Transcripts For CNBC Squawk Box 20160311

Good morning, everybody. Welcome to squawk box here on cnbc. Im becky quick along with Andrew Ross Sorkin and Michelle Caruso cabrera. Joe is off today. Lots to cover on this friday morning. Everything from this civil gop debate in miami to apple and the fbi trading blows over its encryption battle. Check out the futures. Theyre in rally mode this morning. The ecb moves still in the market. Yesterday, the knee jerk reaction was a positive one. You saw markets up across the globe. By the enof the conversation, though, the ecb head mario draghi making comments that this might be the last that they needed to offer easing. You saw the markets go down before eventually finishing flat. This morning, doe up by 170 points, s p futures up by 20 and the nasdaq up by 52. In europe, you see big rallies there, too. The dax is up by 2. 8 . The ftse is up by 1. 5 . If you check out the currency markets, this is the story. The euro was down to 108 initially on this news all the way up to 112. You can see this morning, the dollar is up against the euro at 110. 83. Dollar again is 113. 77. That was aastonishing to watch. It was unbelievable to have that much volatility. Just crazy and just the opposite of what mario draghi wanted. It felt very much like that moment when japan stunned the world. They go to negative Interest Rates. What does the yen do . It surges instead. It didnt make any sense. So today we see what we would have expected to be the reaction. Although this is still higher than before the move. Exactly. Yesterday we were at 109. This has not has not worked out the way they wanted it to. Crude creeping up on 40 a barrel. The International Energy agency saying Oil Prices May have bottomed. The iea also says the increase supply for iran has been less than expected. The agency now believes nonopec production will fall by 750,000 Barrels Per Day in 2016 compared to their previous establishment th estimate that it will fall. Brent is back above 40, 40. 77 for delivery in may. Natural gas at 1. 80 here. We havent talked a lot better. Maybe its finally come off the bottom there, as well. Check out stocks to watch this morning. Its going to vigorously fight a lawsuit that suggestion its trying to keep the company from opening a Second Company owned dealership. This would allow them. They think they should be allowed to do more. Theres a settlement that allows them to only do one. Reporting earnings that beat on the top and bottom line, offering upbeat guidance to speed up its Share Buyback program. Reporting higher Fourth Quarter profits, but revenue missed estimates. The guidance for the year was at the low end of consensus. Froied chicken chain bojangles beat establishments with a quarterly profit of 22 cents a share. Revenue was above forecasts. Also, Action Sports retailer zumi says the sales in the Current Quarter will decline because of weakness at its existing stores. The company says its disapointsed by its performance even though it considered the current retail environment challenging. We see it before. Mellow in miami. What is that will smith song . Welcome to miami. Thats one way we could describe last nights gop debate. That can be good . For the Republican Party, its good. What we saw last night, if you were surfing channels and you thought you were looking for Pro Wrestling and you ended uplanding on the checkers championship, thats what this debate was. It was very subdued. You had discussion of policy, donald trump for example for the first time, so far as i know, came out and said he supported president obamas decision to open relations with cuba, although he said he could cut a better deal. This is something that was a little surprising coming in florida. And you had discussion of trade policy. This is one of the ways donald trump is most severely challenging. Ted cruise went after him and donald trump had a response. Take a listen. The effect of the 45 tariff would be when you go to the store, when you go to walmart, when youre shopping for your kids, the prices you pay go up 45 . But not only that, when you put those in place, because the terrorist attacks on you, the american people, but the response of that is that the countries we trade with put in their own tariff. The 45 tax is a threat. It is not a tax, it is a threat. It will be a tax if they dont behave. And this is how donald trump has reconciled what he told the New York Times editorialal board. This became a Sticking Point a couple of weeks ago when he had done ta interview, the times published some things and there was some idea that there were some off the record stuff that wasnt being released. But donald trump is now saying, yeah, i said a 45 tax, but it was not actually a proposal. It was bluster. Theyve been saying frequently that donald trump suggested that was a starting point for motions is a way to come up with. Donald trump has been very adept of very quickly reversing things that he said before and saying, oh, well, i didnt mean that or you took it the wrong way or whatever. But that can be a skill in a politician and it can be a detriment. We had him on yesterday and you said, look, a lot of this is now these are going to be things that are kind of a negotiation, as you said. The other thing that was mailable was the performance of marco rubio. Marco rubio has been extremely aggressive going after trump. It hasnt really worked for him. Hes approaching what may be the end point of his campaign, the florida primary. And he took a higher tone. Exactly. John kasichs whole stock in trade has been im running a positive campaign. Donald trump is closing in on a nomination, so its more valuable to him. He doesnt want to hurt the brand. Hes trying to be more statsman like. The one who still has the strongest incentive to go after donald trump, and maybe well see more of that, is ted cruz because ted cruz appears to be closer to the oneonone matchup he wanted, although cassic i just have a question about the malleable idea. The good way to position it would be to suggest malleable. The less con b and but his supporters dont seem to care. But is there a time that they will . Or is he so malleable that its a benefit rather than a distraction . If youre donald trump and youre campaign is in motion and tapping into the frustration and anxiety and anger people have about the economy not working for them, the words dont matter so much. Its about emotion. Where its more significant, though, is if you get into a general election, im pretty confident that Hillary Clintons campaign will know how to attack that and its a different deal when youre talking general election audience. Its my understanding that they told the crowd that whoever won the nomination, the party would support. Thats a big deal, isnt it . Rice has a challenging job of keeping this party together. If donald trump goes to the convention and has a lead but doesnt have a majority and somehow a deal is worked out that somebody else gets the nomination, you have a real danger of a fracture in the Republican Party. You have a danger of a fracture if donald trump is the fomny because some of the Establishment Republicans dont like him, but previous, understandably with is trying to keep it together. Stim around. Were going to continue this conversation right now. Rick, youve been hearing what weve been talking about here. Sure. Morning. And the possibility for that in the future or at least that cruz might need to pursue a mudslinging campaign to go head to head. Does he have to do that . Look, i want to pick up on one thing that was previously said. Rice said he would support the nominee of the party. And the convention is where we have the nominee. So is he saying that uhhuh. The person who gets there with the most delegates is the nominee or the person would comes out of the convention is the nominee. Heem are asking that one. I liked the debate because it was more civil. John kasich was able to distinguish himself. I thought that on policy issues, ted cruz was substantive. I thought marco rubio did a good job. Donald trump is the frontrunner, but it looks like he had a lot of policy holes in his committee. He didnt convey to me that he was very comfortable talking about policy. He seemed to avoid all the details and specifics that he was add. Sure. Do you think that if trump goes into the convention and repeats the argument that he made on the stage last night, which is, hey, look, the majority is a random number. If the person who walks into the convention with the most delegates ought to be the nominee, how powerful an argument do you think that is at a republican vengz . But what i think is if he goes to the convention and hes got the most delegates but doesnt have the requisite number of delegates, the party will say that you have to have a majority, 1,237 delegates and if he doesnt have those, there will be an argument made that hes on equal footing with anybody else who the convention wants to put in nomination. You dont think you can power through by saying ive got the most, its logical, i should be the winner . Its all depends on whos in the room. A lot of the delegates that were going to the convention, most of them these people have known the party rules for a long time. They live to go to the convention. They may or may not be donald Trump Supporters. So it will be interesting to see who those people are and but rick, thats the party of delegates who knows these rules. That is not something that a lot of Trump Supporters and a lot of Republican Voters at this point are familiar with those nerves. Thats exactly the point im making. Even if the delegates go and say this is the case, doesnt that risk alienating so much . Its been a huge turnout. There is no question that if donald trump goes to the convention with the most delegates, but not the requisite number, not the majority, and he is denied the nom nailg nation, there will be a lot of people upset. The question is who r people that are going to be upset . Have they been part of the process . And that leads to the question of in november, if they are disfranchised or they had their nominee stolen from them, do they know out, do they set it out or. Going back to the question we were talking about earlier, does policy matter . It doesnt seem to. And ill tell you, when i was with the cruz campaign, we talked a lot about policy and policy rollouts. And the team that had the most pape policy rollouts that i recall was the jeb bush campaign. And the team that had the least amount of policy rollouts was donald trump been. I think youre cutting people short. People are very focused on one policy, what happened to middle class income for the last ten or 15 years and theyre very focused on that policy which is going to help them. And what they hear, and they think a lot about trade, theyre listen to go that particular policy right now. And what they hear from dtd downto downtown. So i think youre cutting people short when you say it doesnt matter what the policy is. On trade, donald trump has been specific when he talks about his what tariff. Yeah. But donald trump the problem with donald trump is that he will change his mind. He talked about visas and changed his mind within an hour and a half. So which is it, donald . Is it a 45 tax or was that bluster, is it negotiating or is that how youre going to conduct trade . Are you really going to have a trade war or is that the opening gamut . We dont know. The ted going to lose points on this . Ted cruz last night says, listen, donald does well on voters that have they are relatively smart, educated people who are now supporting donald trump. Does that make it harder for ted cruise . Well, it depends. Look, the fact is is that if you look at what donald trump i think what he meant was, if you go over the statistics, its a hard and fast number. It appears to be that people that do want have a car. I dont think he meant stupid or to denigrate. Its just that the people who are getting hammered the most, and are falling behind. That is a group that donald trump has certainly emotionally connected to. And they believe that he can fix this. So at least theyre so sick and tired of washington. Very quick answer, if youre ted cruz, what is the number one issue that you want to engage donald trump in economically to try to overturn the preassumption that hes going to be the nominee . Is it trade . Its a combination in terms of trade in terms of what is going to create more jobs. And ted cruz made the point last night, when you have a trade war, youre hammering the american consumer. Secondly, who do we best create jobs . He prepares the tax plan. Donald trumps tax plan seems to be pro growth, but it contains huge debts and deficits going forward. So i think he has to engage both of those issues. And i think that donald trump has not been particularly specific or at least not consistent when he talks about policy. I think ted cruz has been. Weerg going to leave it there. Donald trump will be speaking again this morning. Also, ben carson came out and supported the trump campaign. That is the lead of the New York Post today, too. The department of justice pushing back against apple in the fight to unlock that iphone linked to the San Bernardino shooters. Aman joins us now. This was an absolutely blistering exchange yesterday between the department of justice and apple. It was a new filing by the government. Sayeed farouks iphone and whether the government should be allowed to have access to that. Here is what the department of justice wrote, saying apple attacked the all wits act as archaic, the politic order leading to a police state and the fbis investigation shoddy while ex tolling itself as the primary guardian of americans privacy. Apple fired back and said in 30 years of practice, i dont think ive ever seen a legal brief that was more intended to mere the other side with fall accusations and innuendo and less intended to focus on the real merits of the case. Apple said it was deeply offensive, it was xheening and essentially the government is calling us liers. So this is getting very personal between apple and the u. S. Government. Were head to go a march 22nd hearing in front of a magistrate judge. There we should see both sides in court arguing out these same courses theyre taking on basement now. And if you have if the house doesnt pass this bill and then a judge decides that actually hes going to do what the house wouldnt, it becomes complicated. Yeah, andrew, i think its a pretty safe assumption that congress is not going to do anything this year. This is a bitterly divided congress between republicans and democrats. Most of them are running for reelection. It is a president ial election year. Weve got gridlock, anyway, in washington. So Congress Might be the logical place to look for a solution to this problem, but you cant this year. That question was put to the apple attorneys last night on their Conference Call and they said that what they would like to see, ultimately, is a legislative solution here. Theyre asking for congress to get involved, but the practical reality is thats not likely to happen. Thank you for that. You bet. Coming up, when we return, has the small investors returned to the market . Well tell but a long losing streak that has finally been snapped up. Well talk about Jessica Albas Honest Company now getting called out by the wall street journ journal. Weve got that coming up. Hey hows it going, hotcakes . Hotcakes. This place has hotcakes. So why arent they selling like hotcakes . With comcast Business Internet and wifi pro, they could be. Just add a customized message to your wifi pro splash page and youll reach your customers where their eyes are already on their devices. Order up. Its more than just wifi, it can help grow your business. You dont see that every day. Introducing wifi pro, wifi that helps grow your business. Comcast business. Built for business. Welcome back to squawk box opinion well show you whats going on with the futures. Dow would open higher by 175 points, s p by 21 and the nasdaq by 24. So reversing a lot of what we saw yesterday. European market are sharply higher. Bridge Water Associates hired a Long Time Technology executive who spent years working with steve jobs. John bergsteen will be joining them in may. And another executive who was the ceo . They were going to have votes. They were having votes on their iphones, literally asking people to vote about their credible with each other. This is part of their add caltrans parentsy, i guess. Thats cio and coos are going to be separate. Pretty interesting hes bringing on a knowledge and not an investor. Sort of maybe operations . And thats the way theyre thinking about it. Two cios and two ceos. That sounds awful to me. Daily its running almost li massive social experiment in terms of how people work together. 280 rules. Theres lots of rules. But its transparent. Usa stock funds, its notable because the strength the fund outflows. The ecb pulling out all the stops, cutting rates and expanding qe. Joining us right now with where the markets are headed is lorraine simmer. If you dont like the way the markets are trading, wait an hour or so. Yesterday was a chaotic day, a lot of different responses. How are you thinking about what the ecb did and how should we view stocks through that prison . Good morning. Of course, the market is always very volatile. You see that with the fed. I think what yesterday showed was that the ecb basically overdelivered in every way. Its actually going to pay banks to lend money out. But yet the markets seized on one thing about maybe this is the last rate cut. And it just shows you how nervous the market is about how much longer Central Banks can keep stimulating things and i think part of the decline we saw a month or two ago was about that sort of that end game. Its like how negative can rates get, at what point does it back fire. And so i think the market is kind of looking almost to the exit saying, you know, where is this going to end . And ultimately, what the ecb and the bank of japan and the pboc do have very important. But the most important central bank is still the fed. And i think now were going to go back to what is this going to do and when . Because what the fed does relative to what europe and japan do sets the tone for the dollar and when the dollar goes up, the denies fall, so thats the lens through which im looking at this. Lets talk a about all cough things. There have been two camps of people. One that negative Interest Rates dont work and this is stupid and we dont care what the Central Banks are doing. And theres the net camp of people saying thats what explained yesterday. However, i like what you just said, which is first of all, we were worried yesterday because the ecb suggested this could be the end of cuts and i think its more that people are traders are really addicted to the money at this idea. They love what they initially heard. The selloff came when it sounded like the ecb could be wrapping things up. But now, as you said, theyre looking forward to the fed and what the ecb did yesterday was enough to keep the fed on hold and keep them from tightening, at least for a little while longer. So now that idea and the free money being around for a while, at least a little tightening coming, maybe thats what thickened things up today . Yeah. So in japan, no kidding. The bank has the pay and they cant pats pass that through to the consumers. I think what happened. Europe yesterday is the ecb is trying to keep the banks going. So its paying them to lend money. And in europe where the cycle is maybe two, three years behind the cycle, theres not a lot of demand for credit and also the banks there are not as healthy as they are in the u. S. Capital ratios are different. So its a little bit of a pushing on a string phenomenon. And so i do think there is a sense like, okay, what else is left . And, of course, what else is left is the high monetary can fiscal, which is what mario draghi has been saying for a number of years yet. What if its more sinister. You just talked about japan goes to negative Interest Rates and the yen surges. That is not what they wanted to happen. That is not what they expected to happen. The ecb does what it does yesterday. The euro is higher than when he started. That is not what was supposed to happen. That is not that they just really more. That has of some kind of im pri for the fed. The u. S. Economy is doing fine. Certainly on the consumption side. We have this global trade recession, of course, which is way down. But unrelying at all, the u. S. Economy is in decent shape. But were living in a global economy. So the fed has been trying to lift rates now for a while. Tried in september, didnt work. In december, they went ahead. March, theyre not going to go. And maybe in june, although the market is not pricing that in. I think for investors, the fundamentals are still okay. And you still weve come back so far off the lows. I think investors who are investing they should stay investing. But you wouldnt put new money to work . If i had men to put to work right now, i would probably dollar cost average in and putting it all in today. Coming up, uber drivers get ready. A looming strike one of the nations busiest Commuter Railways. Could leave thousands scrambling for a right into the city come thursday. Dirty laundry, Jessica Albas laundry detergent is c l called out. Your business is on hold. Thats why comcast business doesnt leave you there. When you call, a Small Business expert will answer you in about 30 seconds. No annoying hold music. Just a real person, real fast. Whenever you need them. Great, thats what i said. So your business can get back to business. Sounds like my rides ready. Dont get stuck on hold. Reach an expert fast. Comcast business. Built for business. We believe in the power of active management. Management, by debating our research to find the best investments. By looking at global and local insights to benefit from different points of view. And by consistently breaking apart risk to focus on longterm value. We actively manage with expertise and conviction. So you can invest with more certainty. Mfs. Thats the power of active management. In new york state, we believe tomorrow starts today. All across the state, the economy is growing, with creative new business incentives, and the lowest taxes in decades, attracting the talent and companies of tomorrow. Like in buffalo, where the largest solar gigafactory in the western hemisphere will soon energize the world. And in syracuse, where imagination is in production. Let us help grow your companys tomorrow today at business. Ny. Gov ashley bryant, you are a teacher of small children. Thats right. I have read it is the hardest job in the world. Thats why im here. Can you. I can offer advice from the accumulated knowledge of other educators. Thats wonderful but. I can tailor a curriculum for each student by crossreferencing aptitude, development, geography. Sorry to interrupt. But i just have one question how do i keep them quiet . pause watson . There is no known solution. Welcome back to squawk box. The jessica alba company, honest, which built a reputation on being environmentally friendly is being called out by the wall street journal for not being quite so honest. The paper commissioned some Lab Tests Showing the laundry detergent used some chemical that it swore it never used. But Jessica Albas company is fighting back. Maybe i dont understand the results or something. And by the way within the name . Openest . The thing that bothers you did most well, its not a good name if youre not going to be honest. If youre going the be dishonest. The thing that bothered me the most is when they went after the honest hopper. And Honest Company tried to shut her down because they said they own all things honest. So that bothered me, like just bullying a woman who is the concept. Yeah. I bet you they are the only ones who are honest, right . Give me a break. We should tell you about another story, the Wounded Warrior project fired its ceo and chief operating officer amid wasting spending allegeds. It was only spending 360 of its revenue on veterans. If you look at other charities, they run 10 to 15 overhead numbers, not 40 to 50 . 85 to 90 is then spent on the actual veterans. That is something you can check out. They were doing all kinds of big charities. Bigger treats for staff and Different Things. If youre managing 340 million is that the number were talking about . Getting paid 250,000 to manage 340 million they had a lot less than that. No, 340 million. Do you think thats a fair number . Its not the pay that concerns me. Im on the board of a charity and i know what we pay, and i think thats absolutely a fine salary. The overall amount going to xharty that youre supposedly representing. Now, thats not to say that there was no money going there. It was 50 to 60 . But if you compare that with where your money is being best spent, if youre interested in charitable giving, you want to know the majority of your money is going towards. Its good to see the boys steps in and give action and its good to know that these Charity Watch dogs exist. News you should be worried about, new Jersey Transit talks ending thursday without an agreement, boosting the odds of a strike weekend, which would leave hundreds of thousands of commuters stranded and costing businesses big bucks, as well approximately Morgan Brennen joins us with more, as well. Rail workers could strike starting sunday. It would be the first strike in 33 years, which would shut down the countrys third busiest Commuter Rail line and affect nearly 100,000 commuters between new jersey and new york. And officials warn than an additional 1,000 people could create sxwrurs. Thats exactly true for the finance sector. City group, for one, said it would modify that. The strike could affect fleet railroads that use new Jersey Transit track, causing diversions even in worst Case Scenarios surface interpretations. Csx says it doesnt, quote, anticipate significant operational impacts, but that it is monitoring the situation. At stake, the unions want wage increases, they want Lower Health Care costs. The august a argues that could pop and the two sides meet again today to talk. But were getting down to the wire here. Michelle. There is a situation where washington could step in. Right. And say you cant theres certain laws, Like Airlines and washington can step in. I heard some of the background on this and i forget exactly what the details are. I dont know if you know exactly whats going on. The other question issis christie has been on vacation this week. Weve seen a number of slamming reports this week that hes been on vacation for his 30th anniversary. He says hes still checking in, keeping an eye ol situation. Its specifically the rail workers that are allowing to strike st starting tuesday. Coming up, the long arm of the law behind a biorumor. And then the encryption battle between apple and the fbi getting very heated. Former ci adirector james woolsy weighs in on a security case that 2k3wri7s the nation. My staff could use your help staying in touch with customers. At t can help you stay connected. Am i seeing double . No maam. Our at t buy one get one free makes it easier for your staff to send appointment reminders to your customers. And share promotions on social media . You know it now im seeing dollar signs. You should probably get your eyes checked. Good one babe. Optometry humor. Right now get up to 650 in credits to help you switch to at t. This just got interesting. Why pause to take a pill . Or stop to find a bathroom . Cialis for daily use is approved to treat both erectile dysfunction and the urinary symptoms of bph, like needing to go frequently, day or night. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex do not take cialis if you take nitrates for chest pain, or adempas for pulmonary hypertension, as it may cause an unsafe drop in blood pressure. Do not drink alcohol in excess. Side effects may include headache, upset stomach, delayed backache or muscle ache. To avoid longterm injury, get medical help right away for an erection lasting more than four hours. If you have any sudden decrease or loss in hearing or vision, or any symptoms of an allergic reaction, stop taking cialis and get medical help right away. Ask your doctor about cialis and a 200 savings card when youre on hold,nd get your business is on hold. Thats why comcast business doesnt leave you there. When you call, a Small Business expert will answer you in about 30 seconds. No annoying hold music. Just a real person, real fast. Whenever you need them. Great, thats what i said. So your business can get back to business. Sounds like my rides ready. Dont get stuck on hold. Reach an expert fast. Comcast business. Built for business. Welcome back, everybody. The u. S. Equity futures at this hour are kited sharply higher. This is a reversal of what we saw during much of the day yesterday. You can see right now the dow futures are up about 157 points. Of course, by the end of the day, things have flattened out and you are looking at markets that closed right around zero. But this morning, you are looking at a gain of 157 points for the dow and a gain of 18 points fair value for s p futures, up about 48 for nasdaq. The man behind last years a von buyout hoax has been arrested and charged with market manipulation and insider trading. Medvo nedev, is that fair enough . Yes. Arrested in bulgarian was the target of extradition in the average per day trading. He is also accused of a 2012 hoax focused on shares of a colorado based candy company. Rocky mountain candy company. This guy has been working. Who knew, yeah. As the Justice Department respond to go apple in the fight over iphone encryption call the tech giants rhetoric false and corrosive, adding that apple can be forced legally to write new software to unlock the iphone. On a call with reporters, ael has become so desperate to throw caution to the wind. Joining us now, james woolsley, the chairman of the defense and democracies, sir, good to have you here. I understand its a little bit loud where you are, but lets see if i can be loud enough. I dont want to ask you first where you stand on this apple fbi saga, what side you want to take. But first of all, who does the fbi or the nsa get into this phone fe they wanted to . Me. And he told us on cnbc yesterday that if the nsa thought there was something important on this phone, they would is already done it and this is about the fbi trying to set a precedent and forcing apple to do this. I at first, when this came up, i thought that they could probably work it out if they would just get together and have a confidential discussion. But it looks like both sides have dug in their heels now. It does seem to my as if the fesh to get a light to effectively decide what kind of they were going to have. They were trying to change some important aspect of apples operating system. And i have a great deal of admiration for the fbi, worked with them closely for the couple of years i was at the cia. But i dont think theyre very good telephone designers and i dont think that is their cache. So i want to really underline what i think youre saying. You would side with apple at this point. And you didnt answer my question as to whether or not the government could do this if they really wanted to. I think they might be able to do it, but the way the bureau wants it done would make it, i think, necessary for them to have a back door in their phones that they dont want to have. If the bureau were just asking for one phones worth of material, that might be a different matter. The last time i saw the detailed right up on this. Do you recall, as apple said about everyone be risk and being i apple is generalry right on this. I think they should not have to have a back door in their phones because they would not be the u. S. Government and the fbi will not be the only people would seek to exploit that. Im quite theyre, of courts, saying youve got to get in your phone for this, youve got to get into your phone for that. Thats why i thought it would be better if apple and the bureau got together privately, which is just two or three experts on the side, and got this sorted out. But it doesnt look like thats the way theyre doing. And i think its a tip, if there was information on crop were pept say what. Well, i think if within sh b trying to lt approximately it seems to me they are asking for a restructuring more or less in perpetuity of apples operating system. And i dont think they ought to have the right to do that. By overshooting, do you think that the fbi potentially loses its a much broader situation of just being able to secure information on a phone . Well, id be willing to listen to arguments on the other side but it does can tun co, berp. Knew youre all there. You get any. Its a graduate school. Im just trying to underline whether or not theres any potential conflict of interest. Sir, thanks so much for joining us from dubai at the conference. James woolsey. Thank you. Good to be with you. Coming up, another disruption. Crowd studios hoping to shape things up in hollywood. Were going to meet the leaders, next. Risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Newly launched crowd fund in group is hoping to shake things up in hollywood. Its called legion m. The founders are on a road show but youre not selling shares just yet, right no. We are taking by the way thank you for having us. Were take reservations for shares later this summer well be actually selling the shares. Right now were off terrifying fans the opportunity to get in and reserve their spot for the round that will close later this summer. How does this work . If im a fan ill invest in your company and then youre going to go off and make movies. I do get to choose what movies youre making . I do get to vote . Youll have a say, but at the end of the day youre investing in the company. Were work with a Creative Alliance of top Tier Partners to help us fund tind the projects developing. Well look to the legion to have a vote and give us some guidance but at the end of the day the guys that know hollywood will pick it. How much money your hoping to raise and what kind of films will you do . So, were looking to create a slate of projects across multiple nodalities. Well be doing film, tv shows and games. Some will depend on tint level that we find from the fans. Our aspirational goal is 1 million fans. We feel we can have a huge impact on the industry with 1 million fans. Lets say on average the average investor puts 200 in. At that point in time we would have 200 million to invest in super cool projects and we would have a million fans emotionally tied to them and financially tied to them when we take them to market. We think thats powerful. Do you find people are tied . There are people who invest in starbucks but may not drink the coffee or invest in coke but dont drink the product. You know what im saying absolutely. Entertainment is a really interesting arena for that. People are passionate about their entertainment projects. If you look at platforms like kick starter where they do hundreds of millions of dollars per year from fans that are backing projects simply for a tshirt or a new advanced copy of the dvd. Absolutely. Weve seen firsthand that connection between fans and artists when it comes to entertainment. Good luck, gentlemen. We look forward to seeing what happens. When we come back, the gloves come off. Not exactly. The highlights what may have been the most civil gop debate in the entire election cycle. We have more squawk box right after this. At ally bank, no branches equals great rates. Its a fact. Kind of like grandkids equals free tech support. Oh, look at you, so great to see you none of this works. Come on in. We believe in the power of active management. Management, by debating our research to find the best investments. By looking at global and local insights to benefit from different points of view. And by consistently breaking apart risk to focus on longterm value. We actively manage with expertise and conviction. So you can invest with more certainty. Mfs. Thats the power of active management. Hey hows it going, hotcakes . Hotcakes. This place has hotcakes. So why arent they selling like hotcakes . With comcast Business Internet and wifi pro, they could be. Just add a customized message to your wifi pro splash page and youll reach your customers where their eyes are already on their devices. Order up. Its more than just wifi, it can help grow your business. You dont see that every day. Introducing wifi pro, wifi that helps grow your business. Comcast business. Built for business. Rally on the streets, markets around the world surging to close out the week. Oil spiking and u. S. Futures pointed to tripledigit gains. Can the bulls finish the week in the black. Well go inside the numbers straight ahead. China and trade trouble. Republican frontrunner donald trump says the u. S. Must stop china from eating our lunch. Is he right . Well break it down. When it comes to porsche, Jerry Seinfeld isnt joking around. This is the porsche philosophy. Smaller, faster, better. This is how i see you. Smaller, better. The comedian auctioned off part of his collection of cars worth millions. This isnt a good day car. You look very beautiful. You look amazing in the wind. A look at whats up for sale and whether the auction means the top for porsche sales prices as the second hour of squawk box begins right now. Im in friday, im in love announcer 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. Im becky quick along with Andrew Ross Sorkin and Michelle Carusocabrera. Weve been watching the futures and today it looks like the market is very pleased with what it heard yesterday. You can see right now after fluctuating all over the place yesterday and ending flat the dow futures are indicated up by 151 points. S p futures indicated by 18 points and the nasdaq up by 46. Also if you take a look at oil prices they are continuing to climb. Wti is up before 2. 5 to 38. 75 a barrel. Brent is well above 40 and natural gas is 1. 80. In the headlines, dow component American Express trying to generate more revenue from existing customers. Investors were told that the company is focused on getting more merchants to accept their amex cards. Marissa mayer was in new york yesterday. We dont know what happened at the meeting. A new director slate may be nominated. One economic report, government out with export import prices. Both expected to post declines for february. Department of justice taking the latest swing at a filing calling apples rhetoric on the San Bernardino terrorist attack case false and corrosive. They wrote, here apple deliberately raised technological barriers that now stand between a lawful warrant and an iphone containing evidence related to the terrorist mass murder of 14 americans. Apple says they plan to file a reply brief which is due next tuesday and the company will have another chance to rebut the dojs case in a Court Hearing march 22nd. Another apple story, hedge fund giant bridgeWater Associates hiring a Long Time Technology executive who spent time working with steve robs. John rubenstein will join them in may. Also got some stocks to watch. State street announcing its chief Financial Officer will step down within the year. And higher Fourth Quarter profit for the food chain el pollo. Last nights gop debate, more civil than those in the past. But the bar was low. Education, social security, trade, the main topics. Donald trump even remarking on how civil the proceedings were. John harwood joins us with more. Good morning. Good morning. You know when the Republican Debate is tamer than the apple doj exchange the night before you know were in a different place in the republican place. Rivals decided it was not in their interest to go aggressively after donald trump and donald trump turned towards the task of trying to bring republicans together, agent like the presumptive nominee including by mentioning this about whats going to happen later this morning with him and ben carson. I was with dr. Ben carson today who is endorsing me, by the way, tomorrow morning. [ applause ] we were talking, we spoke for over an hour on education. He wants competitive schools. He want as lot of Different Things that are terrific, including Charter Schools, by the way, that the unions are fighting like crazy but Charter Schools work and they work very well. There are a lot of things. Ill have ben very much involved in education something that really is an expertise of his. Ben carson faded badly at the end but was a force in this race for a while and consolidating that outsider vote is something donald trump can use as he tries to close this out in ohio, florida and elsewhere. John stick around. Well bring in sara fagan into the conversation. And is trump it . Tuesday is truly do or die time for the antitrump effort, for many republicans who dont think donald trump is the right nominee. If we were to consolidate the vote, win ohio, win florida, win missouri, its all over. If he doesnt, then the path for him to get to their necessary delegates at the convention gets very tough. We are in a fork in the road in this race. Marco rubio, is what im reading true. Is there real pressure for him to dropout now before the florida primary so that way ted cruz has a fighting chance against donald trump so the antitrump people, my understanding are pushing very hard to get out so that way you get to a two person race where maybe you have a clearer vision of what the Republican Votership would look like. Theres two camps. Theres the marco camp which says you cant be embarrassing your home state. Youre a young guy with a bright future. If you lose to donald trump in florida what does that mean . I look at it differently. For much of this race weve needed these candidates to dropout so there was an alternative. Now as someone who doesnt think donald trump should be the republican nominee we need them to stay in. So you can get to a brokered convention. So you get to an open convention so you have a chance to put forth a nominee that could beat Hillary Clinton. If you do that. If you get to an open convention. If suddenly it looks like the voters to that point their votes dont matter and theres some deal cut dont you risk alienating a massive number of people who come out to vote in these primaries . I think you will alienate some of them and not vote or move on to some other political agenda. But, you know, as a republican and i think many republicans feel this way, ted cruz may have a difficulty in a general election against Hillary Clinton. But hes not going to fundamentally change the Republican Party. Donald trump fundamentally breaks the Republican Party and it is not the same party moving forward ever again. And that is, i think, a worse prospect for most republicans than ted cruz or a weakened marco rubio or some other scenario. If he was the nominee would you vote for him . No. I dont think so. Who do you vote for . Its a great question. I dont know what i would do in that situation. I dont think somebody who gets on radio and says that a, you know, that to be a perfect ten as a female you have to have certain physical attributes and he talks about many things that are just unpresident ial. We shouldnt have hes very coarse. Youre absolutely right. This is the painful republican parlor game youre playing right now amongst republicans. Sara, do you think that the nominee of the Republican Party is either going to be trump or cruz or do you think that theres another nontrump out there through the process of convention who could emerge . I think its possible that if donald trump goes into the convention without the required delegates, 1237, that you could see a scenario where someone else was put forward after many, many ballots. Who would that be . It would be somebody with enormous stature like a mitt romney, like a paul ryan. I keep hearing paul ryan. Someone of that stature could be put forward. Thats a very unlikely scenario. Donald trump is likely to have the number of delegates at this point or to fall just a few short in getting there. And the way the rules are is if he gets the delegates hes the nominee. If he doesnt the infrastructure of the Republican Base that runs these conventions, theres not a lot of those folks in his camp. They are mostly establishment. To a degree. They are activists. The way ted cruzs former Campaign Manager said these are people who go the convention every year. They are excited about it. They are mainstream republicans and donald trump has done poorly in the few closed primaries and caucuses weve had today. Hes not winning those contests. Only republicans vote. Not new people who have come in. Theres a story out recently that courted Mitch Mcconnell having said in a private meeting with other senators that if donald trump is the nominee well drop him like a rock. What would that look like in the campaign. If hes the republican nominee what do republican candidates do . Do they attend the convention . Do they campaign with him . Do they avoid him . What happens is this youll see a mix of that. Youll see some that embrace him because he does attract new population to the party. But i think youll see many, many people who run from him. Because, look hes not ideologically conservative if you look at his past statements. Those people are not going to vote for Hillary Clinton or bernie sanders. Is there a thirdparty . I think theres a scenario where if hes the nominee one of these governors looks at the race and says why not. Why not run as an independent. Thats not my Republican Party any more. Thats possible. Isnt it too late at that point . Its very difficult. About making a point not about winning, defining the party. It would be very difficult to get on the ballot. It would be doable but very difficult. Thank you. Great. John, thank you. Coming up trade with china a major theme in last nights debate. Donald trump back pedaling off his threat of tariffs. Well talk chinau. S. Trade relations right after this. Take a quick look at futures. Stocks are rallying around the world as the bulls cheer more stimulus from the ebc. Well talk about the markets next move. Dow is up by 156 points. Need to hire fast . Go to ziprecruiter. Com and post your job to over one hundred of the webs leading job boards with a single click. Then simply select the best candidates from one easy to review list. And now you can use zip recruiter for free. Go to ziprecruiter. Com. When youre on hold, your business is on hold. Thats why comcast business doesnt leave you there. When you call, a Small Business expert will answer you in about 30 seconds. No annoying hold music. Just a real person, real fast. Whenever you need them. Great, thats what i said. So your business can get back to business. Sounds like my rides ready. Dont get stuck on hold. Reach an expert fast. Comcast business. Built for business. Welcome back to squawk box. U. S. Based stock attracting 4. 6 billion in new money. This breaks a nine week streak of funds, and thats fund news. Fun news if youre interested. Gop frontrunner donald trump has been hammering china and our trade deals with beijing telling us yesterday that the u. S. Must stop china from eating our lunch. You look at whats going on with the world and you look at what other people are doing to us and what other countries are doing to us, i mean china is the grand master of all and my relationships with china are fantastic. I have great relationships and business relationships with china and even those people say they cant believe what they are getting away with. In last nights debate trump said slapping a tariff on china was just a threat. It would be slapped on goods if they dont behave. He said that percentage could be less. Here to weigh on that gordon chang author of coming collapse of china. Good to have you here. What do you think . On the 45 tariff of course it would cause a problem but people say he would start a trade war. Well no matter what the donald does he cant start a trade war because were already in a trade war with china but only they are waging it. The question is how do we end it on terms thats advantageous not just to the United States but the International Community because we have broader interests. I understand you say 45 would be problematic. It would raise the cost of goods tremendously here in the United States. Some people believe thats what should happen as a tradeoff. When you say were in a trade war. What do you mean. Define whats happening. Or examples you see. China is engaging in a predatory trade behavior especially over the last two years. Discriminatory enforcement of their own rules against u. S. Companies. Also as the Blair Huntsman commission pointsed out in 2013 china is stealing intellectual property from the United States and the mention of that is somewhere maybe 200, 300 billion a year. Thats a war in a sense. What do you do about it . You probably have to do something pretty awful for the Global Financial system. And it very well may be a threat of trade tariffs. This is what the Blair Huntsman Commission Recommended was an across the board tariff on chinese goods. Thats your opening position. So donald trump is right . In some sense i guess you have to do something. We have only horrible choices. Its no longer we can do good things or bad things. All choices we have are really bad and which bad one do we choose . Thats a start. Everything that weve tried up to now and our policies sound good to the ear, but over the course of decades they havent worked and thats a problem for us. We got to do something which is unthinkable to most people now in the Global Financial system. The rationale has been, this protectionist pressures all over the world and we have this belief well export our values, open free trade, well do that, well be the example and eventually people other countries will see that their comparative kpang, competitive advantage is fostered more greatly if they follow those same kind of ideas and china slowly but surely has been moving towards markets within the economy, less intervention, right . Directionally. Okay. From 1978 forward to about two, three years ago that was true. But for the last three years or so china has moved in the wrong direction in so many ways. For instance it is attacking the multinationals on the broad front. Its closing the Chinese Market down. Its intervening in currency and stock markets and we see them recombining already large state enterprises back into formal monopolies. This is a 1950s style in theory thats driving the chinese economy and chinese economic policy. So, last two, three years really bad direction. When you say there have been manipulators, they are manipulating the currency less. From the outsiders view it looks like novice and he neopytes you give a negative tonality and to the rest of it looks like a bunch of amateurs. They are amateurs. China is manipulating its currency is manipulating it up. The capital fight problem in 2015 which was perhaps 1 trillion of net capital outflow will get worse. Trump is wrong on that in a sense because china is helping american exporters. The point is they have actually in beijing have moved against all things that made them successful during the reform era and we got to recognize they past this inflection points. This is attacking the Global Financial system and all the things you talked about right. Wall street journal airing some dirty laundry on Jessica Albas company. And Jerry Seinfeld putting some classics on the auction block. And well tell you how you can get in on the action. Thats all ahead when squawk box returns. Ohh ah ah aflac aaaaflac tadaa hes not a very good magician. He paid my claim in just one day. One day . shh how does he do it . In just one day, we process, approve and pay. One day pay, only from aflac. Okay, so you launched your banks app. Now what . How will you keep up with the new demands of todays Digital Economy . The fact is some believe they wont need a Traditional Bank down the road, so at cognizant, were helping banking and Financial Services Companies Think digital, be untraditional, and reimagine what the bank of the future can be. Our clients can now leverage customer intelligence to predict their financial needs and provide more contextualized products and services. Were creating new platforms across channels so customers can effortlessly invest, borrow, lend, transactwhereverwhenever they choose. And were digitizing the way banks run, driving efficiencies and delivering new value for their customers in return. Digital works for banking and Financial Services. Lets talk about how digital works for your business. We believe in the power of active management. Management, by debating our research to find the best investments. By looking at global and local insights to benefit from different points of view. And by consistently breaking apart risk to focus on longterm value. We actively manage with expertise and conviction. So you can invest with more certainty. Mfs. Thats the power of active management. Advisor and team who understand where you come from. We didnt really have anything, you know. But, we made do. Vo know you can craft an Investment Plan as strong as your values. Al, how you doing. Hey, mr. Hamilton. Vo know that together you can establish a meaningful legacy. With the guidance and support of your dedicated pnc Wealth Management team. Jessica albas Honest Company being called you out by the wall street journal. They did Lab Tests Showing the laundry detergent contanz a hard chemical that they claim they never used. An easy one to get an answer to. There will be additional tests. It either contains this chemical or doesnt. What now about people who are always telling you about how good and honest they are . Thank you. Yes. Dig a little deeper. I find it very suspicious. Morally high grounded people. Should be an easy thing to figure out. Run the test. Sun tan lotion had things in their products we didnt know about. Check out this terrific golf shot. This is blaine barber on the 12th hole at the value spar championship period sinks an 860 yarder on the second shot. The ball never leaves its line and takes a hop for an eagle hop. David blitzer joins us to talk Monetary Policy, equity prices and more. Then the age old question. Rent or buy . Million dollar home battle you cant afford to miss. Futures sharply pose live this morning. Tavi gevinson. Trendsetter, tastemaker, and teenager. Watson, you sound like a fan. Millions look to you for advice. I know. I cant believe it. I am learning to analyze social media to spot trends and predict demand. Sounds like you spend a lot of time online . I constantly absorb online content to follow shifts in pop culture. So. Youre learning to think like a teenager . Yes. How am i doing . Well. Uh. Welcome back to squawk box. One of the stories front and center, fcc has new customer privacy rules. They include customer permission to use their data. Be brought up at an fcc meeting. Nestle recalling three popular brands of food in the u. S. Because the spinach in the products macon taken bits of glass. The affected products is giorno pizza, lean cuisine and stuff to f stouffers frozen dinners. Were an hour away from the governments federal report on import and export prices. Both expected to decline. In news outside the world of business, former first Lady Nancy Reagan will be laid to rest in southern california. Funeral service will take place at the Ronald Reagan library in simmy valley. Her two children expected to speak at their mothers funeral. James a. Baker who served as president reagans administration and former nbc news anchor and tom brokaw will give remarks. The funeral will be a private ceremony but Officials Say more than 3,000 people passed the casket during public viewing. Jetblue says traffic rose more than 19 last month. The driver was a large increase in capacity. Judge united technologys ceo said his company is open to doing a large acquisition. This comes despite rejecting a merger proposed by honeywell. The question is does he plan on acquiring and not interested in being bought. Some interesting colgate raisi dividend. Futures are jumping as investors continue to assess the impact of european Central Banks latest stimulus moves. David blitzer joins us. Also john wrighting who is chief economist at rdq economics. How about that wild ride yesterday . The Market Reaction to what we heard from the ebc. What did you think . I think they were encouraged that the ecb is still in their pitching or trying to pitch. Nobody wants to try to figure out how long you can keep this up and what happened afterwards and negative Interest Rates stocks soared initially and then come back down and watched the euro which swong from 108 back up to 112. What happened . I think a couple of things. Figure out how long the ecb can keep it up. Theyve lost power of mario draghi saying yes ill do whatever it takes. The other thing is everybody is trying to understand why oil suddenly went from about 25 bucks in early february to 40 bucks on brent at this point and whether it stays there or goes back down. I think a day or two before there were predictions it was going back to 20 bucks. John, obviously the call on oil the thing that worries people so much when it drops theres a slowing world demand. What do you think is happening and is demand stronger . On oil weve maintained for a year and a half its supply. Oil is easy to extract not as scarce and its harder to use more oil and the price drops. Hard to store oil. So the price has to fall to u. S. Supply. Production has hardly declined at all. Were in for a bit of a wild ride. But to me its become odd that somehow Higher Oil Prices are good for the stock market and Lower Oil Prices are bad for the stock market and this is correlation thats embedded and hard to explain fundamentally. Twice now weve seen very aggressive moves by Central Banks the biggest in the world and the market does exactly the opposite, particularly the currency markets than what was expected. The euro is now higher than where they started. And the yen what it did after the Japanese Central bank did with zero Interest Rates was baffling as well. I think part of it when it comes to equity prices, the confidence varioes. When the Central Banks makes these moves at the same time they tell us things are worse and if we dont think the tools will do much good but the diagnosis, like a bad illness diagnosis and giving an aspirin might give you more aspirins but will it address the problem. Currency moves oddly. Currency what . Is an odd one. Qe, you would think it would weaken the euro and the reverse on the euro tell me, suggests to me if you see that sustained were not going to get a lot of bang for the euro in these is there something more worrisome there . Part of it is the short term seimpact is sentiment. I think people are pleased that the central bank is back in there trying to do something. Do something not just stand there. Thats why you get a pick up in the very short term. In the longer term, does it work. If it works, european economies will pick up. Clearly favorable for the euro. But i do think it does work. When you have other Central Banks that are in negative Interest Rates you cant do the bigger than neighbor policy when everybody is doing it and the question becomes does the fed just refuse to continue to raise Interest Rates here which i think that probably explains i think the fed my guess is fed doesnt do anything next week. That still doesnt the explanation is what they did means the fed doesnt move and therefore thats a whole circle game in your head, right . A little too circular. The European Union central bank to convince the fed to sit still. Pick up the phone and call them they wouldnt change policies. The problem with fed policy ever since they didnt move in september and brought the Chinese Market and currency into play in their thinking its created a catch 22 situation for Monetary Policy. What do we know now . Underlying inflation is higher. Unemployment rate is lower. Feds data dependent methodology should have us raising Interest Rates but the markets say youre not going to go and the fed doesnt want to surprise the markets so now they are not going to move next week and have to come up with some sort of explanation, rationale what it is. The data looks very strong. Why cant they come out and say that now they have to raise rates. Theres one in five chance youll raise rates next week. Because its too late. They should have been telegraphing this for the last few weeks. Always communication policy in the past couple of years everybody says theyve become too transparent. When i started at the fed there was no communication policy. The fed would scare you every time. I think the other thing inside the fed, you know, the two governors that spoke, fisher and brennan is more of a dove. Theres some disagreement there. And janet yellen is very good but still relatively new in trying to get all the ducks in a row or at least know what the row is. But the other big thing is, abandoned fiscal policy heard. Sooner or later they got to figure out they left half the tool box behind and they have to open it up and look into it. Its very difficult. Europe is petrified of debt. What forces their hand. Is it the central bank saying we wont do anything else . The central bank finally realizes these negative Interest Rates doesnt do anything but mess up the commercial Banking System because commercial banks dont know what to do. They cant hold on to reserves because it costs them too much money. If they dont hold in reserves the Banking Structure is weakened because they have no reserves. Its a mess. All right. David, john, thank you both for coming in today. Great to see you. Coming up next the cnbc Million Dollar home series is back but this time with a twist. The start of bravos Million Dollar listing is here to pick the winner of rent versus buy battle in the Million Dollar home sector. Squawk box will be right back. Tease you by showing you the white house. Cnbcs popular Million Dollar home sales series. Were tackling the dilemma whether to rent or buy. We determine which one is the best bang for your buck. Round one down south in charlotte, North Carolina where you can buy Southern Comfort or you can rent country club charm. Lets see the homes. Nestled in one of charlottes press ti kbotigious nibd this s one acre yard. Outside a four met kitchen, dining area. Spanning both top and bottom floors five bedrooms plus four and a half bathrooms. The smies master bath includes a jacuzzi tub and his and her walkin closets. Step outside to the enclosed terrace. Southern comfort at 945,000. Just minutes from the golf course and one of charlottes most coveted Country Club Communities this 4400squarefoot home boasts plenty of open living space. Dramatic averaged entryways into an expansive living room. Sky lights and Vaulted Ceilings light up a kitchen went high end appliance. Four bedrooms and four a hasnt half baths. Theres a private yard that can be enjoyed from raise theed deck that includes a grill and fire pit. Country club charm for 3995 a month. Ryan, first tell us whats going on in the charlotte market and then well try to figure out what we should do about which one well pay. We dont know charlotte. You dont . You dont commute from charlotte every day. Charlotte is a great market to be in. Great secondary market. A lot of people live there because its an awesome quality of life much two things i look at mostly is where rents are going. Where the purchase market is going. So you have to look at right now in charlotte, the map thats going to help us make our decision here is that charlotte is really seeing the bottom of their purchase market. Good time to buy. Yes. Thats what i would say. People get nervous and people ask me this question. Should i buy or should i rent. The first thing i ask do you have a down payment. A lot of people say i dont know. I have to ask my mom. So first ask your parents if you have your down payment. Do they screen you to see if somebody gave you a down payment. Always. Theres ways around it. Lets assume you have your down payment, lets assume you have the job, income, mortgage, 30 year fixed. You have to look at your Monthly Payment. Youre not living in 945,000, not living in a rental that we just looked at for 40,0,000 a month. Youre purchasing at the bottom of the market. Theres so many apartments and houses on the market for sale there. A lot of different options. Rates are solo. You could get your Monthly Payment down depending how much you can put down for a down payment. You can get your down payment down to a relatively low price. Of course. Lets assume that our viewer can make that choice. They got the money, got the ability. Can afford the Monthly Payment. People are watching whats the better value right now. If i buy now will i gate lot of upside. If not why would i bother. Always. Rents always go up. For the most part they wont go down. Rent will go up on average 2 a year. Lets say youre always going to be paying down your mortgage, paying down that interest. We look at when to buy versus rent crosses each other. Most people live on average in the United States in one spot for about 3. 2 years. Until they are about 40. I try to look and see when that crosses itself, where is that vector. Are you trying to do a five year interestonly arm if you know youre going out of the place in 3. 2 years. Im talking about a 30 year fixed. That was the rationale used to sell many of those problematic loans. Exactly. Interestonly loans are great. But if you look at it here, right, if youre only spending 5,000 a year to own and 4,000 a month to rents at the end of the day youll make about 7,500 a year on a 4 low risk portfolio. And if you do the mortgage interest Tax Deduction youll get back 9200 a year. Purchasing starts to become maybe a little bit better of a deal. If you look at where the market is going charlotte it makes more sense to purchase. To purchase. I thought the second house by the way the walls looked thin. If youed looked at the homes and thought the buy was the one was a nicer home. The fix tuesday, the hardware this is what im looking at. My overall impression. We have this look for what 10, 15 years. Interiors of homes have gotten this very generic, restoration look. Then well be back to avocado green kitchens. Noors will change. People like neutral. Now they do. Now its brass. The first house for sale looks perfectly staged the second house doesnt look staged at all. Because its a rental. Ryan will be back. Hell be on squawk on the street. Youll be here all day. Ive taken over. Coming up Jerry Seinfeld is auctioning off 18 of his prized porsches this afternoon. Sales are expected to top 30 million. Well take a look at whats up for grabs. Check out the futures. They have been on fire. Right now dow futures up close to 150 points. S p up by 17. Nasdaq up by 45. In new york state, we believe tomorrow starts today. All across the state, the economy is growing, with creative new business incentives, and the lowest taxes in decades, attracting the talent and companies of tomorrow. Like in buffalo, where the largest solar gigafactory in the western hemisphere will soon energize the world. And in syracuse, where imagination is in production. Let us help grow your companys tomorrow today at business. Ny. Gov hey hows it going, hotcakes . Hotcakes. This place has hotcakes. So why arent they selling like hotcakes . With comcast Business Internet and wifi pro, they could be. Just add a customized message to your wifi pro splash page and youll reach your customers where their eyes are already on their devices. Order up. Its more than just wifi, it can help grow your business. You dont see that every day. Introducing wifi pro, wifi that helps grow your business. Comcast business. Built for business. Dow component American Express trying to generate more revenue from existing customers. Investors were told the company is focused on getting more merchants to accept the amex cards and get existing customers to spend more. Stock lower by 26 over the last year. We know yahoo executives met with representatives of activist investor star board value on thursday. What we dont know is what happened at that meeting. Star board called for sale of the company and may nominate a new slate of directors. Yahoo down 22 in the last year. Jerry seinfeld is auctioning 18 of his cars from his collection. We have a look on what will be on the block. First question is why . Yes. That is a good question. It could signal a top of the market or could be like he said he just has too many cars. He is selling 18 of his prized porsches for a total that could top 30 million. He takes to the stage at noon in florida to sell just a fraction of his massive porsche collection. He says hes never bought a car for Investment Purposes but its time to send these cars back in the world for someone else to enjoy. The question is whether buyers will pay up after soaring 160 since 2012 porsche prices have stalled with some models falling 20 at the january auctions in scottsdale. His top lot, this is top car that is in fieseinfeld is selli canam, winning six races in a row. Seinfeld said i never drove it as fast as it can go. The car is crazy im not. Seinfeld bought it for 4. 4 in 2012. Thats a huge gain if he gets that price. This 1955, 550 spyder expected to get 5 to 6 million. This car won several races. It could sell for 4 million. Jerry loved this car. A small car with a small engine could be a factor with a big car with a big engine. With could seinfelds cars could fetch a premium in the market. Jerry is in fields puerto rico she. Jerry is meticulous about maintaining his cars. I would want that car because jerry is my friend and b, i know its taken care of properly and maintained properly. Now if you dont have millions to spend on a porsche buy is in fields vw camper between 80 and 100,000. This is the camper and his kids used for their Lemonade Stand before they were shut down by police for an illegally parked vehicle. Whats the premium on that. Is that a fair price . Even though it sounds crazy, 100,000 for those campers they are selling. They are all over california. Every where you go in california you see these things and people pulled over on the side of the road camping. Theres so much space inside. Tiny engine. People love these classic old cars. Smoking pot in there . Probably. I asked the question before why is he selling these things. You started to talk about how many there are. I started to think why did he buy them all . Some of these cars are duplicates. He has a second version of a lot of these cars. Hes got the better version. The other thing theres only so much space and time as he says he doesnt need the money. He doesnt. Seinfeld show we all know is a 3 billion juggernaut. Hulu deal he doesnt need the money. When seinfeld is selling his porsches, that may be a sign that weve reached the top or past the top. How many does he own . We dont know. Its at that ri mystery. He said its a number if i told you would never say oh, that makes sense. So its a large number of cars. If this by the way two of these cars could become among the top five most expensive porsches ever sold. He knew his cars. He loved hes been collecting porsches for a long time. Hes a smart collector. Have you gone to new zealand. Love it. Honeymooned there. New zealand is a growing popularity. U. S. Tourist destination. They led the charge on this. United continental trying to take advantage. Struck a revenue deal with air new zealand. They will start flights in july. They have a cosharing agreement. They will increase coordination of sales and transportation. That will be lord of the rings. Yeah. Thats when i started that i wanted to go. We went in 2001, one of the most beautiful places in the whole world. South island. Gorgeous. You got rain forest, skiing all in the same day. Totally amazing. Okay. We got to go. Coming up the oil pinch putting pressure on what once was the epicenter of the north America Oil Boom north dakota. Check out oil prices this morning. Wti crude 38. 63. Remember this a couple weeks ago we were talking 30. And a new fitness app. Shark tank and mark cuban we got the creators that will join us in the next hour. Well be back in a moment. Theres a lot of places you never want to see 7. 95. [ beep ] but youll be glad to see it here. Fidelity where smarter investors will always be. If only the signs were as obvious when you trade. Fidelitys active trader pro can help you find smarter entry and exit points and can help protect your potential profits. Fidelity where smarter investors will always be. And casuper food . Is that recommend sya real thing . Cedar . Its a great school, but is it the right one for her . Is this really any better than the one you got last year . If we consolidate suppliers, whats the savings there . So should we go with the 467 horsepower . Or is a 423 enough . Good question. You ask a lot of good questions. I think we should move you into our new fund. Sure. Ok. But are you asking enough about how your wealth is managed . Wealth management at charles schwab. Crude realities, new this morning are the International Energy agency saying the Oil Market May have bottomed but what drop in prices has taken a major bite out of engine dependent parts of the economy. Well see how governments and businesses are dealing with the downturn. Squawk in the tank. Founder of fitness app is here. Mark cuban makes a big bet on the company in one of the largest tech deals ever made on shark tank. Wait until you see the newest use for drones. Heres a hint. It involves beaches, bikini, beer and the police. Its time for spring break as the final hour of squawk box begins right now. Announcer live from the most powerful city in the world, new york, this is squawk box. Welcome back to squawk box, everybody. This is cnbc, first in business worldwide. Im becky quick along with Andrew Ross Sorkin and Michelle Carusocabrera. Joe is off today and we are less than 90 minutes away from the opening bell on wall street. All morning futures have been sharply higher following a global rally for stocks after people finally decide what they heard from the ecb yesterday was positive news for stocks. You can see the dow futures are up about 150 points. S p up by 17 and nasdaq up by 45. If you take a look whats happening in the early trade in europe youll see massive gains. Dax superby 3 . Cac in france superby close to 2. 9 . Ftse up by 1. 5. Italy up by 4 and spain up by 3 . Here are the stories investors will be talking about. New report from the International Energy agency this morning suggesting there are signs Oil Prices May have body. The iaea warns it should not be viewed as a definitive sign that the worse is necessarily over but they do think that production is declining. Prices right now, take a look. Wti, 38. 76 a 2 gain. Brent is back above 40. Brian sullivan will join us from the balkan, north dakota to discuss the impact of the decline in Oil Prices Going on there. U. S. Based stock funds attracting 4. 6 billion in new money in the latest week. This data is notable because this breaks a nine week streak of fund outfloss. Were watching the dollar closely after wild swings yesterday. 1. 081. 12. This morning euro is right at 1. 11. Pound is up above 1 month7 couple stocks to watch. Chicken group of stocks. Fried chicken chain bojangles entering 22 cents per share. Beat forecast with same restaurant sales rising. 6 . Where is that in the south. Spicy chicken. Less tasty report get this right. You go for it. El polllo loco beat forecasts. Said sales initiatives put in place last year are taking hold but will take some time to have their full impact. Got to get with the program. I know. Cant roll my rs. Ill work on it. North dakota once the epicenter of the Oil Revolution is feeling the pinch in the collapse much oil prices. Brian sullivan has more. Its a different feeling than it was just a year and a half or two years ago . Reporter my third trip here. Good morning. Things remember decidedly different. The last time we were here a little over a year ago the bus that soly started, they said oil prices would come back. They havent. The crude reality is settling in. This is a hardworking town. Oil this was town. Things have been very difficult. Its not just an oil story its a people story and government story. Look at the population here more than doubled basically from 2007 until today but last year to this year the population is down 10 . Got a billion dollar hole now in the north dakota state budget. And so theres a lot of concern about the future here and what they are going to do because everybody built out. There was a couple of hotels. Now theres 30. No hotel is fuel. A bunch of restaurant, maybe too many. Nobody is full. Theres a concern that well see a lot of businesses fail. It is not just the oil story. I heard michele talking about the iaea report. I wont go after the iaea and say they are wrong. Get to the know the term duc, drilled but uncompleted. Theres more than a thousand ducs within 100 mile radius of where im standing. If oil prices go back up those drill might get completed. There were 3,000 wells here ten years ago, theres 13,000 now. That gives you i think a good idea of the growth and coming up on power lunch michele and i and tyler and melissa will show you some incredible video including a man camp, 100 man camp that was full one day, the owner said everybody out. The next day it was completely empty. We got a tour inside. There was furniture, food left, bizarre. Brian, i heard recently from a couple of different places that some of the big duc drillers say if prices come back to 40, 45, they said they could make money in that range and turn the wells back on. Were within spitting difference of 40. Is that something that is creating much hope there . Becky there might be some. The problem is you cant generalize and say everybody is doomed at 40 or everybody is fine at 40. There might be a few operators okay at 40 up here. Heres the thing about this area versus texas. Everything is very expensive here. Getting oil out of the ground is expensive because its hard. And cold during the winter. Then you got to put it on a truck. You got to put it on a train. They have pipelines. Most of it is still going out by truck and train. The cost of what they call the well head is still much more expensive. Then you add on other stuff and it gets more expensive. Yesterday a guy said 65 would be a good number for here. So 40 might be good, 40 might be better than 30 but 60 is a lot better than 40 and i think until we get to that level, guys, you know, whatever. Ill say this on your previous conversation, andrew, el pollo my oil as a kid growing up. Well watch on power lunch. Looking forward to seeing that video too. Thanks guys. Joining us right now is tom petrie the chairman of petrie partners. Hes advised the saudi government on oil and gas issues. Tom we know oil prices have come back pretty substantially. As brian mentioned 40 is still a long way from 60 or 65 where it makes sense for some of these drillers. What would you say right now about where we stand and where you think oil prices are headed . I agree with what brian said on that. I think really certainly north of 50 and up in the 60s is a much more realistic objective and it wont happen right away. But the key point, i think, was last week, just a little over a week ago, in houston, the Saudi Oil Minister was still saying essentially what the saudis have said given the surprise of 2014, november 14, and in odds with that even while he was talking still all the market reliance and really relatively cautiously and negatively we saw oil rally a full 5 on top of the earlier rally that occurred. I think this is a time where actions will speak much more loudly than words. And really, the excess we have is partly the unconventional, a desire to bend that supply curve. But the other part was both saudi arabia and russia going all out in their production. What do you think of this iaea report out today where they think that u. S. Production will decline this year by half a million Barrels Per Day. Do you think they are right . And then, even if they are, shale is so much easier this kind of production is so muchese ier to bring back online if prices rise as a result. Do we get back in the same circular situation . Number one, yes, i think half a Million Barrels a day is a conservative estimate above the decline this year. Could be 6 or 700,000 barrels day. Thats 40 of the surplus being resolved. The balance has to come from what happens elsewhere in the world. This is going to be a two step forward one step back proposition. And the desire on the part of the opec leaders, saudi in particular, will be to keep the nonopec producers, twothirds of the worlds production very skittish and fearful of a return to 30 oil or even lower. I dont think that will happen but i think there will be that process of two steps forward one back, and there will be this. Were not going to get large amounts of new supply at 40 or 45. Were starting to draw down the excess vininventories. Thats going be critical. Every time we hear these headlines, saudi arabia and even nonopec countries talking about capping production. Youre still capping at the highest output levels. Youre pumping full out. Should we pay any attention to a headline like that . No i dismiss at any time same way. The point of that, i think for the saudis is really to test iran on their assertions they want to bring a Million Barrels a day on. That number is way overstated at least for the next couple of years. They front end loaded some of their exports by delivery of oil through iraq into the market last year. Nobody objected that it was a violation of sanctions. And the ability to add much more than a few hundred thousand barrels a day, 150, 200 is doubtful in my mind. Down the road they need to spend a lot of known get to that million barrel a day objective. Thats multiple years away, i think. All right. Tom, thanks for joining us today. Good to be here. Okay. Back to our big corporate story of the morning, department of justice now pushing back against apple in the fight to unlock the iphone of that San Bernardino shooters and eamon javers joins us. Reporter this was an absolutely blistering exchange between the department of justice and apple yesterday in this ongoing fight that youre talking about. It started with a filing in the court case from the department of justice. Take a look at what the department of justice wrote about apple. They said aprils rhetoric is not only false but also corrosive of the very institutions that are best able to safeguard our liberty and our rights, the courts, the fourth amendment, long standing precedent and venerable laws and the dreamtally elected branchs of government. Apples lawyer wrote back by saying in 30 years of practice, i dont think ive ever seen a legal brief that was more intended to smear the other side with false accusations and innuendo and less intend to focus on the real merits of the case. They were so upset in what the government suggested they said it would be as if apple had invoked j. Edgar hoover ordering the assassination of john f. Kennedy and citing conspiracy theory. Com as supporting evidence. Is there anyway to settle this in some way that makes a sense. Is there a middle ground . I cant see it. If there was a middle ground it would have likely have been reached in private when the two sides were negotiating early on. I asked the lawyers yesterday look this is getting very heated, very emotional and personal. Why is that. The apple attorneys agree it is heat. They hope they said they can get back to some kind of more level rhetorical ground in this debate. Right now it feels personal. They are so divide so publicly even if they get into a room could either side is there any ability from either side to give at all . Reporter it will be more and more difficult since they both have dug their trenches and apple is getting these amicus briefs filed by other companies. You have the Law Enforcement community on the other side. These sides are deeply entrenched now and its basically Silicon Valley versus the government. Thats very hard to unpark. Well leave it there. Thank you. You bet. Coming up next plunging oil prices, harsh sanctions throwing russia into recession. The president of russias Second Largest Bank joins us after the break. And mark cuban goes all in. Well work it all out when squawk box returns. Youre watching cnbc because were first in business worldwide. To find the best investments. By looking at global and local insights to benefit from different points of view. And by consistently breaking apart risk to focus on longterm value. We actively manage with expertise and conviction. So you can invest with more certainty. Mfs. Thats the power of active management. Im spending too muchs for time hiringnter. And not enough time in my kitchen. announcer need to hire fast . Go to ziprecruiter. Com and post your job to over 100 of the webs leading job boards with a single click. Then simply select the best candidates from one easy to review list. You put up one post and the next day you have all these candidates. Makes my job a lot easier. announcer over 400,000 businesses have already used ziprecruiter. And now you can use ziprecruiter for free. Go to ziprecruiter. Com offer2 frank abagnale. Convicted felon and con man. That was a long time ago. You know, they made a movie about it. You were shown to be quite skilled at fraud. Times change. Now i help catch the bad guys. Me too. I help banks detect fraud by applying cognitive analytics to public financial records and social media. So if somebody said, catch me if you can. . We can. Lets do a sequel. It could be a buddy movie. I would like to have a buddy. Russias economy has suffered for nearly two years as slumping oil prices and sanctions have hit hard. Countries gdp contracting by nearly 4 last year and Russias Central Bank is warning the economy will not return to growth until 2017. Joining us is now is the president of russias second largest bang, andrey kostin. The price of oil declining so sharply we have read russia needs oil at much higher prices to balance the budget. How is that impacting you and the country . Well basically, youre right. When the oil price is high everybody is living much better in russia not only people dealing with oil. So for banks its challenging though i would say that Oil Companies always been not our clients, clients of Largest International banks namely. Now, of course, we have to work more with Russian Oil Industry but in general, of course, the growth of the economy you mentioned last year had an active growth of 4 . This year we expect minus 1 or 2 and next year come back to growth which, of course, mainly due to the low oil prices. And the Budget Constraints of course. Budget constraints because of most of the income comes from Oil Companies. State department has told american banks do not help the russian government borrow money which the russian government plans to do. How do you feel about that . Well it was expected probably. Very much in line with the sanctions weve been imposed by the american government. I still believe theres a possibility for russia to borrow they are going to come to market. I think russia will dome market. Im more concerned about preservation process. Russian government Just Announced a Large Program of privatization including companies under sanctions like my bank or leading Oil Companies. And of course that will create some problems because, because of the sanctions we have. The problem being you dont think youll get the price you would want to get, raising as much money as you possible could . Is that the concern . Its the wrong time to sell but its the government and they decide when to sell. The government saying that they need cash this year, they want to sell. Whenever you talk about privatization, whenever ive seen countries in crisis its always the wrong time. You always have to privatize. I agree. They need the money. Reform is always wrong time. Maybe youre quite right. Can i ask you sort of an unrelated russia question but a very sort of selfish u. S. Question which is how the russians perceive the election here . With interest. I think we have quite an intrigue. Mr. Trump particularly is leading republican polls. But i think were watching this. We see a lot of interesting rhetoric in this debate. We always know when theres any candidate becomes president then thats where the business starts. So were just waiting. Well see. We very much want to restore Good Relationship with the United States. Is there a candidate that you think would help restore that trust, that relationship . Trust . Yes. What candidate would be the best for russia . Its hard to say because on one hand miss clinton is very much known to russia, she was secretary of state and she was dealing with mr. Putin and other russian officials. On the other hand, who knows. You never know. Is there a fear of donald trump . No. Not any more fear in america than russia. Hes an appealing person. Hes saying very interesting things. He was working on a trump hotel in moscow at one point i believe. I dont know this. But maybe. He spoke about putin as a guy he could deal with. Yes. I once joke he was saying he would be a friend of mr. Putin. Then he might be under american sanctions. Whats the biggest problem to deal with and how is inflation right now . Inflation is going down. Largest problem remain the same. The structure of the russian economy itself, dependence on oil and other raw material exports but russia is doing certain steps maybe not quick enough but changing this like changing the tax regime, less control, Less Government control. So i think it will produce certain results because in order to make transformation we need reinvestment and investment comes when theres a good climate for this. Final question, stateowned banks traditionally do politicize lending. Absolutely wonderful. 40 we have our corporate governments just absolutely the same as citibank or jpmorgan or any other. Ing . Thanks for coming. When we come back, beaches, bikini, beer and yes drones. One police force is using drones to track spring breakers. Well have that when we return. The heirloom tomato. Intenselyflavored. Colorfullydiverse. Beautifullymisshapen. Cultivated for generations, its the unexpected hero of any dish. When you cook with incredible ingredients. You make incredible meals. Fresh ingredients. Stepbysteprecipes. Delivered to your door. Get your first two meals free blueapron. Com cook. Welcome back. Police in popular spring break destinations South Padre Island texas are using drones to crackdown on this years partying. They are outfitted with High Resolution cameras that will howev hover over beaches. College kids are expected to show up. Police are planning to use drones to find swimmers in distress. Very cool. Coming up some breaking economic news. I just think there will be cops looking at pretty girls. No excuse, well be joined by the ceo of fitness app swo rx in and how he caught the attention of mark cuban. Check out where things are trading. Dow up almost 150 points. Were back in a moment. Vo know you have a dedicated advisor and team who understand where you come from. We didnt really have anything, you know. But, we made do. Vo know you can craft an Investment Plan as strong as your values. Al, how you doing. Hey, mr. Hamilton. Vo know that together you can establish a meaningful legacy. With the guidance and support of your dedicated pnc Wealth Management team. When youre on hold, your business is on hold. Thats why comcast business doesnt leave you there. When you call, a Small Business expert will answer you in about 30 seconds. No annoying hold music. Just a real person, real fast. Whenever you need them. Great, thats what i said. So your business can get back to business. Sounds like my rides ready. Dont get stuck on hold. Reach an expert fast. Comcast business. Built for business. Welcome back. Import prices out in just a few seconds. Rick santelli standing by at the cme in chicago. Rick, take it away. Reporter import prices expected to be down month mover. 7 of 1 . Well half that. Expectations were a little darker than the reality, down. 3 of 1 . And the revision of last month was down 1. 1, shaved the tenth down to 1 . Those were month over month. What does the yearoveryear data look like . Same dynamic just not as much. Were expecting down 6. 5, were down 6. 1. Where we gained. 1 on the revision last month less negative worked the other way on yearoveryear. 6. 2 was the original release now minus 6. 3. Import price have a lot of Energy Dynamics inside of them so well continue to monitor. The best news is that the markets seem to have gotten their sea leg from the destabilization of the notion that Central Banks just may not have the efficacy on their policy and thats above and beyond the cost benefit analysis of the policy itself. But even though the dax is up today and the euro isnt as lofty as it was which were both dynamics not expected by mario draghi lets path real face on it. The dax is still downed a bit on the week even with the recovery today and the euro is much higher than it closed last week. It closed last week a bit over 1. 10 its currently trading a bit over 1. 11. These are the dynamics well Pay Attention to. Interest rates, 1. 90 to 2 , well continue to northern that in as we hover below the 1. 90s. Staying on the theme of the economy, the Global Markets still trying to make sense of what happened with the ecbs decision, the euro being all over the place. Mario draghis comments, Steve Liesman joins us now with more. Michele, the ecb brought out the bazooka but a lot of people on wall street think they are firing dudes. Credit suisse are on the other side. They think ecbs measures will be seen to be good for risky assets. Maybe were seeing that this morning in higher stock prices. But others are saying that the markets tepid reaction in a stronger euro and flat stock price sasse measure of growing impetus by Central Banks especially after ecb president mario draghi said he did not anticipate further rate cuts. He says with this move we see the ecb for what it is, it is out of tricks, no more rabbits to pull out of its hat just r rabbit droppings. In this posttrump world we can say we won. Just rabbit droppings. Just saying. All this matters a lot where the ill show you this chart. Look what happened yesterday. Ecb announcement. The euro falls pretty charply down 1. 08. That would be expected in theory. Well done. And then over sometime during the course of the press conference he goes we dont anticipate further rate cuts and there you see the power of Forward Guidance going the other way and it stayed up there right now. This matters a lot for the fed a stronger euro gives the fed room to move. If the ecbs projections end up packing a punch and it helps the european economies and bolsters inflation the fed could return to the rate hiking path. For now the fed looks too divided. Mario draghi is he kicking himself . Is he ripping his hair out . Youre doing exactly the opposite of what he wanted. I have a theory. I dont know this to be true. What i noticed was no particular whats the word im looking for soft chew to the germans in the program. But i think that maybe getting the approval of the commission or the committee, required him to say we dont connect further rate cuts. That was part of the compromise. My theory. I have no evidence on that. But i think he very pointedly said that and basically tried to get but look. What the fed did before and what mario draghi, what he succeeded it was whatever it takes and now hes taken the whatever off the table. One other technical question. They are going to pay banks to lend essentially. Have we seen that in the Monetary Policy toolkit . Negative Interest Rates, they are going to lend money to a bank, the bank will give them less money back. Think about the idea that central bank is now at minus. 4. This is supposed to give you confidence to go out and buy risky assets . The single value of this 0 overwhelming in the sense of its that bad it has to be negative i think maybe what i want to do and by the way john had this interesting idea that one way you could game the system is to overpay your taxes in europe. If you overpay your taxes the money you pay to the government is at zero rather than at minus. 4. So you get a nice little spread. Other thing borrow this money from the ebc, i dont know the technical aspects of this, keep it in a vault and get paid minus. 4 to keep that money. Negative Interest Rates if it was a broadway play in the United States it would have been shut down a long time ago. The reviews are very bad. It feels like for a variety of reasons the zero lower is as far as you want to go because of the signal value of it, the communication and the effect on the Banking System that you cant so theres a long way to go here. Watch that. You need to see the federal reserve, the Brainard Fisher polls that are out there that the fomc coalesce. Well see that in march but no rate hike. Steve, thank you. New this morning leg mason out with its survey. When asked how market volatility influences their approach to investing respondents showed more patience than panic. Joining us is legg masons head of business development. Tom you want to explain that. They are patient. They are okay with an up and down market. They are showing patience and optimism. If you look deep near to the data, there is some conflicting evidence and maybe even some troubling signs. What do you mean . Lets start with the good news. Weve been doing this survey for four years. This is a grouch investors over 40 with more than 200,000 in investable assets. We asked them how they would view and act on volatility and put numbers to it on average they said 22 decline. 22 drawback might make them think about selling out equities. Isnt that the worse time . It would be. Good news is that if that is true that allows them to ride out most pullbacks, most corrections and i think runs countser to the thought that the individual investor flees every time theres a bit of turbulence. A 10 drop, 15 drop doesnt scare them. They dont think about reeevaluating until it gets down 10 . They didnt learn anything from the financial crisis thats correct. There are four times since 1970 that weve had draw downs greater than 22 . Certainly if they sold out at that point that would have been unfortunate. But we did the survey in december through early january and already there was some thats before things got bad. It was sideways to down and a little choppy. So we asked them how they felt about the current turbulence. 85 of respondents said nothing that we havent already seen. They expect some amount of turbulence over time. Any questions about politics, the election . No. This was about investment decisions. About allocations, about optimism. They showed an optimism towards the u. S. Economy and u. S. Markets. However those are the words. If you look at the actions we look at portfolio allocations for four years with this group and what stand out is 23 allocation to cash right now. Thats high. Its gone up over the last couple of years. The consensus narrative here is that this group is scared. They are scarred from the financial crisis so they are sitting on cash. At the same time they have 41 invested in equities. Average age of this group is 60. Youre 60 and have 40 in equities and everybodys situation is different that doesnt strike me as a hide under the rock kind of allocation. Theres Something Else going on rather than just being scared. Something like what . If you looked at the fixed income allocation its fallen to 15 down from 20. Thats understandable. This cohort needs income. They are looking at traditional fixed income and bonds and 2 generously is not going to get them there. At the same time given longevity patterns they need growth and total returns in that portfolio but theyve 40 in equities. I ti the fact of doubling downtown volatility in the equity market may not seem that attractive. Faced with these two choices they decide to do nothing. Theyve told us they expect this portfolio to generate a 7 return. Which is the math to get to you 7 just doesnt work. Tom thank you very much for coming in. Good to see you. Coming up, simply working, with mark cuban. Well be right back. But youll be glad to see it here. Fidelity where smarter investors will always be. If only the signs were as obvious when you trade. Fidelitys active trader pro can help you find smarter entry and exit points and can help protect your potential profits. Fidelity where smarter investors will always be. With extraordinary offersmance on the exhilarating is. The thrilling gs. And the powerful rc coupe. This is the pursuit of perfection. At ally bank, no branches equals great rates. Its a fact. Kind of like bill splitting equals nitpicking. But i only had a salad. It was a buffalo chicken salad. Salad. Welcome back to squawk box right now making headlines this morning, the wound pd warrior project firing its ceo and chief operating officer amid news reports of wasteful spending. The Wounded Warrior project is one of the largest veteran support groups in the country but only spending 60 of its 340 million revenue on veterans. Board of directors made this decision. 40 was going to overhead. We talked about 10 to 15 is what other veteran groups spend on overhead. Thats been heavily criticized. Other headlines this morning Jessica Albas company honest is being called out by the wall street journal. She built the business reputation on being environmentallyfriendly. But Lab Tests Show the companys laundry detergent contains a harsh chemical that the company swore it never used. She calls the article useless. Heres the question. If you dont have the money or time to spend to hire a personal trainer we have an answer. This is a personal trainer in your pocket. Sworkit. It makes waves after the company that produced an app earned 1. 5 Million Investment on shark tank from mark cuban. One of the largest tech deals ever made on the show. Joining us now is the founders. Good morning. I hear, by the way, i heard he made the deal but he hasnt closed the deal. You guys always want were still in the process of negotiations. How does that work. How does that work on the show . I thought what happens on the show is think about it, they want to produce great tv. Then you go through a diligence process. Smash busy. Theres a lot of companies that go through and get deals. So we just started that process in january, the diligence process. What happens is the network will just say give you two weeks notice, youre going to air and get ready. So then we focus on making the app and site. So i can still jump this deal if i want in. Cuban, were coming. Its not closed yet. Does that matter to you . How many downloads have you had . About 14. 5 million downloads and we are very close to profitability which puts us in a great position. Explain. Theres a lot of apps that track your fitness. Whats different about this . Whats different about sworkit it builds you personalized video work outs. You can specific the exact amount of time you have to exercise and choose from a growing library we have 250 different individual videos we aggregate. It acts like a music player. You come to a move you cant do, say you have bad knees you can skip that. Then were taking this data and over time well start personalizing that experience further. Think like pandora. Imagine one of our featured things were doing. With your fit bit go 20,000 steps, you ran that day we dont want to tell you to do a bunch of lungs alunges and squats. So were working with our engineers to improve our algorithms. I can have a seven minute work out and focus on my abs. Exactly. Is it in app purchase you download and then pay. We have a premium subscription. The app is free to use and ad support. The premium subscription, obviously, makes it ads free. We have additional exercises in there. We have some low impact for people who may have struggle or have injuries or older audience. And then also allows further customization. Whats the monthly fee. Introdetectiver to price of 2. 99. After flow ducker to price. It will go up to 4. 99. Its all body weight. You dont need any weights. Our tag line is no gym, no excuse. We plan to eventually involve the product and integrate weights but thats something we want to do over time. Were making sure we just nailed this. Is it a lower margin business than some of the guys on the info measure shals which one doesnt use weights. One does a dance thing. Zum about a . Zumba. When they sell those dividends. They are selling a dvd for about 4. 99, 6. 99. Its exactly the same. You have an injury and youre steering there with a deer in the headlights i got to either wait for this. Thank you for coming in. Very cool. We wish you lots of luck with it. Thanks. Lets stick with the athletic theme two nba allstars saying good by on the court. Kobe bryant and lebron james playing against each other for the last time. Bryant is retiring after 16 more games. This season at the end of it when he steps down. The cavs won this game 120108. On court rival shared a hug and bryant got a stand ovation as he checked out of the game with 2 00 minutes left. Coming up well head to nyc and check in with jim cramer. Insanity ride. [bassist] two late nights in tucson. Blew an amp. But good nights. Sure,musics why we do this,but its still our business. We spend days booking gigs, then weve gotta put in the miles to get there. But its not without its perks. Like seeing our album sales go through the roof enough to finally start paying megs little brother i mean,our new tour managerwith real,actual money. We run on quickbooks. Thats how we own it. We believe in the power of active management. Management, by debating our research to find the best investments. By looking at global and local insights to benefit from different points of view. And by consistently breaking apart risk to focus on longterm value. We actively manage with expertise and conviction. So you can invest with more certainty. Mfs. Thats the power of active management. I provide for my family. I will use my education to help my community. I will inspire our next generation of leaders. I am a college student, but i am only 1 . Only 1 of College Students are american indian. Donate now, and help our numbers grow. Hey hows it going, hotcakes . Hotcakes. This place has hotcakes. So why arent they selling like hotcakes . With comcast Business Internet and wifi pro, they could be. Just add a customized message to your wifi pro splash page and youll reach your customers where their eyes are already on their devices. Order up. Its more than just wifi, it can help grow your business. You dont see that every day. Introducing wifi pro, wifi that helps grow your business. Comcast business. Built for business. Welcome back to squawk box. The race pofor the white house today. Ohio and florida, the two big races to watch on tuesday. Last nights gop debate is being called kinder and gentler. Former republican president ial hopeful ben carson is going to formally endorse donald trump. I was with dr. Ben carson today, whos endorsing me, by the way, tomorrow morning [ applause ] and he is we were talking, we spoke for an hour on education. He has such a great handle on it. He wants competitive schools. He wants a lot of Different Things that are terrific including Charter Schools, by the way, that the unions are fighting like crazy. Charter schools work and they work very well. There are a lot of things, but im going to have ben very much involved with education, something that really is an expertise of his. Trump and carson scheduled to appear together in palm beach, florida. Live pictures from that venue right now because the event is scheduled to begin around 9 00 eastern time, just about seven minutes from now. Lets get down to the new york stock exchange. Jim cramer joins us. What the heck happened . Trader loved what they heard from the ecb, hate it, and now they love it again . Theres a lot of people who trade immediately off of europe, the futures. Say europe is up, its good. And then when europe went down, of course, they sell it. The reason europe went down, the dollars went down. The euro went higher. Then they come back and bought it. I wish i could tell you that it wasnt stupid. The first is protect stupidity. Yesterdays trading was so dumb, it was extraordinary, and i think if you bought a lot of domestic stocks at the bottom, youve got a great basis to start, so everybody at home should recognize the selloffs based on europe are terrific buying opportunities or, as donald trump would say, elegant buying opportunities. Elegant. Huge huge buying opportunities. Last night was like, holy come on, guys. Cant someone throw something at someone . Like, where were the pies . Gee, donald trump talking about negotiating in israel, a peace agreeme agreement. I wanted fire and brimstone and we got collegiality. And alternate universe from what weve seen. Ratings must be terrible. Gee well, hey, guys, have a good time. Go to the elks, have a couple on me. Not to mention they said they were going to start at 8 30 and i was waiting at 8 30 and that was a countdown to the opening. Ben carson and trump today at 9 00. Thats going to be like a nice, hey, how are you doing . Wheres the old fire . And then what happened here . Did he win and now we have a guy in the center . Potentially. Come on. The china bashing and the japan bashing, great for the market. I thought he wanted to move them to the middle. Then we cant pick stocks. I have a. K. Steel was my 2 window stock on trump. Now its a ripup. Jim, did you see we have the ceo of a company that owns a company in dubai and you were talking about starbucks and American Companies. She said she did not think that American Companies that do business abroad were going to have shed better call sol. She should call sol. Honestly, i think if youre starbucks, howard schultz, last night at the cfo conference we ran, which was unbelievably good, we had a suggestion he run for president. I think, you know, hes kind of an ambassador, goodwill overseas. Therefore, i think starbucks represents american capitalism more than people realize. Maybe people dont want to admit it because it would suggest we eat too much. It stands for calories. Exactly. Bad calories which is a Great American export. They admit they are an indulgence. This whole idea dont you love these companies, its okay you indulge every week. You would be indulging every day. I cant say anything about obesity because thats a protected class. You would join it. You have to pick your poison on these issues every once in a while. I have to give you fire because last nights Republican Debate, i know i have to stay up. I know i have to stay up. And then near the end it was like trump said, hey, vote for me. I love you. I love you. I waited up until 11 01 to hear that . I have to get up early. Obviously theyre going to get some fire and brimstone this morning in a few minutes. Jim, thank you. Why is everybody like, hey, my dad was a bartender . My dad i dont care what your dad did for heavens sake. Great. I hope your dad did great. Get ready, folks. Jim is fired up and ready to go. Well see you you in a couple minutes, jim. Thank you. Okay. Coming up when we return, this mornings biggest stock movers and a lot more back in a moment. Whats going on here . Im val, the orange money retirement squirrel from voya. Were putting away acorns. You know, to show the importance of saving for the future. So youre sort of like a Spokes Person . More of a spokes metaphor. Get organized at voya. Com. Can a a subconscious. Mind . A knack for predicting the future. Reflexes faster than the speed of thought. Can a business have a spirit . Can a business have a soul . Can a business be. Alive . In new york state, we believe tomorrow starts today. All across the state, the economy is growing, with creative new business incentives, and the lowest taxes in decades, attracting the talent and companies of tomorrow. Like in buffalo, where the largest solar gigafactory in the western hemisphere will soon energize the world. And in syracuse, where imagination is in production. Let us help grow your companys tomorrow today at business. Ny. Gov hey kevin. Hey, fancy seeing you here. Uh, i live right over there actually. Youve been to my place. No, i wasnt. Oh look, you dropped something. Its your resume with a 20 dollar bill taped to it. Thats weird. You want to work for ge too. Hahaha, what . Well were always looking for developers who are up for big world changing challenges like making planes, trains and hospitals run better. Why dont you check your new watch and tell me what time i should be there. Oh, i dont hire people. Im a developer. Im gonna need monday off. Again, not my call. Quick upgrades and down grades. Chevron from sell at Goldman Sachs pointing to a Higher Oil Price outlook and relative performance of that stock underperformance, rather, of cvx versus the s p 500 and against rival exxon mobil. Spilling stuff all over the place. Michelle, thank you for joining us. Well see you on power lunch. Have a wonderful weekend, everybody. Time for squawk on the street. Good friday morning, welcome to squawk on the street. Im Carl Quint Tia with david faber and simon. A live shot of Donald Trumps News Conference in palm beach, florida, expected to start any minute. Former president ial candidate dr. Ben carson expected to endorse trump as the republican race continues to tighten. Well take that live. Theyre calling it a do