Transcripts For CNBC Squawk On The Street 20140106

Losses, but some encouraging pmis in europe, especially in spain. Our map begins with twitter. Being slapped with a big downgrade. Sirius xm moving the other way. Liberty offering to make the service a wholly owned s subsidia subsidiary. Apple reportedly snapping up snappy labs. Apple is close to breaking below its 50day moving average. And to buy jose banks, 57. 50 a share. Twitter downgrade. By Morgan Stanley to underweight from equal. Citing growinging competition from facebook and google. The call comes two months to the day that twitter priceded its ipo at 26 a share right here. The stock is now at 140 . This is scott, the analyst at Morgan Stanley. Wellknown. Helped take Facebook Public and now feels they have the advantage in this race. I think facebook, robert pack, sun trust, who was the first guy to say listen, twitter could be amazing. I criticized him, saying is he trying to get the jump . He was. He really pushes facebook today. He downgraded twitter before. I think people are struggling with how to value twitter. Given the fact that i said something on friday, i never thought it was going to be continroversial controversial. I said twitters much more expensive than facebook. How . By every metric. Why would that be controversial . When people love a stock, they love a stock. I wasnt going to play solar city. Twitter says were not going to let 1999, 2000, were not going to be pushing stocks. Facebook does have value and an article in the wall street journal, hey, guys, were a public company. Lets get serious. Dont mean to take away from your serious scoop, facebook is so much cheaper than that story in twitter. Encapsulated that moment where he really transitioned. Suddenly, they said mobile is is not only important, but theyre going to figure it out. So rarely do you have executives saying listen, we were caught totally unawares. You see it in football. Look, we just did not anticipate the pass. In this, we do not anticipate emotional, but were going to win and then they win . That team at facebook is very undervalued still. Couple of other interesting calls embedded. Google, price target goes to 11. 72 from 10. 75. Calls youtube the most underappreciated asset of that company. This is the largest. Ubs says the target is 1300. Theres so much leverage here. So many things that google is doing. Every time you turn around, google has evolved in something they havent even started monotizing yet. I think that company has the most irons in the fire of any company i looked at right now. Around the world. All right, well see. I think their target, ms is the target on twitter is at 33. Youd have to see some blood letting to get back to those levels. 14 times revenues. 84 times ebita. If you get on board here and start rationalizing, i remember during 2000, youd say, at this point, in 2010 numbers, the stocks cheap. Im not seeing that rationalization for twitter. I applaud the analysts for being able to say this one, we cant figure out. Wall street typically tries to figure out, if they cant, they come up with a rationale. Doesnt mean the stock wont continue to go higher. Got a soft float, got a lot of very sided investors. I find that twitter is thought of what look at all the things that could happen. First facebook thats happening. This is like amazon. Amazon ever said you know what . We are doing so well we could offer dividend. The stock would be cut in half. You want to growth to be in the twitter does have unbridled growth, but we cant value it. Finally, it does come on the heels of a lot of downgrades. Cell gene. Met life, going into the new year with discipline . Ive gone through the cell celgene downgrade. I wish they would have chosen the keystone name to not been celgene. Theres a lawsuit involved. Theyre saying when it launches, it isnt that good. I think that the street is still fighting the upside. They just dont want it to happen. Boeing has a contract announced this week. It was breathtaking. This was a monumental move. They just dont want to get behind this market and i think thats a shame because they could be very helpful in the stocks that could be undervalued. At least theyre going after the stocks that are overvalued. Lets talk about a stock that comes up on your show. Number one. It is going to be up nicely this morning. Liberty media lake late friday made an offer to make the service a wholly owned subsidiary. The deal as offered i is. 7. 076 of a liberty c share. Now, these dont yet exist. Theyre going to change them for the as and bs, then issue as well that ratio of said c shares to sirius holders. You would end up with holders owning 39 of Liberty Media, which would be the 100 ownership and also, the stake in charter and the live nations. But not quite a pure play. The argument being made, were giving you a liquid security, a slight premium. Of course, they control the company, but it will require a special committee to negotiate on behalf of this minority holders annual vote of the majority of the minority. To approve it. Best guess is they go up a bit here in terms of what theyre willing to offer on that rh owe, bump it a bitten, and then get the deal done and it will enhance their Balance Sheet to the ability to be able to borrow more or free for a run at Time Warner Cable. If you own sirius, then you are going to own this new security. If you buy here, how do you know youre not overpaying . Well, youre making a decision on not just the largely the prospects of sirius and to some extent, there are some other assets. Shareholders say weve got a pretty liquid security to begin with, but libertys argument, 100 ownership. Even better perhaps or more than we are right now. They already run the management. There are a number of arguments theyre going to make as to why its your benefit, but youre right. You may be want to be careful here. Its running up in part above the price implied by where libertys stock isctatioexpecta. Now, the lmca that were showing on our screen, what is the relationship between that and the potential new stuff . 076 of new share, which is just that, thep you get 21. Theyll do a, essentially a stock okay, the two most popular. Thank you for mentioning. I think that taking advantage of the last quarter perceived to be weaker. Saying listen, this acquisition, this is brilliant. Im just going to tell you. This is approved. Yes, it did. You like the management of this team. You like greg buffet, historically. I dont mean to put you on the spot. Extraordinarily in depth when it comes to financial maneuvers, no doubt about it. And strategically. Many believe they have a very strong and well what i think is is interesting here, jim, on the conference call, well talk more about this shortly, they said theyre fully behind the strategy and theyre not afraid of their competition and they are happy to get in their ownership stake because they believe and if any thought it would go the other way, which it would be spun. Pandoras going to get a 6 pop as well. Wonder what that says about the radio market as much as libertys own maneuvers. Theres a renaissance here. We see a lot. So, renaissance in cable, tv. Lots of areas of the market were written off going into the last six months of last year. The insurance stocks. Doing a lot of chart work and seeing holy, cow, there were areas where people just said, this business is dead and im alive. I happen to think by the way that sirius is a great monopoly. I will throw one idea out at you, which is once they consolidate this, if that occurs, which is likely, nothing says that liberty wont try to buy. Oh, man. Right . Oh, man. Thats got to be something to think about. You boy,s, you know the spot fi pandora universe. These are loved. Youre talk iing about cult status as a user. Once youre in that ecosystem,al la apple, its very hard to get divorced. I was with with someone this weekend, is this Coleman Hawkins in jazz. No, its whatever spotify is playing for jazz. My kids, i asked them, please buy me all mozart. So true. Its goin to be a fun space to watch. When we come back, mens warehouse, man, this story goes on and on. Should you like the way it looks . And speaking of m a, stay tuned for an exclusive interview with libertys cfo. Take one more look at futures as we kick off a busy week. Jobs number on friday. Yellin possibly confirmed today. More sidewalk on the street from post nine in a moment. And they eventually went away with the promise of getting higher. Next thing we know, we get the pack man defense. Mens warehouse is the bigger of the two in every way. It can also borrow more and has moved ahead to an offer of 57. 50 and going after two board members. The window on those nominations is open. I think until january 17th. Two are more important. The two that are up,57. 50, want to sell, that remains up to a question. Its not an insignificant multiple, jim, but there are those who say it could be higher. Clearly, neither one of them wants to be the seller. Both want to be buyer. You look at the hurst deal. In that deal, look at this fire. What happens is the acquirers keep winning. This would be a fabulous deal for mens warehouse because they would own this category of discount mens apparel and that, if they own it, thats a win. Mens warehouse goes higher. Todays not a win for cnbc. Did you see how many jos a. Banks mens warehouse has their entire board of directors up. To want to come back with its own tinder offer, although financing for banks is more in question. The its the smaller of the two questions. It had come in partnership, but raising the money for a tinder offer would be more tenuous, but the entire board of mens warehouse comes up not a staggered board, so just something to keep in mind. You are going to like the way you make money if you own mens warehouse. We do have ge buying a unit from thermo. A little spectrum for sale. I wonder if were going to see the coffers open up a little bit. Of course, monday. Remember what we used to talk about. You come in, the bankers would be working. What did we call it . Merger monday. Maybe somethings changed here, david. Maybe we no longer shrink to grow. Maybe we grow to grow. Well see. It does have a feeling that this year, i dont even want to go down that road. But ml has been the ceo, saying we do this Charitable Trust thing. Gm said, dont you listen, the man is saying the company is being recon figured. You think thats a reason to not be in it . Thats a reason to be in it. Yield is 3. 2 . This is not a bad piece of paper to own if you think the pmi ur ozone number which came out this morning is going to be good. Ge is going to be related to energy and health care. Well used to own our company and some of us be compensated to a certain extent, which didnt work out that well. People dont care about how were compensated. No, they dont. They dont even care to have us compensated. How do you get those two for one suits . My suit, its like i got to mortgage my house to buy a suit. I had a from meet the press. I got to tell you, i could live in it. It felt like butter. Jim loves his clothes. I do. I love clothes. I love clothes. Real quickly, i think i confused people on the liberty sir yous. Take a third of liberty. Youre going to be tripling the amount of shares, so that ratio,. 076 is off of a third. So take the stock price, cut it by a third, then apply said ratio. Get to what its worth. An sat question. I got to go get my tutor. I apologize if i confused people. Im sure that cleared that up. Im going to defer you. When we come back, making money on the first monday of the new year. Get ready for cramers mad dash as we count down to the opening bell. Take one more lock at futures. The dow has not had two days down consecutively since december 11th and 12th. More in just a moment. Hi, im terry and i have diabetic nerve pain. I worked a patrol unit for 17 years in the city of baltimore. When i first started experiencing the pain, its, its hard to describe because you have a numbness. But yet you have the pain like thousands of needles sticking in your foot. It was progressively getting worse, and at that point i knew i had to do something. When i went back to my healthcare professional. Thats when she suggested the lyrica. Once i started taking the lyrica, the pain started subsiding. [ male announcer ] its known that diabetes damages nerves. Lyrica is fda approved to treat diabetic nerve pain. Lyrica is not for everyone. It may cause serious allergic reactions or suicidal thoughts or actions. Tell your doctor right away if you have these, new, or worsening depression, or unusual changes in mood or behavior. Or swelling, trouble breathing, rash, hives, blisters, changes in eyesight including blurry vision, muscle pain with fever, tired feeling, or skin sores from diabetes. Common side effects are dizziness, sleepiness, weight gain and swelling of hands, legs and feet. Dont drink alcohol while taking lyrica. Dont drive or use machinery until you know how lyrica affects you. Those who have had a drug or alcohol problem may be more likely to misuse lyrica. Ask your doctor about lyrica today. Its specific treatment for diabetic nerve pain. To hear more of terrys story, visit lyrica. Com. About six plus minutes before the opening bell. Some Research Moving stocks this morning. Elon musks solar setting, another one, that he owns. Goldman sachs goes from whole to conviction buy capitalizing on fast rooftop growth. This is a hard to value stock, but i know that if you want to go to rooftop way and you can get your electric into the grid, this is a remarkable company. I know people who have used and loved it. At the same time, it is hard to figure out what is it is worth, but goldman says it is a terrific economic leverage play. Dont worry about it. Dont worry, be happy by solar city. Conviction buy. Didnt even go to buy first. Now, what is the Business Model here . Theyve put the things on the roof . They finance it. And you know, david, theres a whole generation of people we often forget who just really believe, i put in on my roof. In some state, i can get a rebate. Other states, its so impossible. Youve got to look at state by state, but some give you a credit and a lot of people are going to criticize this, saying this is just another opportunity to capitalize on what the laws are that are pro solar, but boy, i wish the government did this. Youve got to take a shot, i suppose. Lets talk ebay. Last year, this stock did not perform well in contrast to amazon, for example. Been a stock my charity struggled with and basically gave up on. Earnings are at risk. Now, we often think about this company, paypal, got great growth, but visa and mastercard, particularly visa, because mastercard is going to be split because theres too much excitement. This was one of the winners come out of internet 2. 0 and it just has no momentum and a great manager, youve got to be careful with this stock. When they say the numbers are at risk, i think they mean it. I think its going to be dangerous. Morgan stanley again, the one with the downgrade this morning. Goes back to that level, david. A lot of people have been saying reverse head and shoulders. I only mention this stuff because the charts have been so right from 2013. This is going to disturb the pattern. I think you need to trend or sale ebay based on this particular downgrade. All right. Meaningful research. Were going to be watching it in the post market, which begins less than four minutes from now well be talking to greg maffei on his companys offer to buy the rest of sirius satellite. Opening bell coming up after this. [ male announcer ] what if a Small Company became big business overnight . Like, really big. Then expanded . Or their new product tanked . Or not . What if they embrace new technology instead . Imagine a companys future with the future of trading. Company profile. A Research Tool on thinkorswim. From td ameritrade. Youre watching squawk on the street. We just got news from fedex. Its announced a 2 billion note offering as well as an acceleration of its sharing purps program. Going to use the proceeds to fund that share. I think its up 2 in the premarket. What a remarkable 60point run. Some were unhappy with the way that business has been rub. Can we please focus on underperformers . This is one of the great perf m performers of the particular era. No doubt. Not a Package Delivery company, but again, this is the big theme from 2013. I know there will be people out there who say this is phony. Its all because of the fed. You know what . You can go sell a million shares of fedex right here. I dont know whats phony about that. Gains last year are 50 plus percent. Unbelievable run. Theres a look at the s p. Nice breath at the hope and at the big board, the National Committee on u. S. China relations here for the fifth annual forecast of chinas economy forum. A lot of people taking pictures on the floor. At the nasdaq, sprouts, farmers market, celebrating one of the high profile ipos of last year. I was buy the whole foods yesterday in brooklyn. Theres a lot of competition in that seg m. I like the guys from sprouts very much. I still say whole foods because of mackie and we are seeing, when i talk about whole foods, i know im regarded as being worshipful, but i think that the problem with the idea of being worshipful is people dont understand the power of this thing. Okay, the power of the theme is so incredible and let the walter rob, people regard this as the play on health. Just like gmo. You go there because of Good Housekeeping seal of approval. Thats why that stock is still buying. People are saying no. Go watch what walter robin said on mad money. This stock isnt done. And the expansion accelerating. And this cannibalization thing. Wrong. This is not the donner party. You like their cook book, didnt you . Thanks for going there. Great. Weve not touched on apple yet. This purchase of i think its called snappy app, this app that allows you the take pictures at 20 to 30 frames per second. But the stock, jim, back below the 50day. The chatter is theres something wrong at apple and i can tell you, look, you know what . So sh let it go below the 50 day and then buy it. Its just not an expensive stock. It doesnt have googles momentum. It does have things in the pipe that maybe blow away, but apples not an expensive stock. It did have a Straight Line shot from 380. Were almost back to that level to a tenyear over it. Yeah, actually, we are. Interestingly. Well see. He greatly diminished going into the, were aways from the meeting, but going into his proposal now. The fear here is so palpable. This is a firm standpoint research. But suddenly, theyre on the map because they have this. I think tim cook is going to show people stop doubting us. Really . Yeah. Why do you think that . Because i think that the new products are fabulous. What new products . Tell me. I love the phone. Those arent new. Well, theyre going to have new it ration coming out in a few months. Itration. Wheres the new . Begins today in vegas. Lot of coverage about the internet of things. The internet enabled dog collar. The camera that fits on your wrist. Wheres apple going to fit in the scheme of all that . I think apple is a Consumer Products company that develops. Wheres samsung . They were supposed to be the apple killer. They were killinging apple for a while. Dont hear much about that lately. And i still think sprint is very close to apple and will be the place you go to buy things. Theyre going to keep apple front and center. Im just saying that the stocks not expensive. Which is something we could have said anytime over the last couple of years. True. I found myself defending a stock that i just think when you look at the valuation of twitter versus apple, apples cheaper than any stock in the dow. How about that . Is that right . 30 stocks that are more exp expensive than apple . Which one of those would you like there . Walmart . Like walmart . Minimum wage walmart . Asking me to go walmart versus apple . Im doing that because the age of walmart. Costco. Book signing there. No. Want to talk about sirius and liber liberty. Late friday, we got the word from liberty that it had made a propa proposal to buy what it didnt own. A company that it already controls, owning 50 of it. Wants to employ a tax free stock swap in which it would buy the rest. Lets get more on why now and whether it will happen. Joining me on the cnbc news line to discuss is the ceo, greg maffei. Thanks for calling in. Good morning. Why do you dpguys want to do th . I think there are a couple of reasons why this is attractive. Simplify the capital structure. Puts us on the same page and secondly, allows us to deploy capital across the liberty and sirius businesses, including potentially share purchases. And most intelligent fashion. And why now . Well considering for a long time, ways to utilize the capital of sirius and came upon this as being the most attractive process. Theres a majority and minority needed in terms of a vote. Youve got a special committee youll be dealing with. There seems to be an expectation, especially given sirius stock price that you guys are going to have to pay more. Is that your expectation as well . I think we put a very fair proposal on the table, but obviously, its the job of that special community and subsequently, a vote of the minority to make a decision and it would have been unknown people trying to negotiate for better numbers. Now, why do you believe its for better numbers . Saying i got plenty of liquidity in this stock now. Well, we think as i said already, its going to offer them an attractive stock because it has more liquidity. But in addition, the opportunity for the sirius shareholders to participate not only in the sirius Growth Opportunities, but any other opportunities that liberty has, some of which might be attractive. We think should be b appealing to the sirius shareholders as well. Well, one of those any, does this allow liberty should the deal close to borrow more, Balance Sheet through borrowing given the increased cash flow that will be coming . I think youre right, david. Theres no doubt this gives liberty more flexibility. Many people do think you find that attractive. You own 27 of charter. Those who have been following this closely know that the window of nominations for time warners board opens up in the not too distant future. It closes in mid february. Can we expect that liberty and charter will make a public proposal at some point to acquire Time Warner Cable . Im not going to subject thats going to happen today. What ive said all along, what john malone and the charter management have said, we believe theres a lot of reasons we think consolidation is attractive. There are other attractive combinations out there, too. Theyre saying it would be at least 150 to 155 bucks a share. Is that id be surprised if theres a buyer out there at that price, but you know, thats what if it is. You mentioned Different Things that might be done. We noted pandoras up today. Some some would say competition has never been stronger. Could go out and buy pandora or spot spotify. Is that something you would consider . I think the team has done a great job growing the business while many of the streaming ad based services have grown as well and you know, we look all the time at what is the opportunity around a connected car and connecting with our subscribers and other potential listeners in new ways. I dont need an acquisition, but we need different flexibility to do that in different ways if thats appealing. Sirius has a large buy back. Do we expect that, in other words, that same amount to transfer to liberty shares. Youve bought back half the company over the last few years, havent you . Since we created the Liberty Media stock, weve bought back more than half of it, and Liberty Companies in general have been aggressive with purchasers of stock, so while were not going to set forth the longterm capital plays, the only share we purchased, thats been one of the tools weve purchased often. And finally back to this idea, do you believe there needs to be consolidation . Do you continue to believe thats something that that should happen and if so, why . Look, we made the charter investment because we found the Management Team appealing an the position they had during the world territories attractive. The fact they had an nol, the fact they were upgraded to all digital. We dont need ak wii sagss to make it a great investment. That having been said, horizontal consolidation in the cable industry seems very appealing. Youre up against National Competitors and the opportunity to consolidate, knock out costs, provide more in services because youre able to reinvest more, all of those are. Reporter very attractive. Is there any Product Offering or offering at all that we could conceive of that would involve satellite radio as well as to the consumer . We have lots of ideas. None of them are ready to announce today. All right. Greg, very much appreciate your willingness to come on. Well be following your offer closely and whatever develops on time warning cable. Greg maffei. Sounds like theres conversations to be had later on. Didnt knock down essentially the notions you raised, david. It will be interesting. They bought back more than half of their stock. I thought that was amazing. No company has been more aggressive in many ways than deploying capital and borrowing through the various liberty entities over this last couple of years. They have been willing to take the risk and willing to use what have been extraordinarily generous Capital Markets when others didnt want to. People thought xm sirius was going to go under. These guys came to the rescue in a bold move. Obviously brilliant. And you could have gotten in on it. Malone, its not, i know hes got all the shares, but hes never been selfish. You can coat tail this man and probably done better than if you coat tailed Warren Buffett during that period. Interesting to look at. Malone versus buffett. Sirius shareholders woul own 39 of liberty, but they would have no vote. No vote that comes along with that. Its all controlled by malone. Dow has lost what gains it had. Lets get to bob pisani on the floor. If you would have come to me five or six minutes ago, i would have said it was a good start. We were up on the dow and have just sort of lost it. Just turned negative. Not a good night in asia as well. Just want to point out, a fairly weak start. Japan has an excuse. This was their first trading day of the year. The nen a little stronger today. Normally, that hurts japanese equities. China doesnt have as many excuses. We saw the services pmi numbers that everybody watches. Weak. We saw the manufacturing pmis below expectations last week, so hasnt been a great start. Shanghai index, near the lowest level since august. Shares that trade in china proper, but hong kong isnt doing much better. That is also not off to a good start for the year. Also in europe, what i find interesting is so far the countries gaining the most. So, greece and portugal, theyre having a great start to the year and the more Stable Companies are having a tougher start to the year. This is on top of what happened. Greece and portugal had a great year last year. Italy had a decent year, so its not like theyre buying the losers and selling the winners. Portugal and italy were clear winners last year. Here in the United States, lot of debate over the weekend about financials. I know you mentioned this, jim. I am not impressed with these arguments. There is an argument that financials are going to do great. The only sector of the ten that were up in the first two days of trading and for a simple reason. The biggest tech names are moving up. Bank of america, citi, i get the arguments. Expectations of a steeper yield curve. Maybe more m a activity, but financials had a very good year and a lot of this is already priced in. If you look past these few names t regional banks are not up. The snrns names are not up. Theres a small group of Real Investment trusts that are up. They are the largest out there, so avalon, boston bay, the equity residential. Those are the biggest names of all. The rest of the reefs are mostly flat to down. Theres a small group of people buying the big cap and i get the idea. Interest rates rise. Cap rates rise, increases the attractiveness, but again, most of these arguments have been made before. I think were going to need more indication of the economy Getting Better before we have big moves into these stocks that are justifiable. Take a look at some of the stocks. A good point youre making about the downgrades. This is the season of downgrades. Siri is on the upside. Solar city on that Goldman Sachs upgrade. 32 systems is just about flat right now. First solar on that Goldman Sachs downgrade. Twitter. Also. To the downside as you can see. Back to you. Thanks a lot. I just keep thinking the reason why i like these banks is that the cd rates have not moved this year. For the twoyear, fiveyear. Banks are going to make a lot of money on those. I know thats kind of risk free money and thats part of the excitement. Starting to get some when we come back, what amazons founder and ceo had to say about those kidney stones. Also, Jon Steinberg on bit coin mining. Back in a moment. 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Mattel started in a garage. The ramones started in a garage. My point . You never know what kind of greatness can come out of an american garage. Introducing the 2014 motor trend car of the year. The all new cadillac cts. Aint garages great . Mine was earned orbiting the moon in 1971. Afghanistan, in 2009. On the u. S. S. Saratoga in 1982. [ male announcer ] once its earned, usaa Auto Insurance is often handed down from generation to generation. Because it offers a superior level of protection. And because usaas commitment to serve current and former military members and their families is without equal. Begin your legacy. Get an Auto Insurance quote. Usaa. We know what it means to serve. Five star, kidney stones, zero stars. Thats what the founder is saying after being evacuated from a vacation after a kidney stoeb attack on new years day. He was evacuated by a cruise ship to his private jet then on to a u. S. Hospital for emergency treatment. Didnt need surgery. Dont well, but obviously, an enormous amount of pain. I distinctly first world problem, i would tell you. But look, there must be many because i am told he is involved with the New Washington post company in making decisions there. He has, i told you about it on friday. This is his company. I know theres a conference call. Some good people, but this mans remarkable. Incredible. And not to mention his efforts for space and what hes doing there, which is a real significant effort and obviously, amazon and the Washington Post. And you can go on and on. These are americans. Where are the visionaries coming out of europe . Other than somebody who developing really beautiful ties. The chinese. I mean, theyre great mimickers. Unbelievable business people. I was going to say okay. Dont go there. But your point is taken. Brings us to our squawk on the tweet question. Other than kidney stones, what else would he give zero stars . Tweet us. I take it back. They make unbelievable suits. And cars. Things i like. Suits and cars. Yes. Heres whats coming up next on squawk on the street. Coming up, the weekend is over. Its time to get focused. Theres no better way than six stocks in 60 seconds and cramers got them when squawk on the street returns. She keeps you on your toes. You wouldnt have it any other way. But your erectile dysfunction it could be a question of blood flow. Cialis tadalafil for daily use helps you be Ready Anytime the moments right. You can be more confident in your ability to be ready. And the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph, like needing to go frequently or urgently. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. Do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in Blood Pressure. Do not drink alcohol in excess. Side effects may include headache, upset stomach, delayed backache or muscle ache. To avoid longterm injury, get medical help right away for an erection lasting more than four hours. If you have any sudden decrease or loss in hearing or vision, or any allergic reactions like rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. Ask your doctor about experiencing cialis for daily use and a free 30tablet trial. It took a lot of juggling to keep it all together. K. For some lowincome families, having Broadband Internet is a faraway dream. So we created internet essentials, americas largest lowcost internet adoption program. Having the internet at home means she has to go no further than the Kitchen Table to do her homework. Now, more than one million americans have been connected at home. It makes it so much better to do homework, when youre at home. Welcome to whats next. Comcastnbcuniversal. This is a stock in get rich carefully, should break itself up. Its been in a major, major uptrend. Upgrade of win at city. Wins been remarkable. I remember when everybody wrote it off in vegas. I like this. Got some news on lynn energy today. The biggest bear in the world on this stock was jpmorgan. Theyre saying buy it now that the deal is done, but my trust has struggled with with the stock. Maybe this is the relief weve been looking for. These refiners have been so strong. This isnt a negative refiner, but does say be careful there. Nice buy to neutral for wendys. I am a huge believer in what nelson has done here. I dont want to sell this stock yet. A couple of firms have upgraded, but this was one of the best performing last year. It is a good company now. All right. What about tonight on mad . Zwl the worst performing stocks are going the get a look. We were talking about it before. Bill miller had every single best performer. Congratulations to bill. A lot of people would have said, i had a good run. No, he came right back. When you look at the top performers of the s p, which mutual fund had them. He did. Which ones had the bottom . The ones that were going to underperform, but maybe there is something here. Im thinking of what he said about jc penney posting a couple of good months. Wasnt that immediately decided when youre hot and you have the hot hand like bill miller, things come clear to you. Maybe jc penney, hasnt looked yet. He is back. Very nice man. See you tonight, jim. 6 00 and 11 00 eastern time. When we come back, breaking news on ism services. Well get some factory orders, too, and the Market Reaction and then twitter two months after pricing that ipo. Mark ma hainey and what he sees for the stock. Do not go away. Ment at 1406 35th street the old dining table at 25th and hoffman. And the little room above the strip mall off roble avenue. This magic moment it is the story of where every great idea begins. And of those who believed they had the power to do more. Dell is honored to be part of some of the worlds great stories. That began much the same way ours did. In a little dorm room 2713. This magic moment this magic moment and it feels like your lifeate revolves around your symptoms, ask your gastroenterologist about humira adalimumab. Humira has been proven to work for adults who have tried other medications but still experience the symptoms of moderate to severe crohns disease. In clinical studies, the majority of patients on humira saw significant symptom relief, and many achieved remission. Humira can lower your ability to fight infections, including tuberculosis. Serious, sometimes fatal events, such as infections, lymphoma, or other types of cancer, have happened. Blood, liver and nervous system problems, serious allergic reactions, and new or worsening Heart Failure have occurred. Before starting humira, your doctor should test you for tb. Ask your doctor if you live in or have been to a region where certain fungal infections are common. Tell your doctor if you have had tb, hepatitis b, are prone to infections, or have symptoms such as fever, fatigue, cough, or sores. You should not start humira if you have any kind of infection. Ask your gastroenterologist about humira today. Remission is possible. So ally bank really has no hthats right, no hidden fees. S . Its just that im worried about, you know, hidden things. Ok, whys that . Well uhhh. Surprise um. Well, its true. At ally there are no hidden fees. Not one. Thats nice. No hidden fees, no worries. Ally bank. Your money needs an ally. Welcome back to squawk on the street. Well start with breaking news. Ism nonmanufacturing and factory orders. Hey, jim. Hey, carl. The market has gotten to a point where it was expecting good data. It came out of 53. Were expecting a 54. 6. The Employment Index came out 55. 8. I think the market cares more about employment than anything else. So stock market right now has lost a little bit. Just a tick or so. The tenyear yields have gone down just a hair on this. I guess what theyre saying here is that any bad data probably could be a little more chance of a taper. Factory orders, i still havent seen factory orders out here yet and were supposed to get that at 9 00 as well. Now, the markets up a little bit, too. 1. 8, a hair better than expected and on that, the stock market jumped about handle. Thank you very much. So the markets are riding the flat line so far today, but dont forget for now, the two in a bit session of the year were still off the best part of 1 . Lets bring in nick, chief Market Strategist with converge is group. Nick, youve told one of our researchers is the time to worry is when no one else seems concerned. The first part of the year has been rocky, simon. Weve seen that for sure. I think it is time to to have some caution here. While money flow should be good this month of january, at the same time, valuations are getting full and fundamentals shows the economy still hasnt really hit that second year. Mark, is he right . Simon, actually, i concur with nicks opinion. I think that while we have a rather sanguine view of thousho economy is going to develop over 2014 as it holds within the context of expansion, certainly, the market is fully reflected that in valuations, at least dmesically and as a consequence, i think were verging on overshoot territory, so i look for the market to continue to perform reasonably well, but we need more data points that are accumulating that are positive than some of setbacks weve had of recent like todays services data. But youre not talking about a correction from what youre saying. I think youwere right for. Weve gone an extended period of time without one. I know necessarily what could be the catalyst for it. It could be that perhaps because of markets have advanced as much they have and valuations are all of certainly fairly valued at that juncture, perhaps a whiff of some less than good news could be the catalyst for why equities could sell off. Nick, what is the Bigger Picture here for people who arent trying to trade the tops and bottoms . Theyre just in it for their retirement . Thep to put the money in the right place. Where are we on that front . That longterm investor. For that medium or longterm investor, i think were in a good spot. What i would tell those folks is that be prepared for some volatility. Weve had a really fairly straightforward ride, especially in 2013, that took us to these levels and it was a great ride. Be prepared for bottom market volatility. Still expect 5 to 7 returns. On what part of the market do you favor most . Were looking now, still early cycle mix. We like financials here. Big banks have done well early into the year. We still like industrials. On the flip side, wed be pretty cautious on bonds, particularly longer term, Long Duration bonds. Mark, whats your strategy . Very similar once again. I hate to be so consensus on the views being expressed here today, but the fact is, he do honor a procyclical stance. We do think again on the back of improving fundamentals, thats going to bode well for those more economically exposed areas of the market, like technology, even financials. But to overseas markets, the Earnings Growth profile is much better for 2014 than it is here in the United States. Hey, nick, i dont know if youve read through this paper that i guess ryan heart presented, arguing that the crisis azrieltive to prior is not as bad. Inflation adjusted gdp down five as opposed to an average of nine. That kind of flies in the face of everything weve been told about longterm unemployment and things like that. Does it feel better than it should . You know, its so hard to measure historical crisis or periods of optimism. You cant put your hand in the river twice, according to an old buddhist sentiment. I would be cautious even though they have a great track record. Guys, well leave it there. Have a great week. Thank you. Meantime, the senates voting later today on the fate of janet yellin. Steve liesman joins us now. Also, the former Federal Reserve governor and professor of economics at the University Chicago booth school of business. Steve, what should we know going into today . Well, i think the idea of yellin being nominated and confirmed will be the easy part. Remember there was the yellin, summers over the summer thing. But i think yellin is going to be taking a fed that has in transition at a time when the economy is in transition. Bernanke has been begun the taper, buttal something thats maybe more fundamental. The shift of guidance from being one thats a qe based to one thats based on forward rate guidance. Dealing with some of the issues out there and the questions about how qe works, how the Inflation Numbers have been so low. This is not a transition of one regime to another. Within the same regime. Its going to be a transition i think fundamentally over time to a different regime. Randy, are you in line with steves thinking . I think one of the key challenges that janets going to be facing is is this communications challenge. Try to explain whats happening. How the fed thinks about it and what its going to do because the socalled open mouth operations, talking about what youre going to do has become a full fledged tool of Monetary Policy and is just as important as any of the traditional tools, so the markets are going to have to get used to her words and voice and shes going to have to calibrate her message to convey what she wants and doesnt get an unexpected Market Reaction. Although its been said that she, to a large degree, has been an architect of the new policy. Is that true . She headed the Committee Like giving us the press conference for better or worse. We did a restore on this a few months ago and dudley mentioned it over the weekend. The average fed statement has gotten quite a bit longer and longer during the bernanke era and theres a question out there, carl, are they, are they saying more and meaning less or communicating less . And i think thats a problem. Thats sort of a problem of how challenging the Communications Job has become and this transition from one thats qe based to one thats forward rate is going to put more emphasis on words that the fed uses to tell us how much lower theyll be forhow long or whether or not they pull back from that. I dont know if you have an expression hospital pass in this country, but we have it in the uk when youre playing rugby. It means you pass the ball back with the knowledge thai going to catch the ball and everybody else is going to pile on them. On the way out, bernankes made it difficult for yellin because to sweeten the fact they were going to taper december 18th, he was super dubbish on the guidance. Its about as expansionary as you could be and if the committee is going to improve, yellins going to have to do a uturn on that, is she not in. I think they want to avoid what happened earlier in the year when the discussion of the step down began. They want to try to dif wrennuate purchases and i think thats why you got that strong message that were going to keep rates low for a long time, but start the step down now. I think janet is very much in sync with that and that actually makes the exit a bit easier because she can then do the stepdowns of the asset purchases without having rates rise. Whether that will maintain credibility in the mashlrkets o the next few months, thats going to be the key challenge. I think simon, you make a really good point, that if the numbers fundamentally change, yellin is going to have to make a pivot and youre right about that. Its going to be difficult for her and difficult for the context that randy just said, which is in the contest of trying to keep at least the short end under control and some lid on the long end and the way that doesnt hurt the economy. Another Central Banks around the world. The bank of england, notably with carney in charge is in a very similar situation. I think thats right and its worth watching by the way, the whole Global Situation and are we in a year this year 2014 and i think tightening is too strong a word. Finally, steve, were going to hear from rosengren this week, williams, lacquer, bullard. For so long, anyone who spoke, we were looking for any clues about the taper. What is every statement going to hinge on now . The new thing we need to know is the reaction function around the ten billion of taper. The conventional wisdom in the market right now is that its ten billion a meeting and your question in the press room. Right. And what it takes now to get somebody off of that is what we need to know. We had charlie over the weekend. Are you on this track . How much in the way of growth, unemployment decline would it take for you to accelerate in. So all of these guy, we need to know what the reaction function or the tolerance around the table. Good stuff, guys. Busy day, busy week. Thanks a lot. See you later. Another day, another find for jpmorgan. Apparently, its nearing a 2 billion settlement with federal authorities. This time in a case tied to Bernie Madoffs ponzi scheme. Kayla is back at hq with more on that and what shes been able to dig up. Good morning. His bank of record for two decades has been the subject of an investigation, questions whether it ignored warning signs he was a fraud. The New York Times reports the deal could include a deferred prosecution agreement, which in itself, would rule out criminal charges. Now, a joint deal would close two open cases. One, a justice, the other at the office of the comptroller of the currency. One would cover general charges. Madoff has claimed banks turned a blind eye at what he was up to, telling our scott cohn early last year, quote, i have little doubt that the information i could provide could clearly demonstrate the vital role the major banks played in carrying out my froud including the role of handling the accounts of my major customers. This is not the only issue for jpmorgan. Its paid some 20 billion to settle these lawsuits. The costliest relating to its mortgage products in the financial crisis, but also, faulty oversight, improper marketing on credit card products and nearly a dozen Ongoing Investigation from hiring in china to potential Energy Market manipulation. The list goes on and on. The bank would like to get this latest payment out of the way. That tabs place on tuesday, january 14th, so we have a line in the sand and well see if we get that in the next week. Thank you very much. Well, it was a perfect storm. Of Winter Weather this week and from feet of snow to freezing rain, frigid temperatures and i can tell you firsthand that somebody who went to and from south florida, it reeked havoc on the airlines. Well have all the details next. Mine was earned orbiting the moon in 1971. Afghanistan, in 2009. On the u. S. S. Saratoga in 1982. [ male announcer ] once its earned, usaa Auto Insurance is often handed down from generation to generation. Because it offers a superior level of protection. And because usaas commitment to serve current and former military members and their families is without equal. Begin your legacy. Get an Auto Insurance quote. Usaa. We know what it means to serve. Trying to find the right sleep number bed. The company is tanking in trading after the Company Issues a warning saying current warnings may fall short of forecasts. Cited a slowdown in sales during the Holiday Shopping season and that it sees that trend continuing into this year. Back over to you. Thanks very much. From frigid weather to emergency landings, it was not a good weekend for air travel. Phil lebeau is live at chicagos ohare, where i think its minus 15. Phil, good morning. It is minus 15, carl, but as cold as it is outside, the temperature in here ised off. This line goes down another 50 feet. All of these people have been standing here, im not exaggerating, for at least 30, 40 minutes and this line goes all the way down here, at least another 200 feet. People are bumping into each other. People have a phone in one hand, cell phone in another and are seeing the same thing. All flights are canceled. Here are the latest numbers from flightaware. Com in terms of cancellations today. Youre looking at total cancellations coming in, just under 3400. Delays, more than 4300. Cancellations this weekend have now risen 5638 is the total cancellations. Delays of more than 21,000 and in terms of the airports impacted, it starts here at ohare. Clevelandhopkins is a mess. Laguardia, jfk and napz has been become the fifth most impacted. Indy is gettinging hammered with snow and thats the problem down there. Jet blue, we talked about the east coast being hit. What were seeing there, 48 of jet blue flights have been canceled today. And united airlines, it has canceled regional jet flights in the upper midwest. Ive talked with a number of people out here at ohare who have said look, i was on a regional jet going somewhere in the midwest. That flight has been canceled. What were seeing here when you look at united and jet blue, these stocks may not be reacting a lot today and thats because you need to see an extended delay or consolation. Something of the magnitude of what happened with hurricane sandy, thats when you start to see the Airline Stocks take a big hit, but theres no doubt what were seeing here, i think its coming your way as this snowstorm moves east and the bitter cold, more and more people are frustrated theyre not getting out, particularly into smaller cities and the east coast. Thank you very much. Up next, securing the cloud. Cyber attacks are becoming more and more common. How do you protect your information . Were talking to one company thats changing the world of websites and securing them at the same time. The ceo of cloud flare will join us live to talk about what theyre doing. Right after this break. [ male announcer ] legalzoom has helped start over 1 million businesses. If you have a business idea, we have a personalized legal solution thats right for you. With easy stepbystep guidance, were here to help you turn your dream into a reality. Start your Business Today with legalzoom. Getting the right nutrition isnt always easy. First, i want a way to help minimize my blood sugar spikes. Then, a way to support heart health. And lets not forget immune support. But now i have new glucerna advance with three benefits in one. Including carbsteady ultra to help minimize blood sugar spikes. Its the best from glucerna. [ male announcer ] new glucerna advance. From the brand doctors recommend most. Advancing nutrition for diabetes. From the brand doctors recommend most. That its given me time toabout reflect on some of lifeseen biggest questions. Like, if you could save hundreds on Car Insurance by making one simple call, why wouldnt you make that call . See, the only thing i can think of is that you cant get any. Bars. Ah, thats better. Its a beautiful view. I wonder if i can see mt. Rushmore from here. Geico. Fifteen minutes could save you fifteen percent or more on Car Insurance. Theres nothing like being your own boss and my customers are really liking your flat rate shipping. Fedex one rate. Really makes my life easier. Maybe a promotion is in order. Good news. I got a new title. And a raise . Management couldnt make that happen. [ male announcer ] introducing fedex one rate. Simple, flat rate shipping with the reliability of fedex. Just had to show you minneapolis, st. Paul. Feels like minus 43 as this polar vortex makes its way south. Weather affecting 20 million people. Its going to be the coldest weather weve seen in this country in about two decades. You were telling me during the break, its colder than on mars. As of yesterday during the break, it is colder than on the surface of mars, which has a little more distance between the s sun and it. Between target, snap chat and snowden and as more and more information is being moved to the cloud, its fuelling new fears about data security. So what can customers do ab it . Were delighted to welcome to the program, matthew prince. The cofounder and ceo of cloudfare. A web security and performance company. It says your company basically sitti ins in front of one in ev0 sites when people visit the web today. Are you paid to be there by the user or by the site . The websites are our cu customers and so, if you think about it, Companies Like google have whole operations teams with security and performance and availability. What cloudflare does is we make that same level of Technology Available to anyone else on the web. This is obviously very important. Its become very topical because were realizing these entrepreneurs that are basically trying to rapidly as they can grow social media sites, are vulnerable at the back end. They dont have the sort of protection that you might expect at a time when presumably, the hackers are becoming better at what they do. Thats right. Its not just new social media sites. Anyone who has a web presence is increasingly targeted by any various types of attacks. I think weve been surprised over the last year to see the wide range of sites that are attacked from social media sites an major financial institutions, but also individuals running flower stores or adoption agencies online. Weve seen a 500 increase in the number of attacks just in the last year. How successful are you . You were targeted with a denial of Service Attack in the the spring. We stop hundreds of denial of Service Attacks every single day. In the spring, we saw the largest attack in history hit one of our customers. We were able to keep that site online even though we were seeing over 300 gigabytes of traff traffic, which is actually really amazing accomplishment for our team. You mentioned the traffic. Im curious. So many high profiled attacks. At what point does it have an impact on traffic . At what point are people less willing to use the internet because theyre afraid of this happening to them . Were seeing that increasingly, more and more websites are having to seek shelter behind someone like cloudflare to protect them. Its very difficult as an individual company, again, unless you have the resources of google, to be able to stay onlip. So, were seeing massive growth and again, even our small businesses, if you have the resources of a company like cloudflare, we can keep you online. You know, im just trying to get handle on where this is going. The Consumer Electronics show is going to kick off in vegas and it will be about wearable devices that connect to everything. The internet of everything is something theyre talking about in the press today, where youve got dog collars that respond to wifi. Ultimately, would it become too dangerous to go in this direction and have all that data in the cloud . Do we have to, its an approach from people like you with the greatest of respect because youre small players in the private sector. Do we need a big shield, for example . I dont think so. I think that what youll see is that the network will consolidate behind a limited number of providers. I think amazon is showing, theyre developing the resources and technologies to provide that. I think cloudflare, which sits in front of five 5 of web requests, is becoming a major player. Were building that giant shield and between all of these different companies, i think youll be able to exist and run the internet in a very successful and productive way even as more people are getting online and trusting their data to a network. I see you just got another round of funding. Do you seek to be acquired . What is your aim, your time horizon here . Well, i think that its, were seeing ourselves as extremely valuable and strategic resource on the web. Over the next year, were building into places like china, latin america. Places we havent had our network before and i dont think were building this to be acqui acquired. Were billing this to be a stand alone company. I think youll see us on the show in about two to four years ringing a bell somewhere. I hope we see you before that. Youre welcome anytime. Thank you. Nice to meet you, matthew. The cofounder and ceo of cloudflare. Straight ahead, twitter was having a good 2014 until today. The stock losing nearly all the gains for the year in todays session. Whats ahead for the stock . Well talk to mark about that. Get his outlook on the internet sector for the new year in just a moment. Who found a magic seas. It told him what was happening on the Trading Floor in real time. The shell brought him great fame. But then, one day, he noticed that everybody could have a magic seashell. [ indistinct talking ] [ male announcer ] right there in their Trading Platform. [ indistinct talking continues ] [ male announcer ] so the magic shell went back to being a. Shell. Get live squawks right in your Trading Platform with think or swim from td ameritrade. Get live squawks right in your Trading Platform at a company thats bringing media and technology together. Next is every second of nbcuniversals coverage 0f the 2014 olympic winter games. Its connecting over one million lowincome americans to Broadband Internet at home. Its a place named one americas most veteran friendly employers. Next is information and entertainment in ways you never thought possible. Welcome to whats next. Comcastnbcuniversal. Here are some of the stoirs were talking about. Nonmanufacturing index for december coming in at 53 even. And down almost a full point from novembers reading. The Commerce Department says factory orders rose 1. 8 in november led by a surge in aircraft demand. Disney shares hitting a new high. Up more than 45 over the last 12 months. Check out this oneyear shot if you were lucky enough to get into some of these names like facebook, look google, you would have ended the year a happy investor. Well, its a new year and if youre looking for ideas, lets bring in mark. Good morning. Were looking at downgrades of some, price and target increases of others. Among some of your colleagues today. What is your overall playbook when it comes to social . For social, social continues to be a multiyear trend. Youve got facebook wellknown. Relatively wellknown. Twitter, i dont think is still understood by the advertisers or users or the Investment Community yet. We like them both. We have a preference for facebook, but well stick with our buy on twitter. Even at these levels . We have a 60 price target. An upside range of 70. Twitter solved two problems that caused that initial correction in facebook. They solved mobile from the get go and came out with 70 of the revenue being mobile. That was facebooks big problem for the first year and secondly, they dont have that user disengagement concern that facebook has. My guess is well see that from twitter, but not for two or three years. For now, i think the fundamentals will grow stronger than probably any other company. Youre saying youve got to have a long fuse. Youve got to be patient. Facebook, 60 margins. Right now, twitter is at 5 to 7 . You should look at that and say, those margins are going to ram dramatically over the next five years. You put that together with very strong top line growth, this is 100 earnings grower for three years. The only stock that has that. It has a rich valuation. It deserves that. It deserves to be trading at what is it, 16 times revenues . Cant do a multiple on earnings, but on ebita that is very, very high. Ive heard your downgrade stocks in the past. When facebook came out, all the hype that went into that, we didnt upgrade that stock. When that stock was down, it did not have the user disengagement issue and we allowed some high levels that were built up quickly on this name. That told me that twitter was a guy. This is an aggressive buy. Its not one of our top picks, but still, given that set up, well stay buyers of twitter until proven otherwise. Good morning. I can understand of your large Cap Investment longs, quite easy to understand why google is there and amazon, but ebay . Why ebay . Ebays a shift for us. Overall, were getting more cautious on the internet space. We had a great run last year. We dont expect that to return this year. In that case, you want reasonable stocks premium to the market multiple stocks. Google screens well. Price line and ebay does, too. We had a buy on ebay this last year. Our worst call of the year. The stock underperformed. We think it will have a reversion on the stock. Valuation is more attractive now than its been in two years and we think the fundamentals are just well in tact. Payment business continues to be the leader in that segment and overturn cash to you. More than any of the large cap stocks. We like ebay. Mark, the Consumer Electronics show in vegas is getting underway this week as youll be aware. Wearable technology, what a lot of the people are talking about and also, automotive. Price lines done a deal it would appear with the automotive manufacturers, they are looking to put broad band in the cars. Why do you end up with pandora as the way to play that . Simon, thanks for the set up. We have a term were using now called grow stocks. Green field revenue stocks. This is pandora. All of their revenue to date has come from emotional devices, laptops, desktops. 50 of all radio listening is done in the car, yet they sale 60 of their ad revenue comes from audio ads. Those are what we would call native to the car experience. So theyve got an opportunity thats going to start this year. That makes pandora our number one pick in the states. Google is far and away the best internet pick. Interesting. Pandora Just Announced their december listening hours. I think up 13 . Well see you next time. Thanks again. As Tech Companies prepare to go public, some employees are looking to cash in. And the people looking to get some money for their pre ipo shares, several companies are helping swap shares for cash. Josh lipton is live in san jose with the details on that. Good morning, simon. If you are working at a Silicon Valley company like square, drop box, then you could be a millionaire on paper, but you cant get your hands on that money unless your Company Goes Public or sells out and maybe you want to buy that new house right now. These employees often go to a secondary market that buys or sales shares of private companies. Lawyers say rising demand for the secondary market is due in part to the jobs act signed into law in april 2012. Remember, the jobs act expanded from 500 to 2000, the number of shareholders a private company could have without also being forced to disclose Financial Information like a public company. So Cottage Industry was developed to meet that demand in a variety of ways. 137 ventures which makes loans secured by private Company Shares an equity zen, which has raised some 14 million to purchase shared from employees. Matthew, says the secondary market could be a good thing. They could encourage trade iing it suits their Business Needs and objectives, but the industry also has its critics. Critics arent always happy with the secondary market because they worry about losing control of their shareholder base. Still, there are thousands of workers here in Silicon Valley worth big money on paper, but it is just paper unless their companies go public or they hit the secondary market. Back to you. So true. Thank you. Up next, hear what Liberty Medias ceo had to say about the companys deal with sirius. And later, are you still wondering how someone gets hold of a bitcoin . Well show you how its done onset when squawk on the street returns this monday morning. If you have moderate to severe rheumatoid arthritis, like me, and youre talking to your rheumatologist about trying or adding a biologic. This is humira, adalimumab. This is humira working to help relieve my pain. This is humira helping me through the twists and turns. This is humira helping to protect my joints from further damage. Doctors have been prescribing humira for over ten years. Humira works by targeting and helping to block a specific source of inflammation that contributes to ra symptoms. For many adults, humira is proven to help relieve pain and stop further joint damage. Humira can lower your ability to fight infections, including tuberculosis. Serious, sometimes fatal events, such as infections, lymphoma, or other types of cancer, have happened. Blood, liver and nervous system problems, serious allergic reactions, and new or worsening Heart Failure have occurred. Before starting humira , your doctor should test you for tb. Ask your doctor if you live in or have been to a region where certain fungal infections are common. Tell your doctor if you have had tb, hepatitis b, are prone to infections, or have symptoms such as fever, fatigue, cough, or sores. You should not start humira if you have any kind of infection. Ask your doctor if humira can work for you. This is humira at work. Hey kevin. Still eating chalk for heartburn . Yeah. Try new alka seltzer fruit chews. They work fast on heartburn and taste awesome. These are good. Told ya im feeling better already. [ male announcer ] new alka seltzer fruits chews. Enjoy the relief at afraud could meanuld newblower credit scores. Chews. And higher Interest Rates when you apply for a credit card. Its a problem waiting to happen. Check your credit score, check your Credit Report at experian. Com. And shift through all eight speeds of a transmission connected to more standard horsepower than its german competitors. And that is the moment that driving the lexus gs will shift your perception. This is the pursuit of perfection. Take a look at the intraday price action in gold futures. Takes a sharp dip in just the last hour. Dropped from around 12. 47 relatively quickly. Experienced high selling volume during that time frame. Traders are still keeping an eye to see what prompted the selling, whether it was erroneous or just legitimate. Wak to back to you. Thanks very much. Lets talk about sirius satellite radio. Late friday, liberty offering to buy what it doesnt already own of sirius, a company that controls 52 ownership in a stock swap. That would be a series c that would be created, creating a great deal of liquidity. Take a look at sirius shares. They were up over 7 this morning. A special committee. They needed a vote. May get a bump above the 3 premium implied in the ratio. Not just about this deal, but of course continuing talk of consolidation in cable industry led by the belief that charter and liberty will together make a public proposal for Time Warner Cable. The deal will in fact enhance the ability to borrow any for Time Warner Cable. Theres no doubt this gives liberty more flexibility to make investments, including potentially investments into cable if that is what we find attractive. What ive said all along and what i think both john malone and the charter management have said, we believe theres a lot of reasons to think consolidation is attractive, that it could be an attractive combination, but there are other attractive combinations out there, too. It will be interesting to see what the strategy is. Certainly a big endorsement. By the capital structure, create more liquidity for share hlders. 39 of Liberty Media have no votes. As for whats next in terms of this battle for time warning cable and whether there will be another foray, i asked mr. Muff faye. Can we expect that liberty and charter will make a public p proposal at some point. What i said all along and what with john malone and charter management said, we believe theres a lot of reasons to think charter management was attractive, but there are other attractive combinations out there. Theyre saying they would need at least 150, 155 bucks a share. Is that a price guys could pay . Id be surprised theres a buyer out there at that price, but thats why there are horse races. Not quite sure what horse races hes referring to, but our parent company, comcast, has been examining the possibility of a time warner purchase should that opportunity arise. Does not appear likely at this point, but is not something that can be ruled out despite what would be a number of regulatory hurdles potentially overcome, but difficult to mount. Yeah, interesting to hear him say that. Saying i dont see a buyer at that price, but horse races does connote something that we havent seen a lot of. Its been a frustration for them because they have been the only buyer, but with the idea that comcast is there, the stock price has stayed high at least from the perspective of liberty and charter to try to convince shareholders, who many believe this would be a good combination to really pressure time warner management to come to the table. Chances are, if you were snowed in this weekend or just refused to leave the house because it was so cold, had some nice, hot food delivered. The ceo of delivery khat. Com will join us with answers when we come right back. [ sniffles ] i have a big meeting when we land, but i am so stuffed up, i cant rest. 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Having the internet at home means she has to go no further than the Kitchen Table to do her homework. Now, more than one million americans have been connected at home. It makes it so much better to do homework, when youre at home. Welcome to whats next. Comcastnbcuniversal. After getting 10 inches of snow on friday, new york city saw temperatures below 10 degrees and minneapolis saw thermometers drop to minus 20. Thats minus 20 fahrenheit, so is all this frosty weather causing Delivery Companies to heat up . Lets bring in delivery. Com ceo. Good morning. Good for business . Yes, with temperatures i think swinging to the negative 40 degrees high to low relative to the same time, our business is up about 35, 40 . Can you see it day by day . We were just actually talking during the baek. Just in cities like chicago, were up 300 , basically over the fiveday stretch of last year year. So the volume goes up and the difficu difficulty goes up. With the case of temperature, theres still the ability to deliver between the merchant and consumer. In the case of obviously inclement conditions, it will depend. Food Service Versus services. Were now also in categories like in addition to food, wine, liquor, which is up 100 over this period. Also, dry cleaning and laundry. And how about time of day . When do the servers really spike . Generally at least related to food. Food is a 75 billion industry for delivery. Lunch and dinner. How is most of this stuff getting to people . I was out friday night in new york city walking to a neighborhood restaurant, the st bicycles delivering food. Thats right. And hats off to the merchants and the folks that are doing that on their behalf. Obviously we work with the merchant to the extent that temperatures get to a point that it is going to be in any case difficult if not obviously bad for somebodys health, obviously well take the merchants down on their suggestion. But it is supply and demand. If i was delivering for you, i would require a higher wage to deliver through these sort of conditions. Do you give them bonuses . Or do you just do the job, take it or leave it . So unlike kcosmo, we dont actually do delivery. Were an intermediary. So were a technology platform. The merchant on the other hand obviously needs to make sure these people are paid well and suggest consumers to tip. Can you imagine ever going to dynamic pricing . Like the airlines have. But if suddenly theres a spike in demand its going to cost more if you want to get through the snow tonight . Its all in technology. We certainly have the ability to generate a dynamic based pricing model. So to the extent theres demand from the merchant to offer that to the consumer something we can do. Look at the backlash that uber has gotten this week here in new york. Yes. Doubling, tripling their fare rate based on the weather, its a tough balance. Theres two pieces, the actual product and then the payment for convenience. Obviously we want prices on the site to reflect what you have purchased in the store. Theres no ability for merchant to upprice the actual product. Its up to the merchant to decide if they want to have you, the consumer, pay for the convenience of delivery. We prefer them to keep that at zero and pay for the product like you would in the store. Are you being more aggressive this year in terms of expansion than you were last year . Yes. I think the reflection of that is obviously mobile is having a big impact on our business in terms of growth where were seeing primarily in mobile versus desktop. Really . Yes. Youre not at home perhaps but you want to order lunch somewhere. The convenience of a phone having the full basically capabilities of a computer prevents you from having to go into the computer room or wherever the computer is. In your apartment using your ipad or iphone. Or you live in the city but you, you know, work in jersey, you can purchase one place and have it ready when you get home. What percentage is mobile . Upwards of 30 . Really . Yes. Getting interesting. Yes. And plans for the longer term . Were looking to expand the verticals were in. What has happened in food just as amazon started in books as an anchor product, were looking to do the same things as well. Right across the board. Nice to see you, thank you for coming in. Thank you. Delivery. Com. Priceline. Com striking a deal with General Motors that literally puts you in the drivers seat when trying to book a hotel room. The new partnership making the priceline. Com inventory accessible by the chevrolet app shop. Well talk to the ceo first on cnbc in the next hour. And a harsh review by amazons jeff bezos, ga lap gos five stars, amazon founder of the Washington Post owner saying after being evacuated from the galapagos vacation he was on due to a kidney stone attack on new years day, can you believe it . So today were asking you other than kidney stones, what else would jeff bezos give zero stars . Tweet us at squawkstreet. Well be right back. She keeps you on your toes. You wouldnt have it any other way. But your erectile dysfunction it could be a question of blood flow. Cialis tadalafil for daily use helps you be Ready Anytime the moments right. You can be more confident in your ability to be ready. And the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph, like needing to go frequently or urgently. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. 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Simple, flat rate shipping with the reliability of fedex. Forbes is out with its third annual 30 under 30 issue highlighting 450 young innovators and entrepreneurs the magazine says are changing our world. On the cover is evan speeg el, cofounder of snapchat, the social media messaging service. Heres what he had to say about the company during his appearance on squawk on the street last october. Were not making money right now, but i think were really fortunate to have a role model in ten cent which has built a huge business around messaging in china. Weve seen theyve been able to do that without relying on brand advertising, so thats exciting for us. In the nearterm were going to look at transactions and further down the road advertising as well. Also on the 30 under 30 on the media portion Bryan Stelter of cnn formerly of the New York Times and our own kelly evans. Yeah nice. We love kelly. Shes on closing bell, but we still like to say shes on squawk on the street. Still sometimes here. Yes. Shes a cameo. She does it all. Shes with us in spirit all the time. Shes joining us this week actually. Is that true . They just told me in my ear. Very nice. Lets get to squawk on the tweet by the way. Jeff bezos was evacuated from his galapagos vacation due to a kidney stone attack on new years day. He was air lifted to his private jet onto a u. S. Hospital for emergency treatment. How did the amazon founder and owner of the Washington Post review that experience . He said galapagos five stars, kidney stones zero stars. Brings us to this mornings squawk on the street. Other than kidney stones what else would bezos give zero stars . Foster writes, cloudy nights. Is that a drone reference . Noah writes fed ex and u. P. S. Zero stars for missing christmas guarantee, bring on the drones. And anything that starts with an i. Very nice. Funny how hes become associated with drones so heavily just in the course of one appearance on 60 minutes. Yeah. Its not completely clear that is really going to become a strategy in the future. It may certainly, but may not and many pointing to it as a very Effective Marketing tool that appearance, but maybe not much more than that. Controlling the message. And in fact there were a series of them talking about reconciles of the kindle, they had a good week and the offers they were doing during cyber monday and the rest. They had a good time. Meanwhile the market continues to, i think cramer used the word soggy tweeting early this morning as we sort of makeup for some of the big gains we had at the end of last year, but it will be interesting to see how the action sort of solidifies into the first couple of weeks because these first few days havent been much to write home about. Still up over half a percent. Although if the s p is down today, that would be the first time it starts the year down three straight since 05, which hasnt happened in a while. Usually you get an up day usually in the first few days. See you guys later on. Well talk europe which has had a lot of action today. If youre just joining us, heres what you missed earlier on. Welcome to squawk on the street. Heres whats happened so far. What d you see for gdp this year . I think its going to be closer to 3 than 2, which will be a big challenge. Which would be very positive. If you think about what drove a lot of american corporate growth over the last decades, its been the ability to expand around the world in countries that are actually quite interested in aligning the standards with the United States. Thats becoming more problematic. Every time you turn around google is involved in something they havent started monetizing yet. I think that company has the most in the fire irons in the fire of any company i looked at right now and around the world. Twitter is a thought of, you know, look at all the things that could happen. Facebook has already happened. This is like amazon. If amazon ever said, you know, were doing so well we could offer dividend, i bet the stock would be cut in half. The opportunity for the sirius show to participate in not only the serious Growth Opportunities but serious Investment Opportunities but any other opportunities that liberty has some of which might be attractive we think is appealing should be appealing to sirius shareholders as well. Youve got facebook relatively wellknown. Twitter i still dont think is well understood either by the advertisers or by users or the Investment Community yet. So those are the two obvious plays. We like them both. We have a preference however for facebook. Good monday morning. The dow is currently down about some 27 points. Havent had two consecutive days down on the dow since the middle of december. So were watching that relatively closely. Also want to checkin on two big movers this morning. Take a look at twitter moving to the downside after Morgan Stanley downgrade to underweight. May lose online ad revenue to larger rivals like facebook and google. And sirius rallying this morning after Liberty Media proposed making the satellite Radio Operator a wholly owned subsidiary. Changes in the air at fed ex. The fed, the senate expected to confirm janet yellen as the next head of the Federal Reserve. What will yellens first move be when she takes over . More on that in a moment. For a lot of the country it is extraordinarily cold outside. The midwest seeing lowest temperatures in about two decades. And that bitter cold is on its way east wreaking havoc along the way. Well tell you what to expect. Plus, weve been talking a lot about bitcoin over the past few months, whos using it, whos accepting it, that sort of thing. We rarely talk about how people actually get bitcoins in the first place. Its a process called mining. And we will show you the machinery to do it right here onset in a few moments. Also, priceline announcing a Major Partnership with gm today. The ceo of priceline is here with all the details later this hour. But first joining us for the entire hour is John Steinberg, buzz feeds president and coo on a day where ces is beginning in vegas. Yeah. So much to talk about regarding tech, downgrades, twitter and the likes. Lots of internet stocks and bitcoin, should be a fun hour. This is the mining rig. I dont want to give away too much but this is something i built last week that well talk about. Can anyone see it . No camera will take the shot. Good, thats a better tease for later in the hour. There you go. Meantime, markets are taking another dip lower today after a rough start to the year. Want to bring in managing director principle with douglas c. Lane and associates and dan morris with asset management. Guys, good morning. Good morning. Why is this year starting out so unlike the end of last year . Well, i think youve had two years of linear growth. Investors have been able to ride unprecedent eed liquidity, marks have done really well, we are expecting and at some point youre going to get that pullback. We havent had a 10percenter, who knows if well get there. This is a good part of investing. You need the pillbacks otherwise it will go straight up. Does it feel like the 10 comes in the early part of the year . Is it happening now . I dont know if its happening now, but i think in the next four to six weeks we should be able to see something because what will happen after earnings season youre going to reset expectations. Youre going to say things are Getting Better, maybe Interest Rates get higher and look at valuations and companys that are going to grow not just the overall market. Dan, we did get services ism lowest since june, lowest contraction in new orders i think in 50 some odd months. We were looking at gdp that seem to be accelerating in the back half of last year. Yeah, even if it is accelerating its going to be at a relatively slow pace if we get to 3 by the end of the year, i think that will be quite good. I dont think anyones expecting a big ramp up in terms of gdp growth. The key thing is thats slowly Getting Better, slow improvement dropping Unemployment Rate and so on, better Consumer Spending and thats whats going to drive corporate profits ultimately. Speaking of corporate profits, earning season does start next week. I was looking at some of the names, the alcoas of the world, microns, people are going to want to see topline. Theyve been denied it several quarters. Absolutely. I think one of the catalysts to look for is look at the consumer. The consumer has rebuilt their Balance Sheet. Theyve had again low Interest Rates. Household prices have gone up. If they start spending, that could be the catalyst for corporations to start saying, look, weve been cutting costs, we havent really been spening, weave been focusing on productivity, how about going to cap x, Growth Capital instead of maintaining where we are. Ive had two investors say to me in the past week investors are starved for growth. I heard the phrase twice. What other categories, or industries do you think well see top line growth beyond media and internet. Other than technology i think industrials. I think thats an area given the low energy costs we have in this country now companies can put projects on the ground and say were competitive globally now in terms of energy. In fact cheaper. And if we get better labor costs here and more productivity why not keep it local as opposed to exporting or importing it from other countries. Although, i mean, to start investing in cap x, dan, when rates are rising, the sweet spot was in the last two years, right . I think there might not be as much upside as people think. If you look at whats been disappointing about gdp growth over the past two years, normally during expansions u. S. Gdp expands about 5 , this time a bit over two. Why . The biggest gap in consumer demand and little bit in investment. Yes, theres potential there, yes, with less uncertainty ceos should be more interested. But its the pentup demand thats still there. Consumer demand the key thing for this year. Its funny we got fed ex today issuing 2 billion in unsecured notes, theyre going to accelerate their buyback. What if 2014 turns into an echo of 2013 . To the extent they have low rates and cash, they use it to minimize their flow. And then back out to the markets again and buy more airplanes. But arent the investors pushing that . Arent the investors demanding the buybacks as opposed to the investment . Do you think they will tolerate it in q1 despite rates going up . I think whats going to happen to your point if companies can show top line growth, youre going to get Margin Expansion and multiple expansion. The only multiple expansion weve had on the teslas and netflix of the world. Exactly. Not on the other companies. If you break out the s p and say what companies have really done well . The cyclicals are not over market multiples. If they actually show consistent growth whether its the auto parts, airlines or some industrials, youre going to get multiple expansion, youre going to get Margin Expansion and investors will be rewarded, fine, better use of capital. Thats hardening, dan, on a final note. Theres a sense i think out there that there are no more bargains in the market. Its harder to find in the u. S. I think if people want to look for bargains it is in emerging markets especially in parts of asia. Not of places you can argue are really cheap. Its not really the story in the u. S. This year, its going to be Earnings Growth. Thanks for coming in. It is a big day in washington. Janet yellen expected to be confirmed as the next fed chair. If shes confirmed shell be the first woman ever to run the Federal Reserve starting february 1st. Alfred former richmond Federal Reserve president and Risk Advisory chairman joining us this morning with more. Guys, good morning to both of you. Good morning, carl. Its been said shes in, mark, essentially. The thing to watch will be no votes. I think bernanke got 30, which was one of the highest ever. What are you expecting . When youre going through the confirmation process, no news is good news, and thats what were hearing about vice chair yellen at the moment. I suspect it will be a handful of votes but not many. Now that you only need to reach the 50vote threshold, that makes it a lot easier and a lot less reason to get excited. Al, after today and after she is effectively given the gavel, how does she get through the first couple of weeks here . Were going to get a lot of fed speak. And now that we know the taper question is relatively answered, what are we looking for . Well, i think with the taper now begun, carl, i think the message shes going to want to send is that the level of accommodation has not actually been reduced yet because the economy while things are looking brighter and prospects are better, theres still reasons to keep a lot of accommodation in place. You have very low inflation. So i think one of the first things shes going to have to decide if she does decide to do it persuade the committee is whether or not to reduce the threshold. The threshold now is for tightening is 6. 5 unemployment. I think a lot of people are recommending that it be dropped to 6 . I think its likely she may come to this view unless shes going to have to get that approved by the committee if she does. Do you think theres any t l telltale signs to look for . I kind of heart attaarken back briefcase, what do you think certain words to look for as she imparts herself . I think theres some contrast to chairman greenspan. Shes very straightforward, she speaks very clearly. I cant think of anything in the way of a particular signal. I think you can listen to what she says, take it pretty literally. Obviously if she begins to say things that suggest shes less confident than a consensus about the outlook for the economy that her concerns about inflation being too low are rising, anything like that might be a signal that shes going to be even more reluctant than some people might now expect to raise rates at any point in the near future. Mark, since we now know the taper is effectively in effect, people are now focusing on this 10 billion a month thing. And theyll be looking for changing reactions, what would push us to more than 10 billion. How are you approaching that uncertainty . How should the market look at it . Well, i think al hit it just exactly right in terms of what the key issue is. We have always been told the 6. 5 Unemployment Rate would be sort of a triggering incident or at least a threshold. And ben bernanke last week made quite a point of saying it isnt a threshold, not a trigger. It will be the relationship of the Unemployment Rate to that tapering will be the key things to watch. And the key things that i think we will try to see more greater articulation of, remember theres one more meeting before janet takes office. And so her last opportunity to sort of sit and listen before she is the chair. Finally, we will get jobs this friday, al, mark, you got picks as to what the number may be . And whether or not it will be significant in the narrative of the fed, al . Its hard always to predict this number, this onemonth number, carl, with a lot of confidence. Obviously the latest trend is upward so i would expect, you know, if i had to put a number on it Something Like 200 or maybe a little bit more. But theres a huge confidence around that. Yeah. Generally i expect a continuation of the better performance. My guess would be in the 150 range. Oh, interesting. All right. A bit of an outliar on consensus. Well see what friday brings. Al, mark, good to see you guys. Thanks again. Thank you, carl. Theyre back after a long vacation, congress and the president are back in d. C. Today where the top item on the agenda is the renewal of those longterm Unemployment Benefits. Is there any chance a deal on those benefits can actually get done . Well talk about that political challenge in just a moment. [ male announcer ] heres a question for you where does the United States get most of its energy . Is it africa . The middle east . Canada . Or the u. S. . The answer is. The u. S. Most of Americas Energy comes from right here at home. Take the energy quiz. Energy lives here. [announcer]. If you think the best bed for one of you might be a compromise for the other one. [woman]ask me about our tempurpedic. [announcer] theyre sleeping on the newest tempurpedic bed. The new tempur choice. [man]two people. Two remotes. [announcer] firmness settings for the head,legs,and back. And with tempur on top,that famous tempurpedic comfort comes any way you like it [woman]ask me about the lumbar button. [man]shes got her side. And ive got my side. [announcer] tempurpedic. The most highly recommended bed in america. [woman]dont touch my side dow now firmly in the red off some 40 points. Look at financials one big reason for it. One of the big winners on the s p. At least it was. Dominic chu is back at hk with that. Look at financials they are by far the best performing sector. Theres a decent size group of the regional banks helping to drive the action modestly to the upside for the financials. Shares of region helped by an upgrade of Deutsche Bank to buy from hold. Also price target increased from 12 to 10. Barclays also many investors are looking at these regional banks as ways to play an improving Economic Outlook in the u. S. And these types of banks are the ones they may fare better as longer term interest rises. So those regional banks important rk also check out gen worth financials today. Back over to you. Dom which you happy about his 49ers today. Thanks. After a nice long vacation congress is back to work and top item on the agenda is renewal of the longterm Unemployment Benefits. Whats the chance congress could come to some sort of deal on those . John harwood is at the white house with more on that. Good morning, john. Good morning, carl. Its a shock to everybody to find temperatures dropping. Were going to hit 9 degrees tomorrow according to the forecasters, especially rude for the president coming back from vacation in hawaii. Theyve got several items of on their agenda. The president s todo list includes Janet Yellens confirmation which will occur this afternoon. That is going to happen not really in doubt anymore. A vote will be early this evening. Then youve got a procedural vote on extending Unemployment Benefits. That is not likely to succeed. It is possible that the debate will go forward and it will be killed down the road. But very few people on either side of the aisle expect those Unemployment Benefits to be extended. Other items on the agenda include the president s desire for minimum wage increase, which is also something that the odds are against it, not possible that it will happen. And for a republican perspective, theyre going to have more votes targeting obamacare while the administration tries to make that program work. Immigration is another item on the agenda, unclear whether or not the house is ultimately going to act on a bill that is comprehensive enough for the president to sign it and democrats to go along. But were looking at a fairly icy winter in washington, not a lot of action expected early, carl. Thats for sure, john. You said we took that turn on unemployment not too long ago. Our john harwood in washington this morning. John mentions the weather, and it was a bad weekend for the airlines. Nasty weather forced cancellations from chicago to new york. And things dont look too much better today. Our phil lebeau is live at Ohare Airport in chicago. Phil, someone just tweeted a picture of the Chicago River frozen over. It doesnt happen very often. It doesnt. Its minus 15 outside right now, carl. And for the people who are in line here and believe me were going to show you some video of these people waiting in line, theyre in line 45 minutes, maybe an hour, only to be told that theyre not going to be rebooked for a couple of days. They cant even go outside to smoke a cigarette. Youre out there for maybe a minute or two, you really start to feel how cold it is here. As i mentioned long lines at ohare. And were seeing this at a number of airports in the upper midwest and east coast. Thousands are trying to rebook travel plans after flights being canceled. Most of the impact is in the upper midwest and east coast. Theyre getting hit hardest. The airports that were seeing the biggest cancellations today, no surprise here at ohare, cleveland hopkins, cleveland is just getting pounded by snow right now. La guard ya, boston logan, jfk. Talk about that upper east coast youre talking about jetblues home territory. Jetblue has canceled 48 of its flights today. And the carrier not just jetblue but all of the carriers theyre being hit by their flight crews not in place due to cancellations. Remember, the new work rest rules came into effect on january 1st according to the faa. So that also has a Ripple Effect as well. Total cancellations, is this starting to approach a point where the airlines will feel an impact . Probably. Saturday through today 9,200 cancellations. Compare that with superstorm sandy, were talking about the three new york city airports when they were shut down, they had roughly 10,000 cancellations. So were not too far away from matching that. But when you look at the total impact of sandy from october 29th through the 31st, you have more than 20,000 cancellations. All of that said why would shares of american and delta both be up fractionally today . Thats because a lot of times investors look at these storms and they say, okay, if theres a 15 million, 20 million, 30 million hit in the grand scheme of things, we can live with that. And thats why the Airline Stocks have not felt an impact yet. But for the people who are here at ohare trying to get home waiting for two or three days for a flight to be rebooked, you can imagine theyre feeling the impact of this storm. Guys, back to you. Ill tell you one thing, phil, these models suggest because the cold air is freezing so much water in this country that it might actually extend cold temperatures in general maybe for the next several weeks. I wonder how that squares with the models at the airlines and what they had figured this winter would be like . An interesting question for the stocks too. I think this winter is starting to shape up rougher than they expected. It seems investors thought it was going to be much worse, right . And actually they were relieved to see the first few days. So if this continues on and gets worse, we could probably see impact in the stocks. Yeah, a lot of stocks are higher mostly because oil has come in a bit. Phil, thanks. Good to see you. Phil lebeau at ohare. Those still confused about bitcoin, this is something you have to see . Its part of a process called Bitcoin Mining and john is going to show you how its done after a short break. S ps down almost 7. This is the low for the year on s p. Back in a minute. [ male announcer ] its simple physics. A body at rest tends to stay at rest. While a body in motion tends to stay in motion. Staying active can actually ease arthritis symptoms. But if you have arthritis, staying active can be difficult. Prescription celebrex can help relieve arthritis pain so your body can stay in motion. Because just one 200mg celebrex a day can provide 24 hour relief for many with arthritis pain and inflammation. 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Dont take celebrex if you have bleeding in the stomach or intestine, or had an asthma attack, hives, other allergies to aspirin, nsaids or sulfonamides. Get help right away if you have swelling of the face or throat, or trouble breathing. Tell your doctor your medical history. And find an Arthritis Treatment for you. Visit celebrex. Com and ask your doctor about celebrex. For a body in motion. When it comes to bitcoin, we often hear about who has started to accept or invest in the krip toe currency. But whos mining for it . And what exactly does that mean or even look like . Our John Steinberg of buzzfeed here to tell us about this. Comes on a day where zynga says they are accepting. They are. They are already accepting bitcoin. So thats the acceptance part of it. Yes. How do you mine it . So whats interesting is over the past week i decided i wanted to build a Bitcoin Mining rig. This is a very small hobby mining rig. What happens is this little computer here which is a raspberry pie which costs about 25 is in realtime performing computations with these little usb keys which have the bitcoin logo, to crack mathematical problems to free bitcoins from kind of the computational universe. You cant make real money doing this, but struck me over the weekend this is quite a hobby. Reminds me of the Home Brew Computer Club where steve jobs and Steve Wozniak first introduced the apple computer. I think theres an amazing universe going on around the software with bitcoin to do mining. Have you imagined to unearth a bitcoin . I have not. Do you feel how hot these are right now . Yeah, thats warm to the touch. I was afraid to leave it running overnight in my office because i didnt want to burn buzzfeed down. I think i can get to a dollar a day. My friend who helped me build this thinks we can get to about a dollar a day if i leave it on continuously. You probably do better on your day job. Absolutely. This is the point, bitcoin is staggering. There must be hundreds of thousands of people involved in creating software, mining applications, all these different platforms to run it on, hardware keys on amazon for 49. Theres people selling mining shares in iceland right now if you want to get into that market by basically buying a fractional mining share. Its a whole elaborate ecosystem. What makes you think this has staying power as a currency . Why is this not going to be a fad we look back on in two years . I think we look back on everything thats big as a fad. And i think that this has all of the resemblances we saw to paypal except the fact the currency itself is selfsustained. Something like this has captured the imagination. Why does twitter have staying power . Why does a network capture everybody and develop those externalities . Obviously looking at the price was above 1,000 earlier today. Still 988. Doesnt that scare you that parabolic chart . Early days. I think well get there over time. Im bullish on bitcoin in general. If you say 10 of the worldwide gold market which is held 1. 2 trillion, say 10 of that goes to bitcoin, get to a bitcoin price of 6,000 a coin. I think thats basically the downside. Theres lots of bulls saying bitcoin can go to 1 million a coin. Right now what im focused on is how flourishing this ecosystem is. Its amazing. Youve written a piece for our dot com. Yeah, i went through how we built it and gave images of what the screen looks like. Im running to show you how crazy things are i have my pebble watch im actually running the bitcoin price right now. Theres a lot of people, carl, interested in this as hobbiests. Youve educated me on things that are new. Thats a great tip to those interested, john. Cool. For more on bitcoin rigs and what john has done here, visit our website at sots. Cnbc. Com. When we come back, the consumer electronic show begins today. Well get an inside look at some of the coolest things in tech in 2014. All the gadgets are always great, but where are tech investors actually spending their money . Well ask one of the top vcs in Silicon Valley in a moment. And europe had good action on the pmis. Well get that in a second. Doept go away. [ male announcer ] legalzoom has helped start over 1 million businesses. If you have a business idea, we have a personalized legal solution thats right for you. With easy stepbystep guidance, were here to help you turn your dream into a reality. Start your Business Today with legalzoom. The european markets are closing now. And with that simon hobbs is here to talk about that mix of red and green and some italian banks too, simon. Absolutely. Dont forget theres an ecb meeting this week. Look at the map carefully. You see whats rallying . The peripheral markets, portugal, italy, ireland and spain. Yes, there you go. The italian banks are doing well today. Banks across europe in the peripheral countries seem to be doing quite well. There was a report over the weekend that the european virtually the vol kro rule. Possibly the ceo will step down and possibly the foundations 20 stake could be bought by some u. S. Investors. But Spanish Banks have staged a really good late rally. Check out how theyre doing. Look at this one bank popalare a good rally there. If youve just tuned in because the data in spain is really good today, look at the pmis, Services Pmis came through, 50 equals expansion, below that transaction. Spains Service Sector is expanding at the fastest pace for five and a half years. Now, from a low base but my word 54. 2 aint bad. We still have a problem with italy and france. Look at those below 50. But lets leave that there for the moment. One more stock i wanted to mention to you was the ukin surer rsa which has been much troubled recently as you can see. There is a report that on thursday Price Waterhouse coopers will say the problems theyve had in ireland are kind of a oneoff deal. So theyve rallied 6 after those recent losses. And Proof Positive that Angela Merkel is a woman of immense stamina. Not only was she crosscountry skiing over christmas and new year, but when she injured herself and appears to have fractured her pelvis, shes carrying on. On wednesday shell hold her first Cabinet Meeting of the new grand coalition though she has canceled her trip to warsaw. I thought i was afraid it was a downhill accident, but glad to hear it was cross country. I believe so. But they do go up and down. You know, youve got to push yourself. She is a woman of stamina. My word. In more ways than one. Thanks, simon. Simon hobbs. Lets check in with pasani on the floor with the dow now 47, bob. What happened to our rally . We were up 100 points at the open and moved 100 points essentially to the downside. Look at the s p 500, we had some weakness but disappointing numbers at the top at 10 00. But it didnt react immediately and sort of delayed reaction to some of those disappointment on the ism services numbers. Look at the Economic News recently. Its been choppy so tar this year. Ism services were so far disappointing, retail sales were a disappointment and factory orders and ism manufacturing were better than expected. This being reflected today in the way stocks are trading. Economically sensitive names, so materials, consumer discretionary, industrials, technology stocks, those are the ones the economically sensitive ones that are the weakest today. China is also experiencing some weak Economic Data in the last few days. And that market has really been hurt and thats been hurting some of the emerging market names. Heres some stocks to trade here that are chinese stocks that are notably weak today as you can see right across the board including some of the auto stocks. The fxi, the etf for china, three down days for the fxi and the bogey for china portrayed near lowest levels since almost september. Lets look at gold. Ive been asked what happened with gold . Around 10 15 we saw a 30 drop from about 12. 45 to 12. 15. I did a special on gold and got very close to gold traders a number of years ago so i know a lot of them. The consensus is there was a mistake, a fatfingered mistake out there. There was an unusually large amount of contracts made at this time as many as 9,000 one trader said to me. Do the math, one contract is 100 ounces. So 900,000 ounces times 1,200 thats a lot of money. Meantime the problem is physical demand, its been strong innin di and china and yet the etf demand has been weak. And that debate there playing out has been the real problem for gold. Guys, back to you. Bob pisani on the floor. So wearable tech, hightech cars, smart tv, cloud security, which startups will be grabbing venture startups this year . Managing director joining us this morning from stanford. Great to have you, good morning. Nice to be here, carl. Happy new year. Happy new year to you. Youve had a series of happy new years. Youve had a hot hand for a very long time. Walk us through some of the areas at least at first broadly that you like going into 2014. You know, the two areas i think we are very excited about is one of cyber security. The other is connected home. As you can imagine at ces everythings been connected to the internet, which, one, raises a lot of opportunity, but also a lot of risk around security. Its been said thats going to be one of the big broad themes of ces starting today. How soon are we going to see some of those flash points that build further credibility behind those space sns. I think its going to happen sooner than people realize. I mean, you think of things like snapchat and skype and see were being connected to the internet in many ways. I hear about toothbrushes and electric razors being connected to the internet. God knows what happens when you get Security Issues over there. I feel like people are lumping in two Security Issues. One is hacking, which is what went on with snapchat. The other issue is denial of Service Attack prevention and thic things like that. How do you think about those two . Which are you more interested . . Im concerned a lot about hacking because i think people dont quite understand how deep a supply chain hack sg and how people can come over. The other thing im worried about is all these things get connected to the internet. Lets say the tvs, you have smart tvs all connected to the internet, someone can hack the tv and look into your living room. And that raises an interesting set of risks. Whats the most interesting Security Company that sits between connected home and webbased security . You know, i dont want to keep talking about our portfolio, but we thing bit site technologis technologists, the moodies of securities, will probably be the one to tell you whats going on in terms of security risk. Are wearables being underappreciated, overappreciated . How would you characterize the faith people are putting into these products . There were a lot of conversation about watches and quantified self, but i think its still early. I think, you know, the story of technology is always too early, too early, too late. I think were still in the too early. Funny how that sneaks up on you. I think this is the year of wearables. I think we go into holiday next year everybodys going to want something. Really . You think its a christmas 2014 story . Ill tell you why, i think from the reports ive been reading apples going to go into it, i think the pebble is great, the Samsung Watch is great. Were going to see a lot at ces and i think people ultimately want easy connections and not pulling out their phone all the time. Venky, is there a pushback on that . Ill tell you, associate of Venture Capital firm in 1998 and 1999 told me i think smartphones are going to be it. Spend a lot of time researching wireless data, it took time until 2007 for the iphone to make it. We tend to overestimate how quickly these things happen. The back half of last year was about valuations grant it with a few specific players, but to what degree is that a concern in the valley . Valuation is a concern. And you do have these isolated cases where valuations have gone really high. But look, i think the changes we are going through whether thats mobile, social, we try to think of this as the rightnow economy. Those are fundamental changes and they create incredible value. So i think that we are in for a great run in terms of fundamental paradigm shifting technologies that are going to impact humankind. Certainly thats what were all waiting for. Be a fascinating year to get through. Venki, thanks for your time. Please come back. Joining us this morning from menlo ventures. Lets get to dominic chu with the dow now down 54. Shares of best buy taken a hit. The weakness is being attributed in large part to a disappointing sales reporting from fellow retailer hh gregg. 400 million in market value compared to 15. 5 billion for best buy, but hh gregg said sales this Holiday Season negatively impacted by sales from other retailers. Some worry it can be a concern that best buys margins could take a hit because it did use that promotional Pricing Strategy this Holiday Season, watch the bby shares. One of the great performers of last year, dom, thanks. It is cold outside. Nasty Winter Weather lingering in the midwest, some of the coldest temperatures weve seen in about 20 years. Were going to get a live look on the conditions on the ground in a moment. Plus, bad weather why this past weekends Football Games were almost blacked out on local television until some corporate sponsors stepped in. Were going to talk to one of them when we come right back. [ male announcer ] heres a question for you is your tv powered by coal . Natural gas . Nuclear . Or renewables like solar. And wind . Lets find out. This is where americas electricity comes from. A diversity of Energy Sources helps ensure the electricity we need is reliable. Take the energy quiz. Energy lives here. Over the pizza place on Chestnut Street the modest first floor bedroom in tallinn, estonia and the southbound bus barreling down i95. This magic moment it is the story of where every great idea begins. And of those who believed they had the power to do more. 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Why is the street falling out of love with twitter . Again . Which old flame tech investors might be rekindling. And beating the s p last year is impressive enough, but nearly doubling it is downright ridiculous. Thats exactly what fund manager an drew wellington did. Hes here live to reveal his top three stock picks for this year. And as this brutal winter storm continues to race across the country, were going to look at some stocks in your portfolio that could get a deep freeze. Its all straight ahead at the top of the hour. Carl, see you in about 15. Sounds good, scott, thanks. Nasty Winter Weather plaguing much of the midwest bringing some of the coldest weather weve seen in decades. Mike seidel is live with more. Hi, carl. Last night when we spoke it was about 30 degrees and right now windchills running 40 below zero here in indianapolis. Yesterday was the second snowiest calendar day on the record with 15. 2. And now in indianapolis theyve had more snow than they typically see in an entire season. The mayor just lifted the code red that was issued yesterday to keep everybody off the streets except emergency vehicles and people trying to seek shelter. It goes to a code orange at lunchtime. So basically the downtown is almost deserted. Got a few cars coming by. The roads were snow packed and snow covered. They have plowed these streets, but again, weve got about an inch to two inches of what froze from that heavy wet snow yesterday. Still about 50,000 customers in indiana without power. Now over to chicago, another horrible day at ohare, carl. Weve got about twothirds of the flight schedule canceled. Arrivals, departures, following 50 of the flights yesterday. Its been like this almost every day for a week. And this morning they broke their record low for this morning of 15 below zero. Flights today, again, just a few going in and out of there. Back east the cold air is now moving into new york city. The cold front has just moved on through. Just checked the temperatures at central park and newark airport, carl, theyve already dropped ten degrees. 50s this morning, your highs tomorrow there in the new york city area will be in the teens. So its on the way your way. Back to you. We are bracing for it, mike. Thanks so much. Mike seidel from the Weather Channel in indy today. Meyer saves the day helping the Indianapolis Colts avoid a local blackout in the wild card contest with the Kansas City Chiefs by purchasing 1,200 tickets to the game. They were donated to local military families. The cochairman and coceo joins us this morning with the colts hat on. Hank, great to have you back. Good morning. Good morning, carl. Great to be here. This is a great story on your part, but its also a complicated story as to why the game didnt sell out in the first place. Was it all about the cold . Weve got a lot of customers in our part of the world as you just heard who not only cant get flights or dont dare drive but who cant get out of their homes. So when the colts with whom weve got a terrific relationship called us and said we dont know how to get this on the air unless we get some help, we couldnt resist. This was just a great opportunity to connect with our customers and with our friends in indiana. Did the league, did the franchise, did anyone give you any kind of price concession on the tickets . Not that im aware of. The colts reached out to us, and we just responded. It wasnt a negotiated situation. And, hank, what did they say to you . They just wanted to make sure it was filmed so when the camera pans to the crowd theres people there . What were the rules around buying the tickets . They wanted to make sure that the colts were on tv so that their fans throughout indiana would be able to see the game who couldnt get there. Wow. For them to call you, hank, thats a compliment. Im assuming they didnt call anyone else first, thats a big deal and says a lot about your influence. Weve had some debates on this show as to whether the blackout rule is antiquated. Fcc has some thoughts on that, the league has different thoughts. Where do you come down . We really havent been part of that discussion. We really were responding in this case to a call that said we dont know how to get on the air without selling these tickets. Would you be interested . And we just jumped at the chance. Hank, how do military families go about getting the tickets . Did they follow on twitter or facebook . How did they reach out to you . We worked with the organizations that the colts had identified. Indiana National Guard plus several other indiana veterans groups. Hank, how much good will do you think this buys you among the community . Obviously not that its about that, but certainly it must cross your mind. Well, it felt great. Its hard to quantify that. I dont think you ever can. This is part of the relationship we want to have with our communities. And so when theres a chance to be a part of the game, we jumped at it, as i said. But beyond that the way it turned out, we couldnt be prouder of our colts and of the chance to present this to the community. Just an unbelievable game. You got to hand it to luck and the team. What fortitude, what must have been said during that halftime chatter it definitely worked. No kidding. How has business been, hank, in the midst of the weather . Im trying to think of my willingness to go to the Grocery Store if its 20 below outside. Are you feeling it . We absolutely feel it. And it goes both ways. People are worried about a storm, theyre stocking up. And thats great for business. But then sometimes the shelves get low and its hard to get new trucks in. On balance its been good and were really pleased with our delivery schedules, but its a challenge to operate stores under such conditions. Finally, hank, facing the patriots, im not sure how youre feeling about going to boston and truly playing in the cold. Well, we were spared that this time, but we know that the colts are used to it. And were cheering for them. Hank meijar who saved the day in indianapolis this past weekend. Hank, good to see you. Thank you, carl. Byebye. This morning priceline. Com announcing its the first Online Travel Company Announcing to strike a partnership with automaker, in this case General Motors. What does a gmpriceline. Com Partnership Look like . Well ask the ceo of priceline in just a moment. Ou fifteen percent or more on Car Insurance. Everybody knows that parker. Well, did you know auctioneers make bad Grocery Store clerks . Thatll be 23. 50. Now. 75, 23. 75, hold em. Hey now do i hear 23. 75 . 24 hey 24 dollar, 24 and a quarter, quarter, now half, 24 and a half and. 75 25 now a quarter, hey 26 and a quarter, do you wanna pay now, you wanna do it, 25 and a quarter sold to the man in the khaki jacket geico. Fifteen minutes could save you. Well, you know. Simons back here at post 9 with a special guest. Simon. Karm, you mentioned before the break an unlikely duo partnering up through the chevy on star app. Chevy customers will be able to book hotels right from their dashboard. Chris sodder the ceo of priceline. Com, welcome to the program. Thank you for having me. How does this work . How physically will people book now through the new system . Okay. So through this partnership chevrolet customers will have two ways to locate and book priceline. Com hotels while theyre on the go. The first one is through Chevrolets Onstar system. By pressing the blue button theyll be able to access onstar advisors who can then connect to priceline. Com inventory, search for Hotel Options wherever theyre going and help book and consummate the transaction so they have a hotel when they need it. And the second way is through an app that theyll be able to download from the new chevrolet app store. I think the app is still to come, but will they basically be speaking to an advisor . Is that what youre saying . Yes, the onstar piece will be just like a normal onstar interaction speaking with the advisor over the onstar. And why did chevy decide to team up with you . Why did you decide to team up with chevy . And how exclusive is it . Well, i can tell you that the we will be the sole provider of Hotel Inventory for the onstar system. And for us we look at mobile as we look at ourselves really as a mobile first company. Mobile is certainly the Fastest Growing part of the business. And we know that mobile means more than just your handset or your phone or tablet. So we look at what we call new emerging interfaces or new ways of people accessing the internet and make sure that weve got a great system available for those and certainly one of the most obvious one is cars. Chris, rbc has you guys down as a long, and point one in why they have their long thesis is a global leisure, only 35 online penetrated. If we look at the past year we look at googles acquisition of ways for example, how much do you think of cars as being the third place . Desktop, mobile, cars . How big could it be for you guys . Its hard to say for cars because nobodys really done anything like this before. We know from the folks at gm that one of the most asked questions over the onstar system is information about hotels on peoples route. So we believe, you know, millions of customers out there, chevrolet customers and again with the frequency of people needing information about hotels and our great Hotel Inventory were very, very optimistic. Its still going to be chris, like the one out west, isnt it . Until we settle down. Ces over in vegas is full of talk of whos going to do deals and whether the operating systems for cars might in the future be android, i dont know possibly apples operating system. How do you think the whole thing will shape down in the future . Because there is a danger presumably that you guys could get squeezed out here. Well, heres the way we look at it is its unclear exactly how this will play out over time, but the one thing we know is we want to be wherever it is people are looking to book. So regardless of which platform ultimately becomes the operating system, we have apps that work on android as well as ios and again now by working directly with chevrolet to offer it with their indash system, i think it provides, again, really great coverage of all the potential ways that this might evolve. Mr. Soder, thank you very much for sparing the time. The ceo of priceline. Com. Drivings going to be a lot different in the coming years, ill tell you that. I just hope people keep their eyes on the road. I would have cut a deal with android or ios and get it across all them. I want to talk to siri and say find me a hotel. Yeah. Wow, tell you the prices. Thank you, simon. Thanks for bringing it to us. When we come back, a harsh review by amazons jeff bezos, galapagos five stars, kidney stones zero stars. Thats what the amazon founder and the Washington Post owner is saying after being evacuated from a galapagos vacation due to a kidney stone attack on new years day. Tweet us at squawk street, well get some of your answers next. She keeps you on your toes. You wouldnt have it any other way. But your erectile dysfunction it could be a question of blood flow. Cialis tadalafil for daily use helps you be Ready Anytime the moments right. You can be more confident in your ability to be ready. 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I have an associate that met with, uh, an unfortunate accident. While hes been incapacitated, somebodys been paying him cash. Now, is this your doing . Aflac . Now, if i met with some such accident, would aflac pay me . Nice. This is your stop. [ male announcer ] find out what aflac can do for you and your family. Aflac . [ male announcer ]. At aflac. Com. Squawk on the tweet today, jeff bezos was evacuated from a galapagos vacation due to a kidney stone attack on new years day. He was alifted from the cruise ship by the Ecuadoran Navy to his private jet and onto a u. S. Hospital for emergency treatment. No surgery though. How did the amazon founder and owner of the Washington Post review his experience . Galapagos five stars, kidney stones zero stars. I think we can all relate to that. That brings us to this mornings squawk on the street, other than kidney stones what else would bezos give zero stars, one writes the weather. Jeff bezos would give lore and five stars to amazon revenue, no stars to profits which we all understand as well. Speaking of twitter, john, its off sharply today. Basically given back all the gains so far for this year. Youve long said its a rich stock. Why are analysts so late to the game . I dont know why were finally seeing downgrades. And whats also frustrating everybody lumping together all of the social stocks with twitter. Twilter is basically double the price. You and david were discussing this this morning. The Morgan Stanley report that came out today with the 33 price target would basically put it ev to sales in the same ratio as linkedin. If you look at facebook, facebooks going to grow about 30 this year. Twitters going to grow somewhere between 70 and 100 . I would give it a little premium. I think it should be in the 40s. John, great having you here. Thanks for having me. Lets get back to headquarters, scott wapner and the halftime. Thanks so much. Lets get straight to our game plan for the second half now. Where is the love for twit sner a big downgrade for the stock today, so why is another wall street analyst bailing on the site . On a high note, lyricals andrew wellington up 50 and now unveiling latest plays. Were trading the market with todays starting lineup, john, pete, steven weiss and anthony, certainly thinks a bit wiser, happy 50th. Good to y