Transcripts For CNBC Squawk Box 20150317

Dow up 228 points. Youre looking at a few red arrows with the dow down by 60 points. The nasdaq down by 13. A couple of other stories. Lets take you through some of them this morning. February Housing Starts and Building Permits released at 8 30 eastern time. Stocks expected to drop by more than 2 with the weather being a big factor. Two wellknown Tech Companies to post quarterly result afs the bell and then theres the buzz story of the day. Apple tv and the wall street journal reporting this morning that the company is working with programmers to offer a bundled service of about 25 channels. Now broadcasters as part of the bundle are said to include abc, cbs and fox but channels owned by cnbcs Parent Company comcast so far at least will not be part of the service. The price tag 30 to 40 for the bundle. They would include things like espn in that and the question that i have is whether the economics of whether were actually seeing the true unbundling of all of that. It seems like it is the marketplace doing it itself. The cash its been going on for awhile number one and comcast along with apple is going to do this and apple got the idea that comcast at the same time they were talking with apple they were developing their own platform to do it and apple was also talking to Time Warner Cable until Time Warner Cable was acquired by comcast and now theyre not going to. How are you going to offer, even if its a slimmed down bundle of programming that doesnt include any nbc assets. You see what happens when you try to offer something and youre not going to have final four. So theres the cost of the package and the content. Theyre not negotiating with whoever. Youve seen it. The content provider always wins. You can argue against whether nbc can have an upper hand here if youd like. But go ahead. I would make the argument. Make your argument. That over time it is impossible to believe that the economics of cable tv and content continue in the way that they do especially, by the way, with the lesser channels and thats where all of thats where a lot of it happens to be. How would the lesser channel apply to Something Like cnbc . It wouldnt. It actually would though. No you can drop the smaller channels but youre going to need things like usa i was kidding about cnbc. Its not a lesser channel. Youre going to need to offer cnbc in a bundle. You may and you may not. But thats the question. I wouldnt want to bundle without cnbc. I wouldnt want to bundle without cnbc either. Lets wear it at that. But i think theres a larger problem here which is to say, first of all i think we saw and we talked about it a couple of weeks ago when we looked at viacom, they dropped cable channels and people just continued to live. Wait until march madness. This might be a turning point. But theres people that dont even have cable. When theres been a disagreement between content providers and most of the time the content do you remember last time he was so smug about totally winning everything he wanted in the last battle. It becomes much harder. Theres a lot of little different services. 30 to 40 for 25 channels versus 90 for Everything Else. But you know what this means, this means the Cable Companies are going to be doing things like charging more for your internet connection. Thats going to be the only place. Youre getting phone service essentially for free. Much higher margin business. Meaning if youre a cable operator i dont know if comcast or charter or whomever would want to admit this its just as high a margin business in fact a higher margin business not to offer the tv services. If you could stop having to deal with the tv stuff you would do much better. Most Cable Companies dont want to be a utility. One said it may be difficult for apple to launch a Service Without universal challenge. I doubt it. I dont think they would do that and blind quote that. I dont hi so either but i think this is one savvy Media Executive is all im saying. We watched this for a long time and this is a turning point. Theres going to be a bunch of little turning points. Its not going to change. It will change. But the point is theyre going to go out of business joe. Thats what im trying to say to you right now i have hundreds of stations and i dont watch a lot of them. Theres many channels that will disappear. The stain Glass Network. Ive never even seen it. Ive not seen that. I think youre making that up. Did i . I think so. If you can learn how to make it it might be good. Among todays stocks to watch, American Airlines the company is going to join the s p 500 and will replace allergan being required by activists. Well talk to doug parker at 8 00 eastern. Two new studies finds gileads hepatitis c drugs are largely Cost Effective in the u. S. But researchers are cautioning the widespread use will be a significant cost for the Nations Health care system they spent like 2 . Does that surprise you. It was a frightening article. It was a 39yearold man that needed a heart valve and he was waiting in the hospital for the heart valve. They said we have no surgical instruments or heart valves. You need to be discharged and go home. So he went home and waited and he finally died. But everybody has health care in venezuela. Everybody is covered but nobody can get it. Yeah. Basically theres nothing down there because of supply and demand. Hopefully were never faced with anything similar here. Other Corporate News this morning, pinterest raising 367 million in its latest round of funding. That brings its valuation to 11 billion. Its still looking to raise more money. In other media news disney is in early talks to back draft kings. That site lets users legally wager real money. Fortune is reporting theyre in the middle of raising a new round of funding at a valuation of at least a billion. Draft kings biggest rival is fan dual which has investors including Comcast Ventures and nbc sports ventures. Uber cfo is stepping down. Making that announcement in an email im not going to know how to pronounce his last name there . An advisor to uber. Four sil bulls. Theres not a plan yet. Currency swings Cost Companies last quarter 18. 7 billion which we talked about a lot. Its real money. Its 18. 7 billion. A report by currency Risk Management Consulting Firm fire apps says that the total negative currency impact was the biggest since the height of the euro crisis. Earnings per share of north American Companies were hurt by 6 cents a share on average and we have him on today. The man behind the report will be on at 8 40 a. M. Eastern. Lets get a check on the markets again this morning. As we mentioned the futures are indicated higher. Take another look and youll see this is a massive rebound we saw yesterday. It erased all of last weeks declines ahead of the fed meeting setting up. The dow down about 80 points. S p off by 10 and nasdaq down by 18 points. In europe looks like things are mixed. Not massive moves except in germany where theres a decline of over 1 in greece. That up by 2. 75 . The shanghai up by 1. 5 . Take a look at oil prices. Crude oil continued to struggle it. It dropped 2 of 4388. That was the lowest level many five years. Now down to 43. 18 barrel. Check out the bond market. Ten year at 2 . 2. 047 . The dollar yesterday took a brief pause in its rally. Dollar index was down by. 7 . That was the worst day in a month o. The dollar is down against the euro and yen again with euro at 106. Gold prices up by just over a dollar. Oil prices getting squeezed again. Sanctions against iran would be lifted if a deal was reached would bring more iranian oil to hit the market here in the u. S. Oil storage is now the major issue. Our next guest says its getting so full that buyers may soon be storing it in Church Basements and schools. My thing is leaving it in the ground which theyre able to do now and they can get it almost immediately, right . That makes a lot of sense. Is anyone going to store it in a Church Basement . Well you know if it goes deep enough its probably worth it. Youll pay it back later. Explain the technology and how rev lent it is so far. The principle here is if youre going to spend money well, if you dont do the fracking and then come back to it later. Not just when prices recover but when Services Companies weakened as a result of the stagnation and are willing to cut you a deal. The idea would be instead of having to wait for a supply response it would be right there in the pipe. Its a matter of days or weeks rather than months away. How long would people leave it there do you think . Would it only finally come up if prices recover or would eventually say look weve done it and we might as well bring it up anyway . The idea is eventually to bring it up anyway. Thats the point of drilling the well in the first place. One of the reasons you would do that is you would see declines in your other production. Where we are the price versus been falling and production keeps going up. Its been only so long is that going to continue and were probably nearing a turning point pretty soon. Youll start to look at production coming on to replace supply so companies can keep making revenues. So do you, in the last month, have you got more bearish . Were getting more and more people on here talking about 30 and even below that . Yeah its hard not to get more bearish when you look at the state of inventories right now and where is the demand response going to come from . Probably not very many places. One place it can come is later in the spring. The saudis start burning oil for power in the summer. At this price they might be willing to burn more of it. A couple of hundred thousand a day relative to expectations. On the supply side things are starting to tighten up. If you look at North Carolina as the most volatile and price sensitive of the areas in the u. S. Were starting to see retracement in production. Youll see 30,000 less in april. If you look at the producing counts by their break even prices theres about 100,000 barrels a day right now coming out of the ground that is above that break even rather lets try that again. The break even price is essentially above the current price and as a result youd expect that to be a little bit thats not going to last too long. So i lost my train of thought here. So in terms of the iran sanctions, if those were to be lifted how much is that . Do you expect that to happen if theres a deal and how much would that bring on the market in terms of supply . We do think a deal is more likely than not but the deal is probably going to more likely than not. What happened just recent developments . The letter or the inability to do it. Its almost bipartisan that some people dont want to do it. You cant get the majority to override it in the congress. The Obama Administration has been going for this since 2009. Its going to be part of their legacy. We dont expect them to back down so that its lousy. So better than 50 odds. Is that factored into oil prices at this point . This is the story on the front page of the wall street journal this morning. Do you think its factored in or will this add to more pressure on oil prices . It might be bearish for the prices right now because the deal they have wont bring back crude exports to their level right away. Its going to be a series of gates and steps. A process where iran has to do some things. The first step in sanctions relief probably wont be to roll back the sanctions that came into force in 2012. Thats one of the hardest things to restore if they do. It might be 6 to 12 months out if you get those. On the other hand if they let more western investment back into iran in the interim theyll have more potential. The longer you wait the more you get. So you were saying that to stop it you need to have a veto proof majority to stop the deal. Essentially yes. Youre not seeing that right now. You might be able to pass a bill but when the president vetoes it the question will be where do dem cats democrats stand. They got fired up with the letter and netanyahu and everything. Yes, sir. Thank you. Well see you later. Thanks for having me. The airline wellknown for cheap fairs across europe and things like charging to use the bathroom. Now they want to come to america. Ryan air coming to america. Well tell you about it when we come back. 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 . The board of ireland based ryan air approving a plan to come to the United States. It plans to sell some seats for less than 15 each way. 15 each way. Dont get too excited just yet. The official launch of the service will take several years. We have had the ceo with us plenty of times and some of these things are publicity stunts too. Charging people for the bathrooms and other things. Some of the seats will be very hard to come by. Its 15 for a one way ticket but its 1500 to use the bathroom bathroom. Take your chances. You cant make it 6 hours. I absolutely could. For 1,500 i could make it 6 hours. Double layer of depends. We sit here for three hours and i dont go to the bathroom for about three hours before that. But if you dont drink anything the whole way across might not be pleasant but you cant do it. People that can afford to are at an age where they cant make it 8 hours. So its fair pricing then. I dont want to be on the flight with people that havent paid for it because you never know. You get charged while youre up there for a credit card with food. Total market prices at that point. What else could they charge for. I like when some people claim its a gimmick and not possible to charge 15 each way. Yeah its got to be. 400. No much more. Yeah. Probably is. You can get some fares for 400. But youre subsidized by the first class people. If every seat is a coach seat. Youre much closer to 1,000. Maybe 7 or 800. Its pricey. Yeah maintenance, crew jet fuel. Remember there were airlines that would do this but they would offer three seats for 15. Right its a gimmick and you cant use the restroom. Anyway coming up a key election in israel today. Plus why an nfl player is retiring at age 24 and the controversial debate that it is sparking this morning but first as we head to break heres a look at yesterdays s p 500 winners and losers. Welcome back this morning. Its election day in israel and it could have a huge impact on how the u. S. Deals with a key partner. Tracie potts joins us from washington this morning. One of those candidates was just here right here on capital hill two weeks ago Benjamin Netanyahu with the antiiran speech. The polls in israel are telling us his job could be in jeopardy. Benjamin netanyahu cast his ballot this morning. So did his opponent. He made a last minute push for support promising no palestinian state on his watch. Two weeks ago today he was on capitol hill criticizing u. S. Negotiations over Irans Nuclear program. It doesnt block irans path to the bomb. It paves irans path to the bomb. Negotiations continued in switzerland. The u. S. And partners have two weeks to come up with an outline it. It could allow them to resume Nuclear Production in a decade. If you think the Islamic State is dangerous a Nuclear Armed Islamic Republic is also. Thats tom cotton. He wrote the letter that 47 republicans signed warning iran the deal might not stick after president obama leaves office. A senior u. S. Official says iran brought up that letter twice so far in negotiations. So far israels Prime Minister is against the negotiations but that could certainly change. Were watching at the election going on right now in israel very closely. When their polls close it will be mid afternoon here and well be watching about an hour after that for the results to start coming in. Yeah okay. Tracy, thank you. Were going to go to another part of that in just a second but i did brackets yesterday. Try to change them 15 times. Ive done rpi. Do you still have the four number one seeds in the final four. No and i didnt even have kentucky winning anymore. I read a wall street journal piece that if its 49 probability. 49 means 80 of people are going to choose them. Oh. So the difference between 49 and 80, theres 41 of the people that are going to be wrong and the likelihood that they could make it. For you to win when you pick kentucky you have to have all the other games you have to be really good at all other games. Its hard to assume youre going to do that. Im doing all kinds of different stuff. I already filled it out. I went to silver. I went to the upshot. Did you take kentucky. Well talk about it. I was just doing statistically. I wasnt trying to get tricky. Ive done well in previous years. Im going with my heart on a couple of things. I love iowa state. Like the way iowa state place. Well talk more about this before the tournament starts. This is a classic article about americans that go over and play in iraq. Play basketball in the iraqi league and its government funded and hugely popular and they say the worst american player is better than the best iraqi player. A good player can make as much as 20,000 a month and they say hey it beats working but they said they did have to prepare to go over there and when we pulled out troops in 2010 money is a little bit shorter now so is a little bit tighter now an one of the guys said it made it tough because money is kind of tight and it is difficult traveling to the games when you have to cross over Islamic State controlled regions. What . The competition is difficult because of the cash crunch and the difficulty of traveling for games across territory held by isis. So you just have to hope youre not going to get kidnapped on your way to the game. The other bad thing, no night life for the guys. Im sure. And food. Who shows up . Fans absolutely love it. Do you know what like we watch guys dunk and we just think thats something. Its easy to do. When you go and look at where the basket is these guys are incredible athletes and its great to watch but he played in syria, dubai and libya and he says oh yeah iraq is much more stable than libya. How long is the season . A couple of months . Walk away with 80 grand or 100 grand . They won last year the Super League Champs but they dropped out this year because i guess its too hard to travel across the isis held territory. I dont know how long the season is. Im going to stop talking about my commute to new york city. If you average between 4 and 10,000 but theres like 29 american players over there and theyre earning a living. They love playing basketball. Thats great. That opens your eyes to. Im not going to complain about my commute into new york city. Opens my mind about traveling because i would be petrified obviously. Not worth 20 grand. Reading about jihadi john and what he says. The knife is going to be cold when we do this and he describes each feeling that youre going to feel and then im going to put your head in the middle of your back. Anyway on that note. I was going to do a different sports story. The liberals love this story. Chris borland from the 49ers. Hes 24 years old. Hes leaving football. Leaving the nfl. He says i want to live a healthy long life and i dont want to have neurological diseases and die younger than i would otherwise and hes basically making the case and the decision to leave the game worried about his health and the question of course becomes is he just is this just the beginning. Is there a way for the game to change . There were some articles yesterday that talked about whether there should be no helmets or a lot less padding. The problem is you cant make better helmets because that makes them battering rams and they hurt people. Its still your brain getting knocked around inside yourel skoo. Boxing used to be a huge sport in this country. Its still huge. But if you look at where it is today. Football isnt going to go away. You think its not going anywhere. How much are they charging for a 30 second spot this year. A lot of money. Used to charge for boxing too. Do you think football changes. No. No. It has been changing. Youre not allowed to deliberately and you dont think 25 years from now when kids dont i dont know what additional things theyll put in but the liberals love this story. Every time Something Like this comes out. You dont think generationally today parents are more concerned about their kids so is nfl and football broadly as big a deal as today. These guys are modern day gladiators and most of them know exactly what theyre in for and the offset is living the Football Players life and life style and the money involved and Everything Else and these guys most of them dont want to retire because they love the thrill of the game so. But you have people like lebron james, he wont let his son play football. Think about where the world is in 25 years. Plenty of people will. Everybody will have a robot, no one will be employed. Well be down the toilet. New york will be completely overcome by a tidal wave from Global Warming and what else will happen and there will be no football. You did pretty well there. Eating kale salads and no meat. Can i add one more story to that . Im drawn toward the stories that creep me out. The one that moved me is raw milk. People are drinking raw milk. Im talking about unpasturized milk. Would you say its disgusting . Yes. Its a big movement. This past week West Virginia joined a movement where you allow people to kind of do this contract with a farmer. They buy shares of the cow and get the milk in its raw glory. However we seem to have forgotten. While were worried about that what that does maybe youre not getting the nutrients we seem to have forgotten why it came around. In the 20th century it was credited for largely knocking out all of these milk borne illnessst illnesses and if you listen to one of the doctors on the American Academy of pediatrics said you shouldnt do it. People want to be more responsible for what theyre putting in their body because natural doesnt always equal healthy. Once again the notion that any additive is bad is sort of in the Popular Culture of thats just heating the milk to get rid of diseases. Complaining that american cheese kraft singles have been put on the recommended list by some agency so the whole article was looking for the money trail to see how kraft paid off someone to get it done and the people they interviewed said most nutritionists say anything added is bad so kale is good. You cant call it cheese. The reason you cant call it cheese is because it contains whey and vitamin d and some things added to it but there is cheese and its fine for you and its good you get vitamins and its not going to kill you but the modern day progressive. And i wouldnt drink anything not pasturized. An when youre pregnant youre not allowed to. Just be ware. The pediatrician makes a good point. The left supposedly is so science based on everything they do. You know me with my thing, this was the story i instantly gravitated toward. Come a long way in terms of food safety based on it being inspected and preservatives. Theres some reasons for why we got to that point. We should tell you when we come back picks from mark mahaney and plus well see what he thinks about the apple tv buzz this morning. Stay tuned. Squawk box will be back. Were live from new york city on st. Patricks day. Well see you in just a moment. Ion kids everyday in our country lack access to healthy food. For the first time American Kids are slated to live a shorter life span than their parents. Its a problem that we can turn around and change. Revolution foods is a company we started to provide access to healthy affordable, kidinspired chefcrafted food. We looked at what are the aspects of food that will help set up kids for success . Making sure foods are made with high Quality Ingredients and prepared fresh everyday. Our collaboration with citi has helped us really accelerate the expansion of our business in terms of how many communities we can serve. Working with citi has also helped to fuel our innovation process and the speed at which we can bring new products into the grocery stores. We are employing 1,000 people across 27 urban areas and today, serve over 1 million meals a week. Until every kid has built those lifelong eating habits, well keep working. Im almost done. [ male announcer ] now you can pay your bill. Manage your appointments. [ dog barks ]. And check your connection status. Anytime, anywhere. [ dog growls ] oh. So youre protesting . Okay. [ male announcer ] introducing xfinity my account. Available on any device. Welcome back among the stories front and center. A battle of heavyweight shaping up for may in utah. It will feature a real champ and former serious contender. Five time heavyweight champion holyfield will faceoff against mitt romney. We need names for mitt. I dont know what it would be. Probably wouldnt be nice given people are still unhappy with what happened a few years ago. Holyfield is 62 inchtall and romney is 62 tall and 58 years old and he can hire a couple of people to kick the crap out of holyfield if he wanted to. With his money. Might be tough. Is there a way to give a couple of points to romney early . I dont know im worried about this. Yeah i dont know what goes into the idea. I would not step into. No way. One punch. I dont care if hes 52 or 62 holyfield. No, one point from that guy. Hed be dead. My jaw would have to be wired probably. He could try to bite off his other ear. That might work well. Were going to talk about the internet for a moment. Much talk recently as a bubble brewing in the tech sector. Our next guest says theres three major differences between internet stocks in 2000 and 2015. Heres the lead analyst at rbc capital markets. Before we get to that i want you to indulge us because we have been talking about apple and the new tv plan and what it does to cable and bundles which is to say what . What do you think this all means . So another word for the internet over the last 15 or 20 years is deflation. It created transparency in retail pricing and advertising and travel and all the sectors have been inflation. Were on the cusp of it now. Were adding together things like cord cutting. The ability of people to select the content they want to pay for and apple coming out with a bundle half that of regular industry pricing. My friend says the content is king. Content cannot only not be killed but is so valuable if its king why has it been force bundled to consumers. Just saying the demise of all of this is greatly exaggerated. Maybe it will take time. Maybe it will come slowly. Im saying that this particular Service Without having sports without nbc its not going to be very viable. I think thats true. Thank you. And like cbs, remember when they didnt have cbs, it wasnt march when they didnt have it. Is there anyway that you could sell that to someone normal men that are, normal people that love basketball are going to want to see march madness and if you dont have it theres going to be a problem. Im not saying big broadcasters go out of business tomorrow. Im just saying if youre missing something its not going to work. But the question is what happens to all the smaller channels. Social kwat associated with big broadcasters or not. A lot of content in the past is sold inefficiently. Theres clearly really key important content packages. Sorry to interrupt but how much can espn charge down the road . Almost anything they want. Anything they want thank you. To certain audiences. So content is king. Certain part of content are king and its being sold as all content is king. Thats the change. Thats the disruption youll see. Stain Glass Network falls by the wayside. I have 900 channels and i cant find anything to watch. Some of those will fall. Ive never seen the guys remodelling houses. And millennials are cutting cords. Some of them never started with a cord. That will have an impact on ad rates overtime. If youre no longer talking about just automatically getting in on something. If youre talk about getting paid for performance on these issues it will change how a lot of things work. And for some it will be great because youll get a much broader audience. A lot more people will watch the show but you better have the right content. Some people could charge more than theyre getting right now. Does the margin come down even for the biggest players . No theyll get more distribution. So the best players will get more distribution because of the internet. Its not the newspaper business. You look at the wall street journal. I dont know what you thought of it ten years ago but the wall street journal today which i would put up there as one of the major broadcasters of the print world, by default, the margin on that business even though they still reign supreme in what they do with the New York Times or ft or whatever you decide theyre still in business but the margins still come down materially. If they have good content that more people want to watch and werent able to watch or read before in the past they give you more capabilities. These are fixed cost businesses. More distribution means better margins. And the wall street journal was smart early on about making sure theyre getting paid for the distribution on the internet too. Others struggled with that. Theres clearly a move toward ten years ago everything was free on the internet. Thats not the case. Weve shifted which is a good thing for businesses. Theres going to be 75 inch screens or bigger. High def. Paying for the same content as now and its going to be expensive. Youre looking at 5 million for a 30 second add. Is it 10 a month . 20 a month. 15. So 15 for that. 30 or 40 for that. If youre somebody that watches a lot of content, netflix is another thing you can get back up. Real quick before you go because we promoed you to talk about whether theres a tech bubble and then we got distracted. Is there a tech bubble . I know bill talked about there being one. Probably right in the private markets. In the Public Markets, no. Not when the leading internet assets are trading at 15 to 20 times earnings. Should we be worried that the private markets now are the Public Market which is is to say that you hear all of these players who traditionally would have been considered public are now getting into these private deals putting public shareholders into them already. That is the risk. Theres two or three factors that are causing these bubbles in the private market. Thats one that the public players are now in there and secondly you have strategic buyers because you have apple, google, et cetera with a lot of cash looking for ways to put it to use. So they invest in the ubers. Thats a lot of demand for the private sectors. Thank you for coming in and allowing us to get distracted. I will go long comcast at 151 billion and ill go short apple hes not going short. Short apple 730 billion. You go long apple at 730 billion and short comcast. No. Im going to bet on the valuations. 150 for one and 750 for other. Silly and ill tell you why because you have a great hedge of comcast not comcast. Pick somebody else then. You take viacom and call me. Versus 730. Ill do it. Versus 730 billion. Who is going long . Im going short apple and long viacom. Long apple. Ill take that any day of the week. Im not surprised. Coming up on st. Patricks day everyone is irish. I have a fan in ireland that i said i would mention. He and his son. I said i would mention him. And its good news for irish whisky maker. Well talk to that company next. Ten years. As Irish Whiskey soars in popularity a Craft Movement is burgeoning. Steven tilling is a Top Executive at tealing whiskey company. Thank you for joining us. Happy st. Patricks day. Yeah thank you for having me guys. Happy st. Patricks day from dublin city. I know you come by this honestly. This is something your family has been doing for centuries, but you didnt come by it easily. This is something you had to kind of restart on your own. Why dont you tell us a little bit about your journey. Yeah like our family weve been involved in whiskey for generations. Myself and my brother are the most recent generation to get into distilling. As anyone whos been involved in it it is intensive. My brother and i are excited to bring distilling back to our city. The pot stills are working for the first time in a hundred years here in dublin. As an independent, it is a tough job to try to get these big pots back into the city. So phenomenally exciting time for us. And also for Irish Whiskey. Something like 70 of the whiskey thats drank here in the United States is jameson. So how do you break into this market . Yeah. Like with every spirits category, theres always a market leader. So what the bigger mass Market Brands do is they go out and recruit. What were trying to do is i suppose offer the next generation of Irish Whiskey drinker a lot of flavors and expressions. That they can trade up to and trade around to. So were undergoing a huge amount of growth within Irish Whiskey. With any category you undergo segmentation. We want to be the next discovery brand for Irish Whiskey drinkers. Its been drunk by a quite a young demographic who potentially are looking for more contemporary styles but also probably focusing more on what were doing now. And thats why it was so important fortous get distilling again in the city so people can see what were doing. The demographic whos drinking Irish Whiskey as well would be 30 to 40yearolds. Myself and my brother being in that demographic feel there was a gap in the market to potentially do things on a smaller scale, potentially put a bit more craft into Irish Whiskey and try to get people an expression of whiskey they havent seen before. Stephen, im not a whiskey drinker. I admit that. But i have a glass of it sitting in front of us. Joe and andrew have their own glasses. Great. Maybe you can tell us whats different about this . Yeah. So i brought my own glass as well. It being st. Patricks day. With our flagship brand, the teeling small batch finish. We hand select the casts of malt and grain. We blend them and we actually finish them or marry them in a rum barrel. Really different than what has been done before in Irish Whiskey. What we were trying to do is not alienate what people like about Irish Whiskey. But try to bring more flavors and taste profiles into it. So on the nose straight away versus any of the other Irish Whiskeys youll pick up a signature molasses sweetness from the rum barrels. But then what we tried to do is recreate a thing called a dublin sipping whiskey. So its got grain and malt in there. So it pours rain in ireland, so we get a lot of citrus fruits from our malted barley. It depends to be quite sweet on the nose as well. Cheers to you. Well like to thank you for joining us. Were running to a commercial. But thank you very much. I want to try this. Go for it. Are we going to do the whole thing . Ready . Market buzz over the next two days could be largely driven by one word. Im here to tell you all about the word of the day. Todays word is patience. New data from cnbcs exclusive fed survey on how patient the central bank is likely to be. The word patience means to wait in a calm way. Look at elmo. Hes waiting in a calm way. So hes showing patience. Thats it man. There you go. Oil prices falling down more than 11 over the last week. Well tell you what could drive crude even lower over the next six months. Data miner raising 100 million. They company uses Realtime Data from twitter that acts as an Early Warning system that could move markets. The second hour of squawk box begins right now. Live from the beating heart of business, new york city, this is squawk box. Welcome back to squawk box here on cnbc first in business worldwide. Happy st. Patricks day. Were on 6th avenue and 5th is one block that way. And its crazy. Joe kernen along with becky quick and andrew ross sorkin. I was scheduled to have breakfast on the other side and i changed it. Theres no way to get over there. Better move. No way to get over there. U. S. Equity futures at this hour are not cooperating. Were supposed to be happy. Were supposed to be feeling good. Beckys feeling good even with just one sip of that teeling Irish Whiskey. But were indicated down 86. Had a good day yesterday which i didnt really understand. All i can think is that people are now expecting that the fed will remove the word patient but it doesnt mean anything. Thats what every single guest we spoke with yesterday said. Are we back to bad news is good news . Yeah i think so. God, these guys. Its really hard to break an addiction. Didnt have a green tie on. Anyway, overseas in europe, take a quick look. See whats happening over on the continent. Nothing really. Germanys down but germany was up yesterday. Greece. Greece did go down well below 800 at one point. Wow. And take a look at crude. Were going to talk to an analyst this hour about the impact from a potential nuclear deal with iran. And whats on the wall street journal today that it could put further additional pressure on crude. But were at 43. Only 3. 01 away from a 39 handle. Below 43. Nice. Some other stories were talking about. Apple in talks to launch an Online Tv Service. This according to the wall street journal. Service would include a bundle of about 25 channels that broadcasters are said to include as part of this bundle abc, cbs, and fox. But the channels owned rather by cnbcs Parent Company comcast will not be part of the service. Well see where that ends what the whole package looks like in the fall. Also the Senate Foreign Relations Committee expected to vote on a bill next week that would require president obama to get congressional approval with iran. He has threatened to veto the bill. And a new study getting a lot of buzz this morning finds the currency swing costs u. S. Companies nearly 18. 7 billion last quarter. The total negative currency impact was the biggest since the height of the euro crisis. North American Companies were hurt by 6 cents on average. Were going to talk more about this at 8 40 eastern. But given the strength of the dollar and Everything Else puts the fed in a bind too. It sounds like something theyre paying attention to. Patience is a virtue for many but many believe the fed is beginning to run out of pit. Steve leisman has the results of the cnbc fed survey. Good morning, steve. Yeah becky. And the cnbc fed survey says pretty definitively the fed has run out of patience. Take a look at the data. 38 economists Fund Managers and analysts responding to our survey in the month of march. 69 saying the word patience will be removed from the statement. You can see thats a pretty good change from the prior survey which was in january. Where you needed to get to april to get 50 . Then there was a good chunk down in june. But i think it was that strong jobs report that really changed things around. Lets take a look now at the fed timeline per our respondents to the survey. The word patience comes out here in march. Then when is the first rate hike . It had been september. Now its seen as august of 2015. So a little later in the summer. The Balance Sheet begins to decline in april of 2016. Thats the same as it was prior. And then when does the fed get done hiking rates . It was in the First Quarter of 2013. So these are averages. Moving back it doesnt matter all that much. The terminal rate the fed stops hiking this cycle at 3 . So well take a quick look at the lines here. The red line is the current line of the trajectory of Interest Rates. You can see, folks, by december 2016 the fed is still under 2 . And it gets to a final place of a belownormal rate. At 3 a touch under and maybe a touch earlier where it was last time. The commentary is all over the place. And i think thats emblematic of this volatile market. The fed is too worried that the economy will suddenly accelerate when theres no reason to expect it. The fed has moved into a period of policy irrationality. John donaldson writes in the fomc is ready to answer the question. Does the economy still warrant zero Interest Rates . The answer is no. And their desire to normalize and create dry powder trumps all. They will move in june. Ive got just as many people saying theyre going to move in september or august or some other time. Ill be back at 8 00 with more on whether or not our respondents think its behind the curve and the impact of oil and the strong dollar on fed policy. You can read all about it on cnbc. Com as well. All right. Well see you in a bit. Thank you. For more on the feds impact on the markets we are joined now by jim oshaughnessy. He is the ceo of oshaughnessy management. What do you think about all this . Is the market hoping that the fed hangs in there longer . Well i think that ultimately the market would prefer a slight raise in rates. We basically have been going on as he put it irrationally for quite some time right now. But when you say ultimately, that doesnt mean theres not going to be a knee jerk reaction. That there is not some irrational money in the market right now. Im sure there is. And basically weve looked at the periods where the fed raised rates gradually and raised them during periods where there wasnt excess inflation. In other words they felt that it was time for rates to be higher than they were. Theyve been negative for a long long time. I think also they think a bit about the idea that if youve got 2 trillion in euro base bonds giving negative returns, it could be a wind fall if suddenly they can put their money into something that returns money to the investor. And then you could see if you see that rush of nunds into the u. S. Treasury couldnt that put pressure on the yield anyway . Absolutely. Yeah. Just watching it. If youve got all of this money waiting on the sidelines to come into the u. S. Treasuries that will materially affect the rate that investors enjoy. So we think, though that most of the time benign rate increases particularly in the environment that were in right now do not have to derail the stock market. They definitely dont have to negatively impact a lot of things that investors are investing at. I mean i look at the steve just said okay we get to 3 and he knows when its going to be and hes got a nice straight line. And i see how they figured it out. I think there are 11 quarters between now and 2017. Youd get to somewhere around 3 . But is there any way we can assume its going to be a linear move . The economy is going to cooperate perfectly i dont think the fed wants to do that anymore. Theyre trying to telegraph i agree. Its not a linear move at all. This is like were never going to have another slowdown. But what if we have a recession at some point and were at 2 . Wheres the powder at 2 . Then you get the fed caught flat footed yet again. So the one guy that said they need powder thats the preeminent thing this need we cant be you know no arrows. If theres nothing there and Something Like this. Except for qe which we saw what accomplished in japan. If you saw this. All it did was cut the income for every japanese citizen. Yeah. Listen. Theyre doing an experiment with things they never have before. Right . And so i think the idea of a Linear Movement in rates is absurd. I dont think that that will happen. Jim, do you think the way youre speaking sounds a little sanguine that you think maybe prices arent too high here for u. S. Stocks. Is that well obviously u. S. Stocks particularly the large companies. So for example over the last four years, the 25 largest stocks in the s p went up 77 . The s p went up 64 . Youve got to remember how rare that happens. It very seldomly happens that way. In fact if you look over the last 50 years, you see the biggest stocks generally are a lag between 2 and 3 per year on the s p 500. So one of the things is its much better to identify stocks that are cheap on a variety of factors. Because theres always cheap stocks. Even if youre in a fully priced market environment. Much of that pricing can happen at the very pricey end. Right now that happens to be the teslas of the world. That happens to be some of the large cap names that dominate the s p 500. That doesnt mean there arent a host of other companies that are very cheap, have good Balance Sheets, have Earnings Quality which means theyre not monkeying with the earnings. You know no enrons, no world comps. Then we suggest you buy those that have the highest shareholder yield. Which is dividend yield plus buyback yield. Buyback yield is a fascinating factor. In and of it right now. Take away the cheapness. Take away the things that make it much better. We were able using the crisp data which is the Chicago Research and Security Prices it goes back to 1926 that particular factor has beaten the large stocks universe in every decade from the 1930s through the 2000s. We are out of time but tell us one of the stocks you found. Bed bath beyond. You know its a name that is not going to strike joy into anyones heart. And yet right now theyre at a 12. 8 shareholder yield. All right. Well, thank you very much for coming in today. Always a pleasure talking to you. My pleasure. You think you can walk around today and say my names oshaughnessy, i dont need no stinking ill lend you this. Im embarrassed for you. I may even break out im oshaughnessy oshaughnessy. Which is the way they say it in ireland. Thats a difference. Im in ireland and go to order something on the phone and i say soandso oshaughnessy. The guy comes on the other end and says i know how to spell. I think i could come close, i think. Maybe not. Well that was the great achievement when we were in first grade. We could spell our own name. So you dont want this. Ill give you this. Ive got one. Its in greenwich. Off place here too . I do. Youve done well. Awesome. A lot of green. By the way, remember, we couldnt get to the rest of jims picks but he is a member of our squawk platinum portfolio and can go to cnbc. Com to have see his picks. Coming up getting voefld in m as and deals perhaps. Then well talk about whats going on in israel. Well get a live report of dan senor. Hes in tel aviv. And then data monitor users using twitter as a warning. Were back in a moment. Welcome back to squawk box, everybody. Weve been watching the futures this morning. After a big rebound for the markets yesterday, you can see they are giving back of the gains this morning. The dow futures indicated 87 points below fair value. S p off by 10 and nasdaq down by 15. Also look at crude oil prices this morning. Crude is actually continuing its decline. It was already at a sixyear low this morning. Now down another 82 cents. We did briefly watch wti touch 42 and change earlier this morning. And lets talk a little m a this morning. 2014 was a banner year for financial ipos with nearly 40 firms coming to the market in that sector. Deal flow has picked up steam. And since record volume on the m a front. Our next guest runs the top bank firm and lead player in bank ipos. He expects the momentum to carry over to 2015. On the set is thomas misho. Good morning. Good morning. What kind of deals are we going to see now . Well the Banking Industry has been consolidating for some time and the question is how fast does it do that. Last year we had about 5 involved in a banking merger. The average is about 3. 5 . The reason why people didnt really feel like there was a lot of m as is because a lot were smaller banks. Going to be involved in m a. We think its going to move up market cap. The big banks are he big banks in a position they can do deals . So whats interesting is the industry is as segments as ive ever seen it. Youve got these companies that are the globals. They have different rules and regulations. They have different capital requirements. And that puts them out of the m a business . Many of them are going to the other way. Theyre getting smaller. And the power alley right now in banking is the 5 billion to 50 billion range. These are companies with real market caps. What are you talking about, for example . There have been acquires in the shares. Theyve been an acquirery. So East West Bank has been an acquirer. Bank of america, circa 1990something. I am not sure were ever going to see the consolidation and concentration. I think the regulators believe the areas overconsolidated. They had 80 of the industrys assets. Too big to fail. You talk about how the regulators dont want to see the consolidation, but theyre responsible for much of it. The smallest banks in particular said forget it. We cant continue to fulfill this sort of regulatory need. Thats right. That is true. That is a factor we hear quite often. And really it seems like you dont really hit the performance takeoff moment until you get to be about 5 billion in assets. So the banks smaller than that for a variety of reasons just arent as profitable. I think thats part of the reason. All of these upstarts out of Silicon Valley that want to get into the banking business. What happens to the lending clubs of the world or a firm or a wealth front or any of these guys . Does anybody old traditional say we actually need this . I have to tell you. The one thing i think the regulators have done a good job at is being the guardians of our Banking System. Given all the attention to who is accessing the Banking System bank secrecy act. My opinion is theyre just not going to let anyone show up and start accessing it. So the gates that are there for the banks are going to be there for the technology. And i think eventually the Consumer Protection laws are going to get there. To Silicon Valley . To anyone involved in the lending business. I think over time to date it has been something that has slowed down the business. Hopefully well reach an equilibrium where that wont be the case but today its been something that slows. And therefore makes those businesses less attractive . Maybe less attractive to where they are today. But still might be attractive longer term because theres a lot of big expectations in some of those companies. And real briefly, ipos whab do you expect to see this year . Theyre going to be more. I think theyre cheap. But when you have strong stock prices youve got a good market. You believe the big guys ultimately break apart . They will be smaller. They will be smaller. You look at citigroup. Thats a real company. I dont know if you remember the associates they acquired. That was one of the Biggest Companies in the Financial Services industry. They just sold it to spring leaf financial. So youre going to see this happen at a steady pace. I dont think therell be a big crescendo moment. Thanks for coming in this morning. Appreciate it. Coming up the worlds highest paid model is stepping away from the catwalk. Thats coming up next. E financial noise financial noise financial noise financial noise 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 if you get a trade idea schwab can help you take it on. Tdd 18003452550 were getting a lot of questions tdd 18003452550 about organic food stocks. Tdd 18003452550 [ male announcer ] sharpen your instincts tdd 18003452550 with indepth analysis by schwab experts. 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The worlds highest paid model, Gisele Bundchen is set to retire from the catwalk after almost a decade in the fashion spotlight. The 34yearold brazilian model took home estimated earnings of 47 million during the past year from contracts and other Business Ventures that makes her the highest paid model for the eighth consecutive year. Shes expected to stay involved in the fashion world and she has contracts with h m and chanel among others. Just about topped out the market for euros when she said i want to be paid in euros. Im guessing shes not getting paid in euros these days. I dont know how that would feel taking it at 1. 40. My guess is she didnt keep it in euros for long. Right . I suspect the catwalk is not a very profitable enterprise. Not compared to the other stuff. Im sure to even get her there, youve got to pay her. Considering she can make i dont know what she makes in a day of shooting or something. A ridiculous number. Yeah. But she does a lot of things. Ive seen commercials with her all over the place. In the old days it was like 10,000 was a lot of money to go on the catwalk far day. Now i guess its probably 100,000. When we come back this morning, were going to talk about crude oil. It is falling once again. It is down 12 for the last week. Take a look. Below 43 this morning at 42. 88. When we come back well check out the factors that could drive Oil Prices Lower in the next six months. And an election in israel that could mark the end of the netanyahu era. Well be joined from tel aviv. 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. Welcome back to squawk box, everyone. In our headlines this morning, Foreign Investors sold u. S. Treasuries for a Third Straight month in january. The government says that that pushed outflows to the highest level in at least three years. Boeing says it could do a satellite deal with the Technology Giant this year. Those Companies Want to expand Internet Access around the world. And the tech story of the morning. The wall street journal is reporting that apple is working with programmers to offer a bundled service of about 25 channels. It could launch by this fall. And check out this. An internally flawless 100. 2 carat diamond. Its not 100 as you can see there. Its a 100. 2 carat diamond. Unveiled for display in dubai. It will be auctioned next month by sothebys. The diamond was discovered a decade ago in the de beers mines of south africa. Youd have to be like married to david koch i would not believe anyone who wore that would be real. Unless it was david kochs wife. Maybe. But watching that on anybodys finger no way. Itd have to be a rich person. Really rich. Somebody with a security person at all times. Somebody will cut your fingers off. At some point it becomes obnoxious obnoxious. You cant do anything. I would have cut off the last. 2. Just make it 100. Nice round number. Right. Make an earring out of the other. Can you do that out of. 2 carats . Probably not. Thats not much. Not much but you can do something with it. Right in your nose. Ive seen those. Yeah. I thought about that. Attractive for the show. Attracting the millennials. Thats right. Weve got to do something. There we go. Theyre gone. Theyre doing what you say everybody is going to do i guess. And more and more people are going to become them arent they . This is true. There will be a bigger and bigger part of the population. I still have hope for them to come around and become normal. Apparently they do they do watch us and like us. They do. Except when we dont call them normal. Lets talk about oil prices. As we mentioned theyre falling below 43 a barrel this morning. Our next guest points to the market for that slide. Joining us is matt smith, he is analyst at schneider electric. Its great to see you this morning. Happy st. Patricks day. And to yourself. I know you think the strong dollar is part of the problem weve seen with oil prices but the dollar has at least leveled off a little bit. Now were looking at oil prices continuing to decline. Whats happening this morning . Well, thats right. I think its just a temporary distraction today for the euro. We had a decent german sentiment number. But the key thing is the strong dollar has been pressuring crude low since the highs of last june. But then focused in the last few months and weeks, its shifted to higher inventories here in the u. S. Not only on a total basis which is 450 Million Barrels in storage there which is is the highest level in 80 years, but the key thing is that cushing inventory. We could run out of space there in the next few months. So this is not an irrationally low price as far as youre concerned. There are real fundamental supply reasons for it. Yes. Very much so. In the near term thats where there really is this risk given that yes we are seeing the rate count drop. Weve seen it drop 46 from the high last october. But were still seeing Production Growth continuing. And so thats likely continuing to tick up through this First Quarter into the second quarter. And once that Production Growth starts to level off, once we see a demand response on a global scale, we are actually already seeing that somewhat in the u. S. Here. Were going to see the market somewhat start to balance out a little bit. But until that point, were going to be under downward pressure here. Theres also a longer term issue that the front page brings up this morning. It talk about how this deal with iran could end up meaning we could see more oil coming to the market once sanctions are dropped if this deal goes forward as some are expecting. Very much so becky. I dont think thats going to happen in the near term. They are making progress but they would lift other sanctions first before the oil sanctions. Iran was producing sort of 3. 6 Million Barrels a day prior to sanctions. Now theyre down to 2. 8 million. So they could put the 800 back on the market but thats going to take a gradual process. Its not sort of going to come back straight away. And indeed these sanctions may not be lifted until early next year. So what do you think happens next . I mean momentum is certainly pushing crude prices lower. How low do you think theyll fall . Whats the floor were looking at now . Everyone is looking at the 40 level. And were likely to go and test that. Its really going to be key over the next couple of months how those inventories look in the u. S. Here. Whether they start to get to those tank tops and then its a case of whether we see refining picking up driving season driving on demand for the products. And therefore easing those inventory levels low again. Near term weakness, potentially rebalancing later in the year. All right. Matt, thank you. Happy st. Patricks day to you. Thanks becky. Turning to the election in israel today. Benjamin netanyahu fighting to remain israels leader continues to travel in the polls. He cast his ballot early this morning in what is expected to be a close election that could take months to settle. Here with more on this is dan senor. He joins us this morning from tel aviv. A lot of what weve been reading we dont understand everything as much the way coalitions are forged et cetera to see who remains in power. Whats your best guess to the outcome at this point . My look. They stopped polling here public polling about four days a egg. So based on just the most recent data and then anecdotal evidence ive been gathering, i think that hertzog, the zionist lead serleader is ahead. Whether hes ahead by four or eight seats is the question. Netanyahu lost by about a seat at the time which was headed by libney. He was the only one to form a coalition government. So if its a tight margin for hertzog this time one to four seats, netanyahu stale may be able to cobble together a coalition. Because a larger segment is on the right than the left. The problem for netanyahu is the segment on the right is divided up amongst the parties. If he could cobble together a coalition, even if he comes in second, he can hang on. But if hertzog is experiencing any kind of surge as he may be over the last few days if his victory is four to eight seats, i think its going to be very hard for netanyahu to hang on. So that explains what youre saying if its at least a majority or at least a plurality to the right then by making the comments yesterday about no palestinian state under his watch, he was trying to bolster support with that group of israelis. Yeah. I think the statement netanyahu made about the palestinian state was, you know a political reality he had to address. Which was he had come out for a palestinian state. He had to reassure the right. The right here has been bleeding in the recent polling. So he had to reassure the right he would not deliver a palestinian state to israel in e the hope some of those thinking they can support a right wing party and not have the opposition and power, meaning not having hertzog in power, hes assured them that a, that was a foolish strategy and b, he wouldnt let them down. It was partly politics. But its also a reality. The political reality or the policy reality in israel is there is not going to be the establishment of a palestinian estate here any time soon. There is nothing on the other side to deal with. There was no one who could deliver on the peace side to enforce it. Certainly after the war with gaza and hamas last summer theres not a real appetite for taking big risks for peace right now in israel. So the reality is no matter who wins, even if hertzog wins im highly skeptical that theres going to be a palestinian state. What netanyahu said yesterday was a statement to the obvious. Dan, did it help or hurt with the people he needed to get support from in israel did the address in front of Congress Help or hurt, number one. Is he less bad . Or obviously it didnt put him into the clear cut winner. And number two, what percentage of israelis do you think would say im solidly behind the effort to get a deal with iran by the United States and some of its european allies . Two things. I think the drama, the Netanyahu Obama drama right before the speech to congress did hurt netanyahu politically in the country. Not with his base but generally. I think with right of center voters, it helped. Because obama is very unpopular inside israel with the general electorate and especially with the right of center voters. But since the speech was delivered well it didnt help it doesnt hurt. It was just this sort of neutral factor. I dont think it made a big difference. And it didnt really generate that much support for him on the right. As for the iran deal i think theres a lot of skepticism here about what this actual deal was going to look like and whether or not it would be a good deal for israel. And the irony is even if hertzog wins the Obama Administration has this attitude as though netanyahu is such a troublemaker for them. If they could get him out of the way, they would have much more policy success and diplomatic success. Im not so sure hertzog at the end of the day is going to have a dramatically different position on the deal. So the white house may be in a situation where they get the guy they wanted. They get hertzog as Prime Minister. And then hertzog is as confrontational, maybe in a more diplomatic way. But is as confrontational to the deal that the Obama Administration is pursuing. Now, with netanyahu, the white house can dismiss him as intransigent, hawkish. All the characterizations they describe for netanyahu. How are they going to say that to hertzog . If he expresses the sentiment here in israel which is highly skeptical, how are they going to trash or even dismiss hertzogs concerns . After all, he was the guy the want to get in office. Yeah. Okay. When will you know . Will you let me know when you know . Ill let you know when i know. But the polls close here at 10 00 tonight. Its going to take a few hours before they start issuing formal results. If its close, which it will be it could be a day or two before we really know. But rest assured, as soon as i know, youll know. Ill email you right away. Okay. If theres hanging chads, i dont want to know dan. Until we know dont even all right. See you later. Thanks. Take care guys. Coming up when we return a new round of funding for one of the top names on cnbcs disrupters list to watch. A way to give movement events. Head to a break, take a look at the dow looking like it would open off 85 points. Nasdaq down 15 points. And the s p 500 down about 10 points. Back in a moment. 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 . under loud music this is the place. Their beard salve is made from sustainable tea tree oil and kale. You, my friend, recognize when a trend has reached critical mass. Yes, when others focus on one thing you see whats coming next. You see opportunity. Thats what a type e does. And so it begins. With e trades investing insights center, you can spot trends before they become trendy. E trade. Opportunity is everywhere. Welcome back to squawk box. Dataminr is one of a handful of companies with access to the fire hose of data with twitter. You see it on your screen right now. Dataminr gets first access to the tweets about a refinery fire and then for example it funnels that info to its clients. Like the commodities trading desk of a hedge fund or big bank after the first. Unconfirmed im told. Supposedly 700 million. Has notable backers to tell you about including bank Ceos John Mack and vikram pandit. And then Wellington Management and Credit Suisse and others. Thank you very manager the. Youre back. We were saying during commercial break its better than you going out of business. So this is good. Im happy to live up to the disrupters quota. Heres the question about this. This business has grown like a weed. You are dependent largely on twitter twitter, right . This lives or dies whether people are inputting information into twitter that can be a sort of signal to you. There are questions about the future of twitter. I am extremely bullish on twitter. I do not own stock in twitter. Its important to understand that twitter is really the nervous system of the internet. Its a platform on which people publish in an open forum what they see and hear around the world. So while there are many social media platforms, twitter really is the place where information breaks. Because individuals take it upon themselves to be sensors out there like the example you showed earlier. So i think that quality of twitter is incredibly important in terms of its longterm ability. What about pros tect pekts . Its easy to spot things that arent necessarily real. Like for example, when there was the ap hack and there was an account that said theres an explosion at the white house, there was no tweeting activity around the white house which was an unbelievably tell all signal. So your algorithms did not send out that information . We sent out a signal from someone in the basement saying im here and an explosion did not happen. Twitter is on the one hand and thats all done by the computer. We are not a News Organization. We are systemic in detecting all of this information. Own solely using twitter as the host . No. Using facebook . We use over 30 data sets. We found twitter is by far the first trip wire for the process. But to ascertain if information is actionable you need to contextualize it. So we use market price. We correlate with different news feeds. And that gives us the picture as to whether or not the information is actionable. And how quickly do you think you are ahead of the News Organization . If you to some degree are waiting to confirm the news. Or dont you know . I think its important to differentiate what news is and what we do. Were a company that finds an early signature in massive amounts of public data. We ascertain that its relevant. We proactively deliver that signal into the work flow of clients and in the news industry themselves and now in Risk Management watch centers along with a suite of contextual analytics. Your clients are using that information. Humans are taking that information and doing something with it . Or is there programatic trading. Equipping individuals to have the information they can take better decisions upon is of itself big. What is it . We dont disclose pricing but we have a package that helps all to afford the product. Weve got to run, but last question. Is this a company that will go public in the future . Is that something on the horizon for you now that youre worth 700 billion million. Or do you imagine and im surprised have people approached you to try to buy you . Do dataminr does have the ambition to be a large independent company. This is one of those rare opportunities to be an iconic Large Company that dominates a new niche. While we have no specific plans yet, thats definitely something that well seriously consider. All right. Thanks for coming in. Absolutely. Thank you. When we come back this morning, we have your list of stocks to watch in premarket trading. Alibaba just one of todays movers. Well tell you why right after this. [ r b slow jam playing ] yeah, girl you know, ive been thinking about us and, uh, i just cant fight it anymore its bundle time bundle mm, feel those savings, baby and thats how a home and auto bundle is made. Better he learns it here than on the streets. The miracle of bundling now, thats progressive. Lets take a look at a couple of stocks to watch this morning. Shares of the nations Biggest Airlines are rising in early trading and that is due to the drop in oil prices. The most recent drop has been good for sentiment. There you can see 42. 68 now. Down almost 3 and many think the bottom is going to be tough to find. Alibaba was upgraded to buy from hold. The analyst cites longterm benefits from improvements to the online retailer platform. And argues it compares favorably to competitors included amazon. And shoe retailer dsw beating the street on the top and bottom lines. The company also raised its quarterly dividend. Earnings and revenues at Burlington Stores also beat estimates. The apparel and accessories retailer reporting it rose 7 from a year earlier. Coming up the squawk ceo call will continue with doug parker from American Airlines. Well ask him about falling fuel costs and why hes mad about angry, i think, is probably a better word. About subsidies for foreign airlines. Then details from a new survey that says currency swings cost u. S. Corporations more than 18 billion in the Fourth Quarter and why it can get even worse. Stick around. Llo. I am technology that is changing investing forever. I am a fully automated Investment Advisory service. I can help you choose the right portfolio. Monitor it. And even rebalance it. Ive been called innovative. Revolutionary. And just plain smart. Id blush at the compliment if i could. But i cant. So. I wont. Say hello at intelligent. Schwab. Com 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. Will investors see green this st. Patricks day . The fomc meeting and rising tensions in europe. We have our assets covered as we get ready for our big trading day ahead. Plus apple on demand reports this morning that the company could launch a Subscription Service this fall. Is this the product that will change tv . And tesla is looking to end drive range anxiety. We did it we pulled it off i cant believe it wheres the needle . It broke off baby. But will the Conference Call end in investor anxiety . A peak under teslas hood. The final 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 here on cnbc first in business worldwide. Im becky quick along with joe kernen and andrew ross sorkin. With just about 90 minutes here the futures. Lets check things out here. Dow looking down about 93 points. S p futures down by 10. 5 points. And the nasdaq down by 14 points. Oil prices also dropping once again this morning. In fact, you are looking at a 42 handle. Its below 43 at 42. 67 right now. Among the top stories were focusing on this morning, apple reportedly working with programmers to offer a bundled service of about 25 channels. Wall street journal saying broadcasters will include abc, cbs, and fox but so far not channels owned by comcast. Well talk about this with Walter Isaacson in the next half hour. Also in other headlines with pinterest raising in funding. That brings the valuation to 11 billion. And ubers cfo is stepping down. The Company Making an announcement in an email to investors. They dont have a backup plan just yet. So sounds like something may have been amiss. Few stocks on the move this morning Weight Watchers was downgraded to underperform to neutral. Says that Weight Watchers is over valued given its earnings outlook. Actavis has been reinstated by the buy list at goldman sachs. Will be bolstered by its acquisition of allergan. The exclusive cnbc fed survey is out and for the first time more than half the respondents think the fed is too accommodative. Steve leisman is here and he has details. Good to see you. Good morning. More than half think the fed is behind the curve. First i want to remind you of the headlines from the last hour where we showed you 69 of respondents think the word patience coming out tomorrow. And then the first hike comes in august. I want to get to the data becky was talking about. Notice the next screen here. 50 over a long period of time thought it was accommodative. Thats changed now. Where for the first time a majority more than 50 think that the fed is behind the curve and just 32 , a big drop think the fed is just right. So increasing nervousness that the Federal Reserve is behind the curve. Want to show you more details from the survey. Is the market ready for a hike . With well b they thought they were in the last survey. But now 47 say no. The difference there coming from those who were unsure. So could be a surprise in equity markets and in bond markets when a rate hike does finally come. Another big debate the impact of oil and the dollar on gdp and inflation. What you see here is oil cuts both ways. On the one hand, its a positive for growth but a negative for inflation. And the dollar goes this same way. A negative for growth and a negative for inflation. If we take these blue bars and add them up it takes about half a point. Meaning the fed is going to be moving further away from its 2 inflation target. And you could read all about this on cnbc. Com where we have the full results of the survey. But its certainly something the Federal Reserve is going to have to factor in. The impact of oil and the dollar on on the trajectory of Federal Reserve policy. Thank you very much. Steve leisman again. Folks, weve been talking about the Major Airlines watching whats been happening with them as oil prices dropped. The Major Airlines coes are in the naugss capital this morning for the 14th annual aviation summit. Joining us with more is American Airlines group ceo Douglas Parker who is in d. C. For the summit as well. And doug its great to see you this morning. Nice to see you. The news that were actually seeing america getting added back into the s p 500. Its going to be replacing allergan. I know the stock was up about 4 on that news. Some people saying that was great news for the industry overall to now see the third carrier thats being put back into the s p 500. Its good news for america. We know that. We certainly with over 40 billion of revenue here made over 40 billion of profit. We certainly knew we would be in the s p 500 at some point in time. Its good news. Good news for shareholders. Good news for america. Lets talk about whats been happening with fuel prices as well. Just this morning were looking at wti falling back below 44 a barrel. This has been a steady downward decline. In fact, a lot of people would say this has been an absolute plunge. What has that meant . Lower fuel prices for you and how are you dealing at this point . Trying to lock up as long as you can in terms of hedging . No. Weve been very successful since 2008 actually. Not having not entering into derivatives, not doing any hedging. And the result has been weve paid much less for fuel than competitors. Were happy where we are right now. The falling fuel prices helps. Were seeing more of that benefit than competitors because were not locked into higher prices. And its the fuel price this year versus last year at todays prices about 4. 5 billion lower than what we paid last year. Its a supply driven fall. So demand for air travel remains very strong. So its certainly helpful to our earnings in 2015. You know im always looking out for the customer why are you not passing on the savings to the customer . Prices on tickets have not fallen frankly at all for the most part. Well, revenues are slightly down. Our revenues are down slightly. So its hard to say where theyd be if fuel prices were higher. The fact of the matter is this is a supplydriven fall and demand for air travel remains strong. This is a business that has never been able to pass along costs in the past. So when our costs fall that goes to our shareholders as it should. So long as demand remaining strong for air travel which it has. You mean you dont want to go bankrupt when oil prices go to 120 and you should be giving the money out when it goes back down. Not sure shareholders agree with that. Shareholders smareholders. Whos getting subsidized . Getting subsidized over in the gulf. And this is a clear violation of open skies policy. Well, its certainly not we dont believe its fair trade. We have produced evidence to the United States government that the governments of the uae and qatar have provided over 40 billion of subsidies, the largest subsidy we believe thats been presented to the u. S. Government. And all were asking is that we have a conference about this consultations to talk with those governments and our government about making those agreements more fair. The agreement is already in place. We simply want to have them enforced. And they call for consultations. Thats all weve asked for. And were looking forward to that happening. It sounds like a no brainer. Are you getting push back . Is someone being slow to respond to this . No no. Were in regular contact with our government officials. They have been responsive and we expect well make progress here. But theyre being a thoughtful as they should. This is not a small issue. It requires some diplomacy but again the agreements are in place. Youre right. It does seem to us like a no brainer. But anyway were in regular contact and feel good about our prospects. Doug, when you look at those airlines and i agree you want to have a fair system. Some people would argue, though that those airlines have done an amazing job actually forcing all the other airlines to catch up if you will when it comes to services and product. Do you agree . To be clear look. To be clear, if an airline doesnt need to make profit it can that can be good for consumers in the shortterm. Just as dumping steel can be good for consumers in the shortterm. Because it lowers prices. But thats not what free trades about. A basic tenet of free trade lets talk about this. This is not just american. Delta, American United have been looking into this. What have you found . Solid evidence of over 40 billion in subsidies from those governments to the airlines that to three airlines in those countries. And, you know, which allows them to provide service not at a profit. To provide service at a loss. Something that were not allowed to do. Something we cant do. Again, something we think should be remedied. Doug do you have any outstanding issues with contracts or labor or Flight Attendants or pilots or anything residual from the merger . Yeah no. Weve since the last time i think i talked to you, weve gotten joint collective bargaining agreements with both our pilots and our Flight Attendants that provide them the highest hourly rates. We still have other contracts to work out. But we again one of the nice things about our Financial Success is we are able to pass that on to our employees as we should. So were looking forward to getting contracts with the rest of our boys in 2015. And computer issues everythings all together now everythings done . Were not done yet. This is a twoyear process. Were about 15 months into it. By the end of this year we will combine our frequent flier programs and so far everything looks great. One thing id heard is youre in the process of checking out some new uniforms for the people as well. And im just wondering what the feedback is youre getting. Theres been social media pickup that some people have a complaint with it. Are you sticking with these ones or looking for new uniforms or making changes . We had a wear test for new uniforms for employees. We got feedback from that so were going back and incorporating that feedback. Well come back with Something Different from the wear test. The wear test went well. What are the other major issues that youre hoping to address while youre there at the summit today . Well there are a number of issues going on right now. Faa reauthorization is a big deal for our industry. We believe theres an opportunity to do some real reform of the air Traffic Control system. But mainly most of all well be talking about how america is doing. How well our merger has done for our employees and shareholders and also talk about the gulf carrier issue. Okay. One more quick question for you, doug. One thing we talked about today that we pointed out is that ryan air is now looking at making transit flights available between european and the United States. Theyre doing what they traditionally do which is to do a marketing ploy where they talk about some of the cheap things theyre offering. One is some of those seats will be 15. How do you respond to that . And is it easy to match . We compete. Which is what this gulf carrier is about. We love to compete. Well compete with anybody so long as the Playing Field is level. We want it to be level with everyone we compete with. We will compete aggressively and our team will do well in that competition. We laughed how they charge you to go to the bathroom. 1500 for oxygen while youre up there. You can either take it or not. I dont know how that works. Its ridiculous. I mean its ridiculous. I said 15 for the ticket but you get charged for oxygen if you want to breathe while youre up in the plane. Its a different model, thats for certain. All right. Were happy with our model. We have a great service. Our teams done a great job. We couldnt be happier. Doug thank you very much for joining us today. We appreciate pit. Thanks a lot. Got me with the holding it for eight hours. You cant hold your breath for eight hours. No. Coming up when we return former indiana governor turned president of purdue university, Mitch Daniels joins us after the break. Well talk Higher Education and much more. Then later key economic data. Were going to get Housing Starts numbers. Plus media guru Walter Isaacson will join us to talk about the buzz about apple tv and also talk about tesla today ahead of an elon musk appearance. Stay with us. Squawk box begincontinues in a moment. Sometimes the present looked bright. Sometimes romantic. There were tears in my eyes. And tears in my eyes. And so many Little Things that we learned were really the biggest things. Through it all, we saved and had a retirement plan. And someone who listened and helped us along the way. Because we always knew that someday the future would be the present. Every someday needs a plan. Talk with us about your retirement today. 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 . Im almost done. [ male announcer ] now you can pay your bill. Manage your appointments. [ dog barks ]. And check your connection status. Anytime, anywhere. [ dog growls ] oh. So youre protesting . Okay. [ male announcer ] introducing xfinity my account. Available on any device. Welcome back to squawk box this morning. Take a look t aat the futures. Dow looks like it would open 73 points off. And the s p 500 off about 7. 5 points. Also lets look to the oil boards. Wti crude all the way down to 42. 94. The u. S. Hitting the debt ceiling again this week. Competing budget blueprints from congress. Joining us now Mitch Daniels. Hes now president of purdue university. Unfortunately, governor that first round matchup against cincinnati is not going to go well for the boil makers, i have a feeling. Well we can make a little wager off the air if you like joe. Thats illegal. Actually, your team did hit its stride, didnt it . February . Beat ohio state, iowa, and indiana. Good. Youre paying close attention. Yeah. Its a very young team. Got steadily better during the year. You wouldnt want to draw us in the tournament. Yeah. Okay. But gave penn state a run too. I watched that game. Penn state finally prevailed, didnt they last weekend . No. Actually they didnt. They played us tough twice. They played very, very well, penn state. But we did win by five. I didnt see the end of that. Let me ask you. Youre watching what goes on in washington. Business as usual. Makes a University Job look pretty good at this point, i guess, doesnt it . Any reason for hope with the latest budget wranglings . Oh hope springs eternal. But really this affects universities like it does all of us americans. And one hopes that eventually our Decision Makers in both parties will get serious about the debt were piling up and planning to leave the next generation. You know one of the obvious problems is that the explosion in entitlement spending is eating the discretionary part of the budget. That means less money for investments in education and basic research. Things that are really important to our economic futures. So lets hope for some progress. But weve hoped before. You know lately and i have seen indiana on certain rankings in terms of unemployment job growth all those things. The Mainstream Media doesnt have much. You started there. Isnt illinois right next to indiana . Yes, in fact your geography is correct. Indiana on a relative scale is doing very, very well. Disposal income i think was second to north dakota in the most recent year growth i should say. Yes. Indiana i just read has added in the last few years 50somethousand manufacturing jobs while illinois lost 41,000. So you can do certain things as a state to make yourself more attractive. Why cant you look at some of the simple things you did as governor and then those will work on a national basis. I mean you can make certain draw certain conclusions on what our National Policy should look like on certain issues. Would you agree with that . I think there are extrapolations you can make. And yes, i mean certain basic progrowth policies i believe would be good for all of us. And, you know one day maybe a different viewpoint will prevail. 90,000 difference in manufacturing jobs. Something, you know somethings right in indiana. Somethings wrong in illinois. What can we do about college . Its too expensive people say, number one. And number two, when you get out you cant get a job. So those are two pretty dim results. Well i think first of all we ought to celebrate the fact we have the finest system of Higher Education particularly our Research Universities in the world. And we need to protect and strengthen that if we can. As one University Purdue university where we talk about Higher Education at the highest proven value, weve frozen tuition last year this year. It will be frozen again next year. We reduced the price of room and board by 10 . Meanwhile were making Major Investments in what is already one of the worlds finest engineering programs. National Commission Says we need 10,000 more engineers a year in america. We at purdue plan to supply 5 to 8 of that just as one school. So i think its a really important time to affirm the importance and the value of Higher Education even as we do address some of the very real problems of cost accessibility, and accountability that have grown up over the last few decades. Is it difficult to get students to apply to be engineers . Do you turn them away . Are they not qualified . I dont understand where the breakdown first starts. I think its really changing. We have an alltime Record Number of applications at purdue this year. Its up more than 15 than any other university weve talked to. A lot of those are for engineering, Computer Science. We had the first Computer Science department in the world. 50 years old last year. I think theres a lot more interest at lot more awareness now among young people the importance of Science Technology and math. And that great careers await those who do develop some mastery of that. You know, somebodys got a list of the 12 best paying occupations for new college graduates. And at our school for instance we teach 11 of the 12. So we are seeing a lot of interests. I hope its a manifestation of a national trend. Governor do you run i mean, can you run purdue . You were quoting saying guess what we spent less than we took in and that actually works. Can that be done at college and universities . Well, sure. You know i think in our commitment to get off the tuition increase escalator purdue like most every other School Tuition had gone up 36 years in a row. We said lets try Something Different. I was saying lets try to adjust our spending to the budgets of our students families instead of requiring them to do the opposite. And it hasnt proven that difficult so far. Its a bit like having an arbitrary limit, lets say a balanced Budget Amendment in a public responsibility and a governmental responsibility. If the limit is there, people begin to become a little more imaginative about how to meet it. So its as everywhere else the Decision Making has to be shared. But i think we have common purpose at our school. And our students and families are responding. And you are youre truly a bipartisan College President now, i can see. I wont even ask you about the republican field and who should run. I dont think id get an answer. I couldnt even get you to brag on the progrowth policies of indiana that much. You want all kinds coming into purdue. Everybody can be an engineer. You better work hard though. I got plenty to keep me busy. That was then and this is now. Okay. All right. Im sure off camera i could get good stuff out of you. Anyway, we appreciate it. Thank you. When we come back this morning, is housing on firm footing . Well find out with the latest read on Housing Starts. Plus a couple of tech names to keep an eye on in todays trading session. Well keep an eye on apple and a streaming service. Plus well preview the Conference Call at tesla. Stick around. Squawk box will be right back. Building aircraft, the likes of which the world has never seen. This is what we do. Thats the value of performance. Northrop grumman. Music etta james at last plays throughout sometimes, at last doesnt happen at first. Your dad just kissed my mom. Turning two worlds into one takes love. Helping protect that world takes state farm. Welcome back to squawk box. Breaking news. Starts and permits for february out and theres a big miss. 17 drop on starts to an annualized unit at the pace of 897,000. Below 900. And last look actually revised higher somewhat exaggerates the move. 1. 56 million now stands at 1. 08. And if we look at permits, completely different scenario. Theyre actually up several percent. Last month stands at a slightly revised 1. 06. From there we move to the current number 1. 092. So slightly over a million. Units in terms of permits. When was the last time we saw a sub900,000 starts number . We had exactly the same number in january of last year. But we have to back to september of 2013 to find a smaller number at 87363,000 spopz we will have to factor this in. One of the interesting things today is equity markets are down in europe. Why . Twofold. They have data in germany they werent enamored with. But heres the interesting one. On the spread between u. S. And europe, theyre now looking at our markets and our data and thinking maybe janet yellen is not going to be rushing to remove accommodation. Thereby narrowing the spread. This is a dynamic we better start getting used to as we handicap one central bank versus another while we push paper and ignore our Structural Reforms that are much needed. Back to everyone at the desk. Thank you, rick. Were going to talk about apple tv. Reports right now that apple is in talks to launch an Online Tv Service this fall appealing to the millennial generation. What does the new push say about the future of cable and how we consume it and consume content . Walter isaacson is former ceo of cnn and a cnbc contributor. And of course the author of the great biography about steve jobs. And you hinted tv was coming. We might finally have it now, walter. Yeah. Steve jobs never really talked to me about the physical tv set. He was always interested in an integrated product that makes it easy to get the content through good content management good software, good piece of hardware. The tough thing about tv is getting the content. When steve jobs was alive, he could push cajole sometimes brow beat the kmuk companies to put their songs as single songs on the itune store. Its been harder to get the Television Content providers and others to play along. Especially since the cable providers want to keep control of that pipeline. Walter whats the future of tv content . So far its felt like the golden age for television. But tell me with apple jumping in here and weve seen sling with this other package, youre starting to see the unbundle. Does this start to look like the Music Industry . Or do you think it holds on and is stronger in the future . Well, im talking to you from austin where im at south by southwest and theres a whole lot of people going into content. Why is tv entering the golden age . Because theyre new models. You start getting a real rush for content. And i think that if apple does that, its not just going to be streaming video. Theyre just going to have a library of great content and allow people maybe even people like down here at south by to sell it so they can get what they want when they want on any device they want instead of being tethered to a linear tv. That sounds like what we already have with netflix and hulu and a host of others. Is apple getting involved at a turning point or is this just another drip in the bucket that eventually gets us where were going . I think its more of a big splash in the bucket when apple gets into something. And youre right. This is a trend. I was on your set a couple weeks ago when we talked about hbo saying it was going to do this. I think now people have always said the unbundling of the cable model will happen soon. But, boom its happening this year. It gets even into the Net Neutrality debate. I know joe and i talked about it on your set a couple weeks ago. But its important for apple at least that they can have some cable providers say to them were going to give other people fast lanes and your content is going to be slower. The notion nobody can get a fast lane means a whole lot of people can splash in this bucket to keep our metaphor going. The thing im trying to understand is the economics of content. When i say the golden age of content right now, its not only that the content has been great. Its that the economics have been spectacular. And the question is in an unbundled world, are the economics still spectacular . Yes. I mean i live unfortunately in a print journalism world where it got unbundled but nobody paid for it. All you had was advertising support. If you look at netflix, amazon whatever, theyre charging the consumer 25 30 40 bucks a month. So theres going to be a lot of consumers paying money, buying content. And i think its a golden age for it. Its like the music Business People were giving it away for free for awhile or stealing it. In this model people seem willing to pay a monthly fee to get a great package of services. So tv contents not like print . Well, i will tell you that i really im older than you, andrew, by a little bit and i can remember when everybody 30 years ago say content is king. Content is king. Then the internet came along which said content was not king because it was really those who bundled it. Those who created the internet package. Now that you can get whatever you want on whatever device you want people who make good content will be in demand. People will be saying i need that movie, that show that house of cards. That was me joe, walter. But the point stands. You are older than me as well. Oh, really. Okay. Cant quite remember. Youre right. We may be close. Were contemporaries. But were both very wise at least with our age. Or we play so on tv. Real quick before you go generationally are there people you think that are going to not just the cord cutters that will join up with an apple, but are there people who are going to cut the cord and then move to one of these new packages . How quickly do you anticipate that transition if you think that transition is coming . I think itll come in about a week or two. Theres nobody here in austin at south by who is talking about cable or signing off or whatever. Theyre talking about how do i get content on my devices. And i think, you know if you take 90 of the people Walking Around here in austin who are in their 20s, theyre not theyre going to be signing up for all sorts of content. But theyre not going to be people who the real question and eric schmidt and i taubt it. Will there be people trying to get into the home. Thats the bottle neck bhop can get your broadband into the home. If you think its great for content companies, it may not be good for the Cable Companies for the pipes except that theyre still the only way to get in with the Internet Access. So for now they may still hold something of a draw there. But you think thats eventually going to get watered down. Well if theres more competition offering broadband to the home and thats why the Net Neutrality debate is a complex one. You want to have incentives for other companies to build a pipe. The hardest part is usually that last mile or even from the curb into the house. Those are difficult things to do. But with new types of Technology Even 4g, 5g, its possible to have four or five choices of broadband into the home in a few years. But youre right. Thats why the Cable Companies are still in the saddle. Theyre this ones that bring the cable cords into your living room in most places. Okay. Walter thanks so much. Have fun at south by southwest. Couple of years, walter. Definitely i can see now. I looked it up. You got me by a few years. But you look young and look good. Its my gray hair that does it. Up next the surging dollar hitting business abroader report by fire app showing 19 billion was lost by u. S. Companies in the Fourth Quarter just on the translation. And the worst is yet to come. The ceo at fire apps joins us to explain. So whats going on today . News alert message email calendar update most of us admit to being overwhelmed by information at work. Thats why ibm created verse. It uses powerful analytics to uncover hidden patterns in your email, calendars and social feeds. It continuously learns how you work. And helps you prioritize the people and projects you need to focus on. Theres a new way to work and its made with ibm. Take a look at the futures this morning, everybody. Youre going to see that we are still seeing these red arrows. In fact, theyve gotten a little more steep as the mornings gone on. Right now the dow futures down 90 points below fair value. S p futures off by 10. Nasdaq off by 10. This is after an update for markets too. Housing plunging last month due to the harsh winter weather. February starts dropping 17 in january. Meantime improved Building Permits rose 3 37 and again you just saw the futures, whats been happening with that. Were also watching oil prices this morning. Theyve been under pressure as well. This is a steady downstream weve been watching. Wti, 43. 18. We broke through 43 earlier this morning. We were looking at 42. 99. Thats a decline of 1. 6 . Investors expecting big returns this year from exposure to european markets. They may be in for a surprise thanks to a drop in the euro. Michelle carusocabrera is here to help explain. We spent a lot of time talking about the big rally weve seen in european markets for sure. And its been a big one. But when you are an american which is to say a dollarbased investor to make those moves actionable to your portfolio is more difficult. Lets bring up this full screen which show yous the year to date for the euro based stock markets over in europe. And then what the year to date return would be for a dollarbased buyer. Big difference. France up 18 year to date. But if you bought it in dollars so you lost on that trade, its only up 4 . Spain, youre actually negative even though its up 8 year to date if youre european euro based buyer. Germany, big spread there. Up 24 but only a gain of 9 based in dollars. This is why if you look at this performance of what we call the ewg versus the hewg. The ewg which you see there in white is unhedged. He hewg is hedged. Here is the hewg. The thing is when youre going to buy an etf like this remember theres fees. They may not get the hedging right. It comes out of the cost of nav so its not risk fee. This is a popular way to play it because people have become aware of this. But its not for certain. No. As you point out, theres a lot of ways that they can get taken back out. Something to keep in mind. Simple idea. But people dont necessarily think about it unless they try to execute the trade. Currency swings as you can see there just cost u. S. Companies 19 billion last quarter alone. 63 of the companies reported. Multinationals like google and pfizer and then helps the Companies Manage the currency exposure. Lets get to the man behind the numbers. Wolfgang hoster. What fire apps is is a Technology Firm that helps Companies Understand then measure and manage currency risk. Its more of a Technology Firm that helps Companies Understand. I had a call this morning where people were panicking saying i need to manage this better. How do i do that. And the first and fundamental question is what are your exposures. We help the Companies Understand their exposures. Once you help them understand it they have to do something with futures. No . Well, at the end of the day, one of the options are then to go look at either futures or the cash markets, et cetera to look at how one can hedge it. But theres some internal things people can do operationally. Maybe shift expenses around. The fundamental question is when i go hedging is i need to understand my exposures. And right now the euro and the dollar is very much in there. The Typical Company has 150 to 200 Currency Pairs all over the world. It isnt just euro dollar although a big impact for this quarter. But people are talking about what do i do with china . Brazil . How do i manage all exposures . And i guess to comply with tax guidelines both here and in every other country youre dealing with to be able to manage expenses move things around, you need to be an expert almost everywhere, dont you . You do. And thats its a very complex problem, or it can be if youre using manual processes and trying to support that with spread sheets. At the end of the day, in todays world like many other technologies, youre moving forward. There are technologies to help you understand that with a push of a button. You talked earlier about google. If you look at their earnings report, you say currency is a nonevent. We have the technology to support it. No surprises here. So there are lots of companies who actually do this very well. Yet you still have quite a few companies as you saw in that report. We look at roughly 1200 companies around the world as a sample size. Then we look at whos reporting what. And the report talks about what they actually report. It isnt even extropapolateing anything. The important part of while the 19 billion is obviously a big number, the important number here is you have companies that are surprised by 6 cent earnings per share impact. The benchmark literally is 1 cent or less. 1 cent or less is immaterial. When youre talking about 6 cents as you well know on a quarterly basis thats often much more than the guidance difference between if you want low and high. So its a major number that companies and therefore investors are getting surprised with. Weve got to end, but wolfgang do you need as a company to have great forecasters in terms of fluxuations or it doesnt matter if youre good at that . If youre good at it you understand your forecast and youre able with technology to compare to it your actuals. So the problem is im going to forecast this and i need people to understand the forecast. But then ive got to look at what happened. Weve got to go. Should i stay short the euro or should i cover . You know what . I dont know. Stay currency agnostic. Thats what i mean. Okay. So youre doing stuff at the margin not necessarily making it that way. We appreciate it. Yeah. Its not our business to speculate in currencies. Its to run a solid business without surprises. Would have been nice to speculate at 1. 40. You know you wouldnt have to have a business. Anyway, thank you. Up next weve got jim cramer whos going to be joining us on apple, tesla st. Patricks day, and more. Plus could tim tebow be thinking about a return to football . He was working out with jims beloved eagles. Well get his take next. The future of the market is never clear. But at t. Rowe price we can help guide your retirement savings. Our experience is one reason 100 of our Retirement Funds beat their 10year lipper averages. So wherever your longterm goals take you we can help you feel confident. Request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing. Call us or your advisor. T. Rowe price. Invest with confidence. Lets get down to the New York Stock Exchange imjim cramer joins us now. Tim tebow, tim, thats the answer i think. I think chip kellys an openminded fellow and will look at anybody. Adam said that lasted a couple of minutes. People are trying to puzzle over what chips up to. He took two ws away from dallas and i think hes building a defense and hes been the winner in free agency owe than the indianapolis colts. I just think that people dont get him. They dont get how smart he is. They continue to decide hes not as great as he is. Im all in chip kelly the whole way. Werent you wavering with the first move. Confused by mccoy. What happens you get attached. I mean i have three mccoy jerseys, i felt the organization loved mccoy. When you switch quickly, it becomes like what am i supposed to do here . But it all came clear when he decided to get a running back. Look at all of it as a piece because i was confused. Are you as bad as that de niro character in my father and i used to joke about that movie, it was about us, particularly the dallas game. But you know what . Look, im a huge eagles fan, i will support them. In the year they won four games with andy reid i supported andy reid. I love the eagles. You throw a book through the window at 3 00 a. M. In the morning because you dont like the ending . No comment. Theres been some problems securitywise coming out of games. Thanks. People have talked to me about the show and its a big mistake after the loss. Dont come next to me do not talk to me about the show. Mr. Cramer mad money. Someone said a bad thing about mcnabb and my father said someones going to hit that guy if he keeps it up dad was right. All right. Cramer, see you in a while. Thanks guys. Tesla set to hold a press conference this afternoon. Elon musk hinting the carmakers about to end range anxiety. Well talk stock price and the companys Business Model after the break. E financial noise financial noise financial noise financial noise 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 . Help northern china reduce its reliance on coal fire heating plants and prevent 60 million tons of co2 emissions . When emerson takes up the challenge its never been done before simply becomes consider it solved. Emerson. Heres todays watch list. The fed is in the spotlight as it starts a twoday meeting. It is widely expected the fed will drop the word patient in describing its stance on raising rates. Key earning after the bell. Adobe systems and oracle. Investors want to watch shares of tesla. Ceo elon musk speaking at nvidias conference in san jose later today. Weve got more month tesla now. Joined by james albertine. What exactly do you think were going to learn this afternoon, james . Yeah, look i think a lot of folks are focused on tesla right now. We havent seen many catalysts from the company, so folks are speculative around demand and the lack thereof in china and issues with respect to longerterm demand outlook. This is a very important opportunity for tesla to draw its attention backer to where they stand from a competitive standpoint with range. The Magic Technology . We were at the factory last week. I think we one 0 the things we saw with the transition from the fourth generation to the fifth generation battery cell technology, we think theyre going to slow they have further extentded leadership with extone range. The most important catalyst for 2015. Missteps in china, are you feeling okay about some of that . Do you think its worse than we know . I think it might be worse than we know worse than what tesla eluded to midpoint last year. That also assumes the rest of the Global Demand for model s is worse than we thought. I dont think that to be the case. Plenty of offsets globally. One issue were taking note of but we remain positive and believe the rest of the storys very strong. How do you get to 400 . Were looking at a fully bakes model s and model x rollout, 100,000 units bridges 2016, 2017 time frame. At that point we think that rate will give confidence in 500,000unit target for 2020 five times average auto manufacturers, 25 times ebitda. James, appreciate it very much. Thank you. We have lets go over your brackets. We have nine seconds. Cant do that. Happy st. Patricks day. Happy st. Patricks day. Wear some green tomorrow. Green tomorrow. Join us tomorrow to see andrew in green. Wore green so you could hide from me. Squawk on the street is coming up right now. Good tuesday morning. Happy st. Patricks day. Welcome to squawk on the street. Im Carl Quintanilla with jim cramer at the New York Stock Exchangen david faber is off today. Stocks look soft ahead of the open as we kick off day one of a twoday fed meeting. Oil did fall below 43 this morning. Talk of gasoline going back to 2 on average. Tenyear yield, above 2. 05. Ho