Transcripts For CNBC Squawk On The Street 20150122

Earnings from verizon, ebay and American Express, job cuts a deal with carl icahn and more to digest this quart. Airline results are in. Continental getting hit. Southwest ceo with us in a few moment. The decision marks waiting for. Ecb abouncing bondbuying program to revive the eurozone economy. News conference in frankfurt, mario draghi said asset purchases amount to 60 billion euros a month starting in march, continue until september 2016 lower oil, jim, not inhibiter here. No. I thought germans would argue, cant do this now. But that failed. You have some our rates are all over the map, i want to be careful our rates had gone up big, even in the last few minutes come back down. Spanish tenyear 1. 4 now. Our tenyear 1. 8. I remember when we would sit here in 2011 and talk about how maybe the spain would go bust and rates were going higher and higher, now right i dont know who would buy that piece of paper. But i think i know who may have to, which is draghi. Yep. He may be a buyer there. Of course a lot of this also will have an affect on the euro which i believe is trading down. Not that this wasnt telegraphed or expected perhaps the number 60 billion a bit more than people anticipated on a monthly basis. But weakening the euro certainly, an important part of this. We sat here many days talking about the rise in the dollar, what thats going to mean for example, to so many corporate earnings and were starting to see that in earnings reports and guidance were getting from multinationals. You dont need a weatherman to know which way the wind blows here, said bob dylan. Quarters are starting to be domestic and its all good, unitedhealth, American Express, wow, we didnt see. Or its muches or or you cant get im now seeing like quarters where theyre saying listen, fx neutral, fx neutral, its not working. Its really a big issue. These Conference Calls have turned into a lets just say if you are international company, youre missing the numbers so big that you just literally think that the company has no idea what its doing. Back to johnson johnson, horrendous Conference Call because of the miss. You were disappointed. I was very disappointed. My Charitable Trust owns it. Right. It was just you want to x out currency maybe make a case its good. The currency aint working. Yeah. And the number of companies for a huge issue is going to grow. Ge tomorrow mcdonalds, i think, just a few days from now, where your revenues are half of your business. Take a look at Union Pacific, by the way, which is by far the best rail put it out there, they are a domestic company. When their numbers come out and you look at numbers, you tonight have to say, wait a second what is coal if fx neutral . What does fracking stand . How about chemical . No. Two kinds of companies, the companies that you cant analyze because of the currency you cant build a model anymore, and the Domestic Companies since, again, using unitedhealth has an example, after the Conference Call and say, i know what i want to buy. Southwest air. I want to buy. 27 million passengers where are they flying to . Let me tell you, they aint flying to countries where ive got to do a far x neutral. You may not want to buy domestic oil and gas plays. Southwest air is domestic oil and gas play. Buy it. Good point. Kinder verizon, domesticbased companies, yes . Yeah verizon, you know well get ill do more on it later in the program, carl. But the disappointment there was on the margin side on the ebitda margin side and you may see analysts perhaps bring in their numbers from what had been at least consewn sus around a number of 3. 68 for this year to maybe a bit lower. The stock may be down a bit. When you have 1. 8, 1. 9 tenyear dividend above 4 that can sustain the stock. The spectrum auction, of course the big overhang big question im going to talk about that later in the faber report cap x up a bit. That was that was a positive for overall it sort of the industry and those who provide to verizon. Thats a big deal. When i had john claim bers chambers, really cut back, maybe this is a back to the future cap x. Yeah. Expectations had been 17 and theyre now going 17. 5 to 18 billion, of course they do generate so much Free Cash Flow these companies. Look at dividend dividends not sustainable. How much is he spending in the auction . So much connected into that. More on that later. Am nextex good beat cutting 4,000 jobs bernstein cutting, ebay cutting 2400 jobs. Anecdotal evidence of companies that are looking at year ahead in which theyre going to need fewer heads. Charitable trust owns American Express, i didnt like the call. Why not . They said december was weak. Customer spending was weak. They put in onetime gain of concurrent which is travel travel leisure app, one of these Software Service apps and that spooked everybody, had the stock go up to 88. 5 picked off everybody i dont care if somebody loses in the aftermarket but that was not a good quarter, sorry. Not in the order of j j. Ebay a great quarter and terrible quarter. Paypal numbers i loved. The rest of it look donohoe, i love donenaohoedonohoe, glad the years over. Best of times, worst of times . Yeah. Winter but one thing i talk about with paypal they basically said googles in charge of the world. Because we didnt get the right Search Engine of google our business got really hurt thats the merchandise business. Talked about 200 million in costs of breaking up. Yes. But im sure were going to hear from judge wapner hes got carl icahn. This is you see why they wanted the company to stay together, because when one business is bad the other within can save them. Right. It helps with the other within. They argued there were synergies for some time. Weve been talked about this talked to john donahoe, ceo about it. Interestingly, icon didnt get more focused on the governance of the spins, if you will and the case of ebay splitting up. Something i brought you originally this morning, has been confirmed by mr. Ikahn, focused on the governance yet to come by the way for Companies Split off. He doesnt want them to have poison pills, they wants to call a special meeting with a low threshold in terms of votes. He wants to make sure that these companies, either one, whether ebay split in the marketplace and paypal or when gannett split into call it print, the newspaper business and tv and digital, that if theres somebody out that wants to buy them, theyre not going to preclude that. That is a key part of why hes going after two directors at gannett this morning, again, he owned that for some time but that was somewhat unexpected in the part of gannett. Originally what i was hear you might have gone for more directors, but looking for two. And many proposals hes making again on this governance issue which, by the way, he came at ebay on and got a lot of what he want in also when paypal gets 5 billion of net cash that was pretty good. Weve seen spinoffs where lands end had to pay its price to sears. How much is time inc is taking with. Recall news corp. And fox, another one. Extremely important. Do they load debt on the spun company, put cash on it because that will auger its ability in the future. By the waying a theory that says you can roll up Newspaper Companies eventually. Youre going to. Gannett will be the acquirer. His thought, i dont want you precluded from participating in than think about the pure play print companies out there that arent controlled. News corp. Is controlled New York Times controlled. Gannett, tribune, time inc all out there. I want too own paypal when they spin it off. You do. Yeah. Its got real momentum. It will be bought by somebody else or its a good business. They can acquirer they have great stock. If visa wants to buy them, they could. Its a benign destruction. Kind of like optimistic pessimism of ibm. As weve been talking, draghi continues to make news. Steve liesman is monitoring that. Monitoring markets, carl. The question weve been asking all morning, the extent to which the ecb surprised markets. You want to take a look at euro now, was beginning to plunge as we speak right now, as well as the whole complex of assets across the board. You take a look at u. S. Tenyear yields have fallen as well down 1. 87. Weve lost six or seven basis points in last couple of minute mz eurour s. Bit of delayed reaction took 30 minutes for the market to digest this. So the question is 60 billion euros announced, market looking for 50 there was a story released yesterday, but theres a however here. However, it includes all of the programs that the ecb had previously announced plus the new one, purchasing euro government bonds. A question as to whether or not there is an upside surprise. Where there does appear to be upside surprise, indeed, the timing of this. He says here im going to read this verbatim purchase intended to be carried out until september 2016. And will in any case be continued until we see a sustained adjustment in the path of inflation. So kind of making this open ended. They could end earlier if they get to inflation target but go beyond that september 2016 date. So what we see here is taking a page from the u. S. Federal reserve play book here they did a couple of qe programs that were limited, didnt work so well, then they went to open ended and the thinking in the monitor policy circles it that it was the open ended nature that worked better. Seeing a big reaction in markets here right now, as they seem to digest what looks to be a surprise from the European Central bank. Now below 1. 15. Germans had no bite where their bark let it happen. Germans said do what you want. She did say independent decision. When we come back southwest Ceo Gary Kelly shares the Discount Airline rising on better than expected earnings. Premarket, we have threeday win streak in our pockets. We havent gotten to sandisk, big m a moves. Squawk on the street continues. Southwest airlines beating estimates on the top and bottom lines with latest earnings. Joining us first on cnbc southwest air lines chairman president and ceo, gary kelly. Good to have you back. Good morning. Great to be with yall. Youre the best performing s p stock of 20147 now saying fuel will save you half a billion a year. Why is it that it seems your fuel hedging strategy is working better than it is for your rivals . Actually its half a billion in the first quarter. You know i think that were that were all scrambling a bit when fuel prices collapsed that fast, that far. Its tough on the hedging program, but hedging program is designed to protect against rising prices. And were seeing a significant reduction in our fuel bill. That means hedging program is working well. And im just very proud of our people. I think theyve done a great job. This is a monumental quarter, gary, youre doing an incredible job. Your industry though certainly changed. Delta just basically i saying were were not going to cut rates anymore, plow money back to shareholders. You guys have always done than has the rest of the industry finally adopted your model of trying to return profits to shareholders . You know, i think they have. I think shareholders are more active and demanded that. And in the end, of course i think thats good for us have sensible competitors. Yeah we have very strong competition. I would say, jim, its the strongest that weve seen in a generation. Theyve got stronger Balance Sheets. Theyve got healthy profit margins. Theyre running good airlines. Theyre very tough competitors. And that should make us bitetter. I think our people are up for the challenge and i look forward to it. One thing, i know you dont use hyperbole, customer demand your term, remains strong. This is important. You have texas roots. Even with oil going down your business, the actual customer demand, is just excellent. It is jim. You know i admit, its unnerving to see Energy Prices drop so fast so quickly. But our Energy Markets in texas are holding up very very well in something that were watching very closely. Our short haul markets which could be impacted by the dramatic change in energy costs are also holding up very well. So, so far, so good. And our goal is to continue to grow our earnings at least at the pace that our capacitys grown. Mr. Kelly, you say unnerving, obviously many people would share that perspective in terms of that fall in prices. What are your expectations if you can give me a sense . I mean we have seen this kind of scenario before for texas, its many years ago. Do you expect if oil stays around this level that there will start to be a falloff in some of those roots that you just mentioned . If oil stays where it is, there has to be things have to change. So were already seeing drilling rigs cut back. Were seeing job you know jobs being cut. So far, thats not being manifested in our travel demand. I think on a net basis, though youve got consumers that have a lot of cash in their pockets and they will likely be traveling more than they would have. So how all of that nets out is anybodys guess. My best guess that that nets out system wide for us in a big positive. Of course, its much much lower, you know input cost for us. Right. Other thing i point out to yall, because were a lowcost producer and we all of our competitors and we essentially pay the same amount for jet fuel it is a Significant Competitive advantage for us to have lower Energy Prices because it enhances rest of our cost structure. Really quickly, gary from a consumer standpoint people are curious do they see any fare relief as some hedges come off in the industry absorbs the lower cost . Well the problem is i just you all understand i cant talk about our pricing in the future i wouldnt want to do that for competitive reasons or legal reasons. What i will tell you is that we are americas low fare leader and were going to work very hard to keep our costs low so that we can keep our fares low. At the same time, ive already shared with yall, we want to continue to grow our revenues and produce strong returns for our shareholders and our employees. So well work hard to keep all of our constituents happy. A tough one in that business. Gary, thank you so much. Gary kelly, southwest airlines. Good story. Really good story. People have to recognize, historically the Justice Department does not allow companies to get into a room and do pricing. When he says he cant talk pricing he cant signal leadership. Hes not dodging. He doesnt want to get prosecuted. Hes really unbelievably good is he not . They never lost money. 30 billion market value, that company. Worth every penny. By the way, southwest, very well hedged. American, like no hedges. United continental lost money in fuel. Didnt matter stocks up anyway. This is domestic strength. And i thought his texas comments were on point, which is that certainly no weakness yet. Should they have been seeing weakness already . I dont know. I think a little. A great operator. Boy, some people are impressive. Cramers mad dash, opening bell in a moment. A look at premarket on this day when the ecb makes their move. More on that in a minute as squawk on the street continues. 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Infrastructure company. Right. And this was a brilliant acquisition. So you say to yourself okay why is it going down . Because rich is stepping down from ceo. Hes going to be chairman not executive chairman help says he wont leave, he wont lose his stock. My favorite line from the Conference Call i urge everyone to do explains economics of oil, i plan to die with my boots on. In other words, not going anywhere anywhere. Stop fretting, start buying. Hes got the sensitivity. Look they did their budgeting at 70. But at 50, wti, what hes using 320 for nat gas, hes got ahujs 654 million in excess capital top of the are they going to buy more stuff. Buy, buy, buy. Buy everything distressed thats going to be thrown up thats what theyre going to done he had the brilliance he didnt see the oil price going down using 70 budget but the capital structure makes him number one acquirer of everybody else that will go belly up. This is the company. Sensitive to oil. They have co2, but you go please read the call rich kinder speaks english, which i love. Its my first language. It can be a beautiful language, too. It works for me. Many words mean the same thing. I didnt get to mention sandisk, the opposite of kinder morgan. Well do it around the bell. Customers count to like their product, the takeaway. One customer. You speak english, too. One customer. When you hear one customer and dont mention the name of the customer, guess who that is . I wont mention him either you get in trouble mentioning apple. I wont either. Well head to the opening bell. Keep an eye on eurodollar. Sara eisen is. She retweeted me at 3 00 a. M. 1. 14. I take prilosec otc each morning for my frequent heartburn. Because it gives me. Zero heartburn prilosec otc. The number 1 doctorrecommended frequent heartburn medicine for 9 straight years. One pill each morning. 24 hours. Zero heartburn. Ameriprise asked people a simple question can you keep your lifestyle in retirement . I dont want to think about the alternative. I dont even know how to answer that. I mean, no one knows how long their money is going to last. I try not to worry but you worry. What happens when your paychecks stop . Because everyone has retirement questions. Ameriprise created the exclusive confident retirement approach. To get the real answers you need. Start building your confident retirement today. Ecb president mario draghi continues to make headlines, addressing greece and potential for asset bubble. Steve liesman back at hq watching that. Focus on that greece portion there. European Central Bank President mario draghi saying there are no special rules for greece for the European Central bank to buy those greek bonds but existing rules that they have to have a program in place whats important here, there are issues with the greek elections coming up that well hear from Michelle Carusocabrera from athens today about the issue of whether or not they want to stay with those programs. If they dont stay with them the European Central bank will not be in there buying bonds what mario draghi is saying. Back to you for the opening bell. Steve liesman, thank you very much for than we are awaiting opening bell. Ecb the headline today but secondary acts. Verizon earnings amex ebay you mentioned sandisk quarter. And a lot of analysts coverage. Ge with a buy at ubs, 3m same story. Merrill lynch slashes everything infrastructure. [ bell ringing ] a lot of this is energy infrastructure, which we know is grinding to a halt in canada and some parts of the United States. Theres the opening bell and s p at the top of the screen. Here at big board this morning, lowcost airliner gol. And nasdaq World Economic Forum Annual Meeting where joe, becky, andrew continue to deliver the guests. Jamie dimon interview yesterday where he basically said listen you know what . The regulators are doing the job. Walked it back. Walked it back. Rolled back, walked back. I thought he did a very nice job, actually. Look pretty strong. Is he right . I mean to you ever pick up the paper and not see theres some new entity . They ought to form an entity antibank entity every state it gives money and they throw things at banks. Banks did things wrong. They certainly did. They did. Nobody went to jail. Everybody kind of did well. Nobody went to jail. Where you go to when you do things. Its not just banks. Aig, nobody went to jail. No they did great. Good bred at the open you mentioned tenyear which swung. Oh boy. We were at 1. 92. Now 1. 8. When will we know the treeue reaction to the move. The markets are so thin. Its scary to watch treasuries. I used to trade treasuries 200 million. Feels look a 200 million swing. What happened to the market . No one positioned . I dont know. Youve got the yields back down here, as you point out. Yields, spain, italy falling rather did you see ireland . Dramatically. Euro falling against the dollar strongly. 1. 145. I went to ireland to buy Property Three years ago, the rates are so high, euro so high, i said forget about. Ill do something over memorial day. Come back to corzine trade. Hold on. Wow great trade. Sometimes you he didnt figure out the other stuff but the basic trade was good. If you can play blackjack for ten Straight Days youll make more than the house. Did want to come back to a story ive been following a long time Family Dollar its over. We told you last week its over. Its officially over. Shareholders approved the deal to be acquired by dollar tree. Recall last week i reported when Dollar General did not effectively respond with anything, in terms of improving its offering to the antitrust authority, saying well keep talking to ftc, i declared it over then. Shareholders have declared it over. 74 roughly supporting the dollar tree deal. It is done. I think talking about a late february early march close. I dont think theres any change. Dollar general says todays vote is a loss not only for Family Dollar but consumers across the country. All right, guys. Really was a loss could have gone hell or high water and figured something out. One segment of retail we know is very strong. Theres some other part of retail that make me wonder. Im sure American Express didnt take my comments my Charitable Trust owns. But that does not seem to be the people who American Express people dont intersect with dollar tree people. Right. Right. I should add, rick dryling, recall last may, chairman and ceo of Dollar General, told us hed be stepping down within a year. Hes now extended. He was going to extend if they did the deal. But now hes actually staying on as chairman and ceo for january 29 2016. Very good. Another year. Not ceoless. Another year while they look for his replacement. Conceivably good news. Well wellregarded the way hes run the company. Keycorp had good expense control. Beth on tonight, doing remarkable job. Ohio bank done fantastic thing. And also, by the way, the bank group, david talked about the idea could be mergers in banks. Russell gold smith one of my favorite ceos in banking who never had bad loans banker to the stars, City National selling, huge premium. 26 . A shocker, by the way. I have said over and over again, this mans built a Great National bank for wealthy people, stormed new york fantastic job. He has been so proshareholder, 74 yesterday. 93 today. Where else are you making that kind of money. Wow. Where else are you making that money . Between that and kinder purchase two biggest m a moves which has gotten out to a slow start. Sure has. Shrink to grow ebay its going higher okay. You get this City National deal where hes becoming you know canadians are solvent, though currencys weak. Kelly evans, story about that. Yeah yesterday in particular. Another place youve got to go Prince Edward island went there to buy land. They didnt want americans buying beachfront property. Coming to your town soon jim cramer looking for land. When youre not allowed to own stock, what do you do . Right. Take stock in land. Ive got a bridge not far from here. If its a toll bridge. No its a nice bridge. Built in 1800s, famous. Toll bridges in pennsylvania a lot of money in that fame. Talked to gary kelly at southwest. Alaska air with earnings record high today. Another unbelievable operator. That stock is another one that is just if you look at that chart, is this really an airline . Isnt this what a tech companys supposed to look like . Gary kelly, cant say enough good about him. Am i in praise of an executive . Absolutely. Just pointblank saying gary kellys the best in the industry. Doug parker pretty good executive, too, american air, could be good. Forget to mention travelers but we should, 307, above 254, dropping catastrophic claims, higher premiums. Jay fischman this stock downgraded several times. Really, several times in the last quarter. Hes monster, hes so good. Those with travelers, your premium never goes down. He owns certain businesses. And when people started texting too much and driving, and death rate went up fatality rate went up, whoa backs away from that. Small business start creating more Small Business hes your Small Business insurance person. I own a little restaurant. You its like hey, lets get a bunch of insurers no travelers. Who else writes . Travelers. Travelers. Wow. What a business bushman has. Great investor. Never bought bad stuff. Praising here jay fischman. Twoyear gain of almost 40 . Monster. Big buyback. Take a look how much hes bought in. Its quiet, hes not promotional, i have to promote him. Someone has to do the job. Someone who doesnt need promotion, carl icahn. Gannett shares up less than 2 , after he filed to try to tap two nominees join the board of directors. His focus, as it was and is at ebay govern of the splitoff, seemingly very much focused on trying to make sure that they have a lack after defenses in place, if you will to preclude possibility of consolidation in their various industries. In a letter to their ceo over at gannett, he makes that clear, does mr. Icahn. And gannett responds youre getting ahead of us, arent you here . After all, we havent decided what the governance provisions are going to be for the splitoff companies. Their ceo also going on to say, calling his campaign overreaching in advance office his agenda will not deter the board continuing to serve the interest of all of our shareholders. Note his new focus, i believe hell be a guest on the fast money halftime show with scott wapner. Here what mr. Icahn has to say specifically help owns 6. 6 of the stock. Back in august, beat him to the punch, potentially wage a fight to get them to split the company but announced they were splitting, and his filing hit afterwards. Wow. Everywhere. Hes everywhere you want to be. He didnt have the greatest 2014, for the first time in a while. Remember, energy. He had some energy in his portfolio. Transoceans and some of those names. Speaking of 14 Union Pacific started 114, its now 118, going higher. Much higher . Much higher . Okay. Domestic. Google back to 525. Google hasnt fallen yet in price. Diesel is about to fall dramatically. Its lagged the price of regular fuel. And now Union Pacifics going to plow that back in. You want to buy that stock. Get to bob pisani see whats moving on the floor. Mixed open for the u. S. Stock market. But of course, the story is the ecb fired that big bazooka, all you call it a trillion euro program, and implied openended there i dont know what more anybody could ask for. Look at european stock markets. Germany, at a new high by the way, moved to upside on an intraday basis. Jumped around but modestly on the upside. I dont think you can judge it by looking at stocks though. If the goal lower bond yields and weaker euro its got to be a success so far. Eurodollar the euro plunged against the dollar here. Weve got a tenyear low for that. Up the euro versus the dollar the a tenyear low youll see. The big thing is, just on that the programs a success so far. There you see, look at the plunge in euro against the dollar here. U. S. Futures up slightly going into the announcement. A lot of noise. Were still up fractionally. Sectors that are up techs, industrials, Consumer Discretionary stocks are up. Material stocks are on the upside. Theres your leadership, growth areas for the u. S. Economy. Earnings are starting in big way today. Bank earnings in particular. Regionals, bb t Huntington Bank corp, did fairly well. Theyve struggled with mediocre loan growth lower yields net down. Jim, talking about City National, heres another big Regional Bank thats done really well signature bank. Look at some of the numbers they put up. Loan growth of 32 , deposit growth of 32 . Loan growth 3 4 for most of the big Regional Banks. Earnings up 24 . Few banks putting up exceptional numbers, most on the small side. The stocks up 1. 5 . Bigger banks all trading modestly on the upside this morning as well. Bank of america, Citi Jpmorgan u. S. Bancorp trading up. Transports having a great day. Transports up over 120 points. Big thing, off of their highs. But the big thing here is the airlines. Hope you saw southwest ceo on our air, right here just a few moments ago. But United Continental announced they terminated all fuel hedges. They had a loss on remaining ones. Remember, delta, the other day, said they would have had 7 more savings if they didnt have a fuel hedge. Fuel hedges really becoming a big discussion of among the earnings here. Finally want to note, we havent talked about ipos in a while, but big tech ipo, interested to see whats going to happen. Box as opposed to price, big cloudbased storage company, first tech deal of the year 12. 5 million, 1113, the price talk. Good news good news big space, hot space, rapid growth. But remember theres lots of competition. Microsoft, google, amazon and youve got no profitability. In fact the company made a point of saying we do not expect to be profitable for some time. Still, a lot of the other stories in the enterprise space have done well recently. We have had zen desk and hub spot doing well. If the deal goes well, expect to see drop box and others coming soon. Right now the dow is flat although transports continuing to have a very good day. Back to you. Thanks mr. Pisani. Want to move back to telecom. A lot of Different Things going on including earnings this morning from verizon. If you missed it the numbers, lets call it okay. Ads were not bad, 2 million, ahead of consensus. Some concern about ebitda margins which came in at 42 , lot of analysts looking for 43. 543. 8 . They did take cap x up at verizon. You can see stocks down over 1 . Actually lets call it about 1. 7 right now. The call is going on as we speak. The revenue number not bad. And again, it was addition of new subscribers better but a little concern around ebitda margins. Those, though, who say, listen you know at this point, theyre trending in the right way, cap x seen as a good sign you have this overhang of the spectrum auction and thats kind of the case for a lot of different Telecommunications Companies right now, investors are trying to ascertain what may have happened in that huge auction weve been talking about, that will end now, lets call it any day within the next week or so. Theyre at 45 billion, roughly. A lot of people trying to figure out did at t spend more than we thought they would have . Did verizon spend less than we thought going . Some people noted at t in a. K. As i mentioned to new borrowing. Citis probable outcomes to give you one of many different reports out there, tmobile maybe they spent 4 billion. Dish they probably bought uplink spectrum only uplink. Verizon, they thought maybe spend as much as 15 billion but well see. And they had at t at maybe less than that but again, seems to be argument now that perhaps its going to be more than that for at t. And less than that for verizon. All of which could then mean that verizon perhaps will still look to fill its spectrum need somewhere else, maybe doing something with dish. Again, all of this is speculation. Other part of speculation, who else was in that auction . Did carlos slim step in at all . Love saying his name. Carlos slim. Got to love saying that name. Cramer fat, carlos slim. Excuse me. Cramer fat, carlos slim. No longer of course everybody has relationship with at t. Is there something that could happen there . And figures into speculation around the germans position in tmobile. My point, once we get results here its going to clarify certain approaches that investors have to telecom. Not to mention this google gambit that involves that weve been reporting that were hearing about that involves buying capacity from tmobile and sprint to offer some Wireless Service to people. The only thing i would point out, probably says how important it is for do toll work mobile harder, get people search on mobile and using the google entrance into search on mobile. I dont really think of it as a major effort. You dont. No not at this point. Played up as it is a major. It is. When they buy a wireless carrier or step in and buy an enormous amount of spectrum i will believe it as a major effort. But we are starting to see this idea of, once again, convergence. Cable Companies Buy Wireless Companies at some point. Cable companies, Domestic Companies, again, america first, Cable Companies uniquely domestic. How do they do in this environment . All of this talk about cord cutting, go higher. Its domestic focus on domestic. If i hadnt mentioned of course at t did increase or put in a new borrowing facility with number of banks, over 10 billion, again lending. It could be for directv but lending speculation that they spent more on the auctions. Lets get to Rick Santelli at the cme group in chicago. Rick . Thank you, david. Lots of volatility. What are traders are here looking at . Something i havent heard anywhere else, and i agree, theyre trying to handicap mario draghi and the ecbs wiggle room. It is chicago. You dont think wiggly field. Heres the deal. If you have a lot of other programs liesman pointed out being molded into one big program, its really hard to differentiate exactly how much additional. One thing nobodys talking about, Program Begins in march. We had a ruling that gave the wing and a nod. And the big courts supposed to hear three to five months after that. Well march gives some time to move up that time line should the courts decide to also gives merkel a chance to make a comment, should she desire. These are thing theyre whispering about on the floor. Twoday of tens. If you were buying treasuries buying sovereigns for lower rates, a home run. A lot of guys took money off the table. Were up to 195 at one point but you can see were lower. Now, rubber band today working. Were only several basis points from unchanged on treasuries. Twoday of bund remember it got up to 58 almost highest yield that weve seen all year. And now back at 44. Yeartodate, really shows you how the market leading up was liquidation driven how the market for months in front of qe driven. Look at spread between the two, ive told you many times i like to look at 1. 3507 look for the spread to widen out. Takes incentive of continued buying potentially yeartodate of the dax, dax alltime highs. Watch the lesser equities like the cac and italian stock market, thats where most of the action could be. Year to date of the euro listen, about weakening their currency. To that end and the equity side theyve been successful. We did have a bounce close to 1. 16, didnt last long. Back to you. Well watch that closely. As you said tenyear back to 1. 85. Union pacific as ceo, Jack Koraleski a lift on quarterly earnings. Early gains are slipping. Dow down about 50 points. Back in a moment. In my world, wall isnt a street. Return on investment isnt the only return im looking forward to. For some every dollar is earned with sweat, sacrifice, courage. Which is why usaa is honored to help our members with everything from investing for retirement to saving for college. Our commitment to current and former military members and their families is without equal. Start investing with as ttle as fifty dollars. 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[ male announcer ] call the number on your screen now for your free copy of jon and petes new book. Thats. see the number on your screen call now. I have our personal perspective, and thats helped influence the culture of the company, but we also have Patient Advocates at company. And even our key business decisions, i asked my team think about it. If you or a person living with the disease, if you were a parent is this new technology, is this something youd be excited about, even with the risks, going into the clinic . And thats kind of the fundamental basis of who we are. What a piece of sound from last nights mad money. Gentleman, his daughter was on set, has another child with. Might have seen extreme measures with Harrison Ford a chronicle of his life. Hes done everything he can. The small pharma companyize like trying to solve an illness his kids have, big guys dont move fast enough. Stock getting hit. Biotechs getting hit. Biomarin did a big deal thats an orphan drug play and they did a deal it went through syndicate bid. Theres some people doing great things who wereare executives and making money for shareholders. Great coverage on the sector. Thank you. Stop trading in a moment. Dow down 25. Time for cramer and stop trading. I think tech semis have been odaywe okay other part of data storage. F5 a disaster today, this is japan. And xilinx used to be one of the most consistent companies in the industry hideous numbers. Be aware that theres undercurrent of Communication Software and also Communications Hardware and also data storage hardware that is you call it into question. Dont hide in tech. Know your stuff. Whats on mad. Key with the monster quarter, united Reynolds Company did well. Harmon acquisition. Cyprus semi tjrodgers. I cant wait until tonight. Never have four guests. A big show. Wow. See you tonight. Waking up at 3 00 to learn these things. When we come back more on ecb, unprecedented stimulus plan and head of Union Pacific. You can find a new frontier. Theres nothing stopping you and a lot helping you. Technology thats with you always. This is our promise. Its never been better to wander because wherever you go, youll find us doing everything we can, so you can. Good morning, welcome back to squawk on the street. Im Carl Quintanilla with sara eisen, simon hobbs, david faber at new york stock exchange. We get quantitative out of the European Central bank. Moves not just equities was currencies and tenyear where the yield all over the map. Oil down a percent to 47. 27. The road map, reaction to todays ecb decision from around the globe. Live reports for you from here in the United States from athens coming up. Plus airlines are soaring today, as fuel costs keep falling. A lot of stocks reporting, of course, southwest, alaskan, well have analysis. Box set to price its ipo tonight. How does box keep its customers and generate its revenue . Inside box. Later, Union Pacific a big rise in profit as demand continues to power the rail sector. The ceo of Union Pacific will join us live for a first on cnbc interview later on. Lets get more on todays action out of the ecb. Historic day announcing a bondbuying program to try to revive the eurozone economy, get inflation up. Coverage around the globe. Steve liesman is back at hq. Chief International Reporter Michelle Carusocabrera live in athens. Steve, lets start with you. Judging by the euros reaction weakening significantly, draghi got the desired effect. I dont know if we have steve liesman. Lets check on the euro because this is the ultimate key about whether the how the markets are judging this 60 billion per euro monthly bond purchase program, equate to almost more than 1 trillion euros. 1 1. 1469 weaker by 1 . After weakening 15 in the past year, in anticipation of this announcement. Ill go with you on this. It seems like theres something of a surprise here when i look at the euro. If any market was going to be tuned to what the ecb was going to do anticipate it you think the euro. It looks like it looks a bit surprised here. Lets talk about what they did. 60 billion euros, talk about 50 billion yesterday from news port. This would be adding sovereign bonds to the portfolio. Includes other ecb purchases that are made there is risk sharing, nod to the germans who want the National Banks to effectively take on most of the risk of their National Sovereign bonds. Greece can play too, but some special rules that deals with countries like greece or those countries in countries in eu imf. Draghi talked about how long the program will be in place, take a listen. They are intended to be carried out until end september 2016. And will in any case be conducted until we see a sustained adjustment in the path of inflation. And the key right there is that theres an open ended nature to. What isi said ecb has delivered an aggressive and open ended program that meets our qe2. 5 standard and comes close to talking the u. S. Federal reserves qe3. Bank of tokyo, its hard not to see this as a positive but lingering doubts. Is it enough . Are they riding to the rescue, breaking foundation of the Financial System . Heres the euro again, sara talking about, it was kind of even for a while, and then it had that plunge around 9 00 this morning, down to 1. 14. Thats 1. 5 cents right there, sara. Its something worth watching. You saw movement also in european Interest Rates. U. S. Interest rates initially, simon, stock market liked it and then seemed to sell off in reaction. But in fairness weve had a runup on all of the trades. Fresh record lows on spanish and italian debt. Great point. Love the point that you made about targeting inflation. Well come back to that in a moment. For now, thank you very much steve liesman, back at hq. Lets get analysis now. Capitals ahead of european rate joining us and chief investment strategist mark lashiny. Financial markets get numbers in their heads, and in our head last year was put the idea that they should increase the Balance Sheet by a trillion euros, for so many months we went back and forth, last year as to whether they would achieve that. Now they tell us theyre going to buy 60 billion a month for 18 months. Hey, its 1 trillion they hit the mark and thats why the markets react this way, mark. I agree with you, simon. I think the risk going into todays meeting was that the ecb and mr. Draghi would disappoint because weve seen plenty of evidence of course in terms of the precedence of previous meetings that didnt come out with qe it was more talk than action. The worry, i think for us, certainly they would come out and have another timid response relative to expectations that were built into qe that i think were reflected into the euro already. And instead, not only didnt disappoint, i think they came out with a package that collectively between its size duration and quasi open ended nature of it is i think helping to deteriorate the euro a plus for many of the peripheral countries and good for european risk assets. Let me pick that up with peter. Steve liesman, very importantly, raised the in the key sentence they make here peter, they are going to pursue this asset purchase or these asset purchases and still until theres a sustained improvement in the path of inflation towards 2 target. Now, if you believe that qe doesnt work and you believe that they cant actually push Inflation Higher as many people do believe, they are now fully in on this with their colors nailed to their mask peter, for a very long time potentially even for the disbelievers here. Well yes, definitely. I mean as we just heard, one of the things that comes out of this is that the purchases are going to be much bigger, the size of the Balance Sheet after they are done or you know during the operation, is most likely going to be significantly bigger than the 3 trillion target theyve been putting out. As you rightly point out, given the targeted or link it very closely to inflation, Inflation Expectations, theres every opportunity for them theyve left the door open very wide to increase their purchases even further. So, thats i think, forward the expectation of the size of their operation now, must be bigger than just on paper. Mark, Immediate Impact of the move is on the currency. Look at it from the u. S. Perspective for a moment. Stronger u. S. Dollar starting to hurt corporate america. You hear it from every Single Company that does business overseas and theres a lot more with big consumer names reporting in the coming weeks. Dozen this complicate the does that mean that they perhaps will stay on hold for the rest of the year, because if they do go the other way and raise rates, according to plan can you imagine what thats going to do to the dollar now that the euros sinking on the news. I agree, a nontrivial chance this helps delay the federal reserves liftoff date twroord Interest Rates if the dollar continues to strengthen visavis trade weighted basket of alternatives. That said we know exports, a percentage of u. S. Gdp, about 15 , of which 15 go to europe. So, its a relatively small part of our overall gdp affected by the dollar euro cross, but that said if the de facto effect still is towards seeing the dollar strengthen which weve seen going to work counterproductively to multinational profits we know in addition to de facto tighten tightening, in addition temper inflation in the u. S. Which we know part of the dual mandate the fed is attempting to resurrect. Argue the reason the fed is nailing its colors to the mask going for rate rises, walk back in that later which is monetary easing. Leave that to one side. What do i buy now . What assets this is hundreds of billions of dollars, trillions of dollars, that are going to be unleashed into europe and potentially flood across the world in addition to what the bank of japan is doing, what assets peter, do i buy now . What is this not already factored . Do i buy european equities . Can bonds go higher and if so which side of the atlantic . Well look i mean first of all, start here in europe biggest implication in the bond market youd see everything that has spread on it effectively you two things that are going on one depressing core rates, riskfree rates even further. And ultimately drive people further out the credit spectrum. Secondly in the peripheral space, thats going to help weve seen that in the strong rally of the bond spreads are still coming in which is very strong statement. But it should ultimately also help all other sorts of assets. At the end of the day, lower discount rates, it has pushed up Inflation Expectations already and help assets. You go across the board, thats more tricky. Obviously that depends what kind of assets there respect you heard there might be other elements, for instance in the u. S. Regards to dollar thats more tricky. Clearest implication for Financial Assets in europe no doubt. Right. Mark, what has happened this year on equity markets is that europe rally strongly, up 5 and u. S. Equities are down. What happens now . Will this market in this country rise because of what the European Central bank is doing . I think ultimately it will, simon. I think it will rise on its own merit. I think a lot of cross current early in the year that affected u. S. Based equities. Valuations full in the u. S. Investors more demanding of perfect news. At the end of the day, if it helps inflate risk assets in europe and help the european economy, though i think the economic efficacy is in doubt, that will pull forward u. S. Equities awell. That said i hold the belief european equities are very cheap on valuation basis, and the fact that they finally started to pull ahead of the u. S. Equity market here yeartodate is encouraging and as well, we have conviction that theyll put in a better performance over 2015 than the u. S. Entity market. Yes i i inty will pull u. S. Equities doubt. An historic day. Thank you for joining us mark peter. Thank you. Lets head to athens. There was a big questioning whether the ecb would be buying greek bonds three days before the countrys election. Michelle carusocabrera is there live with latest on the snap election and reaction to the ecb. Michelle . Sara yeah. The answer is no not at first. Apologize for the loud music. The communist party is holding a rally beneath us. Quantitative easing for everyone in the eurozone beginning in march except greece. Draghi said, during the conference, that for technical reasons buying of greek sovereign bonds will not be until july. Two facts, first of all, remember the ecb has already bought greek bonds, in large quantity, 27 billion euros worth weech built weve built a wall graphic how much greece owes to whom. Nearly 350 billion euros of debt. Largest amount of debt 200 billion to other governments. Second largest amount to ecb 27 billion euros of bonds when Jean Claude Trichet ran the bank. Early days 2010 2011 he did that to bring greek yields down to reenter the Capital Markets than didnt happen. But those still remain with the ecb. Whats the second fact that you need to know . Big repayments to the ecb from greece coming in june and july. We built you a calendar. A lot of repayments but the ecb supposed to get repaid 3. 5 billion in july and another 3 billion euros in august. Lets add another fact. The next Prime Minister of greece during his campaign, hes campaigned they shouldnt pay the ecb back that soon. They want some kind of forgiveness or extension of maturities. One of his advisers that i spoke with who is a marxist, admitted marxist, says ecb should do that its the right thing to done i said to him, look if theres anybody in the situation who can really put the screws to greece and i know i dont speak delicately, the ecb, they can threaten to not fund your banks if you bring them to the wire. And he said he done doesnt think theyd ever do that. Its not going to happen because the door will be open for the next country to exit the markets are going to evaluate exit a risk for italy, for spain, for portugal for other countries and this is going to create disaster. So, we are not going to have thats the leverage that the greek future potential government has they put the skrees back ss screws back to ecb, theyll cave, they dont want other countries to see their rates rise. Its going to be interesting. Ive been trying to listen to whats coming from below. Can you email what they play at a communist party . What is it . Keep the red flag flying high remix . How do you dance at a communist party . Earlier playing an antivietnam war in vietnam song back from the 60s and 70s, apparently according to our local translator and consultant. Ill find out what the song is too. Thank you. Viewers love your apology on behalf of the party. Thank you so much. Michelle carusocabrera in greece. Area line stocks soaring and united and southwest jumping after quarterly results. Fuel costs continue to drop how should you be playing the airlines. Well talk about that when squawk on the street comes right back. Your old 401k is rolled over into a Td Ameritrade ira. Yes so no set up fees wooh yeah so i get help from rollover consultants . Wooh yes no rollover hassle. Great. Woah oh, were spiking things, robbie. For all the confidence you need. Thats better Td Ameritrade. You got this. Ladies and gentlemen ladies and gentlemen an event welcome back to squawk on the street. Watching shares of lands end, stock plummeting, down 23 , after the apparel seller said Fourth Quarter profits and sales come in low expectations. At sears, stores shares you can see, down 24 . As for sears shares its also moving lower as well down by 1. 5 so far on the days trade. Back over to you. Dom, thank you so much. In the wake of deflate gate Bill Belichick addressed the media, saying he has no explanation for what happened in conference championship. Take a listen. No knowledge whatsoever of this situation until monday morning, i want to know more about the process in the last three days than i knew or talked about it in the last 40 years ive coached in this league. I had no knowledge of the various steps involved in the game balls and the process that went through that happened between when they were prepared and went to the officials and went to the game. So ive learned a lot about that. Learned a lot about that. Joined by nbc sports dave brigg. Good morning. Good to on on. The early take is belichick is throwing brady under the bus, you agree . It sure felt that way. A couple of things, im covering the patriots every practice every game four a fouryear span, a couple of things. Bell belichick controls every single aspect of that patriots franchise, nothing happens without his knowledge, his instruct. Number two, Bill Belichick knows everything about every aspect of football he can tell you what he ate at lunch ten years ago before he played the jets in game three of the season. For him to say he had no knowledge of the various steps vovled in the game balls that made me fall off the chair. Did feel like he threw tom brady under the bus, bradys personal preference on the footballs something he can talk about in better detail. Tom bradys press conference moved from tomorrow to today. Now that just got exnoengslily more interesting what tom brady has to say about the condition of his footballs. Dave what do you say to people who argue, no way psis made the difference in the game. At the same time if they did bend a rule it has to be addressed. Whats fair . Look first off i dont think it had any factor in the game. Look at the footballs, they were taken away at halftime. Tom brady threw an interception in the first half some felt that was a close football game. Took away footballs, put in backup ones in the second half. Patriots went 280 in the second half. Brady threw two touchdowns no interceptions. I dont think it had any factor in the football game. Even the colts said they could have played with beach balls and still beaten us. I agree with that. This business the integrity of the game testimony you are messing with that theres got to be a heavy, heavy price to pay, given their situation with spy gate given what Roger Goodell tried to do in cleaning up the game ethically. Look they knew that they would be hit hard if they ever messed with integrity of the game. If in fact they did, a stiff punishment. Brady and asked about this on his show earlier in the week i dont respond to this stuff anymore. Would you expect his press conference to be much different . Look youve got to speak to his personal preference about the football thats most important thing. He said back in 2011 on the weei interview, that he does like a slightly deflated football. Now he sounded like he said it a bit in jest because it was from gronk spiking the football on the ground. Brady is very honest open in these situations although i cant imagine that Bill Belichick already hasnt had an extensive conversation with him about what to say and what not to say. They have meetings before press conferences about what questions they might be asked and how to answer them. I dont know if but the patriots do that give them sample questions, sample answers. In this case tom brady lass to come completely clean about the process involved with the football. Going to be an interesting one to watch. Dave thanks so much for coming to the phone on short notice. Dave briggs. Gallup 66 airlines having a great morning. Shares of southwest soaring more than 6 , others, United Continental, alaska air a boost after reporting bullish outlooks for the first quarter, because of lower fuel costs. An hour ago we spoke to the coo of southwest. Its unnerving to see Energy Prices drop so fast so quickly, but our energy marks in texas are holding up very very well in something that were watching very closely. Our short haul markets, which also can be impacted by this dramatic change in energy costs, are also holding up very well. So so far, so good. And our goal is to continue to grow our earnings at least at the pace that our capacitys growing. Gary kelly, southwest earlier. Joining us on the phone is jpmorgan airline analyst, jamie baker. Welcome to the program. Your sectors on fire at the moment. What are you telling clients . You know the general message for clients right now is that they are the ones who are pocketing the fuel price savings. Frankly, im a bit shocked that the market hasnt paid up more dearly. Yeartodate performance has been dismal. I think investors fear management will instead squander the savings. But based on what were learning this week that missed perception is starting to change. Hang on southwest doubled in value over the last year jamie. Are you suggesting it should be far more hand that that the valuation warrants a higher share price . Well, you know if you look at share price gains that we you know benefitted from in 2014 vast majority of them occurred in response to industrys fundamental, you know rehabilitation, in fact equity performance began to stall as fuel prices started to come down. Yes a lot of noise around ebola but look how market caps increased since fuel has come down the markets only putting a fraction of value on these fuel cost savings. Presumably they believe Competitive Pressures, consumer pressures, i mean, theyll have to drop some fuel surcharges or cut prices. But i think you were saying Something Else. Are you suggesting they might engage in some deal making m a, when you say theyll squander resources that they have that will be the fear . Well no i think the fear is that management would deliberately lower ticket prices because of lower input costs. Quite frankly, i think thats fantasy. I think thats folly. Gary kelly hit the nail on the head today there will be some businesses and consumers directly exposed to energy that could suffer. Obviously if you want a cheap fare to russia or africa youre in luck no better time to cash in miles for a free ticket to moscow from dell tap on the other hand u. S. Consumers pocketing 180 billion saving as the gas pump. Travel is discretionary. When people have more money, they travel more. We asked gary at what point fares start to reflect the lower fuel costs. He says i cant go there. But what would you expect . Whats a reasonable amount of time for fares to respond as some of the oil hedges come off . Well look you know i think if managements were undisciplined wed be seeing those types of pressures. And the fact is were not. You know again, i think, based on the guides this week from alaska, delta, southwest, united, 100 of fuel savings are being retained. Its owners of the stocks reaping the direct benefit. Passengers will enjoy indirect benefits such as newer planes on board wifi, you know on trays you can recognize, for what the industry couldnt invest in. I like airline food. Before you go what is the top pick . Where would you herd people at the moment. Focus on American Delta united stocks we think, from here, despite Pretty Healthy gains in 2014 those are the ones where outside market trouncing returns are still quite possible. Good to meet you. Jamie baker from jpmorgan on the airlines. Next on the program, boxs long awaited ipo set to price after the bell finally tonight. But just how does this company that competes with giants like google and microsoft generate its revenues and keep its customers coming in the future . More on that when we come back. Theyre still after me. Get to the terminal across town. Are all the green lights you . No. Its called grid iq. The 4 51 is leaving at 4 51. They cut the power. Itll fix itself. Powers back on. Quick thinking traffic lights and self correcting power grids make the world predictable. Thrillingly predictable. Hi. Pete and jon najarian here in new york city outside of the nasdaq, where we bring you live daily market updates. And today, we have a very special free gift for you. So many viewers email us wanting to know our secrets on how we trade options. So we put our secrets into a new book. And if youre one of the first 250 people to call in right now and just cover shipping and handling well send you a copy for free. Look at the rate of return weve made on some of our recent options trades versus what we would have made had we just bought the stock. Theres no comparison. To make the best returns in todays market, you have to learn how to trade options. And our book will show you how to do it for free. Jon has been Trading Options for more than 30 years. Pete is one of the top 100 traders in the country. And our book will teach you how to trade options for free. So call now. [ male announcer ] call the number on your screen now for your free copy of jon and petes new book. Thats. see the number on your screen call now. If youre running a business legalzoom has your back. Over the last 10 years weve helped over one million Business Owners get started. Visit us today for legal help you can count on to start and run your business. Legalzoom. Legal help is here. Who do you work for . Your boss . Yourself . Your family . Our Financial Advisors are free to realize a plan to fit your familys unique needs. Well listen. Well talk. Well plan. Baird. Welcome back to squawk on the street. Jackie deangelis. The department of energy out with weekly report on natural gas, draw of 216 billion cubic feet. Prices going down on this, 282, around 290 before the report came out. Context on this. This is more than what we saw last time this year its more than the fiveyear average as well, but what traders are focusing on is as of last week stocks were 11 higher than they were last year. You all know how brutal the winter was last year so traders looking at forecast for cold for the next ten days or so. But still, because theres no talk of a polar vortex because its not quite as brutal as it was last year these prices are staying under 3. Right now, 2. 83. Back to you. Thank you very much. In the meantime box shares finally set to price tonight after the bell and of course start trading tomorrow friday. What should investors know about the Cloud Storage company much hyped by many quarters. Cnbcs Julia Boorstin looks inside the box. Good morning, julia. Good morning, simon. Box charges companies monthly fees for its Cloud Storage sharing collaboration and security tools. Since box launched back in 2005 and the ceo was in college, Cloud Storage has been xlod advertises, google microsoft, drop box which focuses on consumers have moved into boxs business. But levy has said what distinguishes box is its work collaboration tools. Box has a premium model, basic toolg tools are free but over 44,000 Companies Paying customers, including half of all fortune 500 companies and the company had 32 million registered users. Its client list includes general electric, in the process of rolling the product out to 300,000 employees, companies as die ver as Proctor Gamble directv, as stra accidentfullyzenaccident astrazeneca and gap. Health care, one of its Fastest Growing sectors, retail, media and entertainment. Grew in the first three quarters of last year but was concern is that the cost of the revenue isnt really shrinking. With net losses of 121. 5 million, in that same time period, a hair lower than a yearowing yearago period. Box defending aggressively aggressively on sales and marking for us in custom virgins, verticals investing in the new sales team and new collaboration tool. Thanks very much. Highly anticipated one after much delay, Julia Boorstin thanks for running us through box. Ahead of the ipo. As you can see, stocks climbing higher in the wake of the big ecb decision quantitative easing, dow up almost 70 points. S p 500 up more than a half percent. Nasdaq up a half percent as well. Check euro below 115. Weakening by more than 1 . One and only art cashin joins us to break it down after the break. In my world, wall isnt a street. Return on investment isnt the only return im looking forward to. For some every dollar is earned with sweat, sacrifice, courage. Which is why usaa is honored to help our members with everything from investing for retirement to saving for college. Our commitment to current and former military members and their families is without equal. Start investing with as little as fifty dollars. Stocks on the rise across the board, euro is weaker. Art cashin at ubs financial services. I cannot remember more telegraphed central bank decision, leaks, reports, anticipation, the hints, even mario draghi, whatever it takes. Yet we still look like got a surprise. Yes, you do. And you had quite a whip saw as different Asset Classes tried to figure out what the implications why. Now its becoming increasingly evident what theyve achieved is a weaker euro but not much else. Reliance on ltros is not going to increase bank lending in europe, as far as i can tell. Well wait and see. I think the u. S. Stock market is probably going to revert back to looking at things domestically things like the oil price and whatever. It was nice that we had our first three up days in a row since before christmas. Can i just reframe that very slightly . Sure. He first talked about doing everything to save the euro the week before the london olympics in 2012. This has been a massive runup that has moved asset prices phenomenally around the world. The fact weve held on to the gains gains is in itself remaskable dont you think. Weve had qe here japan, japans on the verge of buying not only more bonds than are issued but in some cases coming close to buying more bonds than are available. Globally, youve had a massive push to get assets Financial Assets anyway higher. But you know i dont think its going to get into the economy. Youre right, its worked with the Asset Classes but not the economy. Thats where efforts to get currencies lower does work into the economy. I mean what we learned today is that were in the middle of a severe currency war. Mario draghi firing this latest shot. The number two at Goldman Sachs talking about it overnight at davos. How does that end . And what are the implications of that kind of heightened risk for Equity Investors . Well so far it is a war, but its being played look a chess match. That laid back sur reason bralcerebral attitude will disappear. Someone will get the currency in place to cause pain to somebody else. Were already having pain in the u. S. With the stronger dollar. So many different companies. We have discomfort we dont have pain. When we get to pain youll see. Its more than that isnt it . If the Foreign Exchange levels are falling for japan and europe, everything that comes out of the japan and europe is falling in value. Thats massive waves of deflation that at the very least are lapping at shores of this country. You can argue the stock market will still ride through, and its a very Strong Economy but we should acknowledge thats the effect of whats happening. And its only going to get worse. Those waves of deflation will get stronger as the currencies fall. Youre quite right. These nations had been exporting deflation. But it just hasnt turned into a tsunami yet. When it gets close to that then youre going to see Central Banks all around the world decide they better get more cooperative. This currency war cannot go well. They never have. All right, art cashin well leave it there, for today, Equity Investors are focusing on the positive stimulus factor of all of this quantitative easing. Dow up 72 points. Art cashin thanks. Thank you. Keep your eye on oil. And the sports world. Not only did belichick make the press conference, but jeff gordon of nascar saying 2015 his final fulltime nascar season. Jeff gordon, 43 won the daytona 500 three times, number three with 93 career wins battled with back spasms in the past and had back therapy. Big news if youre interested in nascar sports. Over to the cme group and collect in with Rick Santelli and get the santelli exchange. Good morning, carl. Boy, a fun day on the trading floor. Fun denoted by lots of movement some surprises, some nonsurprises. Quickly, before i get with my special guest, look where swiss rates are, just to get an idea of whats go on in the world. Oneyear minus 105 basis points. Two years minus 102en minus 1 in threes. 5s minus 70. Tenyear minus 20 basis points. A chart of that wow, all i can say. If you remember the rule of 72 double your money, minus 1 . If you stayed there yooud lose 100 . Thats the rate of decline by investing there. A lot of themes today. Give me your first blush on the ecb and mario draghi did and then lets go back and forth. I think the first blush is that he put in inflation target on. He said that were going to continue to buy euros at 60 billion a month until september 16 or inflation rate gets to 2 . Wait a minute. Wait a minute. Theyre going to do this until Something Else happens, which is inflation, i dont know, like us giving up steak until Larry Summers gives a speech. Sorry, whats the correlation . Anybody ever proves the correlation . No. Thats what the market sees too. Theyre going beyond september 16, keep going until 2 inflation. Thats why the market is looking at this as upside surprise. Now the other dynamic out there that traders dont agree with, but generically it could be correct, they delivered more. I dont know if they delivered more because the 60 billion is wrapped in a package and we cant unbrap itwrap it yet. Point a. Point b, i talk about the carrot they leave you with is what the currency looks at most okay. Go backwards. What carrot did they leave . They left you with the inflation rate out there. Openended. Exactly. Leaves exit strategy to be more difficult further down the road as well. But to your first point, youre right, 60 billion a month, but it also includes all of the other program as it they had in place. How big are those . No one can answer that question. Thats what happens when you have a central bank governed by 19 countries. Its so complicated we cant figure out how much new moneys going into the program. Its not a simple answer. Tell me if you agree with the axiom, the reason openended works because the markets going to demand more and it gets its way a lot. But what does that do to the normalization on the backside . I agree with you, this program is dictated towards markets, markets get what they want. Its to benefit markets. Listen to the guests ive heard on the network this morning, its good for markets. Is it going to create jobs inflation . Not sure about that but its going to push markets up. Thats why markets get what they want and if thats a nice way of saying youre manipulate markets higher exit strategies manipulations always messy. I could never add anything to that. We have to tend there simon hobbs, back to you. Thats what happens when you surround central bankers with other bankers. Rick thank you. Shares of Union Pacific have had a great year and in fact on the rise again today, beating quarterly estimates on the earnings front thanks to surging rail traffic. Will the trend continue . The coo of Union Pacific when squawk on the street comes right back. Take a deeeeep breath in. And. Exhale. Aflac and a gentle wavelike motion. Ahhhahhhhhh. Liberate your spine. Ahhhahhhhhh. Aflac and reach, toes blossoming. Not that great at yoga. Yeah, but when i slipped a disk he paid my claim in just four days. Ahh four days . Yep. See why speed matters, at aflac. Com. You just got a big bump in miles. So this is a great opportunity for an upgrade. Sound good . Great. Because youre not you youre a whole airline. And its not a ticket youre upgrading its your entire operations, from domestic to international. Which means you need help from a whole team of advisors. From workforce strategies to Tech Solutions and a thousand other things. So you call pwc. The right people to get the extraordinary done. We have a tripledigit gain on the dow. Take a look at telecom sector, down sharply today. Dom chu has more at hq. Right, far and away the weakest sector in the s p 500. Thank verizon for that. Verizons reporting earnings that match wall street forecasts but pension costs are weighing on its bottom line. Results hampered by Competitive Pressures as well. Moving lower, at T Frontier Communications and wind stream. But remember sara telecom the smallest sector in the s p 500 and verizon and at t dominate the way that the sector trades. Back over to you, sara. Also the verizon news weighing on the dow as well. Shares of Union Pacific are higher up nearly 4 this morning, after the rail operator announced Fourth Quarter profits jumped 22 from last year. Joining us here first on cnbc Union Pacifics chairman and ceo, Jack Koraleski. Good to have you on squawk on the street again, jack. Good morning, sara. Good to be with you again. So forget central bankers mario draghi, i want to hear from you. Your outlook on the real economy. You move everything from autos to lumber. Whats the outlook for this year in the u. S. . You know our outlook is pretty favorable. We see the economy continuing kind of a nice moderate growth pattern that we saw at the end of 2014. So automobile business, if you go back in Fourth Quarter, auto sales were strong. Construction products like stone, sand, gravel cement lumber up 10 , fundamental Building Blocks of the economy. And its also consumer confidence. We feel good about whats happening. One of the things you point out in the release is that one of the biggest uncertainties is the outlook for Energy Markets. Talk about how the dramatic plunge in oil prices has helped or hurt you, because as i understand it oil has been a big source of growth for the Rail Industry yet good to have lower fuel surcharges. Yeah, overall when you look at whats happening in the Energy Markets today a lot of people concerned about the sudden drop. And i guess the question that fundamentally is kind of on our minds, how low will it go how long will it stay there, will it stay there long enough to significantly change peoples behavior . From our perspective, if the consumers have Discretionary Spending brought by the lower gasoline prices and things like that, theyre building houses buying automobiles, furniture, all of those things sweet spots for our franchise. Its a win forrous either way. Lower fuel prices a help overall. I get that. Have you seen change in behavior in the energy companies, lower Capital Spending lower plans for production . Starting to feel the impact there . You know at this point in time, weve seen the announcements, but if you look for instance Fourth Quarter results, up 35 , even oil business up 7 weve been one of the railroads trailing oil yearoveryear. We havent seen it in our Business Model yet but we have been watching announcements. Were going to play it carefully and work with our customers to take advantage of every opportunity that we have. Talk a little bit about your intermodal business. A lot of the analysts are looking for you to gain market share, you and your competitors out there in rail especially with what weve been seeing going on with truckers the short supply of truckers and the sort of tightening market there and how you are actually taking some of the online shipments away from the trucking industry. Do you expect that to continue this year . You know we do. We just completed i think our sixth record year of intermodal growth on the domestic side. Right now we have this little problem on the west coast impacting our International Business negatively but our domestic business was quite strong, up 10 in the Fourth Quarter. Its the whole Value Proposition of being able to take the fuel efficiency and effectiveness of rail against trucks and actually you partner the trucks with the rail and the intermodal world. You have the truck that picks up freight within 250 mile radius bring it to rail head we take it long haul thousands of miles to another rail head where they pick it up and deliver it. Youve got the best of both worlds and the fuel efficiency and you also have the environmental friendliness of rail making the long haul. We think that will continue to spur growth. You mentioned the difficulty that youre having with the sports on the west coast. Longer term what about the panama canal and the upgrade thats coming there and this view that it will allow asian importers or exporters to more readily access the northeast of the country, without so much over ground rail activity . What are you saying to investors about that longer term . You know, simon weve spent a lot of time studying the panama canal. We saw the shift that took place in 2002 where some of the business off the west coast moved to the gulf coast and the east. We think the bulk of that business has moved. There might be incremental, 1, 2, 3 more that might shift when the canal opens and is established, but were really not afraid of that competition. We think whats gone is gone and we think the stronger Value Proposition when you look at west coast ports, partnered with great rail service, thats our competitive advantage and well we will fight hard and win in that world. Jack thanks for joining us on earnings day as i mentioned the stock is up and by the way, the Broader Market up 120 points on the dow. Jack is the ceo of Union Pacific. When we come back new york has been the center of the luxury rental universe. That could be changing. Chicago is giving nyc a run for its money. Well talk more about that in just a moment. Have you heard of the new dialing procedure for for the 415 and 628 area codes . No what is it . Starting february 21, 2015 if you have a 415 or 628 number youll need to dial. 1 plus the area code plus the phone number for all calls. Okay, but what if i have a 415 number, and im calling a 415 number . Youll still need to dial. 1 plus the area code plus the phone number. So when in doubt, dial it out the luxury rental market is not just for new york city anymore. The windy city is getting in on the action. Diana olick is live in chicago with more on that story. Good morning, diana. Good morning, carl. Were coming to you from 500 lakeshore drive, a brand new luxury rental Apartment Building owned by the developer behind hudson yards in new york. Related just broke chicago records, selling another of its new properties just a stones throw from here, 500 unit luxury rental building for 328 million. Now the rents there, range from 1700 a month for a studio to 12,000 a month for a penthouse. I know thats cheap by new york standards, right, but it says something very important about whats going on in this market. I think it talks most to how chicago is one of the Great American cities and whereas in the past maybe hasnt been as recognized as much by the very highend purchaser, today the people that drive investment across the country are recognizing the viability of the city. Reporter now related is embarking on yet another tower thats right down will you cant see it but its on the lot next door. Both condos and rental apartments. Rents could be as high as 15,000 a month. Why now . Jobs. Jobs are moving downtown. Witness the founders of groupon bought the Wrigley Building and are moving Tech Startups in motorola at the merchandise mart. And google with new space downtown. While the city overall lost population in the last decade its core downtown head count was the Fastest Growing in the nation, fueled by millennials who like to rent and demand all the top amenities. Now there is not a lot of International Interest here at least compared to new york or california, miami. But that may be about to change. There is a brand new Chinese Development slotteded to start slated to start in 2016 thats going to have close to 300 condominiums and expect a lot of chinese demand there. Back to you, sara. As long as it can brave the cold windy winters of chicago. Thanks very much. Diana olick. Over to jon fortt with a look at what is coming up next on squawk alley with the dow up 150 points jon. A lot for you, sara. Weve got microsoft, the writer for wired who got the first look at that will join us. Google, is it a good idea to sell Wireless Service . Well dig into those plans. Adam jonas on tesla coming up on squawk alley. Ife special by being apart of it. everyone cheers glad you made it buddy. Thanks for inviting me. Thanks again my friends. For everything for all your help. 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