Transcripts For CNBC Squawk On The Street 20150318

Line, General Mills exceeding expectations. Prime minister netanyahu declaring victory in israels election. Tim cook explains why its okay that you dont flowknow yet why you need his watch as apple gets set to join the dow after the bell today. Investors bracing for the fed statement. See theyll drop the word patient. Janet yellen will hold a News Conference. Well have complete coverage of the fed decision beginning at 2 00 p. M. Eastern here on cnbc. Its being called the end of an era, end of the zerp era and end of an era that promises low rates for a given period of time. The word patience. The reason its important, if she does remove it it gives her flexibility to lay the groundwork for Interest Rate increase as if it werent a high stakes fed meeting, how about the letter from ray dalio, major Macro Hedge Fund strategist, talking about risks here. To be clear, we dont know nor does the fed know how much tightening will knock over the apple cart. What we do hope the fed knows, which we dont know is how exactly it will fix things if it knocks it over. Sort of begging and warning the idea of the fed having a plan b, in case the tightening backfires, and thats a traders position. Thats a traders shortterm position. At the homemoment he doesnt want to be overexposed to the market. Its the rubber meets the road. Janet yellen recently when she came up before the senate and the banking committee, people were impressed, professional watchers, with how she handled the language and the questions. We can expect more of that at 2 00. Its the beginning of a long process. She was warning four months ago there would be consequences. Already, weve seen up and down moves. The dow posting its seventh triple digit move in eight sessions yesterday. Havent managed to have two straight days. Nasdaq did ittiest. S p and the dow. Its tough to put two together. People people are blaming the fed. Lets bring in annika kahn and Quincy Crosby Market Strategist. Is ray dalia and others worried about what tightening looks like on this economy and Financial Markets justified . You know the biggest question of the day is going to be whether the fed removes the patient language. I think it hopes the door to the possibility of a rate hike in june. The fed, of course looking at an expansionary period thats maturing and of course want to use all of their tools. Especially if some imbalances start to brew. But they wont follow a predetermined schedule. Quincy what does that mean for the markets . Does it mean 100day swings are here to stay . Does it mean that volatility is going to be the way of the markets Going Forward . Does it still pay to buy the dip, as it has in last six year of the bull market . I dont think youre going to see buying the dips the way you did before with the underpinning of low rates for a long time. It does increase volatility. It turns everyone into a datadependent economist because the fed is trying to be data dependent. Ray dalio mentioned 1937. The fed does not want a false dawn like 1937. It is considered by many many economists, including ben bernanke, to have been worst mistake the fed ever made. Janet yellen is not going to repeat that. She is going to continue to be patient, even if she doesnt say it. She wants to normalize rates, not begin tightening per se but get us off of the emergency level. And thats what i think shes going to try to attempt to discuss this afternoon at the press conference. Quincy lets be clear, i believe in 1937 the stock market actually fell by a third, as a result of the central bankers turning round. Presumably, this fomc if it saw the markets falling precipitously, would be back in with something else. The markets are not going to fall by 30 for as long as this fed is in charge surely. No. It was more than that. We started to see tax hikes to pay for some of the programs during the war, but it was the cumulative effect that knocked the economy down. Look she in 1994 janet yellen advised greenspan, according to the fed minutes, look, i know we made be behind the curve in terms of inflation, but lets not go out there raising rates quickly. Its going to have an effect on the economy. She is going to be very careful, watch to see how the market reacts, Mortgage Rates react, and the economy overall reacts. Shell take away the word patient but she is going to be patient nonetheless. That brings to mine the press conference today. I mean she does have some ability to clarify however the street reads the statement. Of course fisher set to speak on monday. If the next couple of days as r. J. Obrien points out, if theyre truly messy, he can help clean that up, right . Yeah absolutely. In general, we are in an economy where we are getting mixed messages from the Economic Data that is flowing in. Of course we have a labor market that continues to strengthen. We have recent Economic Data thats showing weakness. We have a disinflationary trend and the way the fed will look at it is what is the labor market doing . As long as we can continue to see some improvement there, theyll continue to move and make sure that the economys moving in the right direction. This is going to be a datadependent fomc. So they would have us believe. Quincy if its one purpose for the network, its people that have wealth to preserve. For those worried about whats been said this morning what would you advise as a strategist . How do you preserve your wealth. Theres nothing wrong with having cash, getting ready in case the market really does get terribly nervous. But one thing we know from history, because thats what we have to look at is that the tech sector does quite well after the fed begins to raise rates, six months out. Tech has been a favorite. We would be actually more quality oriented now and be careful and not get not be a hero in this kind of market until we get there. Thanks for the tips ladies. Good to see you this morning. Reminder cnbc will have complete coverage of the Federal Reserve decision and of course Janet Yellens News Conference 2 00 p. M. Eastern time on power lunch. Janet yellen speaking at 2 30. Mixed results for fedex, the Package Delivery company, beating the street with its Quarterly Earnings but missing for the full year. The stock started positive when we had figures this morning then have moved negative. Its a move of 5 overall. Keep in mind the stocks up almost 30 over the past year. A lot of it had to do with thefact that u. P. S. Stumbled over the holiday period with 200 million charge, loss of productivity when fedex did not come out with a warning. This was the read on the Holiday Quarter it and was pretty look the outlook was disappointing. Outlook was weak. Fiscal year which ens in may, 880, to 8. 95. Softer than expected. Fuel costs kicking in restructuring kicking in margins doubled on domestic packages volume was up four ground up seven. Weve seen they tend to be conservative in their guidance. They always throw a curveball the markets way. Its rarely a clean earnings release. My argument in the beginning was that it looked pretty good. But clearly it has had a nice run over the 12 months. With all of the trucking and package and shipments, you mentioned express margins, more than doubling, though the revenue was flat. I think a lot of people were looking for margins in light of the u. P. S. Stumble and impressed with what they saw. A structural growth area for the economy in that online is obviously accelerating higher. Its a growth stock. 60 airplane 600 airplanes and 90,000 vehicles. Biggest fleet in the world . I dont know one of no doubt. Thats why everyones waiting for the fuel to help them. They downplayed that in the last quarter but it did help on those margins. Oracle Quarterly Earnings of 68 cents a snare line with estimates, revenued missed. Also boosting Quarterly Dividend by 25 . Oracle executive chairman Larry Ellison taking aim at cloud competition during last nights Conference Call. We also think is not you will be specific as what the advantages what advantages Small Companies think they have over us and the cloud when we have, i think, clearly the strongest platform based on industry standards and years and years of experience. Weve adapted that for the cloud. Obviously, ellison founder of the company, recuses himself from the dividend hike vote. But now with this dividend hike the journal points out, hell make 700 million a year. How about the talk of the competition, mentioning sales force by name saying its a close race to who sells more in the cloud this year us or them quote, stay tuned. But it is that conviction the conviction he has theyll make it in the cloud. A note out suggesting of the Big Tech Companies, it is them reinventing themselves perhaps the greatest ability, the most likely to succeed and throwing a huge amount of resources. A lot of Big Tech Companies talk about the cloud. The argument is that Larry Ellison will deliver on the cloud like none other. Reports saying good step in the right direction, better than feared but currency well talk about this later on without i mean on as it was, but without currency revenue would have been up 6 . 6 . Preview the other Big Tech Companies, like microsoft and ibm that have National Exposure that are going to get hit on currencies. Currencies an issue for General Mills, reporting 70 cents per share. That exceeded wall street estimates. The stock got a lift here in premarket. The Company Expects to continue quote, strong growth during the current quarter. The cereal volumes are which everybody looks at because of the declines, they were flat. Some growth when it came to pricing and oneoff charges. But going through the notes on General Mills, no sign ive real turnaround in the core business. And that is these struggles for the packaged goods companiesing like General Mills, kraft, god with that recall out overnight on the macaroni and cheese struggling to keep up with the changing consumer. Jurys still out. Analysts pretty neutral. You buy General Mills for the dividend, not the growth. Closed to major factories. Restructuring. 800 jobs on the line. Almost 3. 5 dividend theyre paying. Thats obviously, for most people, they the be all or end all at the moment. Look at the attention the cereal decline is getting, cheerio cheerios, wheaties. And also baking a problem this quarter. Betty crocker, declining category. I think hamburger helper as well. Annies helping. But on Currency International was down almost 7. 13 points currency knocks off 13 Points International sales. I told you its a big deal. Crazy. A big deal for these companies. You hear tim cook say the best companies will manage. Im not sure how you manage 13 points forex. Wouldnt bright spot for General Mills in convenience stores. This speaks to lower fuel price, lower prices at the pump helping consumer spending. They got a nice boost, 6. 6 better sales at convenience sales. U. S. Retail up one. Overall. Helps if you dont pay much taxes on foreign earnings. Prime minister netanyahu declaring victory in the israeli elections overnight. So nettena hue came through in the end, hadley . Reporter he did, it was a dramatic lastminute win for the Prime Minister, just a few days ago it was look willing unlikely hell be able to pull out this kind of victory. There he was, last night, snatching that from the jaw of defeat. Quite interesting, actually this morning. Many reports in the press wondering how the Prime Minister did it. He did it by appealing to his rightwing base. He pulled out all of the stops in the last 48 hours of the campaign. He basically said no to his twostate solution, encouraged more settlement building. Thats not setting well with the palestinian leadership. Its not setting well with many in israel. Look at eu relationship thats somewhere where they get their biggest export imports from. The eu leaders over the last couple of years putting Major Pressure on the israelis because of Prime Minister netanyahus Foreign Policy and he has the contentious relationship with the white house. We have heard from leaders in washington throughout the morning, saying the longstanding relationship between the u. S. And israelis will continue to be a strong one. But at the same point, remember the Prime Ministers Foreign Policy has put him at odds with the white house on several occasions, not least of which a few weeks ago when he made that controversial speech to the u. S. Congress. Going forward, of course, keen to say, as always that relationship remains a strong one. Of course the Business Community here privately speaking to me saying they are worried about increasing isolation and thats a direct result of the Prime Ministers Foreign Policy. Well have to wait and see what happens next guys. Tel aviv thank you. Tim cook has a message for those who dont think the apple watch will be useful. His case for the wearable device is coming up. Another look at premarket here as we as sara pointed out, tripledigit gains on the down for seven of the past eight sessions. We will talk to art cashin. Protests policies and a new headquarter for the ecb. More squawk on the street from post 9 in a minute. 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Yes, but people didnt realize they had to have an ipod and really didnt realize they had to have the iphone. The ipad was totally panned. Critics ask, why do you need this . I dont think anything revolutionary we done was predicted to be a hit when released. It was only in retrospect people could see its value, maybe this will be received the same way. If they launch the pay tv app, youre able to change the television with your watch, see whether the ovens finished doing what its doing, whether the dishes have been you know its the connectivity. This is what we talk about. Yeah, clearly, sort of you can imagine what people will need it for. I thought it was interesting he hasnt set a number on the watch. The fact that you need the iphone 5, 6, 6 plus to use it actually creates a ceiling. And he acknowledged the fact that people dont know the usefulness of the watch but he himself, said was wearing it and he cant imagine not wearing it. The point about inhome cog test provided youve got your iphone in the apartment youre able to Wander Around and use this as a Remote Control on all of these things. Thats the immediate vision surely. Yeah. Cramer would argue, as you put it yesterday, on this program, its a Health Device that also tells timing. Thats sort of one of the bullish cases, the idea it could monitor blood levels, gluke close, alcohol levels. Dont look at me when you say that. Coming up, art cashin here at post 9 with his market words of wisdom as we count you down to the opening bell on this fed day. Look at futures here. Dow looks set to open less than 60 points. S p also set to open negative along with nasdaq. We saw declines across the board yesterday. Well be back on squawk on the street when we come back. Being a keen observer of the world has gotten you far but what if you could see more of what you wanted to know . 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Assume, exfrom they take the word patient out, does that traumatize the markets before yellen can get to the microphone . What shes going to say . And then as much as todays all important, next week traders are going to look to stanley fischer, who they think is becoming a growing influence on the fed and may become kind of not just vice chair but the shadow shadow chair. Is he the punter here clean up whatever might happen over the next 72 hours . He can be. But people will be surprised. Hes been outspoken, he thinks the fed should raise rates this year and that the fed should be less transparent. Maybe a little bit more opaque back to the greenspan days. Hes a team player. He has joined the fed, coming from the bank of israel. Whats interesting about stan fischer and the new makeup of the Federal Reserve is the International Focus here with what the ecb is doing, with what 20plus other Central Banks are doing in the world. That has to come into the feds, maybe it done influence their decision, but at least the discussion. It will have them looking further to him. He comes in with an enormous amount of credibility, taught many who moved on to the fed and having served as head of the central bank of israel he has a great deal of international experience, too. Theyll be looking to him. Can i come back to picture we had in frankfurt and the demonization of the European Central bank from those on the left . I mean protesters like this are nothing new in europe this is how people behave. But its interesting unelected officials, ecb, blamed partly for whats going on in europe. Do you imagine a scenario given dalios warning, central bankers here become vilified for the role they have played in ordinary peopleswell and their incomes over time if they start raising rate now. I think youve seen that already in the congress of the United States. Yes. The questioning they tried to vilify the fed. Yes, they run a really high wire act here. They start to move rates and theres a large negative reaction either in the economy or the markets or both then where are they going to go . The interesting part of the dalio writeup was not that it was solely a caution not to raise rates, but have a plan b. Know what youre going to do if you accidentally tip over the apple cart. Yes. And thats critical. I think thats what people are worried about. Okay, you think you have enough knowledge to begin to move this stuff . What happens if you guessed wrong in thats critical. Im sure well talk to you this afternoon. Thank you. Art cashin. Opening bell 3 30 away. Female announcer right now at sleep train get up to 48 months interestfree financing on tempurpedic. Save hundreds on beautyrest. Or choose 300 in free gifts with Stearns Foster. The triple choice sale ends soon at sleep train. Can it make a dentist appointment when my teeth are ready . 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It got down to 42. 05. Brent fell below 53. And well get inventory numbers at 10 30 a. M. Eastern time. By the way, first time in six years that production in the eagle ford and the bakken fell this month. Maybe well see production changes down the road. Hoping bell. A look at s p at top of the screen, at big board, Goldman Sachs bbc, Business Development company develop greating its ipo. We have four ipos. Wix. Com a cloudbased Web Development platform. The breadth at the open not looking so hot. You mentioned energy. Oils down for a seventh day in a row. Looking at low lelgvels flirting with at march 09 low. The past two sessions its opened low on the back of the oil prices and turned higher towards the end of the day, somethingbob pisani was watching. Oil today you have industrial data from the American Economy institute which shocked people with the inventory bill. If that is confirms with the official figures today from the eia, which i imagine we get in an hours time 10 30, that will be for many people a very important turning point potentially because its clear storage is running out and there could be a further leg down on oil. Seem to be the commentary. Energy and materials at bottom in terms of s p. Yesterday at the top of the Group Telecom and utilities, the move on lower Interest Rates ahead of the fed. Energy names towards the bottom. Aboeb adobe, down almost 6 . Results last night, 44 cents did beat by five cents. Coupled with oracle the top s p gainer, its a 4 move as people think maybe the hard work is starting to bear some fruit. Both advancing in the cloud. Oracle, we spoke about. Did you understand the document cloud that adobe came out with yesterday . Change the way pdfs operate. You can insert a signature, right . Insert a signature on to the pdf but buy the Management System or rent it on the model theyre pushing. Creative cloud, i think they say. They were bullish on the call. Its the document cloud. Going to be talking about this on squawk alley. Outlook and numbers disappointed but the reverse from oracle strong sales growth especially if you take out the currency impact. Check on fedex really quick here. Thats down 2 . Thats going to close to the lows of the session. You missed it, a nice beat, 2. 01 beats 1. 87. Earnings up 53 , cant ignore what the low fuel prices are doing for the company. Fiscal year ending in may, they see shy of the street. Baba, big lockup expiration 300 million odd shares available for trade. See how many cash in. Doubles the size of the free float. Look at alibaba and say down 18 this year. But remember that these are people who were in before the ipo, theyve already made as we came into today 25 gain. The question is coming the end of the quarter are you tempted to lock that . 24 above, thats 68 ipo price that you got in early, except for those who bought it after actually went public are down sharply. Some argue the facebook expiration after its ipo signaled a low. Remember we got close to high teens on facebook and things starting to loosen up . That was more coincidental with monetizes mobile. A big turn. Mobiles a problem for alibaba. Look at some of the competitors, chinese online competitors that trade here theyre up almost 20 so far this year. Nasdaq is higher by 4 this year. Shares of alibaba are down. Theyre down 30 from their peak of 1. 20 they hit after going public last night. Overall market which i imagine is flat on the year give or take. When we talk about what the fed comes up with today, very much anticipated that coming through, there would be some problems people have not chased the market. But the buyback authorizations of course, hitting record levels so clearly ceos feel they will buy back. Keep your eye on gambling names as well. Clsa cut numbers on mccau prior looking at gaming revenue down nine, moving down to 26. Shares of wynn taking it on the chin as well. Kraft the other one, recall you mentioned, 6 million boxes of macaroni and cheese . This hits home literally. A lot of people eat this macaroni and cheese a specific date, september expiration date. Little metal parts, doesnt sound good. Kraft is voluntarily doing this recall. But, oh talk about ugly headline. For one of the obviously marquee names that they make. Gsbd the Specialty Lending arm of Goldman Sachs, which priced 6 million shares at 20 opens with a trade slightly to the negative. Down about 2. 5 to 19. 52. Well be talking about that and what it means for the Banking Sector later this morning. In the meantime dows down 84 points. Bob pisanis on the floor. Weakness today, energy and materials. Tired of hearing that . Oil hits a new low. S p 500, review where we are. Were in the middle of a trading range. Some people dont believe that but we are. Between 2000 and 2100 100point trading range. S p is flat. So, 2000 to 2100 the range, inned middle 2067. Crude at a new low. Take a look. Of course, the usual names, my favorite people, dan bury cab bot oil and das, occidental 71 thats a 52week low for occidental. Every day this happens. Last few days a bounce late in the day. See if that happens again. Still leaders in march. It hasnt been down month. Weve had very good moves in biotech, the bank stocks ive noted rates have generally trended higher. Banks have done better. Airlines better on continued low fuel, american added to the s p, that helped yesterday. And even the semiconductors are doing well intel is not having a good month, but cypress, nvidia up nicely. Laggards continuing armageddon in the commodity complex. Just right across the board. No bounce in the gold miners. Metals are down today. You know whats going on with oil service. And the strength continues today. Lets talk about fedex, because interest thinkings go on with fedex. Beat on the bottom line revenue were light on the top line. I want to show you the volumes. The problem here is weve got fuel lower fuel surcharges unfavorable currency rates hurting them. Look at volumes for fedex, put up the screen, u. S. Domestic up 4 . International economy, up 4 . Those are pretty good numbers overall. International priority was on the flat side. I dont consider that very bad. Very very slow global environment. For the guidance right now talking 88 to 895. If you put uppernings earnings, look at those, 623 for 2013 6. 75 for 2014. Estimate analysts have 8. 97. Maybe below expectations but look at the run this stock has had. The stock was 100, what a year ago. Now talking the 170. Thats remarkable run. And if you do the math on this fedex is not that expensive. Its about 20 times forward earnings given the Growth Companies had. Thats pretty amazing. The feds the main story today. Moving on we asked what happens on the day fed announcements happen. Back to 2010. What happens on the day the fed announcement occurs in the market . 38 meetings since 2010. S p 500, not impressive, up 60 of the time. Average gain 0. 3 . The best trade you could make buy at the open sell at the close, we asked, it was the financials. S p financials xlff etf. Low inflation, strong dollar a string of disappointing economic numbers. Sara, gdp numbers going to be much lower than expected for the First Quarter. I think the fed will remain dovish. The joke here is theyll remove the phrase patient and put back considerable time. Remember that . Thats the phrase they used to use. I wouldnt be surprised if they tried to do something exactly along those lines to plug the hole that will exist once they remove that word patient. Right now, down 81. Nothing i love more than jokes about fed language. Thank you, bob pisani. Lets go to the bond pits. Rick santelli in chicago with the tenyear drifting down to 2 again. Absolutely. And i think that theres some trends here that we should Pay Attention to. Of course i think the major trend is were seeing Interest Rates ease back. Pretty much all high quality sovereigns. Has it correlated to whats go on with janet yellen . I think in part. Train day of tens you can see making a beeline, closer to 2 trading 2. 02 2. 03 now. Yeartodate chart it looks as though Interest Rates have rolled over. They rolled over from a logical point, roughly not right to the tick but close to on a closing yield basis. Now if we want to look at Something Different in the third slot on charts lets look at yeartodate of the hyg. We could put up the jnk. These are etfs that express valuations for high yield or reference junk. Its been rejected as of late. This is significant especially at a time where theres many that are holding or trying to trade in the space due to the enhanced returns. Lets go back and look at intraday of bund yields. Youre not seeing it wrong. Yes, making a be. Eline. 20 basis points. One week ago today, that was yield close. Still marked as the lowest yield close for bunds ever. Yeartodate chart shows that 30 to 40 is 30 to 40 basis points, a hot of concentration is thats fairly significant resistance above the market. Look at twoday of the euro versus dollar. Granted, as herbalife looklook at board, euros unchanged, at least futures are closes are not the same as cash. But thats very important. As you see on yeartodate chart, the euro doesnt look very good but it has at least paused to see what janet yellen and the press conference may discuss today, this afternoon, i should say. Back to you. Thank you, rick. Imbig day with the fed. Big day for official oil data in less than an hour. Bertha perched above 42 a barrel on west texas. Yeah 42 is the next one, simon. Certainly the numbers we got from the American Petroleum Institute Last night very bearish. 10. 5 million barrel build. They do are wider than what you see in the actual number from the government but certainly does not bode well as we are already concerned about the glut in production and also Storage Capacity. One of the notable things they saw a 3 million barrel build in cushing. Nymex crude, well see if it holds there. The expectation is the high estimate is 4 million to 5 million barrel build. Interesting thing, when you look at crude curve, the expectation right now is pricing in for higher prices in the summer when we normally get more demand. But you are also seeing hedging, steven short, the analyst, saying that the june 30 strike put, the bet that the price will go down to 30 in options, there are 76,000 contracts, thats twice the open interest we saw for 40 for this month. So you can see a lot of folks really expecting to see a lot of pressure to the downside. Karl . Bertha coombs. Fedex wrapping up its Conference Call want it might mean for the stock today. The dow off to prompt 82 points to the downside. Theres nothing more romantic than a spontaneous moment. So why pause to take a pill . And why stop what youre doing to find a bathroom . With cialis for daily use, you dont have to plan around either. Its the only daily tablet approved to treat erectile dysfunction so you can be Ready Anytime the moment is right. Plus cialis treats the frustrating urinary symptoms of bph, like needing to go frequently, day or night. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. Do not take cialis if you take nitrates for chest pain as it may cause an unsafe drop in blood pressure. Do not drink alcohol in excess. Side effects may include headache, upset stomach, delayed backache or muscle ache. 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Its a problem that we can turn around and change. Revolution foods is a company we started to provide access to healthy affordable, kidinspired chefcrafted food. We looked at what are the aspects of food that will help set up kids for success . Making sure foods are made with high Quality Ingredients and prepared fresh everyday. Our collaboration with citi has helped us really accelerate the expansion of our business in terms of how many communities we can serve. Working with citi has also helped to fuel our innovation process and the speed at which we can bring new products into the grocery stores. We are employing 1,000 people across 27 urban areas and today, serve over 1 million meals a week. Until every kid has built those lifelong eating habits, well keep working. Shares of fed are down after the shipping giant announced mixed results. Fedex did livedeliver with profits. But clearly Exchange Rates are a concern. About growth moving forward. Let get analysis from the Senior Analyst at oppenheimer. Good morning to you. Good morning, simon. Just lead us through this the stock was up then down. What are the standouts for a professional investor . I think what you saw was a nice quarter and hence the up. But i think the down was a concern over the guidance the implied guidance for the fiscal Fourth Quarter coming up. Its lighter than what the consensus expectation was. Forex as you noted, less of a fuel benefit, perhaps even a headwind from fuel in the Fourth Quarter versus the Third Quarter where were two of the reasons. A third reason was variable incentive comp, that was higher than expected in Third Quarter and will again be higher in the Fourth Quarter. The important takeaway here is the story is still on track. People were keying on the Profit Improvement plan and management on the Conference Call that just ended was very firm that it is pacing well. You have a goodlooking fiscal 16 shaping up beyond the Fourth Quarter. Two structural stories, growth of ecommerce how do you deal with that obviously still finding their way and, as you mentions, restructuring the company away from old school fedex to the new patents. You have 200 price target. Would you be looking to raise that moving forward . Yeah we feel good. I mean i think, if anything theres probably upside bias to what this new Guidance Range is for the remaining quarter of fiscal 15. And 16, i feel comfortable, there are going to be strong numbers. Yeah, our bias is still bullish, for sure. Right, its a twopronged bull story where ecommerce is going very nicely. A very successful Holiday Season and thats important in the business, of course. And as i mentioned before tracking well on the Profit Improvement plan. This storys very much on pace. Scott, are people done graduating down trying to get cheaper shipping rates than they were . Internationally looking at the numbers there, International Priority was not as strong as we had hoped. International economy was still. Looking internationally, thats still something moving around a bit. I would say overall trend is favorable. Yes, overall people want to trade down and do the lower price and a bit of the slower delivery but thats very much in control on the financials and operations at fedex right now. Are you surprised to hear them say that oil could be a headwind in their fiscal Fourth Quarter . That would imply that were at some levels here where energy might find a bottom. Yeah, that was an interesting commentary. They wouldnt quantify but said it was very significant, the benefit in the Third Quarter. Ity thats what we were hoping to seep the Fourth Quarter, softer commentary is a surprise but i dont feif that signals a perceived bottom or not. Theres probably a little bit of caution on uncertainty in that guidance commentary. Perhaps about the surcharges. Before we let you go how does this compare with u. P. S. . Fedex, i think the big difference here fedex is reporting today a successful Holiday Season. Its still something u. P. S. Is struggling with a little bit. You have the Profit Improvement plan at fedex thats working well. I think thats more favorable in investors eyes now. But both companies with ecommerce play look intriguing from an investor perspective here. Thank you for your time. Tesla ceo elon musk saying Driverless Cars will the future. The driver is both dangerous but also antiquated. I think its going to become normal, like feel like a elevator. Used to have elevator operators. And then you know we developed simple sir can tri to have elevator come to the floor that youre at and you can press the button nobody needs to operate the elevator. The cars just going to be like that. Window into the future according to elon musk. Hard to imagine a world where Driverless Cars are going to be common. The difference between a elevator going up and down a shaft and car going through manhattan is completely different. No . Must be difficult to be brilliant like elon musk. You have to Say Something profound. Well find out more about the Software Upgrade tomorrow, thats for sure whether or not it does reduce range anxiety. Fresh off making his first public appearance in ten days putin set to attend a rally in moscow today. Well take you there live when squawk on the street continues. Grind virtually any kind of food waste into an unending source of electrical power for a city . When emerson takes up the challenge its never been done before simply becomes consider it solved. Emerson. Female announcer youre on the right track to save big during sleep trains triple choice sale. For a limited time you can choose up to 48 months interestfree financing on a huge selection of tempurpedic models. Or choose to save hundreds on Simmons Beautyrest mattress sets. You can even choose 300 in free gifts with sleep trains most popular Stearns Foster mattresses. The triple choice sale ends soon at sleep train. Sleep train your ticket to a better nights sleep the dow down about 80 points in the opening half hour of trade. The rally overnight in asia 2 added to the chinese stock market. That market is at a sevenyear high. Japans nikkei on fire this year. Japans stock market at a 15year high carl for the first time in the sixyear bull market, the u. S. Is actually not outperforming some of the other major stock markets. Its underperforming. We know why. Stimulus going that way. Theres a rally about to get under way in russia and president Vladimir Putin is expected to attend. Our jeff cut more has more. Good morning, jeff. Reporter yeah hi. What weve got is thousands gathering here for a patriotic demonstration of their support for the annexation of cry mera a carefully stages managed event by the kremlin within the red square to remind the International Community how strongly russia feels about the crime mia and about who it should belong to. Its worth pointing out here that this week so far, weve had Angela Merkel germanys chancellor, saying there is the prospect of further sanctions against russia at the brussels meeting of the eu. The state department has also said crimea should be returned to ukraine, and they have expressed, through a state Department Statement concerns that this should happen soon otherwise the costs of further sanctions could be ratcheted up on the russian government. Back to you. All right. Geoff cutmore. Putin made it clear they were prepared to use the nuclear option. The fact that hes marching is no great surprise. Apple versus google glass. The dow down 90 points. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Hello. I am a fully automated Investment Advisory service. I can help you choose investments. Monitor them. And rebalance your portfolio. I can do a lot of what humans can. Except have a real conversation. If youd like that, you can always speak to someone at schwab. They arent algorithms. Try not to hold it against them. Say hello at intelligent. Schwab. Com can it make a dentist appointment when my teeth are ready . Can it tell the doctor how long you have to wear this thing . Can it tell the Flight Attendant to please not wake me this time . The answer is yes, it can. So, the question your customers are really asking is can your business deliver . You waited for wednesday waited for wednesday good wednesday morning. Welcome back to squawk on the street. Im Carl Quintanilla with sara eisen, simon hobbs. David faber is off this week. Another triple digit move on the dow, to the downside yet again. Down 101 points on the dow. Almost nine on the s p. As we await the fed decision coming up at 2 00 eastern time. The road map for the hour. Influential think tank oecd warning near term pace for the biggest economies remains modest. The chief economist will join us live. Apple is working on augmented reality, will it be a competitor for google glass . Well talk to gene about that. Ubers offices in france raided by police documents, emails, smartphones taken. A live report. As we said counting down to the fed decision today, 2 00 p. M. Eastern time investors waiting to see if the word patient gets dropped from language related to the timing of a rate increase. And then at 2 30 eastern, janet yellen will give her News Conference. Of course, power lunch will bring that to you live here on cnbc. Stocks are lower this morning, ahead of the fed decision in the News Conference. Lets bring in chief Market Strategist brian reynolds. Welcome. What are you telling people here . Well in a longterm, were in a bull market thats led by incredible credit boom but in the short term we began a pullback earlier this month and i think this pull back has further to go. I dont know which way to take that. Fascinated you think we have a major credit boom under way. Where does that come from . Our nations pensions. They need to make 7. 7. 5 . This is the third time weve done that and those funds buy incredible corporate bonds. When the fed does tighten, funds need to invest more aggressively to make up for losses. From the longterm perspective im bullish on the stock prices but now were in a correction. Its clearly the world is throwing off every year more and more Free Cash Flow that has to go somewhere. The question is valuation and clearly ode direction of the fed. Why do you think well correct further from here . There is the possibility having made virtually no gains on the broader markets this year weve factored some of today in. Well we saw oil break down this week. It established a nearterm low in january of 44 on the wti contract. We broke down from that this week. Theres a lot of debt tied to energy and whenever we see oil break down like that its a nearterm negative for the credit market. This week the credit markets had a lot of tough sledding because oil bond spreads have risen. And thats the opposite of what happened in stocks. When oil broke down this week stocks rose. Thats a intonear term negative that makes stocks vulnerable. We move toward higher Interest Rates. But importantly after the pullback is the path of least resistance back to the upside . Is this bull market that we have seen so steadily buoyed by zero Interest Rates and quantitative easing going to go into another year . Well a bigger driver of the bull market has been the credit boom. That puts cash on corporate Balance Sheets and Companies Using that cash to buy back stock. Buybacks have been the biggest driver in the bull market and i think buybacks are going to accelerate over the coming 9 to 12 months. I think its going i think the path of least resistance is definitely up once the correction gets over and done with. What area of the market do you think will do best . Sorry . What area of the market do you think will do best . Well lets turn that question around with oil in a longterm decline, i think we had a commodity bubble. I think it burst. I want to avoid energy shares. I think the ref of the market is i think if you avoid owning energy shares, i think allbe okay. Okay. Some parts of the market i mean, would you say to people that Consumer Discretionary has further to run . Clearly with cheaper gas prices that scenario of the nashthmarket that people have chased. Thats a beneficiary of the bursting of the commodity bubble. And i think that you will see more buy backs in that area i think youll see more buy backs in technology and more buybacks in finance. I think that youre going to get more financial engineering. This isnt a bull market because the fundamentals are terrific. Its a bull market because of financial engineering. My forecast youll get more intense financial engineering. Brian reynolds from rosenblatt. When we come back fedexs Holiday Quarter getting a boost from lower fuel costs and restructuring moves. The outlook did disappoint. Saying interesting things about crude and energy. Whats next for fedex when squawk on the street continues. Financial noise financial noise financial noise [ 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. Aprils launch of the apple watch marks amazon apples first push into fashion. Piper jaffray analyst says apples feeling a small team exploring the ar space. Gene munster joins us to explain. Good to see you again. Hello. What exactly are you envisioning . Well think of this as you said a profound change this is the next big change the next evolution in computing. What this is is google glass that is not geeky or creep r. And something that take the real world and overlays the Virtual World on top. Lets me give you a couple of examples. One would be the idea of something as basic as gaming or when walking down the street looking at a building knowing what the building is looking at a restaurant knowing the menu looking at a person knowing that youve met them in the past never forget anyones name. As you look at tech giants like facebook and Google Google believes that the next evolution is going to be come around augmented reality and replace the display as we know it whether its a phone or computer. Its going away. Its going to take 10 20 years to do it but apples working on solving that problem. This coming from the company or your sources . How did you dig this up . Well we as we did more work around what facebook and google were doing in the space, and Mark Zuckerberg said this is the next Biggest Development platform, it became very clear that apple also had experts working there. So, it was kind of a domino effect of our work on google and facebook led us to these people working at apple. Sort of carls question the stock is up 127. 35. I cant keep track of how many things apples work on behind the scenes cars, television on bundling or virtual reality. Is there a problem when it comes to hype and leaks . Used to be apple was secretive. We had no idea what it was working on. Well, i think its a symptom of being as big of a company they are, they have so many things going on its hard to keep Everything Air tight. When you put them altogether, its confusing, as you mentioned. But when you layer them out over a decade, it makes a lot of sense. The tv is next after the watch, and then you get into other things like august mbmented reality, five ten years down the road and then a car. I think these things come out because theyre difficult problems to solve and requires a lot of smart people to do that that have to start early on getting problems moving. Yeah you clearly distinguish between virtual real augmented reality you get data as youre moving through. Why would it take so long . I mean if i look at whats on google maps now it can tell me where i am whats over here whats advertised why couldnt you put that on to the apple watch . Why does it have to be glasses, for example . The watch is likely going great point the watch will emerge as an augmented device. An example of a wikipedia app available after the watch comes out that will automatically tell you about Different Things around you. Thats a version of that. But the true nirvana is having it something where you visually can overlay these two. To answer your question whats taking so long the displays a problem. Google was clumsy difficult to see. There was the social stigma around it. These companies, when weve done more work, working on versions that dont have the social stigma and also have a layer of utility to it that google glass never had. Our believe is that if these devices actually are a lot of utility, people will put up with some of the social stigma. The displays a problem is the answer. Yesterday you did a piece on the Apple Television news we were talking about. You seem undeterred by peoples doubts that apples going to sell a standalone television. You did modeling that argued units could add 7 to the calendar 17 revenue. Do you feel like youre ahead of your skis in terms of what the new products might deliver . Ive been wait ahead of my skis on apple tv probably an understatement. I think we approach the apple tv topic with every day by saying lets not worry about the mistakes we made in the past figure out what apples doing in the future and based on talking to people in the Industry Based on what weve seen with the stuff in the media recently, i think that its pretty clear apple is working on a tv i stand behind that. I guess time will set us free. Provocative, to say the least, gene. Always good having you. Talk to you seen. Thank you. Gene munster at pipe. The oecd influential based perry think tank outlook for 2015 forecast to revise slightly upward. Overall the near term outlook remains for from moderate rather than rapid world gdp growth. Real investment remains sluggish labor is not fully engaged. Joining us author of the report, katharine mann. Good to see you. Thanks for having me. That doesnt sound like a very ringing endorsement for a recovering Global Economy. Several years after the financial crisis, when it comes to the Global Markets. Why are you so sanguine here . What is your main concern . So we have revised up our projects for 2015 and 2016. Weve revised up our global aggregate to 4 for next year for this year and 4. 3 for next year. Its modest. It should be faster. It need to be faster to get the labor markets to be repaired. But it does represent moving in the right direction. We have more of an increase more sank win growth for the euro area 1. 4 and 2, which are. 3 up for both this year and next year. So the euro area is looking better. Reason why of course is oil price combined with euro depreciation combined with monetary easing and all three things are starting to appear in yield curves in equity prices in additional credit and, so good news for europe. You know Global Economy in better shape but we really like to see the Virtuous Cycle develop where more demand generates more Real Investment generates more productivity growth, more gdp, that Virtuous Cycle, were not quite there yet. You and everyone else. Interesting that your youre optimistic on europe and japan specifically. Do you think its a problem that the Global Economy, you alluded to this, reliant on easy Monetary Policy especially with Federal Reserve top of mind into the decision today . So i think there has been an overreliance on Monetary Policy. We understand why the Central Banks have moves the way they have or the way theyre going to. But they cant be the only policy player we are looking for. Stable mediumterm fiscal paths, a sense of certainty about what the fiscal path is going to be, theres been uncertainty about that. Particularly in europe. We also need to see a reengagement of structural policies. Quite a few structural poi si can work to benefit the fiscal side. Its mutually reinforcing but it has to be a balanced package otherwise we end up with excesses in various marks as weve seen discuss on your show. The people of frankfurt, the launch of the new European Central Bank Headquarters overshadowed by violence in the streets and burning of cars and looting. Unelected officials screwed down the economies of europe too harshly. The imf in the past apologizes for what it did in greece, not understanding the type of lessons it was trying to teach them and the Multiplier Effect and technical jargon. Do you feel vulnerable to this criticism after such a brutal period of time . So weve advocated a balanced approach to policies using all instruments that are available, fiscal monetary and structural. These work in conjunction with each other to support growth. And thats what weve done. I think that our membership looks at our research and finds support for that balanced approach to policy strategies to engage both business and labor within their economies. One thing that your organization, as well as imf and world bank do well is this global view of the flows and the various markets. Do you think that currencies are orderly right now . Do they look stable . Does whats happening with massive flows into the u. S. Dollar seem like an appropriate kind of thing the fed and the u. S. Economy can manage . So i think to answer the question, do they look stable of course the answer is no to that. There is a sense in which the dollar has overshot as the u. S. Economy was relatively more stable moving forward, higher equity prices we saw a lot of money coming in from europe generated out of the liquidity injekzs by the European Central bank. Go into the middle of the year the question will be to balance the expectation of the Federal Reserves move against what is actually happening in the u. S. Economy with regard to real fundamentals against whats happening in the euro economy against real fundamentals there. I think the potential is for the middle of the year to be looking at rebound of the euro at least a little bit on the base cnbc ofis of stronger fundamentals in europe. On the other hand pathway is volatile. So do you think that janet yellen should not remove patient and should be patient when it comes to rising Interest Rates because of these kind of moves . So the Federal Reserve is quite conscious of issues related to tightening too soon to have that first rung up the ladder of the basis points too soon. Theyre very very conscious of than they do nopt wantwant to be in a position of stymieing the u. S. Recovery. Right now its got good headwinds against growth coming from the egg change value of the dollar. The top line for gdp is not going to look very good in the First Quarter, weather and dollar related effects. So the question is how they will look through those numbers, the question is how much the rest of the Financial Markets will look through them to the underlying pace and robustness of personal expenditure. The other thing looking at and weighing is whether or not Real Investment has moved forward beyond some construction, which is under way, but more basic Capital Equipment and capital spending, ipp, software and so forth. Theres not a lot of strength yet. Sure. I think theyre going to want to see that before they actually move. We will see. Well know more by this afternoon. Thanks for joining us paris, katharine mann. Despite lower fuel costs a mixed quart for fedex. Shares are taking a hit. Concerns about the outlook. Well talk about the results, next. 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. The road. It can bring out the worst in people. But the mclass scans for danger. Corrects for lane drifting. And if necessary, it will even brake all by itself. It is a luxury suv engineered to get you there and back safely. For tomorrow is another fight. The 2015 mclass. See your authorized dealer for exceptional offers through mercedesbenz financial services. Welcome back to squawk on the street. Shares of nava star, truck and engine maker, down 5 right now. This on the heels of a downgrade at Morgan Stanley which cut the rating to under weight from prior equal rate. Also lowered the target to 20 bucks a share from 26. Management must work to cut costs to hit the profit margin estimates. Back over to you. Keep our eye on that one. Fedex speaking of transports taking a hit after results this morning. Morgan brennan has more on that at hq. Morgan. Good news fedex did beat earnings estimate business 14 cents that represented 53 increase in net profit over last year. We saw lower fuel costs relatively mild weather, ongoing air express restructuring and stock buybacks all boosting the bottom line. All, a solid peak season for the parcel carrier, which saw package volumes grow 4 in u. S. Express last quarter, also 7 in ground on the Earnings Call executives saying that this was the best christmas peak in terms of service, quote, ever for customers. Revenue did miss expectations. Surcharges start to be adjusted lower for customers, thats cutting into revenue and thats a headwind that is expected to continue. Thats the reason why this dynamic was a big topic of analysts questions on the call. Socalled dimensional weight pricing, rolled out to all ground packages in january, helped revenue by 3 . The company saying quote, the market responded to the pricing change well. Also the west coast port backlogs contributed to more freight across the pacific into the United States via fedex. The stronger dollar was a headwind. For what happens pushing the stock lower today, Company Guidance that is falling short of street expectations. You can see right there, pushing the stock down 2. 5 . Thats despite the fact this peak season turned out to be much better executed than competitor u. P. S. Nonetheless, take a look at shares of fedex, theyre lower today. U. P. S. Is lower as well. Its had a good move recently. Straight ahead on the program violence breaking out in germany as protesters try to block the august of the ecbs new headquarters. A live report from frankfurt when we come back. Barbara just bought a bike. She wrote a tweet about it. You cant learn much from that. But take data from millions of tweets combine that with your companys supply chain and sales data. Apply ibm analytics and expertise, and all of a sudden, you can learn which bikes to build what to make them from, where to sell them. Because barbara and the world just told you how to build a better bike. Theres a new way to work and its made with ibm. Now with the xfinity tv go app, you can watch live tv anytime. Its never been easier with so Many Networks all in one place. Get live tv whenever you want. The xfinity tv go app. Now with live tv on the go. Enjoy over wifi or on Verizon Wireless 4g lte. Plus enjoy special savings when you purchase any new Verizon Wireless smartphone or tablet from comcast. Visit comcast. Com wireless to learn more. Good morning. Im sue herera. The tune sheeshen interior ministry reporting two gunmen and one officer kill made security raid aft gunman killed eight and wounded six in a shooting attack at a major museum in ton niche shah. The Prime Minister is standing about the government if the aftermath of the attack. Prime minister Benjamin Netanyahu party scoring a victory in the parliamentary election it happened after pollsters inaccurately predicted a left victory. Microsoft planning to allow free upgrades to all Windows Users even if the software isnt genuine, part of its attempt to get legit plate versions into china. 3 4 of all pc software is not properly licensed. And there are more uber cars than yellow cabs now in new york city. Thats what the tax c. And limo Limousine Commission is reporting. Uber has been active in new york city for less than four years. Youre up to date. Thats your cnbc news update this hour. Back to you. The dow down about 60 points, ahead of the big fed Decision Just a few hours away. What should investors be expecting . Steve liesman live in washington preparing his questions for chair yellen. Were counting on you, better ask about the dollar if you go first. The pressures killing me sara. I think the dollar would be something that might come up. But instead of telling investors what to expect ill let them play the game that janet yellen is playing, looking at world the way the central bank does at meeting compare the economy now to what the fed knew back in january. The dilemma continues, it will see softer overall growth lower inflation but a strong job market. You can see headline inflation is on the yearoveryear basis quite a bit lower than it was january meeting with the core rate 1. 6, remaining unchanged but forecast to come down. Average payroll growth about the same. Wages up a tick compared to where they were in a yearoveryear basis before the january meeting. Look whats happened to growth. Our cnbc rapid update that takes incoming information and averages tracking forecasts. The Fourth Quarter, now a point worst than originally forecast or what they knew at the time. The First Quarter tracking just 2 . One more bit of data the markets. The fed does look at markets, takes those in. You can see the dows higher than it was before january. The tenyear, though essentially beginning to price in a tightening and the euro going the other way, suggesting lower inflation in the United States down about 8 cents compared to 1. 06 now. The fed probably removes patient, lowers the assessment of the economy from sole today moderate signals await confidence before raising rates but leaving the impression rates need to rise there is year. I think what happens they remove patient but signal patience. Oil going on a tear to the downside on inventory number. We got the number from the government and it more or less confirms what we heard from the American Petroleum statute a build of 9. 6 million, that takes total crude up to a record 458. 5 Million Barrels. Certainly a big influx into cushing as well. We saw there about 2. 8 Million Barrels rise in cushing, similar to what we heard from the api. Bigger drawdown from gasoline 4. 5 Million Barrels but this certainly does continue to be bearish and continues to stoke concerns about rising supply here in the u. S. We have held on to 42 right here, but, well see what happens this afternoon in terms of the overall market the fed, the language and the pressure remains to the downside. Thank you for that. Lets bring in Stewart Glickman from s p capital. 2. 8 million barrel as the cushing come on a base of 50 Million Barrels and its not at crisis levels for cushing inventories but on its way north. I think as of last week cushing was around 70 of operating capacity for its storage levels. You know those numbers continue to creep up. And a year ago cushing was operating with 25 of capacity. So Storage Capacity. I think this is its going to continue to put pressure on crude oil prices. So what point, as you bill those inventories and storage runs out do people have no option but to sell into the market at whatever price they can get rather than hope for higher price further down the line . Are we there . Is it a grod gradadual process or a moment of truth. I think its still a gradual process. A couple of options, some of the upstream producers in the market can actually shut in their production, if they needed to do so. You may see more crude oil move north to canada. The export ban doesnt include canada, you can move some of Light Sweet Oil north, particularly condensate move north and help move the heavy oil back south. I have a copy of a report you put out in february called waiting for the spring when will it recoil . You say no one saw this coming no one saw the correct in oil coming. Can we therefore, predict when it will rebound . Well the history of oil predicts is littered with what turns out to be incorrect assumptions. But you know i do think that the fundamentals at this point point to further weakness in oil, bentech energy a Sister Company to s p capital iq looking for wti crude oil, averaging 41 a barrel this year and 48 next year. Absolute levels thats really nothing to write home about. Its basically looks like a fair amount of challenging headwinds for the producers around the country. We saw a lot of retail money moving into etfs particularly the end of last year a big volume. Goldman warned it thought it could reverse. Where are you on the oil majors . On exxon, we have a three stars or hold opinion. Exxons a wellmanaged company, they do the best job in the business of again rating return on capital but expected Production Growth for 2017 looks anemic. We dont see a lot of upside for pricing. We dont its going to be a vehicle for buybacks and dividends but we done see a lot of upside. Lets me ask you about that stewart, because either this week or last week, the italians became the first major oil group to cut the dividends. Where are we on that dynamic, do you think . Does that change where you push people . Know i dont think so. I think that if there was one consistent theme coming from Fourth Quarter Earnings Calls, in february and january, it was the sanctity of the dividends. I dont think that any of the major oils are cutting their dividends at least state side. Stewart, how soon and or do we test the lows on west texas. I think absolutely we could test that lower. You know an average of 41 a barrel from bentech forecast for 15 presumes well drop into the 30s at some point this year because weve been above that number so far. I do think that you know as long as we remain in contango and as long as additional Storage Capacity to fill i think those numbers are going to continue to fill and i think its going to put downward pressure. How high does that 70 number get . There a time line . Do we ever get to 100 . When would we get to 100 . I dont foe if theres an easy answer. Part of the reason it built so much in the last couple of months was because of refinery maintenance peerriods where theyre changing over to accept summer crude oim maybe it had an extra build as a factor there. When the reevenries start bringing in more through put after maintenance peers are over that should put downward pressure on storage levels. Hopefully it will be a gradual process as it moves up. Half a billion barrels of oil in storage. Thank you for your time. Meantime antiausterity protesters clash with police in germany as they tried to block the inauguration ceremony of the new office of the the new ecb. Good morning, annette. Reporter good morning to you, as well. Its probably was the worst day for mario draghi. Meant to be a day of glory, a day of joy for the ecb when they were planning to inaugurate that building behind me. It was a building in which they built over the course of more than five years. Very expensive. But then there was a massive protest against their antiausterity against their austerity policy of course. So that was a major blowback for mario draghi and he was saying during that press conference he thinks protests are very very difficult. Bottom line from the protests more than 10,000 people took to the streets near frankfurt in a move to protest against the ecb, against the new build, against the policy and loads of cars were burning during the morning, police cars more than 80 policemen injured, some of them seriously injured. And, of course we had those rubbish bins burning across the town. So one can fairly say that frankfurt resembled a little bit to a war zone at least, in the morning. But in line also the major drawback from the protest is that we have an increasing rift here in the eurozone between throws who kind of like to have the National State back into play and also have the say over policies. And then those people like the ones here in frankfurt today were taking to the street calling for more solidarity because, of course loads of people, above all, in Southern Europe live in poverty and thats why those people here came to frankfurt today and protesting against the austerity policies which, of course advocated by the ecb and the troika. Back over to you. Thank you, annette. I just want to mention where we are on greece the standoff with the rest of europe is getting serious. Yesterday the greeks refused to talk to the rest of europe about what they were doing in order to win extra money from them. Today, theyre voting in parliament to try to give basically a break to people who cant payee electricity bill. Tomorrow the Prime Minister of greece has asked for one to one meetings with merkel and the rest to do a deal. A lot of analysts are suggesting a deal is getting further and further away and an accident over in greece not a greece exit but an accident is waiting to happen as they run out of money and the rest of europe is unwilling to give them more. Bob mcteer will weigh in on the fed decision. Wonder if st. Augustine will come up. Well talk with hem when squawk on the street continues. [ male announcer ] at northrop grumman, weve always been at the forefront of advanced electronics. Providing technology to get more detail. Detect hidden threats. See the whole picture. Process critical information and put it in the hands of our defenders. Reaching constantly evolving threats before they reach us. Thats the value of performance. Northrop grumman. Down 76 points on the dow, ahead of the fed lateer. Take a look at utilities rising once again. Dom chu has more back at hq. Honorable mention to Energy Stocks and second place, barely in the green figure on a down day ahead of a key rate announcement, the utility stocks standing out here. Both day of the twoday fed meeting the sector has been outperformer and a wide margin today, shares of ppl, Public Service group up by a percent or more in trading today. A sector than fallen by 10 since just the end of january on fears of the fed Interest Rate hike. So today it might be bargain hunting though any shock from the fed could lead to more volatility specifically in utility rate sensitive type stocks. Back over to you guys. Over to the cme group, collect in with Rick Santelli and the santelli exchange. Hello, carl. A second fed official well have Richard Fischer on friday to make it a trifecta. Id like to welcome former dl erer dallas fed president , robert mcteer. Thanks for taking time this fed morning wednesday. My pleasure rick. Listen i know that we could do a lot of debating about should or shouldnt the fed normalize policy. But before we get to that it certainly seems though the recent spat of data flowed talk that the First Quarter numbers when we get them in about a month and a half, may be close to zero. Is any of that going to have an impact on todays decision as to the wording of the statement or the eventual normalization of rates . It may very well. We have had a weak Industrial Production retail sales, housing starts. If theyre data dependent, the latest statistics are going to push it forward. However, rick, given the way the markets are reacting to news i think that they ought to go ahead and do it. Its not going to be a big deal. All right. Okay. Thats a great place. I happen to agree with you. So theres two discussions. If we just look at the recent trends and think data dependent, maybe we can come to conclusion to postpone again. But if we consider that were at zero o. Zero Interest Rate policy we shol beuld be closer to 1. 50 to tighten, normalization might go against the grain of logic because rates are too low. Now, having said that do you think the word patience comes out but substituted for something that keeps us on data dependent track . I think they will mess around with the word patience. They wont just remove it and leave a hole but they need to weaken that word and they probably will some way. What convinced me rick is the february employment report. It was so good and yet the stock market went the dow went down 300 points. Were going it react badly to good news im for just saying go ahead and let her rip. I got ya. Get it over with. To me i take that bandaid off. Two areas to pay close attention to one is leverage credit. The status of how mutual funds and how many hedgies try to get good returns at a time where lates are low because they leverage, and the other issue is about the value of stocks. If stocks go down rates go down. What do you think about the leverage credit markets . In my opinion thats where the risk is near material should the fed get aggressive or normalize. Yes, rising Interest Rates will put downward pressure on those instruments. It might not be pretty. But you know they could go for a quarter point, rick and that would be a slight tightening. Whos afraid of a quarter point after six years of zero . Im totally with you. Lets we have another minute here. Getting back to the stock side you know a lot of people on the floor here have good memories about the taper tantrum. But as i look at the january trade in stocks and fixed income this year and last year i come to the big conclusion that its all about stocks with the fed because if the fed decides to normalize and stocks go down they dont need to worry about treasury rates. Theyre not going to go up with stocks going down. Final 30 seconds, comment on that logic. I think thats probably right im dont think the fed started out thinking the stock market was what they were trying to manipulate. U think but i think it ended up being that and the stock market is the referendum in this country of what the feds doing. So, theyre going to be very reluctant to do major damage to the stock market. Bob, its always pleasure. I get im not in Janet Yellens shoes right now. Have a good day. Maybe well talk after we see what happens at the press conference. Sara eisen, its all yours. Rick santelli for fed chairman. Up next, ubers office in paris raided by French Police this week. Officers seized email documents, smartphones. What does it mean for ubers future around the world . Ubers paris office is raided by police this week. Our stefan is live in paris with the latest on the story. Good morning stefan. Well, good morning. Its an investigation into the local service uber pop which is not legal in france anymore since the beginning of the year. According to france all drivers carrying passengers must have a license to do so and have relevant ininsurance. This is not impacting the regular uber service, only local solution. Uber pop which uses nonprofessional drivers, confirm that the police raided its french headquarters at the beginning of the week seizing documents on smartphones used by its drivers. The general manager for france says that exact reason for the raid was not clear and claims that the disproportionate action uber claims the pop service is legal under the french law. Decided to file two complaints one to the french court and the other the european commission. In the meantime according to the French Public radio already since the beginning of the year 250 drivers have been fined by the French Police. Uber as you know is facing a very strong opposition from taxi drivers in france but also in europe. They went on strike last year to protest what against what they call an unfair competition. They made intense lobbying and managed to convince the government to change the low in their favor making this uber Service Illegal since the beginning of the year. All right. Thank you for that. We did get a statement from uber about germany. Company regrets the decision but respects the legal system adding we will not give up on the german market. Uber black and Taxi Services remain unaffected by todays judgment. In addition were working on an alternative Ride Sharing Service developing specifically to fit the courts interpretation of existing regulations in germany. Seems like every day its a different country. On the day where we learn theres more uber rides in new york city than new york city taxi. Sue herera brought us that. Biggest clothes shop in any capital city has been its taxi firms. Its a tough job. Little like airbnb not as bad. Thats why they hired David Plouffe former obama insider to deal with the regulatory issues. Six minutes to go until we take it up with squawk alley. Jon fortt is on deck with what we can look at. Hi, jon. How are you doing . Alibabas lockup expiration is here. Stock down 20 , banks adjusting expectation for the stock, dig into why and whats going on with that. Facebook, getting ready to do some payments. What does this mean for paypal and square how big a deal is this considering theyve gotten expaypal running that. And Andy Cohen Bravo exec and host will join us to talk about his venture coming up on squawk alley. An important question today, which stocks have a history of being the biggest winner on fed decision days. Dominic chu back at hq with the list. Name some names for us. Sara simon, the zero Interest Rate policy environment weve had since the beginning of 2009 has been a huge fact for tore the stocks if you take a look at some of whats happening here a zero Interest Rate policy have led to things happening with the overall rate environment. In terms of how these stocks fare take a look at what were looking at in terms of the overall sectors that do well. If you look at the financials they are again some of the ones that performed the best when we look at the data analytic stats here. Since january of 2009 the large cap s p 500 has risen by one third of 1 percent on rate announcement days. Positive 61 of the time. Looking for where the biggest upside performance has been the financial sectors during that time frame the financial spider etf, xlf, up an average about 0. 9 on fed days and also positive 63 of the time. Among the best performing individual large cap stocks insurer hartford financial up nearly 2 and positive 63 of the time as well. As for some of the worst performers to keep an eye on the s p 500, Consumer Staples etf, xlp, posts an average gain of around 0. 10 only positive 46 of the time. Plum creek tim ber lumber real estate reit, posts a flat day on average, positive 54 of the time, so just about a coin toss as traders gear up for this watch whats happening and then stay tuned also to power lunch ahead of the fed meeting and which stocks, guys have the most staying power five days later, simon. Again, interesting calls here on which stocks outperform. Very timely. Its a big day on cnbc with the fed. Thank you very much. Ahead on squawk alley, sara will be interviewing andy cohen from bravo about vapdser pump rules whatever that is. Maybe ask him about the fed. Over to you, carl for squawk alley. See you soon. It is 8 00 a. M. At facebook headquarters in menlo park, california 11 00 a. M. Here on wall street and squawk alley is live. Welcome for a wednesday. This morning, ed lee, managing editor at re code. Jon fortt and kayla tausche. The fed the big strofrt day. Take some time to talk tech this morning. For instance shares of ali