Transcripts For CNBC Squawk Box 20150128

In some cases they have gone down. And dont forget about energy prizes. Api reported u. S. Oil stock piles surged by 13 Million Barrels this past week. Well be getting official data on inventories from the energy administration. The dow was down close to 300 points. This morning youre seeing a very modest rebound. Dow futures up by about 14 points, s p by 7 and nasdaq by 46. Lets get you through a flood of stocks to watch this morning. Lets start with apple posting the largest profit in corporate history ever to the tune of 18 billion. The results blowing away even the most bullish estimates though i did see some worries. What do you think the dependence on the iphone. Too dependent on the iphone. I think id take the other side of that trade. You can depend on something not selling nearly as well. I would put all my efforts on something that barely sells instead of something that sells so much. Im glad its apple earning 18 billion because when exxon earned 10 billion people didnt like that at all. Of the top 25 quarters in terms of earnings 24 of them have been Oil Companies. This is the only time that a nonoil company has broken into the top. Its something they created. She said it. So im glad i wasnt a bank either. Im glad it wasnt a bank because banks deserve to earn a reasonable profit but not an outside profit as the president told us. Most companies deserve to earn a reasonable profit. You can say theyre doing socially good things. These fancy gadgets. Im not talking about credit. Im talking about whether you actually sort of raise an eyebrow at how much money a company is making. Theres people that think companies can make too much money. This is true. Theyre not monopolies and there is competition normally and that should be something we celebrate. Not something that we raise an eyebrow and think we need to tax. Commodity prices have changed. How about banks . What if theyre really good at raising capital and trading. Apple is one of the most unregulated purely Entrepreneurial Companies in the world. Do you have a point . No but im saying there are other companies, Oil Companies for example this is the point i was making about how stupid people are. I know im the one. What is a fair profit for an oil company then . I dont know. How about a Pharmaceutical Company . Actually Pharmaceutical Company thats a great one. Because its not a free market. Because its not a free market. If it is if it is a free market you should be able to make as much money as you can. Yes. Thank you. Thats a big concession for you. Lets tell you about other news going on this morning. This was a big deal and brave one i would argue. Yahoo planning a tax free spin off of its stake in alibaba. This investment is valued at 40 billion. The reason i said it was brave is without this all you have is the company. So now the company will be purely measured. Marissa is going to be measured for what she is doing and nothing else. Whether it will be enough for starboard who is pushing for the spin off of this and yahoo japan and merger. I would give her time. A brave decision to do that. Worth 45 billion so they spin it off. I dont know how it works. You still have yahoo japan. Youre not done yet. Some argue yahoo japan could be worth 7 billion. Still valuing it as a negative. Depends. Depends. I dont know if i would do it. I think id like it and i guess you want is to be stand alone to see how you did at some point. Plus a tax freeway of doing it. Doing the best way she can do it. Theres less court and juriousageous ceos would keep them in the company. Masking your own. Gives you a honeymoon period. Hopefully theyll look at it and somehow find a way to take half and spend it on good things. Lets tell you about results from at t because theyre topping estimates. So much bad news yesterday. Mobile device deals attracting more as companys users switch to a higher rate and they got a boost in sales forecast. And Juniper Networks beating the street saying cost cutting is paying off. Were in the middle of all of the results and theres other movers this morning. Electronic arts posted better than expected earnings in sales. They had Digital Sales of sports titles. Shares of abiomed is announcing the fda approved its heart pump. Amgens earnings topping estimates in part because of its drug imbrel. Theyre less exposed than other drug makers because only 25 of its sales come from outside of the u. S. I happened to notice the sales number yesterday and it was multibillions in a quarter. They started with nothing and they have got a couple of they worked and they were clean. And just watching this was a great thing. I watched the stock go from a dollar to 1500 dollars and u. S. Steal beat the street but it warns low oil prices and the strong dollar could negatively impact its business this year so it suggests potential for higher u. S. Spending and results from vmware. Topping consensus. The company seeing Strong Demand for its products that help cut the cost of moving data to the cloud. Its a very expensive move. Microsoft talking about it. Ibm talking about it. I need to buy more storage for my iphone. Yes. How do i do that. We need to put your credit card in. You dont need a password . No this is a cnbc thing. So then just say forget your password and theyll email you a new password. Okay. While these two are figuring this out why dont we check on narcotics again this morning. It shows you futures and things were looking better than yesterday yesterday. At one point yesterday the dow was county by 390 points. S p was down. Those were the lows of the day. They did manage to come back. That was a decline of 1. 6 . S p was down by 1. 34 . It was a rough day yesterday. Lets check out and see where european markets are trading this morning. Theyre in the red once again. The cac is leading the way down among the major markets. Its down about. 6 with the ftse and dax down about. 3 . Doubles exist in greece where they vnhavent gotten what they expected. In asia markets were weaker following what we saw here in the United States yesterday. Sang high down was 1. 38 and if you were watching crude Oil Yesterday it rallied about 2 as the dollar fell but this morning its back down another 77 cents. The dollar yesterday as we mentioned actually fell snapping a three game winning streak. You saw the euro bouncing back slightly. Its yielding 1. 8 and lets take a look this morning to see where the dollar stands. We had that fed decision today and thats what was putting a little bit of a halt into the dollars march higher. You can see this morning that the dollar was stronger against the euro. Dollars down against the yen but that fomc meeting will determine whether the green back heads from here. If you want to check out whats been happening with gold prices at this morning youll see they down slightly. Right now back to the story of the morning apple shares soaring. Brian blair joins us with his analysis. It was definitely driven by the iphone and the big story is not that its just sold well in the u. S. But outside of the u. S. Its a blockbuster product. They highlighted china, significant grower of revenues. But china has really taken off. Asia grabbed ahold of this iphone 6 and are driving strong units. Tim cook talked about new buyers coming into this people in china and beyond but he also said they have been stealing market share from android and seemed to be gleeful about that. Should we look to numbers from the other phone makers to be weaker this time around . We should. Samsung dropped off. The back half of last year was tough for them. That was because of competition from lower end chinese hand set makers but we should expect to see market share decline this year. Apple will have another strong march quarter. Thats one of the things were seeing today and that will continue to some degree for the rest of the year but that share will come from somewhere and it needs to come from android. When you say youre thinking the next quarter is going to be good. Yes. Theres a huge upgrade cycle and we had the change in size of the screens but after everybody gets the new screen size then what . That will be the big question this coming fall. Only a fraction of this is upgraded to the iphone 6. Do you worry that it could turn into the ipad in that it became so good that people decided it wasnt something they needed to upgrade every year or every two years. Its just im going to have my ipad every three years. Were running into the law of large numbers here. 74 Million Units is astounding. Theyre approaching 100. The difference is these are high quality phones. At some point that will be the argument. But theres a if you geographyies where smartphone penetration is still low. India, most of them are on feature phones. Still places in the world where apple can see growth but were getting close to that argument. I know we have that in april. Yeah. Do you have any hope were going to get some other blockbuster device . The next product beyond the watch is going to be a television but probably not until 2017 or 2018. The watch is still a big variable. We think theyre making 13 to 15 Million Units this year. Its a big number but not as big as some of the estimates out will. Theres no killer app for it yet so nobody knows howell its going to do. You should talk to me. Everything should be high def and you dont need a universal remote. You know exactly how it works, ease of use because that will i have things now. I have applications i have netflix. Everything takes along time. The cable interfaces are still horrible. Theyre not easy. Theres nothing intuitive about them. And while a lot of people including myself thought we would have seen it by now. I know exactly what it should do and they will rule the world if they make that thing. We use apple tv for so much tv watching. Hbo, show time. Wait until hbo goes on stand alone and you dont need to have a cable subscription and then everybody will just use apple tv. Its doing pretty well. Its an amazing thing. I dont need apple tv because the new samsungs have all of that stuff on it. But its a little slow. Its a little slow on the samsungs if apple did it integrated into a thin tv it would be amazing. You should be able to get into your tv and it should be driverless and take you where ever you want to go. It should be electric and the battery should go 1,000 miles. Let me ask you, 365 million market cap for this Company Stock now looks like its at 116 up from 109 yesterday. Do you buy here . You do. Theres still upside from here. That comes from the march quarter is going to be a follow on monster quarter on top of december. Its not going to be as big from a unit perspective but the analysts are going to get march quarter wrong. And the price starts to make you nervous. 130 plus well see when we get there but thats where i think were going. You saw earnings per share went from 2 to 3. Why . Because of the buy back. They retired a lot of stock. Thats what you do when you have that cash on your hands and pressing the earns for share which makes the multiple cheaper. If its all working, do it. The blockbuster buy back. 180 million in cash. Thats right. Thank you, brian. Design that tv. But they havent called. I did get a christmas card. It didnt say anything on it. Earnings season is in full swing. Many of the multinationals posted less than stellar results and talking about a strong dollar. Joining us now is the ceo of the earnings scout. We had a long discussion on this yesterday saying its almost like a one time event. Currencies are going to fluctuate. Birds are going to fly. Fish are going to swim. It shouldnt go into your longterm thinking of whether to buy the stock or not. Thats true. When we aggregate the data up we tend to find we know its going to impact multinational profits in the u. S. We know it impacts global trade but because most companies hedge it tends to be overhyped and doesnt have as Material Impact on earnings. But if a company isnt hedged right it can be damaging but when you ago rekbatgregate the numbers its overblown at this point. Were worried about the drop in oil prices instead. Thats much more impactful at this point. For groups dependent on oil prices . Absolutely. And youre seeing the worst revisions in the s p 500 right now. The top ten worst are all Energy Companies and if you take the top 50 worst earnings revisions right now in the s p 500, 75 of them are from the energy space. So its going to be quite devastating for profits and expectations for profits for the Energy Companies in 2015 and into 2016. Maybe we did miscalculate because who was that . Look around . Anyone hurt . No you all right . Were all standing here. They know youre on tv dont they . This is the biggest opportunity of your life nick. Some guy is throwing chairs around. Have we gotten to the point now where we say, wow, maybe all in. Maybe the oil thing. Maybe it is negative. Because if it strengthens the dollar and hurts all the multinationals and a big part of the s p is dependent on oil prices being higher the people that benefit and that is with input cost and consumers maybe we offset the benefits in terms of the s p. There are going to be some big winners from the fall in crude. Look at the airlines. Earnings are going up. Delta is going to save 500 million alone in the First Quarter. What were seeing is the ago refwatre numbers for energy. Its not being met with an equal rise of the dollar. Its dragging down the overall numbers and the declines were seeing nernings estimates for the Energy Sector has v been the worst weve seen for any sector since the financial crisis of 2008. Its the magnitude downward thats been the devastating impact. I appreciate it. Just remind me that were going down today because airlines didnt do anything in their Corporate Planning to see oil prices go down yet theyre going to have the windfall profits because of the price of a commodity going down. There should be a way of sequestering those profits as well and chuck is looking at something right now. Actually he is. I know he is. We dont know if youre being sarcastic. Im being real. You believe this. You believe that airlines are making too much money right now because it had nothing to do with the oil price decline. Here they are, raking in this law. You might write a legislation that they upgrade every kaplane with a new cabin. Richard just emailed those. Id rather be with the screaming brats and liberal market strategists. That was a good one. Think hes watching . Showing your true colors. When we return yahoo shares jumping on the companys plans to spin off its yahoo stake but the question is whether this could make Marissa Mayers job harder. Well explain when we come back. Financial noise financial noise financial noise welcome back to squawk box yahoo planning a tax free spin off of its stake in alibaba. That investment valued at 40 beside. Shares getting a huge pop on that news. Here to take us inside yahoo s plan is Victor Anthony and manager director. Good morning to you. Good morning. We expected this sort of. Yes, i think there was some apre aprehension so thats what youre seeing with the share price reaction. I made the case this is the right thing and courageous thing to do for shareholders. Are you in the same place . I am. She shared shareholders roughly 16 billion worth of taxes. Cant ask for anything more. Starboard might be able to ask her for a little bit more. They wanted yahoo japan to be part of this. Yeah they hinlted on the call last night that maybe thats in the future. Why do you think it didnt happen this time . Theres licensing deals with yahoo japan that makes it more complicated. When you now look at yahoo on its own what do you think about the business . Theres not much to be excited about it. The guidance for the First Quarter was week however number one i think next month theres tun for them to rework the microsoft search deal and extract some better economics out of that or potentially shift over to google. Theres a holy grail in may when they could potentially win away from google as well. She mentioned that on the call. Do you think she has a chance . She talked about it and seemed enthusiastic so im sure theyre working with apple. That could add to significant market share. How do we judge her tenure so far. She has done all of the right things when it comes to alibaba and the question is how do you judge the rest of it . Well its a difficult business. Its challenged from a secular perspective. Its some what unwarranted. Yahoo has been through multiple different ceos sometime past. She has made the right moves and im excited about that one piece of the business. I think that could lead to some upside for yahoo this year. As an investor what do you think . Do you buy the shares now ahead of the spin . Is that a bet on alibaba or her and correae yahoo . Right now i think the stock is mispriszced. I think 15 upside. Thank you we appreciate it. Thank you for coming in. When we come back today earnings dominating the market discussion in the United States but greece is sending off warning flairs in europe. A sea of red out there. Why u. S. Investors need to take note after this. First take a look at yesterdays s p 500 winners and losers. Good morning and welcome back to squawk box. Futures are rebounding a little today. We were down 400 points yesterday. Closed down just under 300. Were now up almost 50 points on the session. Apple has a lot to do with changing the sentiment because it was across the board. Across a lot of Different Industries yesterday combined with the ones from the night before and a lot of major names like microsoft and Procter Gamble threw the markets for a loop yesterday based on the stronger dollar and the rest of the day i had cnbc on a little bit and i saw a lot of lower thirds. Thats when we put print at the bottom asking a question will the fed be on pause now . A lot of people brought up what we were talking about. There will be people say look theres no inflation, its not going to hurt. Things arent that flush yet. Theres no reason to be haesstey here. Some think this is a good way to do things. Thats why the market is going to be watching this fomc meeting. Now they say so much is data dependent. Are they talking about European Data . The market will find something in it. They have no better idea than we did. We could make a better decision. Theyre biding time right now. Were ready to do qe. No no. Anyway we are watching greek stocks in the bond market this morning. The Market Making waves and rolling back privatization deals. Michelle joins us on the squawk newsline. This is the beginning of what we heard. We were thinking he could get in. The new party. Wed hear a lot more moderate things. That has not been the case. Thats why youre seeing so many signs within the greek Financial Market right now. To look at the three year yield its approaching 17 . That is an astronomical move by any perspective. The bank stocks are getting pummeled again today. Investors thought he would strike a more pragmatic tone and every move he has made has been antagonistic whether his financial policy or foreign policy. Yesterday he criticized the eu for scolding russia. His first foreign meeting was with the russian emotions bass dor. His very first act was to go to the site of a war memorial for vicks of the german nazis and that went over poorly in germany. Theyre going to likely reverse other privatizations as well. And he campaigned on loan forgiveness so the bankers tell us that people have stopped paying their mortgages and nonperforming loans are finally started to improve. Its been a real reversal. People thought things would be better and we have to see where this goes. The finance minister was on cnbc and shes going to face down with the ecb and get them to cut what greece owes to them. Its going to be a show down but right now signs of Financial Stress in greek. We were looking by greek banks and seeing what happens in yields. We see the pressure in greece. We see it spreading to other places. What does that mean . Thats going to be important when negotiations happen because right now its who is going to blink. The other side is terrified in greece exits or something happen and banks collapse it will be Something Like that but when you see the rest of the Financial Markets not reacting that will give the ecb, eu imf a lot of leverage. Michelle do you think it was intentional would you really do that when you know youre dependent on getting the germans on boor for any concessions . Thats a real thing to do. Do you know how that works . Thats just about setting up his leftest credentials because most of it was made up of leftests. Outside of greece its read exactly how you read it joe. Thats what he intended at this point and it would fit because every move he has made has been antagonistic at this point. Right. We always assume we do that here. We assume politicians will go more to the center after an election and we know that done always work. I thought this guy would be conciliatory and what are the chances of the greek exit . Is it below or above 50 now that he says were out of here with the euro . Look i think its still below 50 because he has campaigned on not leaving the euro and the vast majority of the greek people overwhelmingly want to stay in the euro. This is a man that wants to be in power for a long time and have a bigger role in europe. What i think is a much higher probability is whether or not we start to see some kind of capital controls because theres a lot of stress on the banks. People arent paying. People have told us theyre doing this. Push is going to come to shove and theyll have to make a decision how much leeway are they giving these banks to keep funding their collateral. Leftest go left after an election typically. Earnings driving the market story this week investors are now looking ahead to todays fed statement. Joining us is john silvia. There is. It said silva. I know that. Im not feeling it today. Anyway drw trading group. John were asking percentage questions now. What are the chances at this point that the fed does not raise rates in 2015 . What are the chances . Probably 1 in 4. I think theyll raise the rates. 25 . Im still in favor of raising the rates. A couple of things that are really key here is first for us the Financial Markets are getting some normalized pricing in the Financial Markets. I dont think inflation is a major issue. If you look at the data since 1994 the pce deflated the rate less than 2 . I dont think trying to get it is the relevant target at this point in time. The economy has legs. Its strong enough. I do understand the dollar issues. Thats what well be look for. Emphasis on europe and the dollar. But for us its only one in four chance theyll not raise rates. Okay lou i think of you as a renaissance man watching all things. Looking all over the place. Yesterday, were you i mean scratching your head about some of what we saw . Oil we already know is crazy. Currencies and now these big multinationals, their earnings were bad and the forecast for 2015 is not for, you know 10 growth. Many post revenues and earnings below last year. Is that what the rip roaring economy produces . You think it is. Or not a Global Economy in particular. A lot of the ones that have reported poorly have a lot of earnings from overseas. There was not only weakness in a lot of economies overseas but there was also the stronger dollar and i dont know of any corporations. Its a rare corporation that hedges currency risk well. So we have fallen by 20 on the euro. Its fallen 20 or so versus the dollar and a lot of other currencies are weak versus the dollar so i think thats what played into it. As far as the stock market what are we . 3 from the high . I dont think we should be too concerned about that right now. I do think the data was very confusing though. Yesterday was a good example. We had a very disappointing durable goods data and the transportation component of those for the last quarter of the year was minus average 1. 1 so the thing that always bothered me ais the lack of personal consumption and that has a lot to do with wages and the jobs that have been created. So the corporations have trouble with overseas. I can understand that. Some of the ones having trouble here because the aggregate demand is better than it was. Employment is higher than it was. The type of employment is not very good. Wages are not very good so the growth rate is not particularly good. So quickly, every tom, dick and harry, thats a really old expression but every time they said 8 to 10 s p gains for 2015 and a lot of them were using the s p earnings game between 14 and 15 being around 8 to 10 . Lets say its flatter down because of oil that whole group oil probably wont be above and then the multi multinationals can we make it up somewhere else and still have the market move higher . Even if earnings are flat for the year . I would think that multiples can expand when theres expectations of strong Economic Growth in the future or stronger Economic Growth in the future to fuel more sales so we have the Global Economy is slow and slowing. The u. S. The fed is still i agree with john the fed still figures theyre going to raise rates this year and the stock market has not acted very well when the fed is pulled back on the easy policy over the last few years. Its not all right so far. Final thoughts john silvia i dont know if you juan to talk stock market . But talk about the economy this is not funny. Is it going to be a 3. 5 or 4 year . No absolutely not. A lot of people discounted real strong accelerating and Economic Growth in 2015. Theyre not going to get it. 25 so rate cut. What is it 5 . We have another round of qe . Whats the chances that happened. Its zero. I dont think anything in the world is zero. Bullard didnt say zero. Yeah well okay. He is from the fed. Exactly. That is funny. Now im laughing. All right. Thanks john silvia. I wondered where that was. I didnt see it earlier. Lou. I feel it now. When we come back alibaba under pressure in china today and its all about fakes. Well tell you about that story when squawk box returns in just a moment. So, how do you feel about cash back . I would not say im into it. But lets see where this goes. [ buzzer ] do you like to travel . Im all about free travel, babe. Thats what i do. [ buzzer ] balance transfers you up for that . Well unh. Too soon . [ female announcer ] fortunately, theres an easier way, with creditcards. Com. Compare hundreds of cards from every major bank and find the one thats right for you. Creditcards. Com. Its simple. Search, compare, and apply. [ ice rattles ] opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. We have been talking all morning about yahoo s plans to spin off its alibaba stake but theyre in the headlines today nor a different reason. Eunice joins us now from beijing and shes going to explain. Eunice. Hey guys were seeing a very rare public dispute occurring between alibaba and the chinese authorities here over the authenticity of the goods it sells on its site. Especially on its Popular Consumer to consumer site taobao. A very unusually strongly worded statement the state regulator said they found many of the products sold on the site were either substandard, violated trademarks or were just down right illegal and this comes days after the same Agency Issued another survey where they said out of the sample of goods they examined only 37 of them were authentic. Now this is the first time that were seeing open conflict between alibabas sites as well as the chinese authorities. Taobao which is the popular site of alibaba actually posted an open letter where they were questioning the sampling and the methodology of the government authorities. The government shot back saying heres this white paper and criticizing alibabas taobao for lax internal con rolls. Taobao then issued another statement saying they themselves are a victim of a developing economy. They said they said fake goods are a tumor of economic development. Were willing to work with departments to get rid of this tumor. Peter teal was on your show talking about it ahead of the ipo. One of his concerns was he was wary because he thought alibaba was a bet on chinese politics. All right. Eunice, thank you very much. When we come back this morning, president obama drops his proposal to tax 529 College Saving plans after a public an political out cry. We have that story when squawk box comes right back. I take prilosec otc each morning for my frequent heartburn. Because it gives me. Zero heartburn prilosec otc. The number 1 doctorrecommended frequent heartburn medicine for 9 straight years. One pill each morning. 24 hours. Zero heartburn. Welcome back everybody. The Obama Administration is scrapping its proposal to the college plans. John covering the story from washington, john this only rolled out last week in the state of the Union Address but the blowback was hard and swift. A pretty quick exploding cigar for the administration. It only raised 1 billion over ten years and it was creating a heck of a lot more than 1 billion worth of grief for the administration. You had republicans criticizing it from the outside as a tax increase. And democrats both in places like new york and california, where you have a lot of people high income people who think of themselves as middle class. High income by the american average who benefit from these plans who were complaining it was contrary to the administrations intention. It was trying to refocus money beginning people who make more to people who make less. Nevertheless they decided that discretion was a better part of valor and they pulled it down yesterday. You know john, the thing is this is a good plan to incentivize American Families to take steps to make sure theyre saving for College Costs coming down the road that we know can be astronomical. This is something that you paid taxes on put it into one of these 529 accounts. The only benefit that youre getting that it earns over the life of the account is not going to get taxed. I cant believe this even mate its way into the state of the Union Address to begin with. Well, the argument from the administration the benefits of those account which do have a virtuous purpose. Ive got them. I assume you got them as well. Pretty much everybody i know has these accounts. You know who else has them the wall street journal is reporting that president obama has them for his two hour daughters. Absolutely. They put a bunch of money away in those accounts. But the argument is the tax benefits flow mostly to people who make well above the average income in this country. And the administration is proposing a very expensive program to help people who make less. So part of paying that for that was to take from people who decided they needed it less to give it to people who needed more. Thats what happens when you try to try to redistribute income and its controversial. I always tack about the good mentions, you know we know where those lead. And where the path is paved to. I dont usually get you to agree with me on that. So im not going to say the administration is not well intentioned in a lot of these things. But i will tell you, when youve got a program where its benefit is to those people who are paying taxes, so the benefit to them is that they might pay less taxes, that hasnt been the primary group of people that this administration worries about. Most of the benefits are going to people who either get rebates or dont pay any taxes at all. So it just seemed like a nobrainer that this administration would say this is benefitting people who are in an income people to people who actually pay taxes. Most of what we do food stamps disability, all of those things are people in the lower 50 of the payoff that pay no taxing whatsoever. And thats a cynical way for me to look at this this program doesnt pass the test for redistribution. It seems to be everything that this administration is interested in that. John are you going to let hill answer that . I think hes going to disagree with you. First of all, theres nobody that youre talking about that dont pay taxes. They may owe federal income taxes. When they buy a pack of gum, they pay sales tax, john . Yes, yes. All right. I wonder who youre going to blame, obama or an actual person in his office who had this bright idea . Well, it was a political miss calculation by somebody who decided to pay for the program. Whats that persons name . I dont know. I lot of people working on the budget. Joes point is a valid point. But the matter where you drought line. All right. Well explain this out. When we come back well talk about apple shares soaring. Weve got Liberty Media ceo greg mcfay who is going to join us on the squawk set in just a moment. Theyre still after me. Get to the terminal across town. Are all the green lights you . No. Its called grid iq. The 4 51 is leaving at 4 51. They cut the power. Itll fix itself. Powers back on. Quick thinking traffic lights and self correcting power grids make the world predictable. Thrillingly predictable. Yahoo bringing up its stake in alibaba. Well talk it over with Liberty Media power player greg maffei. And big multinationals. Plus dow component boeing set to release the numbers just ahead. And well tell you where one of the super bowls biggest characters is putting millions of dollars, seahawks star Richard Sherman, on the stock market. As the second hour of squawk box begins right now. Good morning. Oh. Welcome back to squawk box here on cnbc. First in business worldwide im joe kernin along with becky quick and Andrew Ross Sorkin. Were watching the futures after yesterdays market drubbing which the dow was down 400 points. It wasnt it six months ago, we said do the math do the swing at 17,000 youll see this more often. Youll probably get used to them and then get the 850 or 900 points. Among the top stories, apple crushing estimates for the First Quarter. The company posting a profit of 18 billion. Thats right 18 billion in one quarter. That is the largest in corporate history. In the meantime yahoo answering now it will spin spin offits stake. That results in 40 billion. Domenicanenic chu join us. They looked at the data for apples blowup earnings reports. What we looked at the times in the past 20 years where apple has beat consensus earns per share estimates by at least 20 . Its only happened three times in the last 20 years excluding what happened yesterday. Well just look at those three samples here. Apple stock has been positive the day after every single time. So if you had had bought apple shares at yesterday lows close going into the number and you got this kind of report those shares rose. And it also rose five trading days later as well. Pretty decent for apple. If youre an apple bull this might be the time to say, the history that we had for the last 12 years shows apple does well. 178 billion in cash thats a huge number. We know thats a lot of cash. But just to put it in perspective begin the 178 billion that apple has in cash and shortterm investments thats bigger than the market values of at t worth 170 billion. And also bank of america at 164 billion. And disney at 159. Apples cass hoard can buy each of one of these companies. With yahoo to put it in perspective, 340 alibaba shares. And around 40 billion. Ia has market value, entering yesterdays close was 46 billion. So, again, a lot of value at yahoo we know this has been placed in that alibaba stake. And today, well find out how much they want to put in that business, the value of the business overall. Back to you guys. Dom, thank you. Lets bring in the guest host for the next two hours, greg maffei is president and ceo of Liberty Interactive and also president and ceo of Liberty Media and broadband. Vup a lot of titles. We keep generates a lot of companies. A lot of companies. Greg and john malone have created a massive empire if you will. We were just talking about yahoo . Theres a hundred things to talk about. I think want to talk about the economy and media at large. In yahoo in particular how do you judge Marissa Mayer and what she has done. I had argued in the last hour actually spinning this off the way she has, actually a pretty brave thing to do. Its going to expose yahoo for whatever it is going to be but there has been a credit seek of the sale of alibaba which was a tax event . So i think spinning it is the right thing. And she did the right thing. The prior taxable sale was a horrible transaction. The original by jerry yang one of the alltime great deals. The briggs before Marissa Mayer and this team got there to sell half of it early to reduce their leverage was a terrible deal. But this deal makes sense, you know one that we would entirely endorse at liberty. Weve done a few transactions like this along the way. How do you measure her success thus far . I think a work in progress right . A work in progress . Yeah. I mean this was had to do thing. It was almost inevitable i think. It was the right thing to do when she did. T. And the transformation of the business where shes investing in, mobile primarily. Trying to move from display and native ads and the like. I think thats a work in progress. Are you a believer though yahoo unto itself can come back to where it is today . Well see, there are companies that have been successful in reinvigorating themselves. One of the great examples was priceline. Priceline might as well been dead. Amazon was knocked down. You dont think its a company that has to sale starboard, one of the activists going after yahoo wants this company to be merged. Does that make sense to you . I dont know about the particulars of merging with aol. Well see if she gets time for it. People pushed for the sally of alibaba turned out to be wrong. It turned out to be entirely the wrong decision. Well see whether pushing her now, the whole team marissa is the right thing. I want to talk to you about media and its gone with consolidation. But because we had a terrible earnings day a day ago and new earnings numbers that are better what is your broad thought on where we are . If you look at our business some of them more domesticfocused like sirius xm and Charter Cable are doing really well. The u. S. Portion of our businesses like qvc are doing very well. Overseas, were challenged simply by the fact youre translating back into u. S. Dollars. If the euro was 135, 132, and were bringing thing thing back at 112. We had a billiondollar business in japan and a billiondollar business in germany with qvc four years ago. Youre treading water. If you look at modest levels of growth youre treading water backwards in u. S. Dollars. Not necessarily local, but u. S. Dollars. But that strend going to be reversed sometime soon possibly . Im not a currency trader. A lot of people predicting its going to go. You know with that currency of business you made less money . Your companies are worth less . We report in u. S. Dollars. We pay, you know our shareholders measure in u. S. Dollars. In our case the interests are in u. S. Dollars. Dollars are what we trade in. This is why we pay our u. S. Secretary tore always say dollars. Its a tough argument to make for a company . Thats right, one of the things that can be a stimulus for the european as well. A weak youre thats the only way qe would over there. A weakened currency. Obviously, you cant drive rates lower. Well, the other thing theyre going to get is some boost from oil. We have a one hand giveth and a one hand taketh. Its crazy, though the weakened euro. In germany, the currency is weaker they dont deserve they deserve a swiss franc. The whole thing its jerryrigged. I want to talk about media consolidation. Well set this conversation for later. We had your colleague mike on the show. Yes. Just handicap for us how you think the Regulatory Environment is going to treat time warner cable, comcast, at t directv. And what that bodes for consolidation thereafter . My bet would be that all of those deals get done. That what is the set of regulations or restrictions around them and what do the acquiring companies have to agree to that will be the rub. And then there is a domino effect affords it. You and john have a threedimensional chess. Charter has been an acquirer. Its going to continue to be an acquirer. I think to the tree that comcast completes the time warner transaction, thats probably the last acquisition of systems that theyll be able to do for a while. So that probably sets up pretty well for charter. And then the content becomes the big can i i didnt get we just jumped in. I didnt get to the introduction. I brought you guys a present. You brought us a present . I did. You guys now that you moved to new york i dont want you to forget your humble roots. Do you recognize this . I used to go over this every morning. I still go over this every morning. Well never forget this. I was actually lucky enough to have breakfast with governor chris christie. And i asked him to write a note to you guys unfortunately, the snow or the fear of putting it near the bridge the note didnt get here. He was telling me hed be more than happy to give you guys an escort through the lincoln tunnel. This is to remember your roots. Thank you. Thats a beautiful picture. It is beautiful. Greg stick around. Weve got a lot more to talk about. We appreciate this very much. Well talk a lot of things. You know yesterday, you remember my prediction was that this storm is not going to go unnoticed. The complete lack thereof. And i just want to say the tabloids would be all over it. But there is news the biggest tabloid, the New York Times, actually, right here leaders defend shutdown for a blizzard that wasnt. Its weird because it was a blizzard. It barely missed new york. Theyre still mad and the New York Times are in your yeah thank you. They do. This is funny because i watched some of the weathermen yesterday. I love janice i was watching this guy sodino every time they tossed it he was, it was a big storm. Just about 20 miles. His teeth were gritted. Its a weatherman. They used the u. S. Model instead of the noble warming euro model. Anyway. I want to say is that right he needs a new model. Were just minutes away from the results of boeing. Its called something for a reason. Most even arent alive when one happens. Its not every week we get that. The impact on the plunging oil prices and the strong bottom line. Stick around, well have that. S arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Know that chasing performance can mean lower returns and fewer choices in retirement. Know that proper allocation could help increase returns so you can enjoy that second home sooner. Know the right Financial Planning can help you save for college and retirement. Know where you stand with pnc total insight. A new investing and Banking Experience with personalized guidance and online tools. Visit a branch, call or go online today. Welcome back to squawk box, everybody. Weve been watching the futures this morning, after a big down from yesterdays markets you see some recovery yesterday. Although you have to know at some point yesterday we were down. We see a gain of 50 points with the dow futures. S p by 11 points nasdaq up by 60. News from soon to be public restaurant chain shake shack, andrew now expected to sell 5. 16 million shares. At 17 a share. Previously it said it would sell 15 million shares. You guys eat there frequently. We did, but henry was up with a little bit of a stomach. I was up all night. Anyway we are less than 15 minutes away from the release of boeings results. 24 how, caterpillar helped spark a selloff after blaming plunging oil prices in a less than stellar report. Should should investors expect more crude and currency payment ahead. Joining us to weigh in is rebecca patterson, a cnbc contribute. And Mike Anderson at ubs strategy. Guys, good to see both of you. Rebecca, were you worried at some point the strong earnings were going to turn around and bite us in the rear. It did yesterday. Yeah were going to see more of this in the next quarter. And we might see in the next quarterly earnings. But i dont think this is say story were going to see on and on. For three reasons. Briefly, i dont think the dollar falls at this speed. Pardon me, euro yes. Early morning. The dollar doesnt rise at this fee. Secondly, corporations hedge dynamically. Theyre not immune but taking steps in the last few months to try to protect themselves more. And finally, were seeing early signs, i dont want to celebrate, out early signs that foreign currency starting to see a little more demand. Did you hear us yesterday . I watched a lot of your show. I was hoping to get here. We talked about giving you kudos. But what you actually said it wouldnt be this soon for the dollar and there would be political ramifications with protectionism that happens towards the end of the year. And i still worry about that. Now youre taking it back . No i think the politics and corporate issues theyre going to last but not as bad and as shocks as theyve been yesterday. That was a biggy yesterday. Procter gamble was warning for the rest of the year. Its only january. Manage expectations lower, if the dollar keeps rising i like this optimism . I think this is going to be a good year for the u. S. Economy. I think its going to be a better year for the Global Economy. I think its all in the timing. Oil and the dollar these things are going to feed through over time. Were just not there yet. Mike let me ask you, if were looking atough times for currency. If were looking at concerns with were whats happening with oil and currency across the board kind of getting hit, what does it all add up to for the fed . How do they look at this . And does it make it tougher to raise rates . Yeah i think it does. I think the fed is caught right now in a little bit of a trap in that they are in the process of resetting rates. I think the first thing, lets focus on the pace. Theres two things that theyre really wrestling with. The first is this issue about employment markets. Were talking about returning to full employment. But perhaps perhaps the more important issue is weve had virtually no wage growth and target inflation running well below what the feds are looking to do in terms of their targets. To me you have to look at what the fed is going to focus more intently on i its an inflation issue. Rather than unemployment headlines. When the fed makes this decision i think theyre going to be very pragmatic and i think theyre going to defer the rate hikes. I think if anything those who are looking for midyear hikes by the fed, we could wind up seeing that stretch from the Third Quarter even the Fourth Quarter. Third quarter, even the Fourth Quarter but definitely coming this year . Nothing is definitely becky. If we see the europe people economies that rebecca just talked about if it doesnt gain like were expecting, if we see the fact that the Inflation Expectations dont continue to rise at some point. I think theres a point where the fed says well wait until 2016. However, i do think the fed has to be careful about eventually resetting the poems and the notion that you just keep zero rate i dont think thats what the fed wants to do. So rebecca, what are talking of doing right now . Were still overrate equities. Were overrate u. S. Equities. We do have quite a bit of exposure. We have exposure in europe we have exposure overseas and were just hedging wherever we can. And so were taking the currency part out of it. If you take the currency part of it european stocks are outperforming stocks. You cant take the currency out of a u. S. Investor who is coming back in. Sure you can. Well, if you are a u. S. Investor looking overseas our clients were going to buy the stocks and take out forward positions to take out recurcurrency. You need to take etfs out. The market is going to be watch the foc statement very closely. Looking for any sign a change in course. What do you think thats going to be in there . Or how does the fed actually play this to keep the markets from walking away that things have changed . First all, i think theyre going to maintain that patience. Theyre not going to anything in my opinion thats going to reset the expectations with regard to when they start raising rates, say, given its the middle of the year. If they do it theyre doing it at the next meeting. Dont expect to see a whole lot in the changing of the statement. The one thing, rebecca and i were talking about this before we came on board conspiring . Comparing notes. Comparing note. You dont want to share ill share it with you no. The one thing we talked about here is the fact what you could wind up seeing perhaps this de facto tightening in the u. S. Because of the stronger dollar that could give pause to the fed a bit. So it may make a statement to the fact the easing of the tightening of the global because of the stronger dollar thats it. Weve got to go. Do you think the s p grows between 13 and 15 earnings with the oil and the dollar do we get up instead of farther down yes or no . In the course of the shares . Yes. Up marginally. Up single difficult but up. In real current raens, do we have Earnings Growth in 2015 jp. Were looking at 6 to 8 earnings. You havent changed that . Ill a little more negative. You think all year youre going to see these guys comping an entire year fx. Its a big problem. To get in the way of the Fourth Quarter, precipitously, its going to be all year. But the euro is not going to fall against the dollar 8 for each three weeks to the end of the year. I understand. But if youre reporting in u. S. Dollars youre reporting against the 132 or 135 from last year and its 112. Thats a problem. Mike thank you. Coming up next super bowl stars speaking out Seattle Seahawks star Richard Sherman signed a fouryear 56 Million Contract before the season. Were going to tell where you hes investing his money when squawk box returns in a moment. Announcer time now for todays aflac trivia question how many times has the s p 500 closed at a new alltime high since 1928 . The answer when cnbc squawk box continues. And a gentle wavelike motion. Ahhhahhhhhh. Liberate your spine. Ahhhahhhhhh. Aflac and reach, toes blossoming. Not that great at yoga. Yeah, but when i slipped a disk he paid my claim in just four days. Ahh four days . Yep. See why speed matters, at aflac. Com. E financial noise financial noise financial noise financial noise [woman] can it make a dentist appointment when my teeth are ready . [girl] can it tell the doctor how long i have to wear this thing . [man] can it tell the Flight Attendant to please not wake me this time . The answer is yes, it can. So, the question your customers are really asking is can your business deliver . Announcer now the answer to todays aflac trivia question. How many times has the s p 500 closed at a new alltime high since 1928 . The answer 1,024 times. Or 4. 78 of all trading days. Coming up when we return dow component boeing with the quarter, after multinational blue chips got crushed yesterday. Ahead of the break, we take a look at u. S. Futures at this hour. Were seeing a little bit the 40 points nasdaq s p 500 up about 10 points. Were back in just a moment. Welcome back to squawk box, everybody. We have dow component boeing out with quartering results. Lets get to phil lebeau with the numbers. Becky, this is a big one for boeing. Earning 2. 41 a share. The estimate on the street 2. 11 a share. Revenue better than expected coming in at 24. 5 billion. Thats 600 million thats better than what the analysts were expecting. Full year revenue, as well as earning, at record revenue, 90. 8 billion. Thats for all of 2014. Lets talk about what people are focused on for boeing. Thats the guidance for 2015. Theyre expecting to earn between 8. 20 and 8. 40 a share. Thats a little light of the street estimates. Very typical of boeing as they come in on a cautious guidance. As the year goes on it starts to increase with revenue of another. 5 and 96. 5 billion. Commercial airline deliveries of 750 and 755 this year. This year they delivered 723. Operating cash flow came in at 5 billion. Remember, thats been a focus for any number of analysts as far as how they can increase the cash flow. The guidance for operating cash flow for 2015 at least 9 billion with a Free Cash Flow of 6. 2 billion. Again, for the Fourth Quarter beating the street hand lid earns 2. 41 a share. Guys back to you. Watching that stock right now trading higher dow compoent that closed at 2. 48 now at 156. 50. They say anything about currency . They have not, joe. I have not heard anything about currency. Thats going to be a focus. Their Conference Call is coming up within the next half hour. So far have not seen anything on currency. Didnt hurt them. Among the other stories that were going to tell you about, phil, thank you again. Nintendo saying it wont make its annual profit target. The video game maker blaming slack sales of its 3 dancing consoles. And blocking personal wifi access to hot spots the agency said the move is illegal and could lead to heavy fines. And also realtime video ads for the first time during the super bowl targeting people based on what theyre talking about. Now the social networking giant is trying to compete with twitter. Well see if other people will sit with their Second Screen with twitter. People are trying to do that with sports. Ghost busters is back. The all female reboot its lead casts. Bridesmaids director paul fig tweeted a picture, Kristen Wiig Melissa mccarthy. Shes reportedly signed on. And expected to begin, the special effects should be miles ahead of where they are. Thats good. The green slime. I would hope that i would hope i dont know bill murray has gotten too big for his britches. I hope it makes it. Some type of cameo. At least. That word is nice but does boeing do that in dollars like oil . It wouldnt matter. It wouldnt matter on demand. Thats the affected price but you wouldnt have the currency. I dont know the answer to that. But i think a lot of International Things because, we think of it as our greatest our greatest manufacturing exporter. But they wouldnt do it in a way whats the greatest export state in the nation . Washington state. Because of microsoft. Microsoft is currency right . Big currency. We used to hedge out a quarter so we can make earnings estimates for a quarter. But its much more expensive if you do it for a quarter. Its not that expensive. But longdated call options are expensive. I was looking through that and i dont see a comment about currency. I dont know just priced in dollars theyd have to mention if as much as they sell theyve made a lot of the real growth is coming from all of those other places. And the context that we talked about with the wifi, theres a big case marriott was trying to block people at their hotels from using wifi that wasnt their own. Right, right. And so thats what that story is about. Its kind of remarkable that they can even trying to do that. They were claiming it was for safety issues. Right. But the skeptics a lot of us thought really it was just trying to plake sure you can get people for that extra amount that youre going to hit them with. Youve got Young Children in first class and free wifi at hotels. Those are one and two. Its unbelievable. I dont know Cheaper Hotels give free wifi. And the more expensive this is what youve said. This is what youve always said. Youve been right all along. And why if you pay for first class do you got to listen to screaming kids. More people are coming around to this way of thinking. Continuing our earnings discussion, lets get a check on mike, im kind of glad youre here not that im not always s p capital thank you. Good morning. You have a number for s p Earnings Growth 2015 year versus 2014. What is it . Has it come down . Do you need to bring it down will it be affecteded by oil with that group and will it be affected by currency . Those two factors plus you know, the issues with the eurozone. Plus the fear of the exotic is a drum roll right now . A quarter, were already down under 2 for the next. Where were you six months ago . Down 7 . Down from 7 to 2. A years ago we were in double digits. A year ago you were in double digitses . Yeah. Were collecting all the information from the analysts and the analysts would say were not getting a lot of great intelligence from the corporation because i think visibility is very opaque right now. I think the analysts are behind right now, but i think things have happened so quickly. Remember analysts are analysts they cover stocks. Theyre not strategists. Who would have seen this exes soggenous like shots. We talk about hedging, everybody has a different practice. Some guys like apple get around it because theyve had structural accounting. Is that why the analysts cannot figure out whats happening when you have massive volatility in markets. You can expect the analysts to be off and see the type of missesmiss s misses weve been seeing this week . Yeah they really dont. Second quarter . Second quarter, its even worse. Under 1 . Third quarter . Right now, were under 4 . So joe, heres whats going on year and year s p earnings for 2015 5 . Yes, 4. 5 . Positive . Positive now, joe. Look, heres what you havent seen. We do see the Energy Sector and those materials getting punished already in the analysts a expectations, right. What we havent seen what the ceo of Procter Gamble referred to yesterday, hey, look we should get something from the consumers out of this but we havent seen anything on the uptick there. So, look people are trying to put a reason why the market is going on. Lets just take it up a notch and get wind of history here. The s p 500 since 1980 generates about 7 Earnings Growth. It trades around 15 times next years. Heres the problem. Right now, were looking at a year where you might end up with, like 5 Earnings Growth if its pretty decent and yet, were currently trading at 16. 6 times next years earnings. Now, thats really the bad news. This doesnt look like earnings is going to be able to make the case for a higher valuation. Maybe Something Else will. And that Something Else will be that, well everything is relative. And if the rest of the world look really really bad and the dollar is where you want to be and if the Interest Rates dont go up the multiple could expand. And people say Interest Rate goes up for a good reason and the multiple expands. We could get growth because inflation. Theres still a goldilocks scenario to come up with this. We could go 20 times based on secular lower lowterm limits . Where do you want to put your money . In eurozone . China . Me, i like liberty. Every timedime goes in liberty. Basically. You asked me a question i answered you. Comcast right. Right, right. You know im glad to see you, everybody laughed like it was a back hand complement. Because you said im glad to see you this time. This time . Is that what it was . Yes. Thanks for that. Caller that thanks mike. The two most important words for tech investors may be mobile and china. Well talk about that when we return. Plus arizona senator john mccain is waiting in the wings. Hes just back from saudi arabia. The latest on the trip and the state of affairs in the middle east when squawk box returns in a moment. Welcome back to squawk box. This morning as a Venture Capitalist, our next guest has a number of startups over the last couple decades, mysmythe juniper, just to name a few. A 3 billion company. A friend of our guest greg maffei and you have woken up early this morning. Thanks for joining us. Hi, greg. I dont know if youve seen it the cover of Fortune Magazine has a big unicorn on the cover. Its called the age of the unicorn. It talks about how there are now 80 companies in Silicon Valley startsups worth 1 billion. The article at least implies not so subtly that were out of top. Where are you . Whats happening in the Venture Capital business and the private markets is really an aftershock of what happens in the public markets. I think there are really two big things going on there. The first is the rise of the mega cap. And the second is the emergence of the china ipo. First, lets talk about the rise in the mega cap. When you look at the top tech companies, five of the ten were not publicly traded companies five years ago. And so youve had this massive rise in these Mega Cap Companies that are worth an enormous amount of money which is motivating and inspiring the young entrepreneurs that are out there today, as well as giving these companies the currency to make the next oculus acquisition or whatsapp acquisition of 19 billion. And that trickles down all the way to startup companies. The second thing of the china ip is the china ipo. When you look at the Top Internet Companies three of the top ten are China Companies with alibaba being the most volatile. And alibaba is worth more than facebook. Thats going to have a phenomenal impact because those are Global Platforms for our company. So one question we might have is why is this happening . Well i think there are two main factors going on why thats happening. The first is the Technology Business is just on fire. Were in a replacement cycle for existing technology that has two main drivers. The first is web to mobile. And the second is the move from on Premise Data Center the cloud. Right. And web to mobile that is an enormous transition. We think that market is ten times as good as geoff ning are we in . The moment if you will how long will these last the real valuations how many is this 1999 or is this 1994 . Well i mean i think this is a decadelong transition. Because that replacement cycle and then the whole new business of moving offline to online thats disrupting major markets that have never been able to address before which are massive markets, i think were really in the early parts of that. Now, theres no question valuations are high. Theyre in nose bleed territory. You know youre talking about sorry, yeah . Geoff, this is greg you know you have been an investor in disruptive online companies, Media Companies like netflix and some others like these ncns. Right. Whats your thesis on mcns whats an mcn . I was going to let the smart guest tell us. Whats an mcn, whats your thesis . How do you think this plays out . On the mcn, an mcn is a multichannel network. The whole thing, overthetop content that sit on top of digital platforms like youtube. And the whole thesis is when you have next Generation Global Video Networks that youre going to develop new content, much like the new cable content that are formed when the cable industry grew up. We invested in cases like tace made there are mobile networks. Tace makers were can share and discover new contact on top of these platforms. Right now, the biggest platform is youtube. Is that going to change . Is youtube going to own this . Google googles going to own another platform . Or do some of the other ones like amazon going to challenge it . I think there are others that will challenge it. Primarily, viewing is going on on youtube. Facebook you cant count facebook out. Theyre now serving 1 billion users a day. You got amazon and startups like vessel coming in. Geoff, where does that leave the traditional player like greg or frankly like comcast or nbc . With tacemade trying to play. Geoff . Well i think thats an interesting question up to now, people have viewed them as very distinctive separate traditional media versus new media. I think youre going to see much more crossover, and a much more coordinated effort between the two. I think youll see partnerships. Youre already seeing some of the traditionial Media Companies coming in acquiring some of these partners many disney acquisition maker studios, one example, a e Network Going in and tacking up major space. Youre seeing activity on space right now. Geoff, do you want to get in on a golf course we got to go. Is golfing healthy, geoff . Well you know i think when you talk about golfing, i think golfing is doing better. If you look at viewership the pga tour their ratings are on fire. The pga championship had the highest ratings in nearly a decade. Youve got new Young Players like Jordan Spieth and rory mcelrey. Youve got the veterans leak tiger and phil. Youve got the people who have been around that Everybody Loves like adam scott and bubba. The lpga is doing much better with stars like michelle wie. Its just great, geoff. To play around its just hard no youre right. If you look at Equipment Sales are slightly better. But participation is about flat. There are about as many people exiting games as there are entering the game. Weve got increase the participation over the short term. Its about bringing more people back to the game and getting more women to play. I think a lot of things we got to do is change the definition of what is golf. It doesnt have to be a long 18hole round where everybody is grinding away. Golf should be fun. There could be nine holes, six holes. It will never be fun. It will never its a grinding it will never be fun. Thank you, geoff. Thank you. Thanks for joining us. Geoff, come on by if you ever make to the east coast. Et didding up early, thank you. Coming up its only a matter of time youre going to embarrass yourself were watching shares of boeing. The company reporting minutes ago. Well dig through the results with analysts as we head to the break. Checking in with equity futures as they had bounce back a little bit today. Welcome back everybody. Boeing reporting Quarterly Results just a moment ago. Posting a bead on the top and bottom lines. Guidance comes in on the lighter side. Joining us on the squawk news line is howard lobell. Howard, tell us about this this was slower than people expected why is that . Currency doesnt butter boeing, they sell in dollars. The strength is deliveries it looks like a little bit of pricing. Frankly, the outlook is a little stronger for aircraft deliveries. We were looking for 750. At the highend. Theyre a little above that. And revenues a little above that. What does that tell you, a slower than usual growing economy . Well they did a better job than airbus they should do that again this year. And probably into 2016. So its backlog, its market position, its product. A number of things. When we talked to caterpillar yesterday. We heard about a lot of problems theyre facing. Part of that is the dollar but also weaker comphoumodities. We talked to the ceo of cater pillar he said its more fragile and theyre having problems. How does he see it and how is boeing soaring over the top . Well a couple things one is get on an airplane, youre sitting next to anybody and everybody. Theres not a lot of room theres pentup demand for that. Lower fuel prices translate into greater income for people who want to fly. And lower Cost Airlines which in some places will stimulate lower fares in some markets. Theres some virtual good things that are happening, as opposed to all sorts of worry. Society stocks at 137. Do you buy it here howard . Absolutely. I think our price target at 165 still goes higher. And i think that the other story well see unfold this year is how successful boeing is at getting more and more people to fly the driem liner. Eamliner. Thanks, howard. The blue chip is taking a hit dragging down the dow nearly 300 points top analysts from citigroup and barclays going to join us next. Take a look at where were trading this morning. Were back in a moment. A big bump in miles. So this is a great opportunity for an upgrade. Sound good . Great. Because youre not you youre a whole airline. And its not a ticket youre upgrading its your entire operations, from domestic to international. Which means you need help from a whole team of advisors. From workforce strategies to Tech Solutions and a thousand other things. So you call pwc. The right people to get the extraordinary done. Can it make a dentist appointment when my teeth are ready . Can it track my crews performance and protect their heads . Can it tell the Flight Attendant to please not wake me this time . At cognizant, we see opportunities for every company. To meet the new digital demands of their customers. Can it process my Insurance Claim . Like, right now . Can it download a track while im sampling it . Can my keys find me . With the power of digital, analytics and automation now every little thing can provide even greater value. Ok, so can it tell the doctor how long i have to wear this thing . The answer is yes, it can. So, the question your customers are really asking is can your business deliver . Im going to answer with the same answer, so yall can shoot, if yall please. Mr. Lynch, beast mode should investors buy the stock. Im here. Mr. Beast mode big names like caterpillar are being heard. Will the strong dollar sway the fed . Im here so i dont get fined. Mr. Lynch, can you tell me who should run for president in 2016 . Im here so i wont get fine. What about tax reform . Im here so i wont get fined. Do you have a view . Im here so i wont get fined. And what do you think of senator mccain . Im here so i wont get fined. Its good thing swxsquawk box is on the air to get us the answers from the question. Announcer live from the most powerful city in the world, this is squawk box. Welcome back to squawk box right here on cnbc. First business worldwide. Im Andrew Ross Sorkin along with joe and becky. And in the super bowl media day, lynch gave media very little. It would be that lynch would pace up to 500,000 in fines if he refused to participate in the day. What a Good Team Player huh . Skittles. Skittles. He could have played along. I was being facetious, skittles. Heres whats happening this hour. Mortgage applications dropping 3 in the last week. That happened as rates tipped up slightly. The fed will be wrapping up a twoday policy meeting this afternoon. A statement is due at 2 00 p. M. Eastern time. And. President obama is scrapping his plan to tax 529 savings. There are plenty of other ways to raise revenue as far as the budget. This only raised the a billion dollars over the course of ten years. We say bravo for pulling that. And stocks stronger than expected. In the full earnings forecast boeing for next year it falls for consensus. Apple posting the largest profit in corporate history in any company. 18 billion we used to talk about exxon and get robbed by 10 billion. But 18 billion, quickly do the math, 80 . The results blowing away even those estimates, well talk to an analyst in just a moment. Yahoo is spinning off taxfree its 15 tack in alibaba. The investment is valued at 40 billion. In now less than 90 minutes away from the opening bell on wall street, yesterday, we lost about 300 points. Down as much as 400. And closed right in the middle up 100, getting back roughly a third of that. From yesterday, we havent seen the same type of currency woes that spooked the markets yesterday. As a result with apple with boeing, and prices with checks and balances. Which we kind of well, we kind of no we didnt. We didnt figure that out. Greg did and phil confirmed it and so did the analysts. No currency problem, everybody should do that. Checking markets out, converting the u. S. Into dollars. Into dollars. Thats what i mean. Anyway there is the foreign markets, which are except for greece this is going to get im not even going to say fun to watch, but 18 Interest Rates again. They owe 9 billion in theyre not going to raise it between now and the summer. They got to either borrow it or not pay it back. And if they dont pay it back its kind of a combination of both. I was thinking about geoff yang whether or not to peak our own tech things. Venture capital up 16. 5 in the money raised in 2014. Part of this is the enormous markets throughout. Part of this is surprise capital. Youre squeezing more capital its got to go somewhere. Uber at 40 billion. Thats the expectations with easy money around the world. Secure zurich, Interest Rates wheres it going is there some place its going where it shouldnt be . I think thats why you see alternatives, people putting money into real estate. We 19 some noncorrelated assets. Thats pretty good joe. I like that. Not everything goes up all the time. Id like to have something that might go up if things go down dont you think . Yes, i would. Were going to get the views on apple. Apple is crushing it. Last quarter it sold 74. 5 million iphones. Millions more than expected. And this apple has enough cash to buy ibm, all of it 178 billion. Just with the cash they have. Joining us now is dawn kovell dawn, we understand its on quarter. It sounds like listening to tim cook he still thinks theres a huge pipeline of customers who havent upgraded. How long does this go on for . Thats a huge question you thing can there be another customer left on the planet. But tim cook his call of investors yesterday was really bullish. He said look only a low number of existing iphone owners have upgraded to this device. There are potentially millions more. The iphone 6 which is a bit larger is more attractive of getting people to switch from the android to the apple. Tim cook seems to think theres more opportunity there. Moreover, its capturing people who have never owned a smartphone before. Tim cook sees a lot of upside. Whats your sense on the upside cycle . At the moment 2 looks like theyre killing it. Does there ever come a point where it becomes an ipad. People say, its pretty good. I dont need to get one every year maybe ill hold out for three years . Will there definitely has been a different in the smartphone cycle. They can be replaced every couple years. The mobile carriers have encouraged us they allow us to upgrade to new devices in a couple years. Tablets are longer, they seem to resemble laptops which could explain the difference. One of the critiques answer its hard to critique anything that apple is doing at the moment. Its become a oneproduct company for and for them to excel over the long term wouldnt it be nice for them to diversify . I know they have the watch coming in april. What is your view of what the product looks like is there anything thats a potential gamechanger beyond the itv which is like a unicorn. Thats a great description. Oh my god, tim cook was tantalizing us with that again. Talking about how apple tv had sold 25 Million Units to date. Were still looking at it that perhaps the longrumored apple t vcht will come. As you mentioned the apple watch comes out in april. That represents a whole new platform for apple. Its an opportunity for apple to create new experiences for us on our other device. That has potential upside. Analysts are guessing again it would sell anywhere from 10 million to 3 million of these smartwatches over the course of 12 months. Thats a new opportunity. Plus apple pay. Tim cook offered some early insight into the performance of apple pay which is apples mobile payment platform that works on the phone and presumably the watch. That accounts for 2 out of every 3 of these contact list transactions that happens over the last three months. Thats pretty significant momentum. Greg maffei here apple tv what can you tell us that we dont know already about this . Nothing. What do you know . Nothing about it or you cant tell us anything about it . For the former. You know theyre very good at keeping their plans quiet. And this one has been quiet for a long time. Is apple friend or foe are in your mind . The Music Industry thought they were friend until they werent. We have a lot of music guests so we watch that closely, too. On the tv side theyre obviously trying to wedge themselves in and trying to find a place between the Cable Companies and the consumer. And there are relationships where they can drive demand. They can help turn or do things that would be positive. Do you see them actually selling a physical tv or a box . Well what its the tv going to be a screen. They already sell screens, i think theyll sell a physical screen. The box is going to have the intelligence. The screen is just going to be a viewing device for lots of things. Greg thank you, dawn thank you for waking up early on the west coast. Appreciate it. When we come back the fed is ready to wrap up a twoday meeting. Well tell you what investors can expect. Plus more on two city pros cits and Barclays Greg Cantor will be here. Squawk box will be right back. Do y ou like to travel . Im all about free travel babe. Thats what i do. [ female announcer ] fortunately, theres an easier way, with creditcards. Com. Compare hundreds of cards from every major bank and find the one thats right for you. Creditcards. Com. Its simple. Welcome backs to squawk box. The fed will issue a Monetary Policy statement this afternoon. A look at what some are expecting, steve, good morning. Andrew good morning. What theyre expecting is a later liftoff for the first fed rate hike if they get around it the first rate hike in nine years. I want to get to a deeper dive in the data. Its interesting it shows how things are changing. The first thing when you look at this in respondents to the cnbc survey, the plurality. The most number of respondents think that first rate hike does still come in june. But whats happening the tail of this distribution those thinking its later Third Quarter, september, and even two for the First Quarter of 2015. And one coming out all the way out in 2017 that tail is growing. Thats why when we do the averages for that first rate hike, what you seer its gone from the prior survey which was july and now it is september, which is quite a bit later. And get becomes, the fed does not have an economic projection this time where they tell us the trajectory of rate hikes that they had foresee. Whether or not the fed would also do this if they would also push it ahead if they get it we dont know that. Until the next set of economic projectionses. Finally, weve been talking a lot about these issues why are Interest Rates so low. We polled our 33 respondents and the biggest is low inflation. European qe even less of a factor. Easy fed. Not so much of a factor but flight to safety is the number two position. Joe, were looking at the today say it remains operator perhaps some tweaking with inflation, my best guess is because theres no press conference this time around, the fed is going to let the statement pretty much stand. And if they do need to correct what our respondents are thinking, its the outlook for fed policy it will happen on a day at a press conference. That decision comes at 2 00 today. You can tune in for like that. Its like a ghost town here theres some tumbleweeds here blowing across. Steve, you lower inflation doesnt stipulate just here . Did you specify we did not, thats a good point. We could go back next time around and add that low u. S. Inflation or low domestic inflation or low overseas inflation for sure. Thats the whole question when the fed says theyre data dependent. I want to know is it global data dependent or u. S. Data dependent . Well i think theyre u. S. Data dependent. To the extent there are issues that have to do beyond oil. The fed is be looking through oil that it is looking around the world for those influences. Generally, joe, box the United States is such a big economy, were more the pricemaker than the pricetaker. We really have a small percentage of total growth or gdp coming from overseas. Half of what it is. Weve employed a lot of deflation. And we know whats going on with Interest Rates. Theres no way in the back of their mind that doesnt factor in their decision. You bring up a good point, real quick, the issue of whether or not they would add this problem of overseas growth to the statement. On the one hand they have that. And the Massive Action by the ucb. My guess is they cancel each other out and they dont make a statement. And the bottom lines in the number of groups with cat and microsoft a couple victim. What we made of these today, apple and boeing a different animal entirely. Joining us now is citis chief strategic larry cantor from barclays. Youre looking at this like assumed gdp number and multiplying what that correlates with at corporate earnings youre at like 13 . No, were not, give me some. You have to no earning growth. Okay. So our economists a forecast is 3. 6 gdp. Historically, every percentage point of gdp is worth about 4 of eps is and s p. You go back in time. That would get you 14. Were looking at about 7 . Weve already trimmed back our numbers from any hit of energy translation from the overseas business. And im actually surprised that anybody is sprielgsed by the currency hits or the compho commodity price hits that companies are seeing. This is obvious. You cant adjust your 7 with the currency factoring that out if you knew it was going to happen people should be down from where they are. Larry, it takes a while for people to feel flush from the tanks. In the meantime the s p group thats dependent on this when does the good part of these things factor into these numbers . Well i think, remember youve got these two big lifts, right, Lower Oil Prices, a longer dollar. Stronger dollar. And this is going to shift the composition of income in the United States. Basically, its been going the other way. Weve been looking at gdp with the Consumer Spending, theres an income side. I disagree a little bit with who . The plus to consumption with what you saw, its happening now. It is . Okay. Fourth quarter Consumer Spending we dont have Fourth Quarter gdps, likely to be around 5 . So its happening now. One other thing id point out in relation to what steve said regarding inflation here and inflation globally. Lower oil prices a stronger dollar has an ambiguous effect on inflation. By the way i dont think everybody is prepared for this. Starting early next year youre going to seeing in tiff head line inflation prints. Its going to be negative. For the year at the december reading, that makes it very tough for the fed. Whereas, if you look overseas their opposing effects on the one hand Lower Oil Prices reduces inflation. But they have weaker currencies which goes the other way. See what i mean . So, i think, number one, this is tough for the fed. The labor markets we havent seen a labor market like this in decades. You dont see the Unemployment Rate falling at a percent or more a year. Thats rare. 240,000 payrolls in the last few months, more like 280. On the other hand youre going to go into deflation. Having said all of that i think its a bit of a red herring, personally, whether they hike or not. Suppose they hike a quarter point. No one thinks the feds going to be out to kill the economy. This is not with deflation, come on. This is not so this is going to be in my opinion, more like when they had had the qe and everybody freaked out that the bond market was going to sell off. They did it three time they ended qe. And it rallied. Is this as bad as its going to get . And its going to get better from here . I think the u. S. As tobias said its averaged over 4 . Today, thats strong growth. I think the next two quarters are also going to be over 3 . So its hard to have deflation when the economy is growing that fast. So headlines are going down a while because oil collapsed. I think theres more of a risk in places like japan and the euro area even those currencies are going back. Let me push back in one aspect labor aspects are about 60 . Commodities, really not focused on commodity costs. If you look at the focused calculation. The number of civilian unemployed. Divided by whats called the jolt of job listings. How many people do we have that can potentially fill the corporate steed . The fed has been doing this for 35 years to focus on core inflation. All of a sudden, theyre going to say oil prices are down forget what we said for 35 years. We need to risk that credibility. After all is said and done lower inflation and oil prices are good well finally decide thats true . Nobody is going to want to rush ahead and put too much on the multiples. And multiples arent expensive, theyre not cheap. Theyre somewhere if you sell stocks because of oil prices do you buy stocks with ramping inflation and 200 oil . No, to be fair if you go back stocks kept pace with inflation. You prefer a disenflation. Deflation is horrible. You think the sale thing, sooner or later, these are good . Well see, the way i look at it, oil is a price, right. Everybody who is paying it somebody else is getting it. The negative effects play out for years. Nobodys going to stop producing gas in the shale fields in dakotas. They have people there. Theyre not going to buy the next field. Over a few years youll see the negative effects on equipment spending. But the consumer is getting the boost. I think this is the positive of the short term. Okay. Thanks. When we come back this morning, we have reaction to video of the new feature in particular in the new car that has passengers holding on for dear life. The video after the break. Later, senator john mccain talks tax reform immigration and the economy. Hes just back from saudi arabia, well talk to him about that. Squawk box will be right back. Do y ou like to travel . Im all about free travel babe. Thats what i do. [ female announcer ] fortunately, theres an easier way, with creditcards. Com. Compare hundreds of cards from every major bank and find the one thats right for you. Creditcards. Com. Its simple. Say youre a finance guy. A farmer. A researcher. You used to depend on experience. The internet. Your gut. Today you can use ibm watson analytics. It can make sense of all kinds of data. Uncover hidden correlations and new opportunities. And give recommendations with more confidence on who will buy. What to make. Where to plant. Which helps you make smarter decisions. Theres a new way to work and its made with ibm. Check this out. We showed you some video of people looking shocked on or maybe soiling themselves. Just reading here. Those folks are riding in the upgraded model s by tesla. It has a button that allows the driver to switch from insane mode. Sending the car from zero to 60 in 3. 2 seconds. That is comparable to sports cars like lamborghinis and the ferrari. Its features and delivers 6 everyone pounds of torque of zero rpm. What happens if you do that on the highway . Do you think thats legal . You dont have to i have a tesla. The acceleration is ridiculous. You take people for a ride and they pull back in the seat. You love that youre not allowed to go zero to 200 on the west side highway. You should be careful. Or at least you shouldnt do that during the day. The daytime when the cops are out. When we come back after the break, weve got senator john mccain, hes joining us. Later with less than a month before pitchers and catchers reports, behind how how the Atlanta Braves is doing. The ceo is joining us. Take a look at u. S. Equity futures. Dow up 101 points nasdaq up about 61 points. Apple there. S p up about 15. Opinions. Theres no shortage in this world. Who do you trust . Whose analysis is accurate . How do you make sense of it all . A simple unbiased stock score consolidated from the opinions of independent analysts. Is that too much to ask . Nope. Equity summary score powered by starmine, will help you execute your ideas with speed and conviction. And its only on fidelity. Com. Open an account and find more of the expertise you need to be a better investor. Push your enterprise and you can move the world. But to get from the old way to the new youll need the right it infrastructure. From a partner who knows how to make your enterprise more agile, borderless and secure. Hp helps business move on all the possibilities of today. And stay ready for everything that is still to come. Welcome back to squawk box this morning. Some stocks to watch. Boeing earning 2. 30. Revenue above forecasts. We talk about shares of video games, Electronic Arts e. A. Earning 1. 22 per share. Its above estimates. The company raising foreign guidance. And Holding Shares the main chip suppliers to apple its gaining after apple posted a record quarterly profit yesterday. President obama returning this morning from saudi arabia after the funeral of king abdullah. Arizona senator john mccain was one of those people and hes here to talk about how important the saudi relationship is for the United States and also much more. Senator mccain we should mention is the coauthor of the book 13 soldiers a personal history of americans at war. Senator, thank you for being here today. Well thanks i just got off the plane about 45 minutes ago from saudi arabia. So i may not be as bright as usual. Hi john. Hey. Senator, youre just back from this trip to saudi arabia, obviously, saudi arabia has been an important ally for decades. I just wonder how with the transition where things stand . Well first of all, i think the transition is smooth. The real question will be the next transition box theres a whole lot of people that are will be in competition, and they have an interesting way of choosing the next leader. But this one will be in keeping with the saudi policies towards us. And the region. The saudis are more frightened and i am more concerned about the rise of isis. And even more the incursions of iran into different countries. Right now, iran has significant influence in iraq syria, lebanon, yemen now, where theyre sponsoring the houthis who have basically taken over the governments of the country. So theyre very worried. And i am worried, too. And frankly, they perceive a lack of strong american leadership. What should we be doing at this point that you think were not . We havent got time on the program, but let me begin by saying that we should arm the first syrian army. We should have more american boots on the ground in iraq and syria in the form of air controllers. Intelligence capabilities special forces others. We should be understanding that this is one fight, not two separate ones between iraq and syria. Where we seem to have two different strategies. And finally, we shouldnt be training young men in saudi arabia as we are, and sending them into syria to be barrelbombed by al assad. Theres a delusion that were going to have an agreement with nuclear iran. And that were working together. The iranians are on the march in the middle east. The iranians on the march. Even the things were you talking about, arming the syrian army. Thats something that youve been pushing for years. Theres no progress on that. Is there a point its too late to stop doing Something Like that . We dont know who the good guys or and the bad guys are. That becomescreaseing problem. The freesyrian army theres article on the wall street journal about the foubables not arms the first syrian army. In iraq its the shia militia fighting isis right now. The shia militia are people we fought against. The iranians have significant penetration into iraq. The iranians have now basically taken over yemen through their clients the houthis. So the list goes on and on. But we need to have a steadfast policy. We need to have a strategy that will work. Right now, we have no strategy. The next time you have someone on the administration on this program, ask them whats the strategy against isis and against bashir al assad. The strategy is dont do student stuff at this point, isnt it . Thats pretty compelling for the nation. Thats remarkable. The saudis have probably done the most beneficial thing recently and that is of course the price of oil which is weakening vladimir putin. By the way, we still refuse to give defensive weapons to the ukrainians. Thats another shameful dishonorable chapter in american history. John the president said the elections have consequences. One of the consequences of the most recent elections is you are now the Armed Services chair. What are your priorities and what are you going to fix or ameliorate the impact of that . Thanks for asking greg. In about an hour were going to have a hearing with all Foreign Service chiefs who are going to describe and im saying in drastic terms, the disastrous effects of sequestration. And if sequestration is not appealed over the next two years, they will testify that they dont believe theyre capable of defending this nation against the threats as they see it. We have to convince our colleagues in congress and maybe get the president to weigh in that weve got to repeal the sequestration. Look im against the waste in this mismanagement and cost overruns. And im very much disliked in some parts of the military industrial complex. But sequestration is not the way to do it. Then, of course we have to try to force the administration to come up with a strategy in the middle east. And against vladimir putin. So those are just a few things on your agenda. How do you deal with immigration as a larger issue . Do you think this is something that we can get resolved in the next couple of years . Yeah i think we have to. I think we have to address this issue. And we can secure our borders. And we must secure our borders. And we have to change the law that applies to these children outside of mexico that they just show up at our borders and theyre immediately allowed to come in. If they have a humanitarian crisis, they should go to our embassies and consulates in hone ndur ross el salvador and guatemala. We have to have a system a guest worker program. And all of these things can be done. Maybe the house wants to do them stepbystep. Thats fine by me. But the situation, as it exists in my view is not acceptable including border security. Senator, i warranted to ask you a pop culture question related to Armed Services. You are a decoratinged veteran. I dont know if you saw the movie american sniper. I want to get your reaction. Michael moore has been critical. He tweeted this my uncle killed by a sniper in w w2, were taught that snipers were cowards. Well shoot you in the back. Snipers arent heroes. And invatders are worse. Have you seen the movie . I doesnt see the movie. I intend to see it. Sometimes when i hear an idiotic statement from someone like Michael Moore i dont want to dignify it. Thats like saying we should not use airplanes, we should not use tanks, or other weapons. What does he want handtohand fighting . The most important thing, these brave young men, theyre the most highly skilled, saved the lives of other of their comrades because theyre able to neutralize or take out an enemy thats been destroying them. Better capability that we have the finer young men that we have, the better off were going to be. I just you know it really does a great disservice to stay that about so many of our young men and women who are serving in the marines and the army. And many of them are scout snipers. Its almost insulting to them. So john continuing on pop culture for a moment. Youre a big football fan. If Carson Palmer werent hurt would this be a home game for the cardinals . And more broadly, you had some commentary recently in the nfl obviously with ray rice and concussions. And Adrian Peterson and everything else. Whats your view on the nfl with right and wrong about it . You know the nfl and mr. Goodell are public figures, and they have to understand that. And that means that they better have a Public Relations training and team to understand that you have to that were in a 30minute or maybe even a tenminute news cycle. And youd had better be ready to respond immediately for things that happen such as those that you just mentioned. You have to respond. It isnt good enough to wait some days and then hold a press conference, as was the case with the race the rice situation. And not have an answer. If i were them id do a little pr training, because especially in the most popular sport in the world outside of soccer. And our friend bud selig is retiring now. I think that maybe they ought to look at the way his stewardship which i thought was overall very excellent of organized baseball. So, theyre not responding well. And they have to be ready, and the American People especially on an issue like this are insatiable for their desire for information. And they are very impatient. You think that this is though, a particular leagues mishandling of it and not necessarily society kind of changing more quickly than lots can catch up with it . Or do you think this is a problem in particular to the nfl . I think its particularly to the nfl at the moment, although other sports can learn from it. Look, i was involved in a scandal one time a long time ago. I dont even want to refresh your memory about it. But the one lesson is when Something Like this happens, you got to get all of the information out there as quickly as possible. Answer every single question that exists. That is the only way you get over it. And even then it takes some time. Senator, wed like to thank you very much for your time today. Really appreciate it. Always glad to be with you. Thank you, john. Senator john mccain and his book is 13 soldiers a personal history of soldiers at war. 24 days until pitchers and catchers reporting for the Atlanta Braves. Its also week one for the new commissioner of baseball bob manfield. Were going to take the field with the chairman and ceo of the braves after the break in just a second. Breath in. And. Exhale. Aflac and a gentle wavelike motion. Ahhhahhhhhh. Liberate your spine. Ahhhahhhhhh. Aflac and reach, toes blossoming. Not that great at yoga. Yeah, but when i slipped a disk he paid my claim in just four days. Ahh four days . Yep. See why speed matters, at aflac. Com. Welcome back to showdown jerry rice here with 8 year old Andrew Hunter debating who will win the big race between the tortoise and the hare. What do you think andrew . Rabbits are faster. Its not a rabbit, its a hare. Whats the difference . Maybe figure that out before debating the best wide reciever of all time. Wait, are you Odell Beckham jr. . E financial noise financial noise financial noise financial noise welcome back to squawk box. This morning, shares of soaring, the medical device making raising its forecast. And a free scale Semi Conductor sales getting a boost on earnings and upbeat sales forecast. The growing demand. U. S. Steel beating the streak. But it warns low oil prices could negatively impact its business this year. Still, it suggests the potential for u. S. Spending could help demand. Finally better than expected earnings, and sales and the driver and growth of sales sales of its sports. I was on the e. A. Board for years. Theyre doing a great job to turn it around. Hes doing a wonderful job at that company. Were talking baseball. New era for major league baseball. As soon as i said era, i meant e. R. A. Its not e. R. A. Rights with that. Its Digital Media not being able to achieve record revenues. But can the league solve its problems. Were joins by terry mcguirk, chairman and ceo of the Atlanta Braves. Its a great pastime, terry. You look at football and the reeminence they dont look at local markets. Radio and tv if i got to watch and listen to the red, i would do all 162 games. Its different. We think football is now number one. But baseball is on the up and up, right . Well i was just watching the previous segment and the senator paid a nice compliment to baseball that bud selig did a wonderful job in his leadership. So ill take it from the senator that maybe were doing something right. Yeah but for the grace of god im sure you take no satisfaction with whats happening in the nfl, with steroids, baseballs had a lot stuff happening. Trying to figure out how to cut games down from 3 1 2 hours, right . Theres some problems with baseball. Atlanta might have been the countrys team. But everybody else still sort of confined to a smaller market. You might not watch the world series if youre teams not in it. Well baseball is predominantly healthy, id have to say, its in great shape as bud selig, the ninth commissioner leaves office this week, and bud leaves it to rob manfred to take over as the tenth commissioner. Things are healthy. Certainly pace of game is something were looking at. Games inexplicably have gotten longer. We would like to cut them down. Pie have no doubt rob will be successful. Maybe shotput with pitchers right . I think that will happen in the minor leagues. Almost all of the experiments to shorten the game will happen at the Minor League Level or the Arizona Fall League and then move to the major league. With football, by deflate Deflategate Deflategate with the pitchers will that give them time to put pine tar or spit on the ball to get that action . Im not sure i should continue this line of questioning. Everybody looks for an edge. In sports i dont want to think that deflategate is like a guy that had action on 90 seconds in the bathroom i dont think there was enough time. Terry, i have a go good to see you. Good to see you. People think baseball is a sport primarily for older people. But amazingly, baseball has been on the forefront of Digital Rights, getting on top with b. A. M. Baseball media. And make you can talk about how you see it Going Forward . Its now 20 teams pulled their Digital Rights to create a service to stream video to consumers mostly on the pcs now migrated to all mobile devices, ipads iphones. The service has been the streaming video of all of our games, all year long. Its been incredibly successful. B. A. M. Is probably baseballs proudest achievement in the media world over the last 20 years. And just that we called that the front end business of b. A. M. B. A. M. Issing to the technical outsource their requirements to b. A. M. As i understand it. Perfect. Thats where i was immediately going to. Thats one of the more exciting pieces of this asset is the back end business that b. A. M. Has created. And b. A. M. Is servicing probably 25 companies right now with backend digital distribution to all of these mobile devices and doing a fabulous job. Hbo recently announced that it is using b. A. M. For its distribution over the top to pcs and mobile devices and i think i was reading in the paper today, wwe, which uses b. A. M. Had another huge increase. Its a very successful business. Its west bank of the untapped pieces of hardly anyone knows about. Its a quiet business. But it may be growing even faster than the core Digital Business that everyone knows about. Thanks. When youre in town come on the set with us hopefully, once in a while, from down south. Thanks terry. Very good. See you later. When we come back cramers going to talk apple, yahoo boeing and more. Well do that next. More from our guest host greg maffei is here. Squawk box returns in a moment. Stamps. Com is the best. I dont have to leave my desk and get up and go to the post office anymore. [ male announcer ] with stamps. Com you can print real u. S. Postage for all your letters and packages. I have exactly the amount of postage i need, the instant i need it. Can you print only stamps . No. First class. Priority mail. Certified. International. And the mail man picks it up. I dont leave the shop anymore. [ male announcer ] get a 4 week trial plus 100 in extras including postage and a digital scale. Go to stamps. Com tv and never go to the post office again. Do y ou like to travel . Im all about free travel babe. Thats what i do. [ female announcer ] fortunately, theres an easier way, with creditcards. Com. Compare hundreds of cards from every major bank and find the one thats right for you. Creditcards. Com. Its simple. Down to the new york stock exchange. Jim cramer joins us now. Every days different, isnt it . Today, its wow, apple and boeing yesterday it was awful. Today, good numbers. Dwra. Really a daytoday thing that sounds silly. Caterpillar is poorly run, didnt execute well. Boeing, problems in defense, looks those were solved boeing, worry if oil went down so much, people would get new planes. Not what american is saying not what southwest is saying. Its come together. Boeing is a Conference Call stock. Its possible that mcnerney says something not in sync. United Technology Stocks at 115 when the market opened went up to 120, Conference Call was terrific, you had to listen and people hadnt from the night before. I got to stay close to boeings Conference Call before im sure. You dont see it in boeings numbers with forex stuff, if i were a european carrier, id be airbus now. Couldnt that hurt boeing if you have to pay dollars for boeings jets. Wouldnt than 20 more expensive than it used to be. Wouldnt it hurt carriers. Right. To me the big subsidy is to a couple of companies, to zemans, phillips and airbus. The idea is no ones going with boeing because its a discount. Boeing is a Great American manufacturer and superior planes and producing at a higher level. Plenty of demand. Those who think boeings going to lose the dollar raise are making a mistake. Jim, see you in 4 12. 11 seconds, 10. When we come back digital download. Changing face of music, how Liberty Media is taking advantage. Checking on futures, dow futures up by 737 s p futures but by 12. Squawk box after a quick break. Grand prix race car made history when it sold for a record price of just under 30 million. And now, another mercedesbenz makes history selling at just over 30,000. And to think this one actually has a surroundsound stereo. The 2015 cla. See your authorized mercedesbenz dealer for exceptional offers through mercedesbenz financial services. Guest host, greg pla fayemaffei. Driving around listening to sirius. Cnbc. Loser. You discover blues em. Not a huge fan. Who . Electronic dance music, edm. You are lying. Sirius alt nation deep tracks. Classic vinyl. If i hear it led zeppelin. What about download . What about the state of the business taylor swift . I think all of these guy whose have models predicated on free service are going to get challenged because the Record Companies are going to degrade that free, artists dont like free they think its commoditizing the music and a lot of price competition from people like apple. That was fast. We have no time. Thank you. Come back. You have a home on squawk box and dont need to go anywhere else. My house isnt far. Join us tomorrow. Right now its time for squawk on the street. I got to have faith good wednesday morning. Welcome to squawk on the street. Im Carl Quintanilla david faber. Stock market calling for backup in the rough earnings season and looks like apple and boeing will deliver. Futures set to bounce after the worst day for tech stocks in three years. Oil back on its heels. Down 2 . Its fed decision today, tenyear hovering above 1. 8. Road map,