Transcripts For CNBC Squawk Box 20150210

And now i realize why people live there. Why do we live in the northeast . It makes no sense. Because of jobs. Good morning, g20 finance ministers are gathering in istanbul turkey. Here at home the employment market front and center. The Labor Department will release its latest job openings and latest Turnover Survey the jolt survey at 10 00 a. M. Eastern and on the earnings front dow component cocacola is among the names set to post Quarterly Results before the bell that means this morning and Pay Attention to currency as well. Well see how Unfavorable Exchange rates may be impacting cocacolas business around the world. Lets also tell you some stocks to watch this morning. Qualcomm agreeing to pay 975 million to the Chinese Government. This settles a 14 month long probe into alleged anticompetitive practices. The second gaps january same store sales decline 3 . Its a bigger drop than expected and that was above wall street consensus and then aeropostale shares soaring on the boost. Fourth Quarter Sales rising a bigger than expected 1 . Promotional activity was higher than expected but adding the company isering the a a clean inventory position. Lets get a check on the markets this morning. We have been watching the futures and yesterday you saw the dow down by close to 100 points. There are green arrows. This comes after we saw choppy trading in the afternoon. Stocks did close off their low of the session. The dow futures are close to 20 points. S p futures up by 2 points. Nasdaq up by 7 points. Yesterday we were following what happened so closely in greece. If you want to take a look this morning youll see that greece is rebounding ever so slightly at a gain of 2 after pretty rough headlines. Also cac is up by. 2 and if you check out what happened in asia overnight youll see the nikkei was down about. 33 . Crude oil is poised for what sit calling a relatively swift recovery because of all the drillers that stopped drilling but the group does not see oil coming close to returning to the highs of recent years. Wti is down by about 1 . If you have been checking out the bond market youll see at this point it looks like ten year is yielding close to 2 . 1. 991 . If you have been watching currencies, this morning it looks like the dollar is up against the euro again. The euro is all the way down at 11279. Dollar is also up against the yen at 11895. Goal prices are down. 1,238 an ounce. U. S. Treasuries rallies on worries but our next guest believes greece would be better on its own. Your point is greece might as well just step out of it. It might be better for greece but what does that mean for the euro . It would be better for greece because the amount of debt they have to service cant be serviced by that economy. Its not possible. For the euro would be close to a disaster because it would wreck the notion that nobody can leave the euro or the euro region. I think greece if they go back has the cheapest tourism in europe and would be fine to be honest with you. You put out something yesterday that interested me. It reminded me i was glad i was out of college but you have this whole equation that adds up to lower yields in america. Do you want to talk through what some of those are. I can tell you the formula but nobody is going to understand it but explain why this adds up to lower yields here in america. Certainly what is relative value which is the rv part of the equation and thats you have currently 16 of all the sovereign debt in the World Trading at negative yields. You have the yields in asia spa january and europe substantially less than american yields and overtime because not all money has a man date meaning not all money has to go to one place youre go to see european money and asian money flow in and buy our bonds and american bonds are going to equate with european yields and you have three issues in the world which are ukraine, greece and isis and we know from long, long experience that any time theres a flareup in these situations treasuries go up equities go down and i expect more incidents to come in all of those three areas. As a result if were looking at lower yields when it comes to the bond markets in the United States what do you think about stocks . You liked u. S. Stocks because you didnt think there was anywhere else to go. You sound like you may be changing your tone. Ill tell you what i really think is attractive now especially for Retail Investors and thats closed in funds. Both municipal ones and taxable ones. A lot are paying 8 to 9 on a tax equivalent basis. Some are higher than that. This is a time given what i see are earnings in declining fundamentals that what you want to get is yield and not worry so much about the depreciation so i would want to be in the closed in funds and capture the yield and i like that space very much versus trying to bet on something going up when i think earnings are going to be declining because of the strength of the dollar. I want to go back to the idea for a second which is to say i know what you think should happen. I know what you want to happen which is to say that greece should leave the euro. The question is what do you think will happen . How do you actually handicap the chances that that happens in reality. In reality i think the odds are 40 that greece either leaves or is forced out and 60 that germany, austria, the netherlands cave. I think it would be in greece best interest to do this. The one problem that is difficult to argue with here is what the current government ran on to win the election which is the end of austerity and how do they go back to their parliament if they dont stick to the platform they run on and i think thats very problematic but the odds are still less than 50 that greece will actually leave. Good morning. The treaty which bond europe together in 1992 makes it almost impossible makes it almost impossible for anybody to leave. We talk about greece leaving the euro. The process by which they would actually leave the euro would make the greatest hollywood divorce look simplistic and all the European Countries wining about greece and their problems maybe you shouldnt hate greece because it brings down the euro and makes your exports more competitive. Greece does bring some benefit to the euro zone, does it not . You can argue that though greece is dependent upon olive oil and tourism which is their main industry and something and in shipping you also have to say the treaty certainly is there but the issue isnt going to be a teety issue if it gets down to it. The issue is going to be greece defaulting on its debt. Theyve already done that. Well they have done that in terms of the private sector but now you have to look 362 billion is mostly held piano the ecb, the imf and Central Banks so its going to get down to if they cant service the debt or refuse to pay the debt thats when youre going to get into screaming, shouting. What happens february 28th . Do we run right up to the wire with this do you think . Absolutely. Well run it up to the wire and there will be hand ringing and threats and every other thing you can possibly imagine and treasuries will two up as a result of it and we havent begun to see yet the screaming and shouting thats going to take place. Greece is now demanding that germany give preparations for world war ii and what the nazis did to germany. Howell do you think thats going to play in germany not too well. It does show you how messy things are going to get. Thank you for joining us. Good talking to you. You too. Were talking activism this morning. An article suggesting that theyre questioning stock sales by dupont ceo. Exercised Stock Options and sold more than half a million shares valued at 38 million. I want to say this article is making a mountain out of a moe hill because these were part of a rearranged trading program. Its hard to make the argument that its based on news of the day. We also have a column in todays New York Times by a guy we know. I almost choked when i saw this column because i wanted to write it for fortune. You read my mind. I was going to ask you if you thought i lost my mind. I wrote a column in todays New York Times focussing on activism but this time on women in activism and the s p, namely the following people marissa myer ellen coleman, what do they have in common . They have been the target of activism or vocal shareholder. We have kyle bass on our show pushing for that dividend but if you look at it theres only 23 women that run s p 500 companies and at least a quarter of them have been attacked one way or another by activists. Is that a consequence or is there Something Else going on. Statistically its a little weird. Some of those women on the list i did enough research to start k look along the same lines. Its a little odd that so many female ceos have been attacked by activist investors. Thats not to say they dont go after the men too but you wonder if they think they have a little more sway when youre going after women on some of these things. Some of the women on that list, somebody like Larry Ellison at oracle who is still really the guy running the show on some of these things. I thought the same thing. Could be a consequence but something tells me theres a Little Something going on. Theres all sorts of interesting studies done recently including one out of the university of utah where they went to 222 mba students and show them a fake company, same financials. So one run by a woman. They showed a picture of a woman as the ceo. Picture of a man. Same backgrounds that they described of the huge people. Huge discount for the company that was run by the woman. And every activist i talked to i should tell you said no i cant believe youre raising this question. We only look at the performance thats why we would do it and you call some of the female ceos they dont want to talk about it. They want to be judged solely on the merits. Which i can understand. They feel like a story like this plays into the gender stereotype and one issue we didnt put into the column but people emailed and tweeted overnight about is the idea of not the Glass Ceiling but the glass clip. That some of these women i dont know if i believe this theory but theres an idea that some of these women have been put into companies that are in trouble or have a troubled situation and therefore theyre on the glass cliff in which case the cliff meaning they could go over the glass cliff. But i look at a mara y bara. She has been on the job a year and dealt with a crisis. Nobody gave her that job knowing the company was going to implode. At ibm you could peak the stock out when she took over. The company was so big. Its not her or anybody. It would take a magician to perhaps run the organization. You can probably look through a lot of these cases and explain why the activists in there. I thought the same thing you did. And behind the scenes you know that its such a big game of clashing ecos when you see activists go into a room like that. You also have to think the stereo types and the studies suggest that becky would fight me on this but that women historically may be more willing to compromise. May be less willing to fight. All the things that if youre an activist. But they also make better investors. Not that thats necessarily a bad thing. They listen to people around the table. So i did look at this idea that they make better investors. You should know this. Theres been lots of studies and we help them win theres weirds where women out perform the market and we say they make better investors, first of all its a toss up and the sample size is very tiny but women seem to make better investors when the economy is in a downturn oddly enough because they make less risk so even then its hard to generalize whether a female ceo is better than a man. Theres ten year periods where they clearly out perform the men and theres other ten year periods its a losing battle to make the measure but diversity at the top across the board always you get better performance. Not necessarily as the ceo but if you were to count the people within management. Meaning what . The more gender diversity at the top broadly speaking i think you could say that the studies suggest that you will have some form of better performance. That is true. All i know is having been to vegas or Atlantic City ive never seen any woman put all of her chips on the table. Bet it all on red. There you go. Good job man. Walk away. Coming up disturbing news on the u. S. Ranking far behind other countries in retirement savings. Plus the return of spiderman with a twist. A historic Hollywood Partnership but as we head to break heres a look back at this date in history. Is this from sex in the city this music . Were in shares. Which characters would we be . I wont go there. Well lets talk about some of the issues that caught our eye this morning. First up we have been talking about Retirement Security and where the United States ranks among the globe. If you think you havent saved enough for retirement youre in good company when it comes to the country. The United States barely ranks in the top 20. Thats right. We came in at number 19. We also beat out iceland but andrew guess what the number one nation was on this list . What was it . I dont know. Based on our recent travels where things can be spartan at times switzerland. Switzerland is number one which explains why when were there they have the right idea there. Saving and making sure they go for the retirement. How was it over there . Nice trip . It with was. But its spartan. What do you mean . Its a beautiful nation. It is but i think its where we stayed. We stayed at a former sanitarium. Thats appropriate. A former sanitarium. You might have made it a current one by your visit. By us being there. Joe got the smallest room. It was probably from here to there. He had a bed. He took a picture of it i dont think you would fit in it because it was short and really thin. You had to sleep standing up. Basically. It was beautiful but it made me realize they have the right idea. Theyre saving for later. But you guys are going to pebble beach later this week. Is that accurate . That is accurate. Shes going. Im going to be right here. Holding down the fort. They dont live as lavishly and spend as much money as we do. Without getting too serious on a Tuesday Morning americans homes are 40 larger now than they were 30 years ago. 40 bigger. The average car is 32,000 i mean my dad bought a porche in 1977 that was 5,000 brand new. Todays dollar that was the peak of the financial fortunes right there. That was the top. While were living so lavishly were not putting away for retirement. 20 of the respondents had not even begun putting money away. My point about the house is i think americans use homes as their savings. I think the idea is that can be a tricky plan if you have what happened in 2008. It is but, listen listen i completely agree with you becky but i think that when you talk to people theyll say well my home is my savings account and they look at homes as safe. You forget despite all the ups and downs and problems and people saying its a rig game or whatever the stock market is greatest wealth creator with an average return of 10 of dividends. Homes are not an investment. Theyre a money pit. Right. The advantage is you can live in it but youre right about larger homes. American homes have gotten 40 bigger than they were just 30 years ago. Wow. So i think were putting now materials have gotten cheaper but were putting our money into our homes. Real quick lets talk about this crazy email the james dolan email because the guy that sent the email that he called an alcoholic. And loser. Said im not looking for an apology. I want improvement to win a championship. He wants a title. Interestingly adam silver the commissioner of the nba that could have fined or said something said the opposite of what i thought he would do. He said jim is a new yorker. A back handed insult. Jim got an unkind email and responded with an unkind email and that was it. James dolan needs to be happy he has fans that still give a you know what. The guy had the effort to write in after this point after 20 years of misery as a knicks fan, you go back to late 90s, they were scrapping, those were incredible games. You couldnt get a ticket. Now i watched the miami game. They were in miami. Nobody cared. They found a way to snatch defeat from the jaws of victory and now theres fans that put up a website where theyre trying to force the dolans to sell the team. Do you think phil jackson will be able to fix it . No. No . They have the highest payroll of the nba. Its not that theyre not spending money. They have the second worse record. They stink. This is new york. We will leave it there. This is new york. On that note were going to talk about washington actually when we come back. Making his way to our new york city set. President obamas right hand man on the economy. Jason furman is going to set off a debate. No topic off the table. When we come back well talk to him but first as we head to a break a look at the s p 500 winners and losers. Tdd 18003452550 [ male announcer ] your love for trading never stops tdd 18003452550 even on the go. Tdd 18003452550 open a schwab account and you could earn tdd 18003452550 300 commissionfree online trades. Tdd 18003452550 so when a market move affects one of your positions, tdd 18003452550 schwab can help you decide what to do. Tdd 18003452550 with tools like free livestreaming cnbc tv tdd 18003452550 that give you the latest Financial News and trends. 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And with over 300 locations, and 3. 7 million square feet available, theres a place thats right for your business. See if startupny can work for you. Go to startup. Ny. Gov. Welcome back to squawk box here on cnbc. Im here with becky quick and Brian Sullivan. Vds valentines day is drawing near. If youre looking for the idea qdobas could have the answer. Order a smoothered burrito on saturday and share a kiss with anyone and youll get a second burrito for free. Nothing says romance like a smoother burrito. Are you going to go on saturday . Im not sure i will. Youre not sure the burrito is for you . Is there going to be a competitive . I think we should keep escalating this until it gets completely out of hand. What would you do for a tostada. There you go. The New York Times is reporting the Justice Department is pushing for felony pleas by big banks in an inquiry. At issue is whether they manipulated the prices of foreign countries. The department of justice told barclays jp morgan and city groups to settle cases. Its domestic banks as well. The slow down at the nations west coast sports having a serious impact on trades. 2thirds of all volume moves through these ports and each day of the slow down comes with a hefty price tag. 2 beside according to manufacturers and National Retail federation. Here to tell us what theyre doing is jason and were going to talk about a lot of other things as well. Hes the chairman of the counsel of economic advisors. We usually see you across the way. Its exciting to be in your manhattan studio. What are we going to do about this problem . The two parties are at the table. Its up to them to workout. Its in both of their interests to work it out. Were hoping they do that expeditiously. Are the numbers as bad as we just reported . I havent reviewed that particular set of numbers but no doubt the best thing for our economy and best thing for both parties in this discussion is to stay at the table and deal with it as expeditiously as possible. Big topic around the stables. How excited you were very excited about this. Theres lots of questions about how excited we should be. The economy strengthened a lot in 2013. You saw the momentum continuing into 2015. The biggest thing you hear is wages. Real wages grew in 2014. Wages grew a lot in the first month of 2015. Then why do people say they dont believe it or dont feel it rather . I dont agree with that. Look at consumer sentiment, Consumer Confidence theyre at the highest they have been in a long time. You see that reflected in Consumer Spending as well. One of the strongest come poenlts of growth in the Fourth Quarter is Consumer Spending. Its deleveraging and wage gains and Energy Prices all together helping fuel the consumer. What happens now . People are looking at this jobs report and saying this is a reason for data. Theres a lot of data that shows our economy is doing well. Probably a good time to get away from zero Interest Rates and raise rates. The fed should do it later this year, probably in the summer but then people like Larry Sommers come out and say not so fast. I can think of four Different Reasons this shouldnt be happening including what would happen if the dollar gets even stronger. If the fed raises rates. What does that do to our economy . Ill leave that to the fed but im not taking growth in 2015 for granted. Theres things we need to do. We need to make sure theres no unnecessary austerity in congress. If we move forward with some plans like infrastructure that would both help our economy in the medium run but also be more insurance this year and then you see secretary lou right now engaged with the g20 in turkey trying to deal with the other challenge we face to our growth this year which is the global economics. You say you cant deal with congress. Youre dealing with congress controlled in both houses by the opposite party. How do you reach out . How do you work with them . How do you get any plans passed . We want to Work Together on the budget we saw great examples of that last year with that. It had almost everything in it so we had a number of models with our ability to Work Together and when you talk about the numbers in the budget theres always give and take in those numbers. You dont want to blow it up with extraneous matters. Going out publicly and saying the economy is great and its much better than it was before and wages were up and all of that. At the same time making the argument about inequality and continuing to can those both be true at the exact same time . I think so. I certainly think you can walk and chew gum at the same time. Im not someone that believes people are worse off today than in 1973 of course theyre better off. Of course Living Standards advanced in the last several decades but they advanced more at the top than in the middle. We have a real challenge. We havent dug our way all the way out in terms of real income. Typical Families Income hasnt fully recovered from the blow in the last expansion when it fell in the recession when it fell still more. So theres a lot more we need to do. Its true in the gap between the 1 and the 99 has never been wider but how much acknowledgment is it that the gap is at the. 01 and to make it to the 1 you have to make 380,000 but 380,000 a year is not bill gates but theyre both in the 1 . Is there an acknowledgment that while the gap has widened its the. 001 that skewed it so much that the numbers get twisted . Thats absolutely right. So to give an example of your show its step up basis at death for Capital Gains. It wont effect middle class families. 80 of the taxes raised by that policy are from the top 0. 1 . Thats where the wealth concentration where does the limit start. When you classify people that make 250,000 as being in the upper income and policies that target them are even 300,000 youre targeting the people that arent the. 001 . But those should barely be effected. It has 200,000 in Capital Gains from it and you know the tax rate increase as you saw for the highest income households started at 450,000 for a married couple. If you look at the focus of the plan. College for chairild care. Its what you can do to get middle class families participating. Heres the story that doesnt get told enough and theres no reason for it to get told here but as we face a growing inequality gap the world is shrinking. Inequality is coming down. We know that. Capital tends to go where its cheaper so how do we tell the story that the world is getting richer we may not be but then also convince people to narrow the gap in america without appearing protectionist . Well let me give you a good example. Good morning by the way. Good morning. Let me give you a good example of that. Take trade and globalization. That has enormous potential for the u. S. Economy in terms of creating more higher paying jobs. Makes us more efficient and creating more variety for our consumers but no doubt it comes with down sides and trade offs. Thats why the president as hes negotiating tpp is looking to make it a high standards agreement. Youre bringing up the Transpacific Partnership at 6 30 in the morning on a tuesday. You have to do it baby. By including labor standards. Thats two treaties in 40 minutes. You can actually instead of having a race to the bottom make it more of a race to the top so youre raising standards for everyone helping Living Standards and addressing some of the problems. I want to touch on two other issues. One was beckys favorite topic which is the 529 plans. Do you have any worry that that decision not to reverse course but even just the initial decision to go public with that man is going to hold back investment of 529 plans this year or 401 k plans where people say i dont know what these Government People are doing and i dont know what the plan is going to be next year . I cant imagine its going i have heard people that worry that the rules of the game could change for 401 k s too. I realize yall love this topic. I think its time to move beyond it and ask what we can do to increase Retirement Security. How do we fund it . Do we then take away the rules that make 401 k s beneficial to people . We can go back. But the. 01 is not who youre talking about taxing. Youre taxing 2 or 5 of america. Youre the only one i know still talking about the 529 idea. He raised it. I didnt raise it. Thats firair enough. But we should talk about how to make college more affordable. Big data you guys came out with a report on this. Its much more anxiety producing than were supposed to think . Or than we thought before . And whats going to happen . Does that mean well be regulating more . Big data has huge potential for our economy. The council of economic advisors conducted a report that the president asked us to do and one of the things we found is it has huge potential for consumers. Its long standing things. They get discounts at movie theaters. Those are examples of very primitive use of big data it will have many same benefits but it also has pitfalls. Thats why we need privacy and need to be he especially careful. Id like to see regulation. When you see things like anthem and Peoples Health information thats been compromised when you hear about the tax situations with Tax Preparation Software that may have been compromised it starts to get scary when you realize how much information could be up for sale. Absolutely. The president called on congress to pass data breach for a single nationwide standard for how you deal with those situations. Can you establish legislation to help people stop being criminals . Thats what were dealing with. Hackers are going to go after information. Yeah. But im just wondering you said that big data has benefits. Im wondering what they are . Of mass collection . They can say we can target your decisions to what you want to buy. Im thinking i want to pull off the internet more and more now. It seems only draw backs. Just look at what its done in the government. We use it to detect patterns of fraud in medicare and have saved money. Its saving lives. Theres been studies about neonatal care that helped refine the way we do that. It helps save money for Power Companies as they monitor the power of the grid and adjust it overtime so theres a lot of ways its helping our economy and society. We need to deal with issues. Especially private and security. The one and only jason furman thank you for coming in this morning. Thank you. Facebook makes a push into india and then is castro a fan of house of cards . Well the details on a big play by netflix. And steve forbes stops by to talk taxes the economy and much more. Squawk box will be back after a quick break. Were live in the heart of midtown manhattan. Welcome back to squawk box. Among the stories front and center this morning, facebook wants to make an internet push in india. The company is teaming up with a local company to offer free access to a hand full of online services. Its focused on low income and rural users. Coming up is cuba the new black . Whats behind the netflix move to get into a country where less than 1 of the population has Broadband Access . Well discuss that next. But first check out the most clicked on stories on cnbc. Com. Squawk box returns in just a moment. 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. 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. You want to know what takes real courage . Holding it all together when the stakes are this high. All right there you go. A scene from house of cards and netflix is apparently headed to cuba. They have film makers and arts culture and we hope to be able to bring their work to our global meantime, less than 5 of cuba has the internet and less than 1 has broadband services. Is this just a pr service to get them more attention . Joining us is senior film and media reporter. And judging by the fact brent, that we are talking about it on this program, it is clearly a successful pr stunt. This is a joke right . I mean i dont think its a joke joke. I dont think its a joke. 1 of cuba has high speed broadband. For practical purposes they might as well be launching in the rings of saturn. Give me a break. When i heard it yesterday, just hearing the headline i thought they must be starting the Mail Order Service where they will mail you a dvd. Nope, its streaming. And you said the broadband number there is are daunting to say the least. So this is really more about netflix trying to get some attention for itself. And also planting a flag and anticipating that you know now that the relationship has normalized the economy there will start to grow and strengthen more internet will become available and they will be the sort of first pioneer. Do we think theres more underground internet than we know about . When you hear these stories, people take satellite they have dish and directv satellites by people bringing them in pieces and they put them in their chimneys so you cant see them. Andrew its 8 a month u. S. The average income in cuba is 20. This is 40 of the average cubans monthly income. No offense to netflix, but this is come on guys. I think those people are probably going to use that part of their income for food and shelter not for streaming puss in boots or whatever. Its definitely a publicity move. You have to remember this is a company that turned the announcement of a new adam sandler film into a huge global event. So they know what theyre doing here. And they certainly have gotten a lot of attention. Well we fall for it. Were part of it. Were talking about it. Netflix, one, squawk box, zero. Some of it is because netflix has done so much to revolutionize the way we consume content that we see films and television that i think were sort of inclined to think that every announcement is the next big thing. Can we talk about something nobody else is talking about probably because they dont want to . I use apple tv at home. Theres a cnbc app which is great. You can watch live cnbc watch the interviews fantastic. Hows that for a plug . You like that dont you . Well done. Theres another icon. Theres espn showtime hbo. How big is this going to be . When does apple make that move into tv . Because people say whens the apple tv going to roll out . As far as im concerned, its already there. How come nobody talks about it . Its always speculating. Will apple buy a content company because they have the cash to do it. Why would they . They dont need to. In the past couple months ive started to realize i can run a lot of my tv off that little 99 box. Are you going to be a cord cutter . No. Because i need cnbc swuch a different story. And you need the internet to run it. I hard wired an ether net able into mine. Comcast xfinity is very fast by the way. You get my point. Apple tv is already here. And when you look at what netflix is doing, right, some of this is preventive. Theyve got a global strategy because theyre competing with apple, google, and amazon. And hbo is about to launch a streaming service. If netflix wants to continue growing at the clip theyve been growing at do you believe everyone becomes a cord cutter and starts buying all these things a la carte. The reason i watch cable in all honesty is because the stuff that im watching even on apple tv is stuff that i need the access code for over my cable system. So hbo go showtime. If you want to watch them they give you an activation code. If you have all the codes, it works like a charm. If you dont have the codes, its complicated. I agree. But my point is everyones like will apple unveil some tv product. I think their tv product is here and its not bad. Not at all. And its in their core competency. Is it a big deal . Apple gets attention for everything they do but for some reason theyre not getting any attention for this. It doesnt seem to be their Major Business the major way they run revenue. Its something people in hollywood are certainly monitoring. You Better Believe theyre scared it will Something Like that would encourage cord cutting. Because you go to netflix and maybe the movie you want to watch is not there. Right . In your subscription. Then you go back to the apple tv app and there it is. I would like to see somebody streamline all of this. I dont like to jump all over. I watch more and more stuff on demand on cable. And i hate going to it takes a long time to go through 15 different places from where you might see it. Youre right. Its very i think right now thats why sort of the internet tv thing hasnt caught on as much because its hard to find. That also brings up all these kinds of licensing challenges that major studios are facing right now too. Youre right. People expect now content when they want it where they can find it and where theyre most accustomed to finding it. Maybe those deals arent in place to provide for them. Thanks for coming in today. Good to see you. Is black sails on starz the best on television right now . Im a pirate nerd. Thats a fantastic show. I thought black sails was it has pirates. Whats the John Malkovich one on nbc . Different . Whatever it is it must be fantastic because its on nbc. I dont know what that one is. You mean with james spader . No. Theres a John Malkovich pirate show on friday nights. Were getting yelled at. Weve got to go. Thank you very much. Black sails, heads being cut off. When we come back this morning, a score card on the earnings season as it races to a close. Then a man who knows business and politics very well. Steve forbes. Well be right back. You just got 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. Earnings alert. Dow component cocacola set to report. We will bring you the numbers and the instant reaction. The iea expects oil prices to rise saying a rebound is inevitable. Well let you know what that might mean nor the markets. 50 shades of green. The merchandise hitting shelves now well tell you what the buzz is all about. As the second hour of squawk box begins right now. Live from the most powerful city in the world, new york, this is squawk box. Welcome back to squawk box right here on cnbc first in business worldwide. Im Andrew Ross Sorkin along with becky quick this morning. Also Brian Sullivan is in. Joe kernen hanging out in pebble beach all week playing at the at t pro am. Check him out on the golf channel. Well see how hes been playing. I havent seen was yesterday his first day . I dont know that theyre even playing yet. It may just be warmup stuff at this point. Can i say on the song good vibrations, im reading a book right now called catch a wave. A tortured genius. I wanted to throw it out there its spectacular so far. It was written for the album smile. Our top story this morning, the iea predicting a recovery in the price of crude but no return to highs just yet. The agency said Market Participants are confident that spending cuts in Oil Companies will lead to a recovery price. Wti crude now trading 52. 17. Though i have to tell you im hearing mixed views that we might take a little dip before we go back up again. Youve got to remember too, that drilling rigs coming down. But that doesnt impact current Production One bit. When you say the rig count has gone down thats drilling rigs for future production. You want to hear supply being cut off by being shut in. That actually happen yet . No. A little bit. I talked to a number of guys. Some of the lower producing wells are being shut in. In terms of where it doesnt even make sense. Its uneconomic but the reality is 90 of your capital costs are going to be initial. Once the cost is in doesnt make sense to shut it down. No. Keep flowing. Thats why supply are a Million Barrels a day more than they were last year. We keep forgetting that. Among the other stories were watching this morning, qualcomm has agreed to pay china a fine of 975 million to end an antitrust suit. Qualcomm will lower its royalty rates on patents used in china that will likely help chinese smartphone makers. Also microsoft and samsung calling off their patents. The case of measles has grown to 107. 39 have been linked to the outbreak in december. Were going to talk more about the vaccine controversy at 7 30 a. M. With the mayor of san diego. More than 60 s p 500 companies out with Quarterly Results this week but we have a good read on how the season is shaping up. Dominic chu joins us with more. Dom, good morning. Twothirds of the companies in the s p 500 have reported their earnings numbers. Were well over that midpoint. Also about 75 of all market cap, all the market value in the s p 500 has been reported. So the bulk of earnings season is now over. If you take a look at how we stand with our earnings score card. You can see a pretty decent beat rate. 73 have beaten analysts. And 17 have missed. Theres a big caveat here. Analysts estimates have been coming down. So this is a beat over a low bar. Low expectations for earnings season already. If you dig into it a little bit deeper, heres where a little concern is coming out. Because there are some important factors to consider. Sectorwise. If you look at the sectors that have contributed the most to Earnings Growth here Jonathan Gottlieb took a look at health care. Already posted the strongest Earnings Growth this season up to 22 as a sector. But if you strip out gilead and that hepatitis c machine they have there, the overall sector growth would be 12. 5 . Gilead accounts for the bulk of growth in health care. Technology has grown 18 . But if you strip out apple, its only 10 growth. I say only but its still a pretty big growth rate. Technology without apple its 10 growth. App sl a huge impact there. If you look at the Overall Energy sector you can see here its been down about 20 . Earnings contraction has been there. The overall picture for earnings, brian, this is where the concern is. Although i will mention that health care and technology are two of the three biggest weighted sectors in the s p. Back over to you. Thats kind of stunning to see just those two companies alone gilead and apple. Those are weighted in those sectors as well or unweighted . Theyre huge. Obviously apple is the biggest part of the s p 500. Its the most valuable company in america. And gilead is a huge part of the biotech industry and of course the Health Care Sector overall. The key here of course is when you talk about technology youre talking about 20 of the overall s p 500. With health care youre talking about 15. Financials are the other 16 . That makes up the top three. When you have health care and Technology Driving earnings its a good sign because theyre important in terms of the weight. But its also interesting because maybe not everybody in terms of sectors or industries is participating in the big Earnings Growth picture. Again, these are lowered expectations. Thats the reason why its important. Thats the reason why pessimists are saying this isnt as good of an earnings season weve seen in the past. Although pessimists by nature always find a way to be pessimistic. They do. Thank you. Now we have im going to kill the name. Principle investment analyst. And head at William Blair. His William Blair Allocation Fund has a five star rating from morningstar and more than a billion dollars under management. Im going to start with you. With talk about greece, greece, greece. Its in all the headlines. Please as you service wealthy clients, batch patch together greece with why one of our listeners are thinking what does this mean to my 401 k . Tie that to our investments here in the United States. When most people hear greece they think of Olivia Newton john. Of course. But then is what happened in 2011 going to happen again. You saw yields go through the roof. There was this fear of contagion today the u. S. Stock market is much higher than it was in 2000. Not much higher b but its higher. All the worry of greece then didnt do much. And i feel like were repeating this. You can almost just run the show from 2011. Well i think there are clearly some differences between 2011 and today. If you look across all of europe theres a lot more fiscal discipline i can say, across europe. Weve had many many years of austerity which has pushed deficits back in order. For many countries in europe. You also have the ecb engaging in these assets. There are some meaningful differences. I think whats going on in greece is ultimately going to lead to more market volatility. That is something we need to be prepared for. I guess my point, brian, is were talking about all this stuff and youre right in everything you talked about. But for a doctor in des moines iowa, who just wants to invest in the stock market theyre probably wondering why does this really matter to me . Well, the threats that existed back in 2011 and 2012 are different. The banks in europe were exposed to that. If youre a doctor in des moines, iowa you have your pension. It is exposed to those assets on some type of pension plan or anything like that. Today its not the same situation. But what we have to remember and you alluded to it before in terms of volatility there is an incentive now for yanis to youre just showing off. No no. Part of a negotiation is threatening. Theres a lot of bluster and progress yet. 29 states have a bigger gdp than greece does. Thats not whats important. Whats important is that across europe there is a populist fervor fervor. That party has not been around for about a year. Already its got 20 of the popular support. Thats an astounding growth. Its what we saw out of syriza. Already ireland has said if greece gets a better deal it should be transferred to ireland. You know the same is takes place in spain and portugal too. Were taking destruction to a new level. Its a smaller level, but it is a level there. Theres not a lot of backing down these players can do. The troika cant back down. You have them wanting the same deals. But sapras cant back down. Weve actually been long along the eurozone in particular spain and italy. I will however, take greece out of that. We have not bought greece equity markets or had any position in the bond markets. But what is likely to happen from our perspective, we reduced by about a third a couple weeks ago. Were looking far chance to get back in this extreme volatility. The eurozone the euro will not survive as it is today. Greece really doesnt belong in there. They may find some way to shoe horn it in. My point im trying to make is i went to greece in 2009 when they were bombing banks. I was in the square when they were rioting. The dow was at 7,500. Look where the dow is now. Im not saying greece doesnt matter. It does matter politically. Its got wider implications. But it doesnt seem to matter for the dow. Or the dow would be at 25,000 if we didnt have greece. I dont know. It just seems noisy. And its also it might work to scare people off of investing. Saying i dont know all these greek politicians. I better not buy shares of xyz corporation. It hasnt necessarily bled over. But as an u. S. Investor ask how much exposure do you have to European Assets . Given whats over there the German Market is up 14 this year. French market up 10 . Youre right. Theyre doing quite well. But if you consider the currency and the loss of the euro youre not looking as good. Thats why domestic investors and u. S. Investors care about whats going on in europe. Not so much because it trickles into the markets here but because it has an impact on their international exposure. The u. S. Is up because its the one stable country that can offer growth. And thats the difference. You cant argue that things are bad there but were up. Thats why were up. Thank you. Everybodys avoiding that. Okay. Thats the point. Thanks guys. All agreed. It took awhile to get there. Finally. Thank you, gentlemen, for agreeing. When we come back, steve forbes on innovation. Then weve got the mayor of san diego weighing in on possible shutdown of west coast ports. And the measles vaccination debate. Plus movie merchandise that isnt for kids. The 50 shades of grey themed products hitting shelves right now. Squawk box returns in just a moment. 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. Its frustrating being stuck in the house. Good thing xfinitys got 2 hour appointment windows. They even guarantee theyll be on time or i get a 20 credit. Its perfect for me. cause i got things to do. Oh, yeah woooo with a guaranteed 2 hour appointment window and a 97 ontime rate xfinity is perfect for people with a busy life. Welcome back to squawk box. Futures right now pointing to a sharply higher open this morning. Coupons. Com warning its First Quarter revenues will thwart estimates. Coming under pressure the i. T. Providers sales falling expectations. And theres positive news on the united continental. Reporting traffic rose by 1. 1 last month. Steve forbes planning a summit next month to boost economic growth. He joins us right now. He is the editor in chief of forbes media. Hes also the author of a new book money. Why dont we start with the conference. Because this is a repeat of what we talked with you about last year. I wonder what kind of progress weve made what kind of hope you have at this point. Well i think the progress is selfevident. The United States is stronger than the rest of the world. Not strongs we should be but when you look around the world. Weve got dynamic things going on. And even though Energy Prices have taken a slam the fact of the matter is in terms of cheap natural gas, that is for real. And as people begin to realize its for real, youre going to see more and more people figuring how to use this ultra cheap energy in ways we havent before. New materials before it comes out in the aluminum truck. Nano steel is coming and youre going to see more of this kind of innovation. So the heartland is coming back just as im told the cubs are coming back. Miracles. Hopefully one will not take as long as he other. Yes. Well as george will said any team can have a bad century. Cubs havent won a world series since 1908. And you mentioned harold hamm. His company is one that slashed Capital Expenditures. They know what happens. Theyre slowing down on growth. How much does that slow us down on this Energy Revolution . I dont think in terms of Capital Expenditures yes. Because harolds seen it all, hes lived through the 70s and 80s so he knows how to survive the thing. The key thing is the energy is there. Ifs cheap. And youre going to see trucks using natural gas and things like that. So look beyond the immediate horizon. And say what does this mean for the next generation. Its huge. U. S. Is now cheap energy. Who would have thought it . Its funny because i always have the tease the show, 2 00. I thought it starts earlier. It does. Power lunch is on at 2 00. But im on at 2 00. Its my cheap plug. Its my pay for coming here. You are cheap. I should demand more. Is lower natural gas costs. Were seeing this port disruption. And were seeing currency volatility. If i was a manufacturer, i might look at all these things and think it might be a little more expensive, but why dont we bring manufacturing back to the states here. I dont want to deal with currency volatility or the whims of a long shore union. Lets bring manufacturing home. Do you think thats going to i know its started, but do you think its going to increase . You look at germany. They went whole on their electric energies. Thats huge in certain circles. Theyre coming over here. Again, those Companies Take a longer view burden of proof are we going to be 10 to 20 years down the road . And once we get going on permits for liquefied gas terminals, its going to have huge political implications too. The fact we will be exporting liquefied. Natural gas, what does that tell moscow . Your days are numbered. That has been part of the missing piece. In order to attract more of these manufacturing jobs you need to have the people almost an if you build it they will come sort of scenario. What should we do with that . How do we fix that problem . Thats one of the panels at the conference. How do you train people . And there are good ideas on that not Just Community college but setting up School Systems where instead of one size fits all, you have a proclivity for something, lets develop it. And there are a lot of good paying jobs out there. Trade school sort of things. Yeah. And online. It makes it very easy. How much are you going to talk about politics at this conference . Meaning 2016. I hope very little because we want to talk about, i think, things to make it happen. Illinois worst state in terms of finances. How did he do it in illinois . Rahm emanuel is keenly interested in how you get an environment to get more investment going. So i think on the political side especially on the local level, theres a keen interest in what are the barriers what do you do about it weve got real things to do. We cant play games. But what about the games. Lets talk 2016. You put jeb up against hillary. I assume you have a view. I think jeb wins. You think he wins . Not only that you want him to win but you think he wins . Yes. I think the countrys in the mood. Talking to a Previous Panel about this sentiment in europe its here in the United States. Which amazingly if warren ran, im not sure she would. She would be a contender against hillary. On the republican side bush is the front runner. But theres keen interest in scott walker and other candidates. So its going to if youre a political reporter youre going to have a lot of lively stuff in 2016. Lets talk about money like your book. Looks to me like we are engaging on a currency war around the globe. You have Central Banks that are trying to devalue their currencies as the one way to beat your neighbors and to get ahead of the game. How does that end . Theyve got to stop it. Because one of the great myths that we discuss in this book is that you dont get Real Advantage longterm by cheapening your money. In fact, it hurts you longterm. And one of the things thats amazing is qe hurts a Company Rather than helping it. Although quantitative easing may have worked when you look at what every other country has done. Relative to what others are doing. Talk about cubs in baseball. When. 260 is winning you a title, you know you have problems. When you should be hitting. 360. And the idea that if you change the value of money that youre going to get an advantage like saying you can change the number of minutes in an hour youre going to get an advantage. Its a myth that comes out of the 30s. We had currency wars in the 30s, did not end well. It just gums up the economy. I look back to the currency wars of the 1930s and we know how that ended in terms of wars breaking out and other nations getting super aggressive. Its the political side that theres a breakup. Are you suggesting thats a possibly if the euro breaks down it gets us to a point of looking at another war on the continent . You already have one simmering in crimea. That draws on the rest of the globe. When it looks like the world is fracturing no one is in charge, thats where u. S. Leadership is going to be essential. Foreign policy is going to be big. How do we prevent the world from going kablewy . I remember being in athens six years ago when a lot of this stuff was literally and figuratively blowing up. You would talk to people on the streets and they were ticked at germany in world war ii. They were still angry. You have 40 theyre now talking about reparations. 40 on those 25 and younger. It is a boiling point. One of the things we discuss in the book is in terms of growth you dont do it through what theyre doing in europe. And yet unfortunately this greek populist government in europe and greece doesnt know what theyre doing either. You can understand the reaction to the socalled troika in europe, their aus ter the i is dont hit the government too hard. Smash the class with higher taxes and regulations. 45 payroll tax. They wonder why they have a big informal economy. They should be taking hong kong and say do that. Starting a business do what new zealand does instead of going through the 50 steps tough go through there. Bribes all the way to set up a legal business. A lot of positive things they can do. But the germans just say tighten up, starve to death. Its not going to work. So both sides in this dont have it right in terms of how you get the economies back on their feet. Stable money, low tax rates, sensible regulation. Europe would come back pretty quickly. They seem intent on going over the cliff. Just hope they dont drag us with them. Yeah. Too soon for that. Thanks for joining us today. Thank you. Appreciate it. Coming up want to drive Warren Buffetts car . One lucky bidder will have the opportunity. Then the mayor of san diego will join us to talk innovation immigration, and the west coast port strike. Anything . No. You . No. Aflac what are you guys looking for . Claims legend has it these hills are full of em. It can take months for an Insurance Claim to surface. Claimin takes patience. Aflac paid my claim in one day. They got some newfangled kinda one day payin machine . Hehehehe yea, i got aflac at work. Aflac. In just one day, we approve and pay. One day pay, only from aflac. Aflac. Why do we do it . Why do we spend every waking moment, thinking about people . Why are we so committed to keeping you connected . Why combine performance with a conscience . Why innovate for a future without accidents . Why do any of it . 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It is revamping search results for 400 medical conditions. Instead of a list of links, searches will now generate illustrations and medical assessments about how serious the condition could be. It will source the mayo clinic for much of the results. In my humble opinion switch not humble at all, i will say never google anything about your health. Whatever youve got, itll terrify you. You got to stomach ache, google it, it might be cancer. I know youre offering saged advice, but i cant help myself. You have a headache and you go there and it says you could have a headache but you may have a spear and its worst when you do it for your kids. The doctors say the worst thing that happened to us is the internet. Everybody is saying i dont need your advice. I know what ive got. Ive got where my skeleton wants to jump out of my body. Yes. Its the selfdiagnosis problem. Is that a thing . Should i fear the outbreak of that . No. Im going to look now. We have coke numbers just hitting. Waiting for my screen to come along. Now that i said that, its not here. Lets just sit here in awkward silence. As we do the coke numbers. I dont see the coke numbers just yet. Though there they are. Cocacola beating. Were going to be getting those as they cross our screen. Across your screen faster than our screen this morning. Which is making this a little bit more challenging. This isnt helping. Okay. So revenue 10. 87 billion. The estimate was 10. 75 billion. So revenue up a little bit better than expected. Not a lot. What we care about in cocacola, what you want to see is case volume. Thats what people go with. Thats better than expected. Global volume growth of 2 im sorry. 1 for the quarter. Its in line with expectations. Youre saying we got in line with cocacola. There we go. A little bit be rt with cocacola. Itll be interesting what they say about soft drink trend. App lot of companies having to adjust their models as soft drink sales fall. All right. There we go. And currency is going to be a massive instance for cocacola. Beat a little bit bit revenue, beat a little bit of eps. The chairman and ceo says theyre looking at the progress theyre making at this point. They see positive early signs in the quarter. We remain resolutely focused on accelerating growth and taking opportunities to solidify our position in the key markets and categories. However, there is a but that comes with this. We continue to see 2015 as a transition year as the benefits from the announced initiatives will take time to materialize amidst uncertain and volatile macroeconomic. They did have a selling day in the calendar. Grew 5 there. Not a lot of negative comments im seeing on currency so far. But again the cocacola results are very large. Were on Live Television and radio. So were trying to go through a 500page document. Driven by positive price mix and the impact of one additional selling day. Im trying to figure out the frozen orange juice sales, but im having trouble concentrating. Ha. That was better than your spirit by the way. Yeah. What, concentrate . Frozen orange juice . No . When we come back, well be talking to a cocacola analyst. Plus the mayor of san diego, i had will join us on set to tell us about the priorities of the port strikes on the west coast and the debate over the measles vaccinations. Take a look at the u. S. Equity futures. The dow futures up by 120 points. Dow component helping that right now. That stock trading around 42. 30. Stick around. Squawk box will be right back. Tigers, both of you. Tigers . Dont be modest. I see how youve been investing. Setting long term goals. Diversifying. Dip you got our attention. We did . Of course. Youre type e well, i have been researching retirement strategies. Well thats what type e s do. Welcome home. Taking control of your retirement . E trade gives you the tools and resources to get it right. Are you type e . Can it make a dentist appointment when my teeth are ready . Can it tell the doctor how long you have to wear this thing . 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 . Welcome back to squawk box. Got a great conversation coming up with a very interesting guy. Port labor disputes and the measles scare are among the stories front and center for those living on the west coast and for the rest of the country. Right now there are already more than 140 measles cases in the state of california alone. Two state lawmakers there are pushing for a bill to get rid of the personal belief exemption many parents are using to avoid vaccinating their children. Joining us on the set, mayor of san diego. Thank you for coming to new york. Just to see us i know. Exactly. Lets talk about the ports. That has direct impact on your city. How long do you think this is going to go on for . What should happen here . Yeah. All of us need to come to a resolution. Were fortunate to have the deep water port we do. All the automobile contracts we have. So the slowdown while its probably not affecting us as much in san diego as some of the other west coast ports we want to solve it. Do off guideline on where to stand . I dont. But i know theres a lot of conversations. Everyone believes its in their best interest to get this done. What shocks me about this is were hearing numbers that are being thrown around. How do you have two sides across the table who cant even get to that point . Something i think the ports and management will say its something 125,000 or something when you include overtime. The union side is saying its close tore 85,000. How do you get around that . You have to have the real conversations. As a mayor, im no stranger to labor negotiations. We do that for a all of our employee contracts. Tough have it in the economic best interests and from an export and import situation its incredibly important for all of us on the west coast. Make sure were opening up new markets, were getting the trade flow that we need to. So getting this contract solved is very important to us. Should we segue and talk about measles . Sure. How worried are you about this problem . Ill tell you. When you look at the spread to other states and others its a real issue. And i think it really understood lines the absolute need for vaccinations. And i think that most folks are understand that and realize that. And what about this proposal to eliminate the personal beliefs exemption . Well i think everyone should have vaccinations. Im a father of two young kids. Should there be an exemption . If you have a personal belief should you kb allowed to say i dont want my kid vaccinated . Should that be allowed . I think its critically important that every kid should get vaccinated. I understand what you think. What do you think the law should be . That should be the case yes. I thought we were going to have a debate about this. But theres no debate from you. No. You look at the university of california that just came out and said were requiring vaccinations. Thats incredibly important. You look at the strength of this country, particularly when you look at the san diego innovation of economy. What weve done on polio. Thats how were solving these types of issues. We have to have people vaccinated. How would you feel about federal law . In terms of . Forcing the vaccinations. I think we have to have vaccinations. I think its just you would accept a federal law . I think absolutely. There are a lot of people in your party who would say thats a horrible idea. It should be a states rights issue or even beyond that it should be a personal issue. I say it as a mayor and father its critically important to vaccinate our kids. Lets talk about san diego. You are just 30 minutes away from the border with mexico. You want outreach as well. We look at the border as an asset in san diego. When we look at the trade in the commerce were doing, that is something that i try to absolutely project and say we need to expand this. I have a great relationship with my counterpart in tijuana. We signed one of the first memorandums of understanding in our cities. We are connecting on issues of water quality, the environment, transportation. Its a huge economic benefit to us in san diego to have the relationship we do with mexico. Okay. We got to leave the conversation no were not done. Go for it. As a chargers fan, are you going to be here on National Television guaranteeing the chargers are not moving to los angeles . Bolt up and keep the chargers in san diego. We are spending a lot of time to keep the chargers right where they belong in san diego. And thats that was not a guarantee, mr. Mayor. It may not be his decision. The chargers are going to stay in san diego. Thank you. There you have it. Guys good to see you. Thank you. Appreciate it. Coming up movie merchandising. We know its big business. The gear from 50 shades of grey decidedly not for kids. Julia boorstin is going to report on what target may be rolling out coming up. Boy once upon a time, there was a nice house that lived with a family. One day, it started to rain. The house tried to keep out all the water, but water got inside and ruined everybodys everythings. The house thought she let the family down. They just didnt think it could happen. They told the house they would take better care of her. Always. Announcer protect what matters. Get flood insurance. [ male announcer ] at northrop grumman, weve always been at the forefront of advanced electronics. Providing technology to get more detail. Detect hidden threats. See the whole picture. Process critical information and put it in the hands of our defenders. Reaching constantly evolving threats before they reach us. Thats the value of performance. Northrop grumman. Listen to me. I dont do romance. My tastes are very singular. There you have it. Sex sells. 50 shades of grey based on the best selling novel opening in theaters this weekend. Also steaming up retailers around the country. Julia boorstin looks at 50 shades of merchandise. Julia . When we talk about a movies license merchandise, were usually talking about kids toys. For this its a whole other story. Were talking about adult toys. Like this blindfold set and massage candle. In fact, target are selling items on their websites from the blindfolds to sex toys. Target draws backlash when one store put a 50 shades display next to kids toothbrushes. Now, this is the first time that such a racy movie has inspired branded merchandise. But theres also a wide range of pg products. Like an official makeup collection from makeup forever. Branded wines. Red satin and white silk. And jewelry including a 150 necklace made with mini handcuffs. Plus theres clothing and lingerie. Theres even a Vermont Teddy Bear inspired by christian grey the lead character. And some are cashing in without licensing. Personality Hotels Offers 150 package that they have a discreet box of goodies. We expect this to be a big opening this weekend for 50 shades. Weeks ago it became the best selling are rks inging rrated film ever. Ive seen where advanced sales have gone. I think in the south its been surprisingly strong. South and midwest. Really surprising. South and midwest is where the sales have been huge. This could be a 60 million opening weekend. It could set a new record for valentines day at the box office. Thank you. All right. Here are some of this mornings stocks to watch. Starwood hotels posting better than expected earnings. The company also announcing it would spin off its vacation ownership business. Meanwhile aeropostale shares are soaring on their beat. Urban outfitters sales rising 12 . When we come back this morning, inside cocacolas quarterly report. Well dig through the numbers with an analyst and talk about americas breakup with sugary soft drinks. Squawk box will be right back. Theres nothing more romantic than a spontaneous moment. So why pause to take a pill . And why stop what youre doing to find a bathroom . With cialis for daily use, you dont have to plan around either. Its the only daily tablet approved to treat erectile dysfunction so you can be Ready Anytime the moment is right. Plus cialis treats the frustrating urinary symptoms of bph, like needing to go frequently, day or night. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. Do not take cialis if you take nitrates for chest pain as it may cause an unsafe drop in blood pressure. Do not drink alcohol in excess. Side effects may include headache, upset stomach, delayed backache or muscle ache. To avoid longterm injury, get medical help right away for an erection lasting more than four hours. If you have any sudden decrease or loss in hearing or vision or any symptoms of an allergic reaction stop taking cialis and get medical help right away. Why pause the moment . Ask your doctor about cialis for daily use. For a free 30tablet trial go to cialis. Com good morning and welcome back, everybody. 7 50 here on the east coast. Cocacola beating on both the top and bottom lines. The ceo saying this year will be a transition year. Here to break down the numbers is chief Investment Office at tigress offices. They had a beat on revenue and earnings. We look at their economic process. We want to see an income on capital. One of the things theyve done over the past few years was to cut back on promotion and advertising to increase their net margins. However, every time coke has reduced their promotion and Advertising Sales have dropped off. Now theyre starting to increase advertising and especially point of sale promotion which is the most important thing. The most important has a direct correlation to increase in sales. Have you been happy with cocacolas return the last few years . David winters whos been on squawk box, he went after cocacola famously about two years ago as not being map happy as a valued investor. Have you been . No. Its dropped over time. Coke was one of the original companies to incorporate or focus on economic profit. And as a company matures, their growth slows and their margins have to flatten out. Like starting to buyback with their dividends. Theyve been returning cash to shareholders at a good base but they now have to look for niche markets to grow. The growth in carbonated soda is flat and now theyve been buying a lot of teas and flavored waters. Those are the key areas of growth they can expand on with point of sale promotion and the brand strength and their delivery infrastructure. So what is it youd like them to do . Make additional acquisitions in the noncarbonated drink segment. Im just trying to feel out what you think they have not done enough of. Well theyre doing a lot of different things. Their focus for growth is in niche bempblverages. The beverages have greater trends. The overall trend is drinking less sugar based soda. They have to understand that trend and also population growth has flattened. So overall demand is flat. They have to look for other areas for growth. David winters, the investor came out. I dont know if we consider him activist hes not. In this case certainly. He put out a lis of questions he planned to pose cocacola on its call. List of eight different questions. But he says more broadly speaking we think bthe pace of restructuring is still too slow and the board of directors seems content to sail along as if nothing is amiss. Change is coming one way or another. Is he right . Yes. These companies have to change and change quickly. One of the greatest events that ever happened for Democratic Capitalism was that the whole board got dismissed. The board has to realize they work for the shareholders. They dont work for themselves. When shareholders are unhappy, they have to address it quickly. When business is not growing or profitability is declineing with they have to address it quickly. Is mutar kents job in jeopardy sfl. Im not sure. But it will be if it doesnt change. How much time will the market give him if you think David Winters is right . And weve heard from other investors including Warren Buffett who give him an enormous amount of credit. Buffett is a more patient investor. What do you think the mix of cocacola investors are like . More buffettlike or winterslike . I think theyre more buffettlike. Then why dont you sell your stock and go somewhere else . If the company is not performing the way you want sell the stock and move on. And so if youre not happy, why arent you moving on . I dont know. We recently did upgrade we had neutral on the stock for a long time. We recently liked the changes were starting to see. So we upgraded from neutral to a buy. So you like the changes. You would just like to see them at a faster pace . Well everybody likes to see them faster. Yes. And the comments from kent this morning suggest its going to require patience. But they are addressing it. Unhappiness shareholders and management are at least listening to it. Then it is the first positive step. And you think theres a positive impact here . Yes. Pepsi is up 19 over 52 weeks. Dr pepper is up 57 over 12 weeks. And still has a lower forward valuation than cocacola. With all due respect to cocacola, im trying to figure out what the attractiveness is about the stock . The brand equity. We got to go but was the criticism of pepsi for so long wrong . No. No . No. Interesting. Thats a longer conversation. Hope to is you back. Meantime coming up ceo of allergan is going to join us to talk about the companys well known drug botox. Were back in just a moment. In my world, wall isnt a street. Return on investment isnt the only return im looking forward to. For some every dollar is earned with sweat, sacrifice, courage. Which is why usaa is honored to help our members with everything from investing for retirement to saving for college. Our commitment to current and former military members and their families is without equal. Start investing with as little as fifty dollars. 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. The 66 billion deal for botox. Allergans ceo joins us to talk about the best quarter in their history. A look at the top Innovative Companies. And love is in the air. With valentines day this weekend, millions of flowers are coming across our borders and into vases around the country. We go behind the scenes of the nations Busiest Airport when it comes to flower imports. Wake up and smell the roses. The final hour of squawk box begins right now. Live from the most powerful city manyin the world, new york, this is squawk box. Welcome back to squawk box, everybody. This is cnbc. We are first in business worldwide. Im becky quick along with Andrew Ross Sorkin and Brian Sullivan who is in today for joe. And im learning about the program. When you complain about the music in the commercial breaks they redouble the music. We are guaranteed to hear it the rest of the morning now. Check this out. Collapsing in a controlled demolition this morning. No matter how many times you see these things you cant take your eyes away. The 202 room hotel was located just off the famed strip and it opened in 1970. Its been known as the debbie reynolds, greek isles, and royal in. The Property Owner is still making plans for what will replace this building. Lets tell you whats happening at this hour. In the news were watching the employment picture. The Labor Department will release its latest job openings and Turnover Survey. Thats coming up at 10 00 eastern. Also the iea predicting a recovery in the price of crude. But doesnt see a return to crudes highs. Then theres home depot. Hiring 80,000 workers for the spring. They typically add this many because this is the retailers busiest season o. We are less than 90 minutes away from the opening bell on wall street now. See how your markets are shaping up here. Mixed. Not a direction for the dow, the s p, and nasdaq. Maybe slightly lower. Then you go on fair value, slightly higher. Either way, the markets are trying to figure what to think about greece and everything else. There are a few stocks on the move this morning. Cocacola shares are rising. Starwood announcing it with spin off its vacation ownership business and cvs earnings also beats. And the gap had a bigger drop than expected. But the retailer is raising its outlook for the justcompleted year. Aeropostale expecting better than holiday sale. And shares soaring on that news. An Urban Outfitters also getting a boost. Fourth Quarter Sales rising a larger than expected 12 . Becky . Bill ackman may not have succeeded when he teamed up with valeant and attempted a takeover of allergan but it still made him money and made him the top of 2014. But ackman wasnt the only one cashing in. The stock soared 90 over the last year. After it was announced that allergan would be acquired edd by actavis. David pyott of allergan joins us this morning. Thank you for being here. Pleasure to be here. What a strange trip its been other the last couple years. The last couple years were going quite well in fact. Over my 17year tenure the company grew enormously. In fact, when i started back in 98, the total sales were about 1. 1 billion. Including business we spun off which now is owned by abbott. The surgical business. And last year was the sales grew about a billion across the year. So we were really on fire. And as you said best quarter ever. So were going over what Brent Saunders and i referred to as a racing track. It has been an amazing run. Shareholders have faired very well. But i just try to think about the back and forth and trying to manage a company while also dealing with hostile takeovers. Dealing with bill ackman. What was that like . Well it was all consuming. And in fact a long time ago we said if ever we got into kind of a very tough situation, we would subdivide the management team. And thats exactly what i did. Fortunately i appointed and the board obviously doug ingram as president of the company, summer of 2013. And by about day two i said okay, doug. You and head of rnd, you run the daytoday monthtomonth operations. I will concentrate on the investors, public relations, all of the above. You just said the word raters. Force for good or evil in that to some degree bill ackman put you in this place youre in now which probably i think you think is a good thing. Mixed feelings. Ill try to be very balanced about this. So between the day that the valeant offer was announced, april 22 and when we or pretty much to date the value of the stock has increased about 20 billion. Now, part of that isnt just a takeover premium at the end, but we constantly ramped up our performance. Not on the earnings per share but also sales. The sales from beginning to end increased about 300 million above the expectations wed forecast at the beginning of the year. So real strong performance. Now, some of that of course is good. You know you have the sort of damocles heading your way. You have to really tone things up. But i think we have to be really careful in Corporate America that things do not become too shortterm. Youre always back to this its not a sprint its a marathon. How do you create value. Not just for a quarter or year but over a long period of time. Whats something that maybe would have been more difficult to do . Something you can do at this point because you dont have people knocking on your door. Yeah well. You know i think my attitude in general is companies that are not well performing do need a shakeup. That was the case when i was hired. Because frankly im only the third ceo of a 66yearold company. In our case the company was already performing rather well. Now, of course we can always do better and attribute to the team. We really put on a spectacular show. Tremendous performance across the full year. Almost 17 growth. Virtually every franchise doesnt get better than that. Theres a Class Action Lawsuit that your shareholders have brought against valeant and big ackman. Suggesting effectively that he or they were able to steal through insider trading, if you will, some value of the company during the period with which people didnt know that they were getting into that. People who sold shares. As they built up a 10 stake, people who sold shares. Would you join that do you think your company should join that lawsuit . From a legal point of view youre right. Between the first purchases and the announcement, there was about a billion dollars of gain made. So by definition somebody missed out on that. We as a company dont have standing because we werent selling stock. I personally wasnt in that period either. But other parties are. And its clear that there are several law firms looking into this. And we know how that goes. Whats your take on that case . Even if you cant join the case if you could join the case, would you . Yeah. Absolutely. Last time i was on tv i repeated what judge carter the federal judge in california, said. Serious concerns about this and one would hope that the s. E. C. Is about to take action. Although weve heard from bill ackman himself who said he ran it by the former head of enforcement of the s. E. C. And thinks he is in the right. Whether you think the laws need to be changed or not, he thinks hes in the right. Well one often consults experts. Thats appropriate. But the end of the day, its the current officials and administration that will make that determination. You think were going to see more transactions or more hostile attempts like the one that was that you became a target of . I think every situation is different. In our case as i reflect backwards, it was interesting that i think Neither Party were Strong Enough to take us on on their own. Therefore theyre acting together was a real cardinal element. Thats unusual. But as we say, every company, every situation at the margin is different. Could i ask you one more question . You were the person who you put in charnlge of people you were calling raiders at the door. Bill ackman is known as an intense guy. What was that like . How often did you hear from him . Infrequently. In fact most of the tos and fros occurred in the media. You know i think what he discovered is im a very intense person as well. I was on this topic 24 7 for over eight months. And it was interesting. Botox has a lot of new applications that are coming along. I mean this is not just about something fixing wrinkles at this point. Some of the new applications that this can be applied to include things like absolutely. So last year the franchise was over 2 billion. Grew about 16 to local currency. And to your point, the therapeutic applications are slightly larger than the cosmetic ones. Botox for migraines and bladder conditions. Spastic bladder. These are people who had accidents and so on. And then just severe incontinence. That application is growing at a huge rate. In the future theres other good stuff. The one i like to look at is botox for depression. And if this were to pan out, it would be a perfect franchise for the new company actavis given they have enormous strength in neurosciences. Are you joining the board of the new company . Under discussion. As you know in the merger agreement, they have a slot for two directors from our side. Ive been on boards for a long time and you have a lot of rearranging to do. Is there any chance of a product coming out in the next couple years where i could eat and drink as much as i want not exercise at all, and still look good . No. I was about to say maybe you need botox for depression because you think about it. David, thank you for joining us today. Its been a pleasure and we hope you come back again soon. Thank you. Still to come this morning, flower power. Were going to go inside the world of flower imports as we approach valentines day. But were also going to talk exports. Feeling the brunt of the almighty dollar. A look at some names that could see a drop in goods shipped overseas. Thanks to the strong greenback. Heres a look at currencies at this hour. Squawk box returns in just a moment. Welcome back to squawk box. A number of stocks on the move right now. Hold on what happened . In the commercial break becky exclaims oh my gosh. Neil armstrongs wife found a camera at the moon landing. You mean the supposed moon landing. That was a joke. Thats cool. She also found a bunch of artifacts from the moon landing. It sounds like the viewers should spend more time on twitter than watching us. No no go back. We tell them whats on twitter, they dont have to use it. Theyll come to us. Wyndhams results were better than expected. Also hiking its dividend. Spirit airlines topping consensus. Traffic rose by 1. 1 last month. And also qualcomm agreeing to pay 975 million to the Chinese Government to resolve practices. Paul jacobs is going to join us on squawk box on friday. Well talk to him about that and a lot more when we see him. As king dollar reigns supreme, a lot of smaller and Midsize Companies might bear the brunt of the pain going into e the rest of this year. Smaller exporters account nor for nearly 40 . Already seeing slower Revenue Growth. Joining us with a breakdown is brian hamilton. They do amazing work on the private sector. We appreciate it. Because the Public Sector have put out reports. You dig into the private sec sor which sector which is mysterious. What are you finding . Youre right. The Revenue Growth of privately held manufacturing firms and wholesalers are going down a bit. But remember its still healthy. So all is good on the western front. Things are going well. And remember only. 1 of 26 Million Companies in the u. S. Which are privately held do exporting. So i dont think its fuzz on the screen but i dont think its a huge deal. Thats interesting, too, because we always say u. S. Companies especially the big public ones are going to be crushed because of the u. S. Dollar strength. But youre saying maybe not public, but the private companies, 9 t of them are probably not going to be impacted at all. Yeah true. Lets dive into the details. If you look at manufacturers and wholesalers which as you know do a lot of exporting. About 30 of our export dollars are from those companies as you pointed out. Those guys have pained. I dont know if im going to get this right. The point is the u. S. Dollar being strong doesnt necessarily cause the lower Revenue Growth but its not good for those specific companies. All right. So how big of an impact then would you say lower natural gas is . Greece . The dollar . In other words, are viewers and listeners who own a small company, a 40, 50 100 person concern, and theyre reading the headlines or watching on cnbc do any of them necessarily matter . Yeah, well i need more iq points for that one. But let me give it a try. All of those factors as you know they all are important. But they tend to counterbalance each other. So my view is a strong u. S. Dollar is generally good. It correlates with good gdp growth. A strong economy. Im sorry . A strong economy. Not always. Yeah. So if the economy is good main street businesses are very. A pi because it means more revenue and Gross Margins and net margins. So the dollar being strong it probably affects 160 companies. Remember theyre still growing. Remember its always a big deal. We have to look at the niche companies, but its not going to drive tons of effect with these 26 Million Companies. Last question brian, and im going to put you on the spot my friend. I know youre good on your feet. Have you done any work at all at how much these lower gas prices are really going to benefit private companies, the overall economy, et cetera . Yeah. You got me in the morning. Im used to you in the afternoon, brian. But not really. We dont. As you know we collect fundamental data on companies. Again, let me take a whack at that. I would say that again those types of sort of microeconomic issues or whatever effect niche businesses. So on the overall state of u. S. Companies, its good. But we dont collect that type of data, to be honest. We put you on the spot did a great job as always. We will see you in the afternoon and in the morning again. Thanks, buddy. Appreciate it. Thank ss sthanks, man. With valentines day around the corner the customs and Border Agency are expecting 80 million cut flowers to cross our borders. Each one has to be inspected. Were going to go behind the scenes of flower imports. And a look at whats trending on twitter this morning. Were back in just a moment. Hey, girl. Is it crazy that your soccer trophy is talking to you right now . It kinda is. Its as crazy as you not rolling over your old 401k. Cue the horns. Just harness the confidence it took you to win me and call td ameritrades rollover consultants. Theyll help with the hassle by guiding you through the whole process step by step. And theyll even call your old provider. Its easy. Even she could do it. Whatever, janet. For all the confidence you need td ameritrade. You got this. A Little Flower power is going to be on display at the Miami International airport over the coming days. Some 209,000 tons of flowers with a value of about 209 million flow through that airport annually. This week one of the busiest. Mark potter joining us now from miami with the flower tale. Mark . Hey, brian. If youre wondering where your valentines day flowers come from, youd be correct to assume most come from south america. Mostly colombia and ecuador and almost all arrive here at miami at the International Airport where they are then inspected in warehouse and refrigerated warehouses. The numbers involved are absolutely stunning. Officials say that in last year last right valentines day and the six weeks before as many as 800 million cut flowers came into the United States. Right before the day, there were as many as 22 million cut flowers coming into miami alone. Now, of course that poses big challenges for these agricultural inspectors from u. S. Customs and Border Protection who have to make sure the flowers are free of disease and insects that could affect u. S. Crops. Just a short time ago we spoke to the commissioner who said the work being done here on this inspection line is very important. Theyre looking for mites. Theyre looking for aphids. Theyre looking for other bugs. Any of those things brought into the United States can really wreak havoc with our own agricultural industry. Now, this is the way they do it. They take the flowers, they shake them they strike them on the side. Then they look on the white paper there to see if they can find any bugs. Its kind of low tech but it works and they do it all the time especially now during valentines day coming up. Mark question for you. How often do they actually find anything, bugs disease, anything along those lines . Quite regularly. In fact, that lady down there just shes bent over the table right now looking for something. She found one a moment ago. What theyll do is if they find a bug, and theyre hard to see, theyll put it in a vile with some liquid and theyll send it off for inspection and theyll be more careful to watch those boxes coming in. They have a trusted traveler program. Producers that have good records get lighter inspections than others. So they cant look at every one with 22 million coming through per day. But they are very careful and they do find them. And its an important thing to discover because of the effect those bugs and diseases could have on u. S. Crops. Mark thank you very much for joining us today. Again, thats mark potter from nbc news. When we come back this morning, boring is beautiful for Lloyd Blankfein. Comments coming out from the Credit Suisse financials. And look at equities this morning. Dow up close to 118 points above fair value. S p up by 14 points. Nasdaq 28. Well be back right after the break. Ok, if youre up there, i could use some help. Smart sarah. Seeking guidance. Just like with your investments. That sets you apart. It does . It does. Youre type e. And seeking another perspective is what type e s do. Oh, and your next handhold. Is there. You dont have to go it alone. E trade gives you the support and guidance to make informed decisions. Are you type e . Being a keen observer of the world has gotten you far but what if you could see more of what you wanted to know . With fidelitys new active trader pro investing platform, the information thats important to you is all in one place, so finding more insight is easier. Its your idea powered by active trader pro. Another way fidelity gives you a more powerful investing experience. Call our specialists today to get up and running. Welcome back to squawk box. Heres whats making headlines this morning. Microsoft and samsung putting the gloves down and settling a dispute over patent royalties. The disagreement about the handset business acquired a year and a half ago. Also inflation in china fell to a fiveyear low in january. Thats sparking calls for more. And the latest jolts report coming out ahead. Thats the measure of Job Opportunities in labor turnover. If you want to drive a car like one of the worlds most famous investors, guess what. Now you can get that opportunity. Theres an auction site to bid on Warren Buffetts personal cadillac. The auction will begin at 11 00 a. M. Tomorrow morning. The opening bid is 10,000. Proceeds will go to girls inc. Of omaha that helps girls 5 through 18 years old to be smart, strong, and bold. And if you win, you could travel to omaha to personally pick up the keys from mr. Buffett. And Lloyd Blankfein is outlining to a business model. Mary thompson joins us with the details this morning. Hey there, andrew. We know that goldman has been called many things but boring isnt one of them. Now it seems management wants to play up a quiet restructuring that makes the firm more stable along with the nimbleness. Blankfein said earlier this morning we are simple but we are not simpler. At a Credit Suisse financial crisis blankfein highlighting the reports showing goldmans earnings have been less volatile than its peers. Including the firms risk management, the ability to manager cost especially compensation, and its diverse businesses. The diversity of businesses give 6 came from the Institutional Client Services group. But here blankfein lifts the veil on a business. Goldman also delivering higher return on equity. Than its rivals like Morgan Stanley over the years. Even as their stock outperformed over a threeyear period. Marty mosby credits this to Mohr Dan Stan lease narrative of the fact its building its Asset Management business to make it a more stable stock and firm. Goalman has been transforming itself into a more stable firm. Which is happening across all its line not just in Asset Management. This obviously is part of the effort to sell that story. Becky, back to you. All right. Thank you. You know, it raises the question whether boring and defensive is the right way to go with all the global risks hanging over the markets right now. Lets ask allison dean. She is chief Investment Officer at crt capital. Shes also a cnbc contributor. Chris wolf is here as well. Hes chief Investment Officer for Private Banking and Investment Group at Merrill Lynch wealth management. What do you think . Boring good right about now . It feels like it should be to me. We had a pretty tough first half of the year with whats going on overseas stronger dollar weaker oil, now a potential strike that could shut down ports on the west coast. It feels as if solid, steady more domestic Oriented Companies would be the way to go. Such as . Id say focusing on technology. The consumer retail. Although some of them will be hit by the port thing. Some of it has affected stocks. Id stay domestic in those industries. Id avoid financial services. Id avoid for more of the economically oriented. The entire energy industry. That could come down. Some pretty big swaths of the market. Thats where i felt going into the year that e the earnings outlook for the s p was strong. You could have weak and tough comparisons year over year. Whereas the second half of the year because of increased Consumer Confidence spending could pick up and that could boost the second half of the year. You know i made a chart this morning and tweeted it out of the dow. And i highlighted greeks first bailout in in may of 2010. Since then the Dow Jones Industrial average is up 75 . Thats right. Im not saying greece doesnt matter. But it does it matter. The markets tend to look through and ignore things. The. Bad news is good news. For years in america, every bad news cycle, every bad number was followed by dont worry the feds got our bag. You get the moral hazard, the put, all the cliches people use. But i think to beckys point earlier, the idea that boring is good dividends if thats what boring means are key to what investors want these days. You have russia greece europe things going on in south america. All sorts of slowdown risks in china. I think many clients look at this market and say im going to be a little safe right now. The dividend story looks pretty good. Profit margins are well supported in terms of cost structures. And theyre passing that on as a good thing. But do you look to europe as a place that might be the next potential booming market . You think that happens . Because we hear from a lot of people that domestic is where you want stay. The strong dollar. Dont bwant to get caught in those cross winds. Its the number one question that our investors are asking. Do i need to be more u. S. . Not the cheapest place in the world. Or are all the other places is there an opportunity . And its about time horizon. All the cheap stuff is outside the u. S. But you really need a three or fiveyear view. Not saying its going to be perfect, but there are places in europe. Some of the stocks look interesting right now. If you actually take the three to five year view, you think it will be a clear out performance . If you come back five years from now and i invested a dollar somewhere in europe and a dollar here you think thats worth that much . You take the currency out of the equation. I think you have better opportunities. So yes. I agree. I think the valuations are good. I think you can keep currency in the equation. The next couple of months the dollar is going to get so high it wont continue to go up. It might come down. The majority of the Big Companies in europe that we talk about in these indexes, most of their business comes from the United States. Volkswagen volkswagen, loreal. If30 to 40 of their revenue comes from overseas. Theyre Multinational Companies at this point. Not necessarily based in any one area. Thats the flip side. Would you tack the base in europe or the completely and utterly discounted company thats not yet a multinational . We have the really big kind of well known companies. Would you buy a tiny company in germany you never heard of or would you buy volkswagen . Theres a lot of cheap stuff in the second and third tier parts of europe and china. I like how you say it. Volkswagen volkswagen. Thats right. Thank you for both coming on. Thank you. When we come back retailers getting a boost on strong holiday sales. Urban outfitters and more to watch. Well see if stocks are a buy right after this. Then its a big day for jim cramer. Were going to head downtown to hear from the birthday boy himself. Stick around. Squawk box will be right back. Boy once upon a time, there was a nice house that lived with a family. One day, it started to rain. The house tried to keep out all the water, but water got inside and ruined everybodys everythings. The house thought she let the family down. They just didnt think it could happen. They told the house they would take better care of her. Always. Announcer protect what matters. Get flood insurance. Welcome back to squawk box, everyone. Weve been watching the futures and they have been decidedly sharper throughout the morning. The dow up close to a gain of 115 points. Nasdaq up by about 27. Shares of coupons. Com getting slammed this morning. Revenue falling short of what is expected. That stock is down 32 right now. Computer science is coming out of pressure. The i. T. Provider sales stock down to 7. 5 . Check this out. Spiderman is teaming back into action. Hes ready to team up with iron man and captain america on the big screen. Sony and Marvel Comics are teaming up. That means that spooididey will appear in a film. Big names out there with news the gap same stores sales dropped 3 but guidance was beat. Aeropostale soaring on better than expected sales as well. When we come back on squawk box, will the markets give this man is special birthday present today . Well take a trip downtown and hear from the birthday boy himself jim cramer. Find out whats on his radar, hopefully cake and ice cream ahead. The futures are all indicating a higher open. Dow indicated to open up nicely now about 118 points. And we are back after this. Happy birthday to ya happy birthday to ya we are going to get down to the New York Stock Exchange right now where the birthday boy joins us this morning. Jim cramer happy birthday to you, sir. Thank you, andrew. Thank you. What do you have planned on your birthday . Can you tell us . Well you know its actually low key. Its a high key date but a low key night. Its a tuesday. So i really kind of am doing my planning for thursday friday saturday. School night. Lets talk briefly about coke. I want to get your thoughts on that. Then i have a question about actavis in just a moment. Sure. But lets get your take on coke first. Ive been looking for some growth. They started to give some growth. Transition year. I like the fact that they must feel the fire. Because this was a whole release that didnt say how great they were. This was a release that said theyre doing stuff to get better. And i really like that. Because i think there had been kind of a they got fat and doesnt seem like theyre getting fat anymore. So i was encouraged and i understand why the stock is up. Makes sense to me. We were talking earlier today about two articles. One i wrote, the other in the wall street journal. The first one from the journal about the stock sales by dupont. Do you have a problem with those stock sales . I was surprised to see it. Yeah, i do. In support of hers because the stock has been good. But it doesnt make sense. I said why is costolo still selling . These are rich people. I know its a program. And people always hide by a program. Ive canceled programs. You can cancel them if you you say, listen i dont want to sell anymore. Youve got to wait for awhile. But i would have not i would have done it just looks bad. It looks bad because it you do get the sense that nelson peltz had a hand in pushing the stock and so shes taking advantage of that. Thats what it looks like. Im sure it is much more benign but you know how it is. You just look bad when youre doing this. Okay. Talking about looks, talk to me about this. I wrote a column today on what looks to be a trend amongst actavis targeting female ceos. Do you buy it . It was a tough piece. You dont have to agree with it. Im just asking. I know nelson well. I said on air theyve got a good board member. The stock is up. Is there a pattern . I know fortunes identified a pattern. I think that you look at his long history and nelson has not. But it is odd. It is odd. On stock sales, im you know ive sold stock for the street and bought for the street. People say why dont you do this. To me if youre super wealthy it just seems like costolo, why not step back. That piece was an important piece. Ive got two daughters. And im sure they would say this is just sexism. When youve got two daughters, you cant just say no you dont know the whole story. Do you have a special brand of birthday tequila, jim . Lets get to the heart of the matter here. Its 5 00 somewhere. You know its casa amigos is our best seller. You had gerber on last week. That is george clooneys. I dont know if people know its clooneys. That stuff flies off the shelf. Its the only one hard to keep in stock. Jim, quickly before you go can i ask you . Theres news breaking about general motors. Theres a statement out saying that harry wilson who you may remember is from mave advisers now, but he had been involved with the process of going through all that, turning gm around. Hes now nominating himself as a candidate to stand for election on the gm board. He says hes acting on his own behalf but also with four investment funds. The stocks up about 3 . What do you think . You know go back to the point, right . Shes doing a good job. Brought in feinberg. I defer to andrew. Im throwing that hot potato right to andrew. And im going to throw it right back. Weve got to go to a commercial break. I think shes doing a good job. Weve got to check it out. Jim, happy birthday my friend. Thank you guys. Have a great day. All right. Lets talk teen retail now with jan rogers of Worldwide Enterprises intergalactic. Are you there . I am here. Im sad i couldnt be there on that great new set. Its all right. You can talk to us via bluetooth headset. You guessed it. Are you surprised by gap or the strength of aeropostale and Urban Outfitters . I think i was most pleased with what urban turned in. Though i do think both are more promotional. But longer term im concerned that urban is telling us theyre going to increase the size of all stores by a factor of three times and make them much more destination spots and places that will be higher dwell time opposed to just focusing on what theyre doing best right now which is growing their internet business. Shortterm it looked good. Aeropostale had horrible numbers. They were down 9 . They just werent as bad as people thought. Their sales are down 24 . But people still traded the stock up because, wow, guess what. They were better than people expected. Doesnt mean its good. Theyre still facing into the toughest competition out there. Theyve got to be against forever 21 h m, and other teen retailer and store. I cant get excited longterm on either one of those two. Gap i feel differently about. I feel they can be a great Omnichannel Retail per. And i think theyre doing the right things. But they just fired rebecca bay. They need a new designer to gap. Its going to take a year to make that work. Let me be more direct. Given the fickleness of the teenage consumer giver the fact that a lot of these stores appear to be in my old mans eye interchangeable. It doesnt seem like anybody is able to predict whats going to happen in eye ayear or two or how theyre going to have the fluctuations . I do like gap. I dont consider them a teen retailer. I think its for the reason i said. They can be an omni channel player. And reduce the number of stores and make it work. Being in that space right now, or even being in a mall is really, really tough. Because mall traffic is probably down 4 . Probably down 5 in the Fourth Quarter. Thats really hard if youre a mallbased player. And if youre in the teen space, the competition has never been like it is today. Youve never had people whose average price point at the store was 14 bucks, you know . Yeah. Its just really tough. Ill let you get back to the treadmill. Thanks. More to come on squawk Box Including the Fast Company List of the most Innovative Companies in the world. Plus sad news for the nfl to report this morning. Ed sabol has passed away. If you dont know the name by heart, he was the founder of nfl films. Hes the guy known for building nfl films and taking us into super slow motion internet reels he is seen her with his son steve sabol. Was elected to the pro football hall of game in 2011. Was 98 and passed away at his home. Ngs account to his merrill edge retirement account. Before he opened his first hot chocolate stand calling winter an underserved season. And before he quit his friends leafraking business for not offering a 401k. Larry knew the importance of preparing for retirement. Thats why when the time came he counted on merrill edge to streamline his investing and help him plan for the road ahead. Thats the power of streamlined connections. Thats merrill edge and bank of america. Welcome back everybody. Take a look at shares of general motors, shareholder harry wilson you may remember hes a guest here on squawk box. Harry wilson announcing that he plans to nominate him as candidate for the gm board at the annual meeting. By the way, he has the backing of four different funds. Dont know the name of those investment funds. That suggest theres power behind the shareholder base. Hard to know how many shares he has. The seattle automaker competing for that after that meeting. Some of the actavis investors have gone after it. The New York Times takes a look at whether those actavis investors are targeting geos. Mary barra has been there dealing with a massive situation. Gms shares up 3. 4 . Cocacola earnings rivaled better than expected. Here we go. Transition here, 2015 the cfo of coke saying we do think cheap gasoline has impacted consumer behavior. And it will help our business but ads the macro environment continues to be, quote, challenging. Of course, the dollar is a big part of that as well as macro contributions in europe. And the cfa telling sarah eisen, were always looking at things globally. There you go. And out with the annual rankings of the worlds most Innovative Companies showing out the best in innovation. Rocket bob is the editor in chief of the magazine. Good morning. Good morning. Lets go straight to the top of the list. The number one most innovative partners in the part. Whats so innovative, they make glasses . They broke through on an area of glasses. 109 share in the glasses business. Willy parker has come from nowhere to break into that market. Its a Company Created by millennials for millennials connecting across all demographics and thats really why theyre on the list. But the innope vasion the way they sell the product, the way they market the product. The idea theyre giving away one pair for all sold. Its all of those things integrated and executed across the country. Its very distinctive, this sort of platform basis that make the most innovative Companies Take off. What happens . In the long run . Yeah. Bought. I think they have no interest in being bought by anybody. They want to build it slowly over time. Im going to shamelessly plug a friend tris ten walker. Tris ten was a technology star. Started a business called walker co. Hes targeting products for the africanamerican companies. Hes started a razor company, taking on gillette. Hes killing it. Targeting the africanamerican. Hes going to have more products coming out. I love tris ten. We tristan, we did a big story about him in the fall. His business is not quite there yet. You named him. Sure, hes on. List. And harrys does the other razor. Thats actually a spinoff from guys from warby parker right . Yes. Who has fallen off the list . Well twitter is not on the list this year. Yeah. I dont know if thats a surprise to you guys. Whynot. And amazon is not on the list this year. It was a harder decision for us but they had that trouble with the firefighter that made it difficult to put it under the list under 70 million. Whos the biggest jump . The biggest jump listen there are only five companies that repeat on this list from year after year. That is because were trying to encapsulate the change going on in the economy. Warby parker apple is a repeat tesla and netflix. The repeateds. How do you figure out who goes in what order . Ive looked at that warby parker, ive met the guys i know theyre doing interesting stuff. But to put that ahead of a google or apple, how do you rate that . We have a private system an algorithm . Thats right, an algorithm, very hard to bust yeah. But you cant tell us anything about why warby parker we just peel like warby parker represents a next generation of a kind of company. Next consumer generation. I like the message youre producing basically, you dont have to have an app. You can make glasses and razor blades and still be a superstar. Thats whats cool still make physical things. All of this social good stuff. Yes. All the social good stuff. I want to know if its real or if its marketing. Its both. Ideally, its both but it has to connect authentically to customer us and to talent. This is the Thing Companies in the future will need to have as part of their dna to be able to attract the customers in the town and their future. Thank you for coming in. Thanks for having me. Who is on the cover . Neil. I know neil. Thank you guys. Are we im supposed to say goodbye. The show is over. Were going to wish jim cramer a happy birthday. Hes coming up right now. Squawk on the street begins right now. Good Tuesday Morning. Welcome to squawk on the street im carl quintella. With david faber and jim cramer. 60 years young today. Thank you. Thank you. Knocking off the ball. What can i say . You can raise your hands like rocky right now. The scrolldown takes forever. Scroll down oh my geez it takes me ten minutes to get to 1955. Free markets in a bit of a