dogs yes, because i have dogs. What about your dogs i know that you have dogs. Three dogs. Yes. I was actually thinking about it because i was hoping i wasnt going to go into this when i reported on deer, if the tv is on, its worse than alexa. If my dogs hear that word, they get thats the one word, deer, that they know if theres a deer anywhere, they dont like i dont know theyre yeah. They go nuts. My dogs, if they see deer, my dogs go nuts as well it isnt just german shepherds. They know the word. If you say anything that rhymes with deer, they start going ive even spelled deere and they go d i love my dogs, dom. I wouldnt be yelling for a beer. Dont say that. That kind of limits your options. Anyway, joining us now, chris numani head of fixed income and oppenheimer funds. Dog or cat guy dog manya. How about you, jonathan im not a dog or cat guy. Im sorry. Im like a people person. Heartless i am. I am a bird maybe, fish we had fish as kids. Jonathan doesnt belong here. Fish. You can if you see a dog, will you pet it yeah, i dont know. Forget it forget it. Let me start with you, krisna. Yeah. Just move over. No im going to start with you because i wonder how youve been feeling lately in terms of sentiment. Whats your staum target for the end of the year . 3,000 basically 12 for the year if you were asleep and you woke up, the markets up about 2 right now. Yeah. The earnings are coming in this is the best quarter of beats. As far back as we have history going back 20 years in terms of the number of companies beating. The economic back drop is good the tax thing has been a bigger boon than people thought that it would be its all you know, the naysayers i think right now are just on the wrong side of this. The art cashin hats are effective for one reason, because you remember when he wore each 1,000 point move the 25,000, we were oh, my god, 25,000 it was only a month and a half ago. First couple of trading days a year. Wasnt it like i was out last week and here i am. Im like, was there a correction what happened. Was that enough are we going to test the lows . I think what happened was the market ran up a lot very quickly in january and gave a lot of those gains back just to kind of recalibrate itself the bottom line is what jonathan is saying. The economy is doing very well the profitability is good and rates are still pretty low and the likelihood that rates rise to a significantly higher level is still quite remote. Thats a pretty Good Environment for global equities. What about on the fixed income side, khrishna. Can equities handle rates lifting from here . What do you think is actually first of all, where are units going to go . Can that be okay for stocks . I think for 2018 yields probably tenyear yields probably remain around the 3 area the front end of the curve because of fed tightening can probably go up significantly having said that, i think for the markets to get in trouble we have to be contemplating yields north of 3 1 2 in ten years i dont think that is very likely at the moment. 2 1 2 to 3 1 2 can be a range. Yes. For how long . Used to be 2, 2 1 2 two or three year range or will it be a one year range . I think we will get to a Decision Point relatively quickly because we had the Congress Pass a spending bill that is going to increase the deficit in a tight market. So as a result of that, either exports im sorry, imports increases and our deficit increases and we see lots of buying by Central Banks and if that happens we can remain stable if thats not the case, then the dollar is going to be very volatile and will probably have a correction. Krishna, you were mentioning the spending bill. Its amazing, the bond market is all over this as an issue. Equity investors are not theres more stimulus coming from the spending bill than the tax bill in 2018, 2019 we can see 3 plus gdp this year and next which would be a total surprise i think youre going to see a bigger pickup in revenue than people know. Maybe they are both reacting. Maybe the fact that bond yields are going on the stock market, starting off this year all the way kind of through that event they were up big on that. If you look year to date for all of this belief that rising Interest Rates are a bad thing, if you look only at the days where Interest Rates went up, the markets are up on an annualized pace by 25 the market likes rising rates when its due to Economic Health i think if rates continue to rise, at some point it becomes a problem so i think rising rates are good for if i give you two options, i said one of these two things is going to hurt stocks its going to be rising rates or its going to be a flattening yield curve. I dont think flattening yield curve is going to hurt equities thats a very old model, right now its really about whether rates are going to rise its true in the last expansion, you know, it took us a couple of years but ultimately the fact that the yield curve inverted was exactly what the whole thing told you the daisy chain was coming to an end. At that point rates were 5 rather than 2. 5 , 3 refunding costs were higher. Its not just the shape of the curve, its the action level of rates that matters jonathan, you said that people have not factored in the spending bill. Right. Theres a lot of people that havent factored in tax policy does your projection or your number on the s p seem light to you . Are you going to have to raise that if both those things are not factored in . You know, all indications are that if im wrong, im wrong because the earnings are better than i had forecast, not worse than i had forecast. Right. Normally what happens, analysts start with their estimates way too optimistic they fall and they fall and they fall this time theyre rising if you actually calculate how much of the movement up in analyst estimates, so the forecast, is due to taxes, its like 2 3 from taxes and 1 3 of it is just the economy is shooting the lights out. So i think youre going to continue to see throughout the rest of the year these numbers edge higher. I think its going to be the spending bill thats not this reporting season you have to figure that the tax of every company, this is our effective tax rate this year. We know the impact of the effective tax rate it went from the average company went from 27 to 22 its actually a little bit worse than we thought. We thought it would be a little bit better, but heres the Good News Companies pay investors pay more for the earnings coming from the economy than they do from taxes so id rather see a better economy and a little less on taxes. I think taxes have been incorporated what is not being incorporated is the impact on the spending. Thats a plus and potentially negative plus because if it is modest, it will support the overall equity level. On the other hand, if we grow too fast and the fed tightens significantly, i think thats going to be a problem. Gentlemen, thank you. Happy friday and coming up, ad growth growing by leaps and bounds. Were going to talk Online Advertising and advertising success with sir Martin Sorrell with cpp then garbage business is big business Waste Management here to talk about where they see development and growth stay tuned, youre watching squawk box here on cnbc. Obvious. Sometimes, they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Welcome back shares of amazon are trading at an all time high it passed microsoft to become the Third Largest company which is over 700 billion now amazons ad revenue is outpacing that of google and facebook. On set with us now is the ceo of wpp, the Worlds Largest ad company, sir Martin Sorrell. Were talking about winston churchill. Exactly. Were agreed on that. Yes, we do. Have you seen that movie . I want to. What . Youre going to come in here did you see it . Of course you have to see it. Did you cry a little . Yes, i did, actually. Its a weird movie to cry at. Yeah, but it was wonderful. It was great. I agree. Sorry. No, please. No, no, no, no, no. Im sorry. Go ahead and then dunnkirk which is unbelievable. My crappy history teachers, i didnt know how important by the way, i agree we got the agreements out of the way. Got the history out of the way. Quickly on amazons ad growth, its still small we dont know where it is we speculate they made last year 2, 2. 5 billion, i saw analyst yesterday 4 billion. That pailes against google. Why are we talking about it the disintermeadation of Google Search by amazon search we know that most of them emanate from amazon search growth of the ad platform and then the real heart of the issue is about data. But before we that data will be controlled by amazon and that disintermediates our clients and their relationship with the consumer when unilever buys Dollar Shave Club its not because it wants to compete with gillette, its because it wants to build a relationship directly with directly. Same thing with marriott and starward before we go down that path, do you what is the thinking about that right now so our media book is about 75 billion last year and about 5 of that went to google and about 2 went to facebook and the fox disney combo would be about 3 billion. And order of magnitude for amazon last year was 200 million. This year will be about 300 million. Its escalating very quickly, but its still very small. I refer to it i think on cnbc as a pimple thats probably a little bit unfair, but its certainly growing. Its becoming a bigger pimple or boil but it still is in the foothills. It will grow quite violently and become a big factor. The big issue particularly for packaged Goods Companies is how theyre going to maintain that and how far they go. We have a situation with nike i think a few months ago where they said, no, theyre not going to go on the amazon platform but they quickly reversed that you saw the impact and i think they hit a high on the back of that. You mentioned that amazon would take possession of the data obviously its mostly transaction oriented search type advertising. Right. I would assume . But how do your clients think about the general situation in terms of Digital Advertising in terms of measurement, effectiveness. It seems theres a lot of slippage in there. You know, were in the olympics weeks and thats a very good example of total ads. Nielsens data excludes online basically. Yes. They have a total audience metric and nbc has a total audience metric and there is a decline in the olympic audiences as against sochi last time around but pyeongchang is not exactly the center of the world so probably thats understandable if it was vancouver or Salt Lake City or if it was l. A. For time zone effect . Time zone and of course commitment of the viewing population. Right right. But having said that, if you include total audience, the difference is actually much less probably about half. If the audiences are off on Network Measurement by that 15 , theyre probably off 7 as best as we can tell from audience delivery which takes in online, out of home, everything like that that Measurement System is not being refined to a degree where you can say for certainty its correct. If anything, it probably underestimates the audience so its probably better than we think it is and probably advertisers Getting Better value. What about the broader issue mike raises which is how much can you trust the metrics coming from Online Advertising period well, this not necessarily the tv over the streaming but just generally google, facebook, all of these platforms do you have confidence theres controversy one of our clients, cmo, keith weed made a speech about the importance of well, hes been talking about measurement, validation, now Consumer Brand safety making sure that content is appropriately place or advertising appropriately placed against that content making sure that its safe, not just for children but also politically safe as well making sure the Tech Companies take that responsibility which i think to be fair google and facebook, who are the two Biggest Online factors, they are taking this much more seriously. They are hiring lots of people i think facebook, 20,000 people. Yeah. Google, 10,000 people to monitor the content in a much more effective way so whilst they might not admit that theyre media companies, yet they are actually putting a lot of investment in to making sure they monitor the content. How much of the news feed tweaks that weve all heard about with facebook has become a tailwind for other companies too early to tell and this whole issue about whether google or facebook have lost out, my own view is that they havent lost out. Theres a lot of noise surrounding, you know, the fraud issue, the vierability issue all of those evaluation issues, but at the end of the day they continue to rise almost inexorably it continued significant momentum these two forces are formidable. If you look in terms of market valuation, you know, the five the big five, the fierce some five is like top five by market valuation. I noticed amazon has crossed, what, 700 billion of market cap. Whos the first to 1 trillion . I think apple is up close to 900 billion. So theres no fight there. Those are the two chinese companies, ten cent and alibaba are both about 500 billion those seven are very powerful companies and between them we probably have about 4 trillion plus the market cap now. So they dominate our brand value brand valuations, they dominate market valuations the two are actually synchronous now. Back to church. Get an invite what invite are you referring to have you gotten one do you expect to get one is it in the mail . Im not expecting anything, joe. Im not like you i dont expect anything. I think you will and id like to be your guest anyway no time now for todays aflac trivia question. When did the japanese high speed bullet train first make its debut . The answ wn bcsqwk xontinues ua aflac and a gentle wavelike motion. Liberate your spine. Aflac and reach, toes blossoming. Not that great at yoga ya but when i slipped a disc, he paid my claim in just one day. So he had your back . Yup in just one day, we process, approve and pay. One day pay. Only from aflac everyone has a thing. That binge watch over the weekend thing. More checkingin or checking out things. That tripledouble thing doing it yourself or tagging a friend thing. More revolutions in the making thing. That play like a girl thing. That fourlegged friends thing. At t gives you more for your thing. More entertainment, internet, and unlimited plans. More for your thing. Yeah, thats our thing. Now the answer to todays aflac trivia question. When did the japanese high speed bullet train first make its debut . The answer, the japanese shinkansen or bullet train Began Service in 1964. Its debut was timed to coincide with the tokyo summer olympics that year. Good morning welcome back to squawk box here on cnbc were live at the Nasdaq Market site in times square corporate earnings front and center this morning. Among the ones crossing the tape, cocacola earned 39 cents a share in q4. Revenue came in up a penny food giant kraft heinz missed on the top and bottom it came in at 90 cents, 5 cents below estimates. It did not reflect its progress or its potential the shares largely unchanged despite that miss this morning. Heavy equipment maker deere reported quarterly profit of 1 poip pope 31 a share, 11 cents above estimates. Shares up about 1 and dogs are barking everywhere, i guess. Campbells soup up 1 its organic sales fell 2 . Campbells says it is disa pointed with its performance shares down 2 . Waste management ceo jim fish calling 2017 arguably the best year the company has ever seen he joins us now to tell us why and whats ahead in 2018 its great to see you, jim you know this coming from the midwest theres people count trucks coming down i75 in cincinnati. Yes. Its a great gauge for economic activity. Most people dont know an even better one is garbage and how much is generated because of packaging, shipping, all of that. Yeah. So and youre saying that how can you tell things are percolating right now . Were a pretty good barometer for the economy because we see it on every segment of the economy, whether its the industrial side or Services Side right now were seeing a very good economy we grew our revenue by over 6 organically in a 2 to 3 economy. We like the economy. We like what tax reform has done for us so far. So were happy with what we saw in 17 and going into 18. What was your tax rate before tax reform before it was 36 last year, just slightly north of 36. That was your stated tax reform people dont believe that. I have people tweeting that we let corporations lie because none of them really pay. They dont understand that there are multinationals that have facilities so the blended rate is lower. Right. You cant just hire an accountant and get to 24 before taxes. We paid we paid a little over 36 last year, were going to pay about 26 so not quite the statutory decrease of 14. What are you going to do with what flows to the there will be more flow to the bottom line. Well, yeah. The benefit to us was about 275 million and were not just that was the central question really do Companies Just give it back to shareholders through Share Repurchase we gave about 70 million back to employees through a bonus and then were spending an extra 150 by accelerating spending on trucks and i. T. Spends about 3 4 to 80 of it will go back into the economy. We think it will benefit shareholders on the back end be of the cycle. Yeah, but youre buying trucks the manufacturers of trucks, they have employees. It seems like if theres 1,000 Waste Managements big and small doing things like this, i dont see how people cant realize this could be additive to growth. Intended consequences i think people worry about the unintended consequences. These are the intended consequences everyones worried about Wage Inflation. Right. You have the Corporate Tax rate coming down so its not exactly a headwind it would actually still be a tailwind when we get confused about watching these one offs or a trend of higher wages but this had to come and its still a benefit for you . Yeah. I think we see weve seen Wage Inflation in some of these tradetype jobs for several years. We address it on a market by market, jobbyjob basis. Im curious because weve had big announcements about recycling. Right. These are longterm issues but it seems like theres momentum to do something about waste. Is that a challenge for you guys or how do you figure it . Recycling is probably the only segment of our business not hitting on all 12 cylinders going into 18 part of it is contamination requirements coming in from china, meaning that theres trash in the recycle stream. We have a real battle on that at the recycle facility some of our plants have 40 of what comes in the front door being trash. We have to take that trash out nobody wants trash in the recycles stream. Thats really the big challenge there. I think the rest of the business is humming along. Isnt there exposure to commodity. What you get for things that you sell out on the open market . For sure. China, right now is their slow time its not coincidence that theyre doing this during their slow time so as a result Commodity Prices have come down a bit. We think theyll return to more normalized amounts. Your predecessor lessened your exposure to waste energy and to some of the recycling stuff. It didnt make economic sense, right . Its nice. It sounds good with natural gas, its hard to do it economically in an economically profitable way. I think thats right. Weve really focused on the core weve divested some things we were off the middle of the fair way a little bit. Is that true for recycling still . As Companies Make the big announcements, we want to push this stuff is that going to cost them a lot more who does that cost where does that cost how does it flow through the system right now the beneficiaries tend to be the buyers of those materials on the back end, and china is a big buyer they buy 30 of our materials. They come out of our recycle plants and the cost ultimately is borne by us right now but at some point weve got to make sure that that cost, which is largely as a result of that trash coming into the system, is eliminated so that we dont have higher operating costs at our plant. That sounds like i mean, already i go to whether its chipotle or something. Its like landfill, recycling. Everyone has them all confused i dont know where to put the liquid it sounds like if youre going to start charging them for all of that food waste going into the recycling, theyre going to be extra sure theres no contamination. Some people like you are really trying to do the right thing and simply cant figure outdoes this plastic item go in the recycle bin or not some people literally put trash in their recycle bin weve got to take care of both. I dont notice sometimes. I toss it in the thing i noticed that about you. Let her off the hook is what she wants. No. It sounds like a big challenge. I do want to say happy birthday to my 15yearold i missed her birthday coming out. That was her birthday. How do you celebrate . She had a dinner last night im going to have to celebrate with her tonight theres no recycling, Waste Management shes a big recycler. The dumpsters, thats still how much of your business . Because you rent them out, right . Right that was waynes initial idea that is the single most profitablepart of our business are those small containers its probably close to 30 of our business. They talk now on your commercials. They do talk. Do you like that yeah, i do. I remembered it, obviously i think theyre green. They are green. Smart move, too. Do you like that . Green yeah think about these things jim, thank you. You bet. Thank you. Not Everybody Knows that trash is so interesting let it let the guys go on strike for a week and youll suddenly realize that after your to being tore, Waste Management is the next most important thing, yeah coming up, the investigative preview. A look at who is behind Riot Blockchain that companys stock has soared in the two months since its changed its name from bioptics why the ceo pulled out of a promised oncamera interview with cnbc when we come back from this break check out the markets. Before we do that were seeing gains of 1 for the kaca cac ka france cheers whats it worth to talk to your mom . Whats the value of a walk in the woods . The value of capital is to create, not just wealth, but things that matter. Morgan stanley i thyou never got the brakes looked at . L. Oh yeah. No. At cognizant, were helping todays leading manufacturers make things that think and do automatically. Imagine that, a world of new Digital Products and services all working together for you. Can i borrow the car when its back . Get ready, because were helping leading companies see it and see it throughwith digital. Welcome back its been one of the highest flyers Riot Blockchain. It changed its name from bioptics, a medical company. Who is behind Riot Blockchain and who made money buying and selling at the right times Michelle Carusocabrera joins us. Thank you, kelly. We began investigating them after it made its splashy debut back in october. We found a lot of red flags that might make investors worry we wanted to find out who was behind Riot Blockchain, but for weeks no one would talk to us so we decided to see if we could get answers here, at the swanky boca raton resort and club in florida. Thats where riots annual Shareholders Meeting was set to take place it would be an upscale setting for this upstart company with red ink as far as their most recent Quarterly Report took place. Twice Riot Blockchain announced they were going to hold their annual Shareholders Meeting here at the boca raton club, twice the night before they announced they were postponing the meeting and in fact the hotel tells us there was never a meeting room ever booked under the name Riot Blockchain so we drove to this nearby Office Building trying to find barry hoenig. According to sec filings, he might be the man behind the curtain. He was an early investor in riot back when it was venaxus and then eventually bioptics the new board changed the name from bioptics to Riot Blockchain. Hello hi. Michelle carusocabrera. As the elevator door opened was not barry hoenig, john orourke he made news in december for selling about 869,000 worth of riot stock just two months after the Company Changed its name. Orourke quickly closed the door five minutes later he emerged and agreed to talk to us, but only off camera. He said he was here for a meeting with hoenig when he arrived and that we had just missed him orourkes attorney sent us the following statements we did not have a kwaur rom of shareholders required for a vote we are also working on other Corporate Action items that would require Shareholder Meeting as well. As far as orourkes stock sales, he said, quote, i sold less than 10 of my over all position with covering Tax Obligations as a result of socalled phantom income tax from the vesting and restricted hack awards. We were the first nasdaq listed company to have blockchain in its name this change was made to reflect a new Business Strategy that had been evaluated for some time and not for any improper purpose you can see more, the full story on cnbc. Com and coming up on squawk on the street around 10 15 we have a closer look at barry hoenig, the investor. He was shutting the door on you. That was it was interesting to find him there. Thats barry hoenigs office we walk in he says he has an office town in ft. Lauderdale there were a lot of questions about whether hes working there very often he says no. Hes kind of related parties, seem to find the same smallish company. There was sort of a pattern here that you saw evidence of oh, yes barry hoenig and john orourke have been in business together several companies. If you start reading through the ooe filings a efilings you see a lot of the same patterns of a lot of the same people investing in the same companies together. Are they a Blockchain Company . So they have made an investment in something called coin square up in canada which has appreciated in value on the books and john orourke also tells us that they are going to mine bitcoin they have put out press releases saying they have bought Mining Equipment and he says that they are mining hes told us they were mining up in canada and will be in norway. They dont actually say they are mining in any of the sec filings thus far at least theyre filing. What . At least theyre doing the s oe c filings, i guess. Having read through all of them, theyre incredibly difficult to follow and there is perhaps an expansive view of some of the rules and regulations about timely filing on the part of various investors. Youve got to do your due diligence. This is crazy to me that people just see a name that assumes Something Else in this day and age. Rallies are crazy. It rhymes this reminds me of things from the past, and its always the same people in the past that ive seen. In certain, you know in hindsight you look back and say, wow, it looks a little iffy. Something like this no. Yeah. Pick any industry but now blockchain and bitcoin, too. Whatever is hot and sexy . Right if youre looking into some Cannabis Companies you might find similar things, for example. Sounds like the next investigation. Okay. Thank you. See you later. Coming up, week one of the olympics is winding down the games are just getting started. Were heading to pyeongchang for a live look at this weekends big event lineup and watching the futures all morning. If you follow andrew on twitter, hes arrived he has arrived. How closely are you following along here i worry about my my little buddy. He made it its a long way. Its the other side of the world. Its a threehour ride so im monitoring the dow posting its first five day winning streak of 2018 its on pace for its best week since 2016 squawk box will be right back. Big thinking in the finger lakes is pushing the new new york forward. Were the number one dairy and apple producers in the eastern United States supported by innovative packaging that extends the shelf life of foods and infrastructure upgrades that help us share our produce with the world. All across new york state, were building the new new york. To grow your business with us in new york state, visit esd. Ny. Gov welcome back to pyeongchang where Carl Quintanilla joins us. Carl reporter kelly, good morning. When the korean war ended in 1953 each side decided to push their troops back from the front line by 2,000 yards. The area is called the dmz with the help of some u. S. And south korean officials, we arranged to get a trip into the area that still separates the Korean Peninsula now welcome to the demilitarized zone, 160 miles long, 2 miles wide it was created in 1953 intersects that famous 38th parallel north and divides korea roughly in half. All that you see over there. There are villages and people who live in the dmz, both on the north and south korean side. Occasionally youll hear loud speaker propaganda from areas like the north korean propaganda village, they call it. There are residents on the south korean side with all kinds of special rules. Curfews from midnight to sunrise. Not taxed. Any rice that they grow is bought and distributed as dmz rice so here we are were inside what they call the joint security area. It is the zone within the dmz that for years allowed the north and South Koreans to interact under the terms of the armistice that was signed in 1953. What youre looking at here are the south korean soldiers with their backs to us but facing the north korean side. I dont know if you can see the sort of concrete barrier on the floor about halfway across these blue buildings thats essentially where the border is between north and south korea. Now south korean soldiers face the north core reign counterpart, but when the north koreans come out they tend to face each other, not the South Koreans. This, of course, has been a source of tension over the years. There have been instances where over time hundreds of diplomats and soldiers have been injured or killed because of tensions between the two sides. Now the armistice wasnt signed in this particular building, but sort of in a big tent that was on the same location and that armistice essentially laid down the rules about where soldiers could travel, where you could deploy military personnel, where you could put military equipment and that armistice has lasted for 65 years. One thing youll notice over here is a bridge in the distance they call it the bridge of no return when the armistice was signed p. O. W. S were given the chance to go to the country of their choice across that bridge. Were told once they did, they could never go back. But where checkpoint 3. Reporter officials here tell us the fact that the joint security area even exists is symbolic of the hope that one decor rea will reunite for now it is the Central Location of one of the most tense military standoffs in the world. Ive got to tell you, guys, a little surreal a little eerie to take that tour not a retail tour. Not just anybody can sign up and take that tour you need to go through military channels really strange probably an area where not a lot of people will go to not without stage craft. Our tour guides were soldiers but they had a script and they worked very hard to keep us in line we could only point our cameras in one direction we were told not to waive to any north korean soldiers in case they thought we were trying to mock them. We did see some cross the stairs of the White Building there. Who knows if they know when the tour groups are coming through and whether that was a coincident or not. Fascinating for sure and chilling, carl i mean, you know, theres so much talk before these games about how close it was happening to that border with all of the efforts that north korea has made to reach out to the south sounds like a lot of South Koreans are not even that pleased about it you know what, this is supposed to be our games, our moment on the International Stage here its become incredibly tense, hasnt it . Yeah. The whole offensive that we talked about last week is politically fraught. Theres probably some element of the south korean population, mostly older South Koreans, who have some nostalgia for a good area we know whats behind this offensive and thats why its so dangerous. Were so glad you gave us a glimpse right there at the border Carl Quintanilla in pyeongchang. Weve got to go. Steve grasso has been our guest. Two hours already time flies. That is quick. Last week i said dont time the market, just buy the market, dont be cute. Thats what you saw today. I think the market goes much higher from here. Not time to be cute yet not time to be cute. Not an option for you to be cute . No. Were still on the air, joe. Not nice. Youre cute. Im just human. You want to go on a boat trip with me, a little fishing . Ill see you a little later on. Cue the music. If you start saying things like hail mary. Coming up, markets looking to add to the fiveday win streak that weve just had at the open well check on whats moving them next. Well ask quicken loans jay farmer which is at the highest rate in four years that interview and Economic Data straight ahead squawk box will be right back. R world for investing. Lets create jobs, build bridges, insure prosperity. As Investment Management professionals, lets measure up. Cfa institute. Flexshares etfs are built around the Way Investors think. With objectives like building capital for the future, managing Portfolio Risk and liquidity and generating income. Thats real etf innovation. Flexshares. Built by investors, for investors. Before investing consider the Funds Investment objectives, risks, charges and expenses. Go to flexshares. Com for a prospectus containing this information. Read it carefully. Thwho hold themselveshe to a higher standard. They are called cfa charterholders. Demand the best. Demand a cfa charterholder. Cfa institute. Tracking the gold. Well take you live to the olympics where well get a glimpse of squawks very own athlete in training. This is the final hour of squawk box begins right now. Live from the most powerful city in the world, new york. This is squawk box. Good morning and welcome back to squawk box here on cnbc live from the Nasdaq Market site in times square. Im joe kernen along with kelly evans and mike santoli becky quick is off today and andrew is there. He says here hes on his way to the olympics hes tweeting. You should follow him. Hes got a lot of followers. Its andrewrsorkin if youre interested i saw his credentials. Carl did not pick him up at the airport. Its a threehour drive. Carl is coming on the air. Hopefully he didnt have to call an uber or something i think he made it we may see him later lets get a check on the futures or the markets the futures are up 92 points theyre up more than that. Triple digits for a while. 90 is after five Straight Days or whatever its been and over 1,000 points in terms of a rebound. In europe, a quick look. Europe has been sort of biggie backing off some of the trading here in the states its green across the board again today. 1 gain in france and italy. Treasury yields moderated a little bit 2. 88 now they were lower earlier. 2. 88 all watching those sort of closely. Its gotten more interesting for sure in the last two weeks. Its a busy morning for earnings some dow components. Lets get you caught up. Coke would be that dow component. Beat estimates by 1 cent revenue topped estimates as well overall revenue was down 20 as the company sold off the bottling operations but organic sales growth increased to better than 6 . Shares up 3 in the market food giant kraft heinz missed on be the top and bottom. Earnings came in 90 cents a share. The company said its 2017 performance did not reflect either its progress or its potential. Down 1 this morning campbells soup earned 1 a share. Revenue above forecasts but its organic sales fell 2 . Campbells said its disappointed with its performance down 3 . One more report to tell you about. J. M. Smucker beat on the top and bottom line. They raised the full year forecast amid better cost controls, also ongoing benefits it cited from tax reform. And news just out from qualcomm for the first time its giving details and a response to its wednesday meeting with chip making rifle broadcom which wants to buy it in the 121 million view qualcomm said broadcoms deal still materially under values the company. It calls the talks constructive. Qualcomm said its concerned about undertaking a transaction that may or may not close and that the currently proposed breakup fee which i think has been a huge one, actually, still does not properly reflect that risk qualcomm fluctuating unchanged. We will get the final inflation test of the week in less than 30 minutes import prices. Just how hot is the inflation indicator at this point . Steve liesman joins us with that story and youre always listening. Youre always listening. I am. I wrote in at 6 00 a. M. You wrote me after i talked about you, which i do. I think i called it the highlight of an illustrious career when the fed changed the model it was the government, not the fed. Completely yet. No. Its a process. This is the First Quarter that they do First Quarter gdp right still, its a process. Theres supposed to be more changes coming in august the trouble with it, joe, we wont know its fixed for maybe five years what was what was robust about my work was that i used 30 years of data so how do you know the First Quarter is wrong if theres only one First Quarter every year you need a number of years to figure it out. What i do know is that moodie moodies. Com puts a half a point fudge fact orp which is minus 0. 5. Just for the First Quarter. I found out that moodies thinks the january cpi data might be overrated repeatedly. Moodys analytics yeah. They do very good work over there. Oh, please. Analytically. Talk about the stock market. You think there was no inflation trade but, in fact, bond yields have risen the inflation data has come in pretty high. How high take a look. We have an inflation thermometer for you to put the data this week into context. Heres core ppi. Up 0. 4, well above expectations but not out of line really since the last number was negative were kind of saying its medium to just a little bit hot the Empire State Manufacturing index, the prices pay component, 48. 6 plus 12 points, the hottest in five years. Go onto the philly fed prices paid index, 45 also up a dozen points hot in six years hottest of all, core cpi hottest number we got,. 349. The thermometer though, it looks a little different if you look at it year over year this is a way to think about the number year over year the core cpi is hotter than the core ppi is hotter than the core cpi take a look. What were going to talk about is the suddenly relevant inflation data tracker which nobody cared about, what, three weeks ago . And now all of a sudden thats what everybody wants to know theres the ppi you can see the cpi is very stable just a little bit up where the ppi is is where the pressure is. Now well go to the suddenly relevant inflation tracker you can see all the points there if we can get that up. First, you have february 28th. Powell talking well get how he thinks about the inflation. Then you have the pce. Feds preferred inflation rater then the big jobs report is a week late this year next month because when march falls theres a holiday, whatever it is. If that wage number is not 2. 9 , i mean, are all bets off does it just go back to 2. 5 . I dont think the wage number was as bad as people made it out to be. Or as good. You know the wait, now im confused by that what dye think about the youve confused me. As high. I dont think it was as strong as bad as a negative for the market, negative for so you you know, weve talked about japan kelly and i have see how long they try to get some inflation yeah. Couldnt do it. They would do it. Here we have an economy that we actually can engender a little bit of pricing power. Yes. This is going to go from half empty to half full in my view. The feds been whining about being below their target for inflation. We get there. We get to it and we get a huge 10 selloff this is okay. Huh i mean, okay. Look, what can i do . I can tell you more or less where i think the economys going to go. I can tell you where inflation is going to go and i can tell you where the fed is going to go i cannot tell you with any certainty i dont think anybody on the street can tell you where the stock is going to go relative to this. You have the inflation scare you can see the market react to inflation data it became important for the first time in a decade. Could be good now were talking about the idea that the bond yields in fact have gone up. If you put up the ten year, it is really at 290 and change, 2. 9 and change up from 2. 60, 2. 80 the market sold off. What do i think about the stock market right now you did have a change in conditions inflation a little bit heightig. Growth happened. The market is off 5 or 6 now . Five, yeah. It will try to find out plus 4, plus minus 4, minus 6 or 7 to try to find be a level with the new realities. My only point is this whole thing to me is predicated on that one wage number from the jobs report, 2. 9 and maybe, maybe the cpi number. Can i push back a little bit . It feels like the march jobs report will be so important. It is important. It unwinds that narrative i wonder what other data points people have to point to. It is important im getting told in my ear by producers it is going to be the most important jobs report in our lifetime its march 9th at 8 30 a. M. Right here on squawk box. Theres other data. What powell has to say. Thats the key. Do we let it run . Thats the key. Get a feel for how jay powell thinks about inflation and markets and rates on february 28th thats why thats important. Over the Government People are talking going, did you hear youre still not happy with the way theyre doing it. Not if moodys is taking a half a point off. Thats still a big reflection. They come up with this stuff. Liesmans still upset. Theres a reason why good data matters theres a reason why we fund it and why we should hold the statisticians of the government to account because it leads to better or worse policy decisions and better or worse business decisions. Youre totally right. If you told me every year for the first 30 years the First Quarter was weak and i changed my mind about how i was going to think about the year or the Second Quarter based on that, thats bad decision making. If the First Quarter comes in at 1. 5 . You may think its 2 . If you tell me, okay, i understand its, you know is that message going to get through to most people that, hey, maybe its actually better . I dont think so its going to feel like, wow, when it does, were stuck. There was money to be made every year especially in the last five years by betting against the weak First Quarter and in favor of the stronger Second Quarter money to be made on that there was an issue that i found was that the economists never caught onto the fact that they continually under forecast the First Quarter. So i know this is an arcane thing, but we need to get this still there now im getting the hard yeah, because ian shepard son is going to join us now. I didnt know that. Yeah. So, ian, if the First Quarter really does sort of suck. Yeah. You know, like in past First Quarters of what steve has youre our founder youre at pantheon obviously, but are we already have we backed up too far in rates already if we get a 1 handle jim paulsen is here as well. Hell talk stocks for us what do you think, ian have we already moved too high in yields if the First Quarter is below 2 . You know, im not so sure the growth matter matters so much as the cpi and wage numbers which everyone is now particularly obsessed with. Ive got to say, i think the First Quarter problem is bigger than moodys my First Quarter drag is. 9 mine is. 9. Wow. Im expecting it to look pretty terrible. I think it will be blown away if we get more cpi numbers like januarys, but i think actually thats quite unlikely. I think the january number had a couple of flukey things in it. Its more likely to revert back to a steady. 2 although i think inflation pressure is building generally, i think its building slowly and i dont think its going to surprise us and shock us in the way we got the one two punch in the way of the cpi numbers in the last two weeks the wage number on march 9, i think will drop from 2. 9 to 2. 7 and everyone can exhale and take it easy for a bit. We eventually want some wage growth you know, we never were we want it and then were not happy when we get it i mean, so many times the employment number comes out and people go, oh, but, boy, look at that wage gain its weird, isnt it seems like were never happy yeah. Its a matter of degree. It depends where you sit if you are looking at it from a cost perspective, you think of wage growth as a bad thing if youre looking at it from a revenue side, its different from the feds perspective, i dont think theyre going to be very comfortable with the mid 3s but were in the high 2s were a long way from anything thats really alarming id love to see some wage growth because we havent had much for a long time. Thats what i mean. Especially among the lower pay. All of that spike in january was among higher paid people the wage growth for the production workers, nonsupervisors, thats 2 1 2 year over year i know. Jim, im coming to you in one second, i promise. Ian, real quickly on this point. You mentioned the december and the january thing. Is january wage number going to change, be influenced by all of these announcements that weve had because of tax reform . In other words, even if it comes in at 2. 9 again is that going to be seen should it be seen as possibly a one off . If it comes in at 2. 9 again, thats going to require quite a big monthly jump i think, you know, what will happen then is that markets will get out their ruler and start extrapolating saying, hey, if were getting. 3,. 4 two months running, wage growth will be 3 1 2 before we know it and the fed will be in panic mode. It really is a question of degree and a question of the shape of the trajectory. I dont think anyone at the fed is going to be too upset if wage growth gradually crepes higher over the course of the year. Kelly, the answer to your question is bonuses going up vertically. Bonuses are not included in the wage growth. If there are changes upwards in salary, if you are really hiking the minimum wage, thats in the wage number. Onetime bonuses are supposed to be excluded. Jim paulsen, lets talk about the ten year where is it do you believe in this whole hes an inflation guy i would have asked him if i was leading this i dont call him mr. Broken clock but you finally you finally got it you are finally getting some inflation and you called up, you said, let me on, let me on, im finally right. Let me let me say a couple of things on this front. You know, joe, it isnt just about the wage number because cpis going from over the last two years from 0 to over 2. Ppi is going from minus 4 to plus 4 youve got pro tuesdayer prices now, the last year for the first time rising faster than consumer prices, which means theres cost pressures going on s p, Goldman Sachs commodity price index is up 60 over the last two years youve got Inflation Expectations at better than the bond market thats gone from 1. 2 two years ago to 2. 1 now so theres a its a large array of different inflation measures, not just that wage number but i kind of agree with kelly that, you know, if that page print drops back to 2. 5 or 2. 4, i think the market is going to go higher. I dont know if it will stay higher all year because i think inflation is moving above 3 on wages and towards 3 on cpi and that probably means were going to put the treasury ten year up to 3 1 4, 3 1 2. You cant do that with a 22 trailing multiple on the stock market i think theres going to be some turbulence this year. If it goes back, the wage number drops 2 1 2 , you said you think the stocks will go up. Theyre not going to go up if theres Price Inflation and not Wage Inflation theyre only going to go up if they think oh, generally this is not, you know, a sort of inflationary type of economy, right . Youve got to kind of thread the needle for this to still be something the stock markets doing, dont you yeah. I just think youve got to remember, were back to full employment were going to push into the three handles on unemployment this year probably, and it becomes a much narrower path for the stock market because you can go off either side as were talking about here you could have a hot wage number or you could get a weak real growth number and both of those ultimately would become concerning and the really bad thing would be a hot wage number and then a weak gdp report. You use the you sent me something yesterday with the s word in it yes. It makes no sense jim, i dont remember where you are on the s p anymore i remember there was a year you said wed have a selloff and close higher i thought you actually were you bearish for 2018 do you think were going to have a down year . No. What are you . Where are you . Yeah. I i i think you know, ive been bullish again. I went conservative, joe, and took 2014 when we broke through 2000 really until the early part of 16 and then kind of came bullish again. Im a little more conservative now. I dont really think were going to have a permanent collapse of the stock market i think we could have a 15 correction this year yet i think this is the year where we have earnings grow into the grow into their valuations we could do that with a quick sharp collapse like a 1987 sort of deal, 15 collapse where everyone agrees its a bear market everyone agrees its a Recession Risk thats a great buying opportunity. We didnt already have that or you can do it in a series of corrections. You want five more . We got didnt we get interday 12 geez, youre holding out for 15 . Well, the multiple is still 22 times trail. Do we close higher and then we go up into the end of the year, do we get to 3,000 or not . Well, its possible if we adjust the multiple, then we can start trailing earnings again and we can start the stock market can go with earnings. This point were too highly valued. Its coming back to me because i said leuthold is always bearish you have a beard, he has a beard. Then you got bearish. I got bearish when . Last time you were on about three months ago. Yeah. Yeah. Now i remember. It pays to remember these things it does. I see people on these other shows and its like they never said any of this stuff they said now theyre saying new stuff its like anyway, thanks. Ian, never happens with you. Thank you. Thank you coming up, ceo call. Chief executive of qckuien loans going to talk rates and homeowner ship right after this. 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Welcome back weve talked a lot about Interest Rates as a result Mortgage Rates have reached a fouryear high joining us is jay farmer, the ceo of quicken loans, the nations largest Mortgage Lender your ads are everywhere. Welcome, jay. Hi, kelly thanks for having me. So, first of all, im just going to say, i dont really believe higher Interest Rates are going to have a huge impact on the Housing Market. I understand though that there is an affordability issue, but can you describe how you are seeing all of this play out . What exactly is happening from the fact that Mortgage Rates are moving a little bit higher right now . I think we agree. We dont see a slight increase in the rates affecting the Housing Market every day weve got folks reaching out, they want to purchase a home. Probably inventory or lack of inventory is more of a concern right now as we see the prices rising on homes faster than the inflation you guys were talking about in the earlier segment. Right thats the key to this, isnt it the key is home prices keep going up the second thats not the case, of course its the fact that rates are higher,too, will not help, but do you guys think prices are just going to keep going up if so, why yeah, until we get a handle on inventory well see prices continue to rise again, somewhere in the 4s on a 30year fixed and a lot of people are looking at a 7year adjustable down. Homes are incredibly affordable. Theres more demand than weve seen in quite some time. That will continue to drive the prices up. Hopefully not so much where we see an issue of people stop wanting to purchase homes. Or we see a bubble. We do not want to go back to the housing bubble did i hear you say a sevenyear arm . You did, yes. Okay. Speaking of the last cycle, lets think about this for a second if i take out a sevenyear adjustable mortgage, that means my rate resets to whatever the going rate is . 2025. Thats right so not for everyone but if someone thinks theyll be moving between now or then or some other life event will happen, a pretty good program especially for those who are concerned about remaining somewhere in the high 3s or low 4s on their rate. Jay, some of the people who are enthusiastic about the tax cut environment for banks talk about how maybe deregulation, things like that are going to help them become more competitive in the Mortgage Business is it getting tougher from your end basically people getting more aggressive in this area no. You know, we hear about the deregulation, but as you probably know whether youre a bank or a large Mortgage Lender, the regulation has not been adjusted at all. So its still a very complicated space to enter into. Weve been here 32 years and weve had the luxury of building Incredible Technology thats helped us deal with the regulation i think for most the barrier has been there and we dont see it changing here. Im still thinking about the sevenyear arm look, maybe some people know, okay, im definitely moving in three or four years, but if not arent they making a bet that im definitely going to be paying a much higher Mortgage Rate when this thing resets . I dont know, anything could happen the economy could go into recession and things could fall. That seems risky in the landscape were laying out like you said, its something youve got to be thinking about. Thats where Technology Becomes important. We rolled out Rocket Mortgage where we take all of these things into consideration. We serve up that to our clients so they can see whats going on. Transparency is key in the mortgage industry because people dont do it every year, right . They do something every five, six, seven years a person will repurchase a home. They need transparency and thats where we put all of our focus, innovating in the space to make sure that people have that visibility so they make good decisions. Its going to be a hot Housing Market in the spring, you think . I think its going to be a great Housing Market were seeing people every single day come off the fence, i suppose, is the right way to think about it to purchase a home, especially millennials i think were at 32, 33 of folks out there looking and for us somewhere north of 70 of all the people reaching out to us to purchase a home are firsttime home buyers. We are just one of them it was crazy competitive on how much demand was the demand was. The supply wasnt interest jay, thanks for joining us. Thank you. Its official and it happened not today former president ial candidate mitt romney is running for senate in the state of utah. He made the announcement a few minutes ago on twitter so weve got that going for us, which is nice. Coming up, were just minutes away from a full slate of Economic Data Housing Starts, Building Permits and import prices on deck. Well bring you the numbers. The futures indicated some of the lowest levels weve seen up 37 points on the dow. Well be right back. Experience lexus Safety System plus standard. In the 2018 lexus es and es hybrid. Lease the 2018 es 350 for 339 a month for 36 months. Experience amazing at your lexus dealer. 30 seconds okay 30 seconds away from january Housing Starts, Building Permits and import prices. The futures are now on the dow back to up 50. Up 4 and change now on the s p and the nasdaq is up 13. This would be six Straight Days were up somewhere around 1200 points since last friday Rick Santelli is standing by at the cme in chicago and liesmans here maybe you guys can disagree on something later, rick. Hey, you never know theres always a Silver Lining to everything. Import prices up 1 . A bit more up. 6 if we look forexpetroleum, it was up half of 1 , also hotter import prices year over year, 3. 6. Month over month, up. 8. Export prices 3. 4 in export prices year over year. So all these numbers are a bit warmer its nice to see export prices up that way and that is following the upward revise of 2. 8. Lets go for Housing Starts, shall we almost up 10 . That is a nice jump especially considering last month also revised higher well probably stay under 1. 21 million. On the permits, 1. 396 million seasonally adjusted analynua an. 1. 30, right on the nose. That revision was a little bit lower revision, but were not talking big. So all in all up almost 10 on starts permits up almost 7. 5 and import prices and export prices rising. Now i personally think thats a good thing on the export prices, but its about what the market thinks after cpi being hotter followed by ppi with very little big positive response with regard to Interest Rates being higher, here we sit at 2. 88. Now, granted, yields are once again up on the week, but we continue to work our way to 3 and fits and starts without any major retracement. Dollar index actually having a rare up day. We want to Pay Attention because yesterday we set a new historic comp closing once again at levels unseen since the end of 14 after we had that jump in february kelly, good morning. And its back to you. Good morning, rick. Stay with us if you want Steve Liesman is here with his reaction it seems like the Housing Market is a scene steeler, steve. It is its a big number. Id like to see it continue. December was pretty lackluster down 6. 9 with starts up 9. 7 this month and youve got it in single family, youve got it in multifamily it was a big number for multifamily big jump in the northeast. Makes me think a little bit of weather involved there we had a little bit, that cold spell, then you had it a little bit warmer could have been a little bit of that in there. Im interested again another hot inflation number. I was going to say, i cant remember ever import export prices being really a market mover. This is the it fin 234isishes the narrat. If this is the one that freaks out the market after it overlooked the cpi and the ppi and thats going to freak out on import export prices which is the least consequential of them though maybe perhaps it is down the road indicative of whats happening i would not i would be very surprised. That would be almost an oil story. No, nonpetroleum number is also up 0. 5 although that was unchanged the prior month. This is one of those ones. Joe talks about arguing with rick this is the not the time to argue. Is rick still there . Hes gone oh, hes back normally we cant have a santelli and a santoli on. Right. Too confusing to the anchors. Anyway, rick, the reason i ask was were going to talk to megan now, megan green shes chief economist. She has posited the possibility of a one handle on the current gdp. I want to know, santelli, is 3 first or 2. 6 first what do we get to first . Jim paulsen was on and he used the s word stagflation. Do you think we get to 3 or 2. 6 first . And then well get to megan. First of all, joe, i have to compliment you the choices you give me are perfect. 2. 63 last years high. Basically youre asking are we going to fall below last years high before we test the one 3 close to the end of last year . I would go with b. Were going to test 3 before we have any significant type of test of 2. 6 area as a matter of fact, we might be in the mode where we can test 3 , over shoot it because markets always get hot can you imagine the news when we hit it its going to be front page. Jump through it, then come back and over time test lower levels. 2. 6 is the key below the market. Megan, im ready for a 3 4 year we have some crappy number really, im going to skip january. That would be good to skip my birthday are you really looking for a 1 handle on gdp . Just on q1 gdp. Well, thats bad enough, isnt it yeah. We just had a couple of threes. Is that seasonality stuff small piece of it the number of hours worked fell in january unless you get a big boost in productivity growth, i dont see how we make that up. I think that will call all the now casts. Atlanta now casts. Theyll follow bitcoin theyll have to come down. Does that mean you were a 2. 6er before you were a 3er for the ten year no, im not that was more about inflation. I think there are a bunch of disinflationary forces. Do you say inflation is a word not said on this set for three weeks. There you go. Beautiful word. Its a nice word. That being said, i think in q 2 inflation will look stronger its not because anything has changed at all, its purely a statistical effect cell phone plan repricing, moves in the dollar that affected import prices. Inflation is going to look better in q2 investors are all primed to see inflation in q1. Give us your outlook then for growth this year and the inflation story this year. How does it all work out i think well have overall growth of 2. 6 . Good number yeah. Then i think well see it decelerate inflation, depends what measure youre looking at. Headline will exceed 2 for the year thats not what the fed is looking at for policy, core pce, the feds favorite number will remain below there targeted 2 . Well get it around 1. 6, 1. 7 . Stubbornly low, persistently low. Nothing is changing there. Do you know theres an Olympic Games drag to gdp . I did. Did you know that i did. 2 or 2 . The payment that our Parent Company makes to the olympics according to ryan sweet at moodys tells me this yesterday, ends up being an import of intellectual property and therefore it is a very slight negative that doesnt count all of the the more we pay for the olympics, that detracts from gdp. An actual decline. But is it the i. O. C. . We its an over seas payment. Megan knew that. Yeah, i did there also tends to be a Market Correction before the opening ceremonies which we had this year. Really . Yeah. Not causation by any stretch. It must be. It must be. March madness no one works either thats coming. Also, by the way, im getting some reports from people who think maybe the flu could have an impact on gdp because theres enough people that are out which would raise gdp. The people who are left are darwinian. Mike knows a little about that. I know what you mean. Megan, thank you. An hour, really . More people saw you in a minute athanasiou you in that whole hour, i guarantee. Quite possibly. Oh, theres no doubt. Up next, were going to take you live to the olympics and get a check on the medal count and perhaps, perhaps Andrew Ross Sorkin as we head to break, take a look at u. S. Equity futures back up 60 you might take something for your heart. Or joints. But do you take something for your brain. 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Utilizing pg es talent and expertise in that area trains our firefighters on the gas or electric aspect of a fire and when we have an emergency situation we are going to be much more skilled and prepared to mitigate that emergency for all concerned. The things we do every single day that puts ourselves in harms way, and to have a partner that is so skilled at what they do is indispensable, and i couldnt ask for a better partner. When we come back were going to check in with Carl Quintanilla whos live at the 2018 Winter Olympics carl, what do you have coming up reporter joe, when we come back youll be getting some highlights. Reporter carl, carl, carl, im here i made it. Reporter andrew . Reporter im here reporter andrews here i guess well try to get him on set when squawk box continues from pyeongchang in a minute its all yours. Wow record time. At cognizant, were helping todays leading Life Sciences companies go beyond developing prescriptions to offering subscriptions with personalized, realtime advice for lifelong, healthy living. Honey . You almost done . Nope. Get ready, because were helping leading companies see it and see it throughwith digital. sighs i hate missing out missing out after hours. Not anymore, Td Ameritrade lets you trade select securities 24 hours a day, five days a week. Thats amazing. Its a pretty big deal. So i can trade all night long . All night long. Is that Lionel Richie . Lets reopen the market. Mr. Richie, would you ring the 24 5 bell . Sure can, jim. Trade 24 5, only with Td Ameritrade. Lets get to pyeongchang theres been a sighting, i believe. Carl quintanilla is live at the olympics yes, yeah, yeah. Theres Andrew Ross Sorkin carl didnt pick you up, andrew. How did you get did you get an uber . I mean, hopefully someone was there for you. I walked on my little feeties. No no there was a lovely guy who drove us about 3 1 2 hours to here great to see you. You, too. Reporter this has literally been, like you know, like jumping off the set there and jumping on reporter most of the time when people travel transpacific they get to go to the hotel and crash. Reporter because i love you. I want to see you. Youre going to tell me everything i missed. Reporter heres the set, right . Reporter right. Reporter olympic park behind us joe is in that camera. Reporter hi, oe. Reporter youll toss to highlights as you know, right . Mens skeleton, right . South korea takes their first gold in reporter whats your favorite sport at this point winter olympic sport reporter i think skeleton is catching fire. First few days were about snowboard. This thing, 85 miles an hour. Reporter head first. Reporter head first. Reporter isnt it luge head first . Reporter kind of although we talked to john daley. They say this makes more sense this is more like sledding in your yard when youre a kid when theres a snow day. Reporter also seems more dangerous. Reporter yes then sort of handle joes, you know, and beckys, you know, barbs. Reporter thats a plan good instruction thank you. Reporter yeah. Yeah joe . Andrew, where do you get your tickets . Do you know what you have do they get them . You must what events do you get to go to today, for example . Reporter today i have an invitation to bed in just a little bit. I dont know i think the ticket the pass is the ticket . Reporter yeah. We have badges that can basically get you into most events although sometimes seating is limited. Sleep is for wimps. Make hay i know you, youre going to be out and about quickly. Reporter what time is it here now 10 46. Reporter almost 11. Reporter 10 46 i didnt get a lot of sleep on that plane, joe. No babies. No babies. You got the davos youre doing double duty on the davos coat, dude reporter got to amortize the clothing i didnt think about that thats awesome what about the skivvies, long underwear . You washed it, right reporter i dont have it on. Reporter its nice out. Reporter well be doing a whole fashion show of coats all week long next week so dont worry about that. Excellent glad you had a safe trip you went korean air. Did you have the like the bed that goes down was it good . How do you rank it reporter really, what hold on, we were all just talking about this to be honest with you. I know that i know you. Reporter whether you flew business class, are you wearing long underwear reporter what do you think of the bed on the plane . Reporter you dont sleep we have this for, you know maybe it was your stock image. Reporter maybe it was ars. Ars now youre trying to tea cup the other stock in the room. Okay, this is yeah. Im going to get off the set this is your show. This is your show, carl. Reporter for a couple more hours maybe. Actually, its yours, andrew. Glad you made it across the world really. Reporter thank you. Oceans, scary mountains its good. Good that youre there its amazing in a tube. Reporter its good we will see you next week and carl and i will be doing some fun stuff. Reporter yes well have some tape to show you on tuesday after the long weekend, joe. Reporter okay. We look forward to it. Yeah, get some sleep, andrew give carl some of that cologne, dude i know you brought him some from the duty free shop. Reporter were going to be selling it. Billions. Billions smell like money anyway, see ya. Reporter thats a great see im always thinking. Reporter see ya later. Move on too much fun. When we return, we will have jim cramer joining us from the new york Stock Exchange. Here are the stock prices. Steel point higher off the highs. The dow is pointed up 52 well be right back. Today, innovation in the finger lakes is helping build the new new york. 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That firm citing the recent pull back that have resulted in an attractive valuation the companys recent track record in improving profit margins. Shares of vf corp are lower. North face, dickeys and wrangler out with earnings. It missed earnings estimates by a penny. Revenue came in below forecasts as well. Just an yun datupdate, kelly, be get to uhoh. The happy meal, no more cheeseburger i thought they replaced it with chicken nuggets. No, no, its ham burgers. Just take a piece of cheese off. Whats the point. Instead of a 300 calorie cheese burger you have a 250 calorie ham burger. That changes everything thats im kidding. It changes nothing. I want cheese on my ham burger cant i have a cheese burger when i was a kid i didnt like cheese. Dont you clearly were targeting a particular number, right calories for the whole when you get the ham burger, do you ever get it without cheese i dont. My choice is, i have to figure out what cheese, jalapeno. Did you always eat a cheese berger im very late on the ham burger bandwagon im making up for lost time. I think they want to put out an announcement look, we took out cheese. Fewer fridays. No chocolate. Dont you look around for the extra ones in the bag . Oh, hello. Look at you. Sometimes arent you so lucky . I need to add salt to them too, so bad. Lets get down to the new york Stock Exchange jim cramer can tell us a few things jim . Look, no treats i tell that to mr. Easter bunny. I say we will go and have an egg mcmuffin after a big night out on the town and if we really feel like weve been very good in our diets we will go for a big mac, fries and a diet coke thats what matters. These are treats and we have to think of it like that. I agree or san miguel. Right absolutely those first six margaritas go down pretty smooth, dont they, at the restaurant . It depends. You have to use 100 agave even if its checked off by the mexican government, you will not get a headache theres my tip for the day. Brutal. Jim, speaking of lets talk about drinks cocacola, dow component this morning. Oh, i love it 6 organic growth. A lot of it is the new things theyre doing. Its the zero coke has taken on. A lot of it is tea has been good theyre listening to customers its a very nice number. Some people would say, well, listen, james has been given a good hand. All i will say is james has augmented the hand i like what hes doing the stock can go higher. Thats on the one hand. What about kraft heinz what the heck is going on there lately i think theyre asking that themselves what the hecks going on i mean, the only people i think that really use kraft cheese whiz is ginos steaks. One whiz wiff. I just learned thats how they do it. The pantry. Millennials dont have pantries because thats kind of like what we have. This is the Pantry Company and thats just not going to work anymore. I will say they are all natural and unorganic. Inorganic. Heinz ketchup, jim, i had to go to amazon to order it they dont sell it a the the whole foods. Were doing our part here and there. Well, its just theyve got theyre the center of the store. So many Food Companies i went to the supermarket last night. Their center of store is deadly. No one wants to be seen only older people like me are in the center of the store. Its like Sunrise Senior Living in there, which i good company. So theyre going to have their challenges missing on the top and bottom. If there was another line to miss they would miss on that line, too. They missed on the middle line this is a terrible quarter. Yeah, it was, but like i said, well see if theres much more of a share price reaction there. Jim, thank you as always okay. Jim cramer down at the new york Stock Exchange. As we head to break, look at this, dau fow futures have been all morning. Now were trying to stay positive. Earned you miles to get to the places you really want to go. With the united mileageplus explorer card, youll get a free checked bag. Two united club passes. Priority boarding. And earn fifty thousand bonus miles after you spend three thousand dollars on purchases in the first three months from account opening plus, zerodollar intro annual fee for the first year, then ninetyfive dollars. Learn more at theexplorercard. Com tomorrow, its a day filled with promise and new beginnings, challenges and opportunities. At ameriprise financial, we cant predict what tomorrow will bring. But our comprehensive approach to Financial Planning can help make sure youre prepared for whats expected and even whats not. And that kind of Financial Confidence can help you sleep better at night. With the right Financial Advisor, life can be brilliant. A cpi tends to be bullish. Tech, Consumer Discretionary and health care. Checking out the shares of Riot Blockchain down about 3 since we aired that cnbc Michelle Carusocabrera investigation about the Company Earlier in the show. Make sure you tune in to cnbc to see more about that investigation on dotcom, i think theres more. Lets look at the futures courtney this morning, shes worried. Upholding onto the gains. Courtney ragan, market timer. Well have her on as a guest. Wait until the 1 00 p. M. Buying surge that happens on fridays. Thats true well see. As for now, youre santoli santelli is the other guy. Mike santoli, thank you. Kelly, you have a long day. Good luck. We both do. God speed. Andrew made it. Make sure you join us on tuesday. I forgot squawk on the street is next good morning on a friday good morning and welcome to squawk on the street. Im david faber with jim cramer. Carl quinn la is in the wtanill winter hes at the Winter Olympics in pyeongchang, south korea. Been be doing an amazing job covering so many aspects of that lets take a look at