Thats something weve been watching so closely. And right now the yield pushing up once again for the tenyear, 2. 741 30year at 2. 967 the twoyear, 2. 165 . Facebook posting betterthanexpected earnings, but users spent less time on the social network in the latest quarter. The number of daily users in north america also dropped for the first time shares initially dropped but then recovered on the Conference Call the cfo saying they are maintaining the 2018 expense forecast and suggesting the tech giant would benefit from a weaker dollar in the first half of the year. Well talk about this in a minute what stunned me was the amount they said 50 million user hours a day which is only 5 which tells you about how much people are using facebook i see that as a positive. For society for Society Millennials its not just millennials go experience life. You supposedly experiential life dont experience a screen. You need to do the experiential so you can put it on facebook, so other people can experience your experience fomo. Mofo . Fomo. The market was negative yesterday. At one point, yes when that happens after being up 200 240 at one point. You wonder will it continue monday and tuesday then it does the head fake and closes positive. Next week, we are up against a potential shutdown of the government again i knew that would happen schumer is mad we have to figure this out, whether he buys the dip or not oh, whether the sorkin family buys the dip no, in general. Were waiting for the pullback you never know the technician yesterday said 2700 who wants to buy at 2 , if its going down 8 , 9 . Then the market thinks you know that, it doesnt go down, it goes up. Then you miss it its the double reverse psychology double secret probation remember the name of that college . Faber college. Faber college the brain the brain we should tell you this morning that microsoft reporting a 6 6. 3 billion loss in its Second Quarter related to a tax payment related to profits held overseas adjusted earnings beating forecasts by 12 . At ts Fourth Quarter results topping estimates helped by tax cuts and the addition of 300,000 new wireless customers Randall Stephenson is confident at t will complete its acquisition of time warner the Justice Department sued to block the deal a trial is set for march thats going to be a big story over the first half of 2018. Some other stocks to watch today or that might be interesting, a lot of this is based on results qualcomm posting a Fourth Quarter loss on charges related to the u. S. Tax law and an antitrust fine from the eu the companys First Quarter outlook is below estimates its down 1. 5 paypal is trading lower after ebay announced its going with a new primary payment processor. A lot of ill litratithat ebay will go with a Dutch Fintech startup when the relationship with paypal ends. Pa paypals latest revenue topped estimates. Ebay also reported Fourth Quarter results, revenue during the holiday period topped estimates. Focus on marketing attracted more shoppers. Shares are trading higher this morning. I used to love animal house and faber college. What happened its always funny. When you have a child entering college, those frat parties, they seem much less they seem dangerous to me. Alcohol, its not funny. Not funny. Now im its like we need to get a whole on hazing. All that i agree wait until the twins are still got a few years i just thought about that strikes fear in my heart this is why i was like i never wanted autonomous cars, until i have a daughter driving age, now it seems like a good idea remember dday would take a beer can the 13yearold, the shopping cart, they took the girl she was like 13, 14. Were you branded during college . Branded was a good did you ever see that what do you mean a fraternity being branded were you a frat brat . I was in a fraternity. Sigma pi you were gdi tappa kega brew was there a secret handshake . In the 70s i thought those guys were square i wish i had done the greek thing. Okay. Lets talk Washington News are we making headlines this morning. Congressional republicans are on retreat in West Virginia ylan mui joins us from there good morning good morning. Lawmakers say they still have a job to do, thats why theyre pushing forward with their retreat out here in West Virginia even after yesterdays deadly train crash some members of congress are also doctors, they were liter literally the first ones to respond to this accident they said there was a loud bangon the train, a slam. The lights went out, then when they went outside they saw some of the wreckage that had occurred ohio representative Brad Winstrop was one of the people to first reach the injured when you think about what could have happened that makes it tougher yeah, we had a fatality. Thats bad enough. But when i think about the fact that this train did not derail, and that everyone really on board was good, that gives me great solace representative jason lewis of minnesota has been released from the hospital after suffering a concussion he did make his way here to West Virginia to continue to participate in this retreat. Gop lawmakers had a packed agenda today theyll meet with white house officials to talk about defense, foreign policy, tax reform, and even infrastructure. President trump will be addressing lawmakers this afternoon over lunch while this is a republican retreat, theres been an outpouring of support from both sides of the aisle at least one republican said thats put some of the infighting in washington into perspective. You know, washington partisan washington, d. C. Climate, sometimes i think some of us start to lose that, what really is important in life. And this incident today, i think, brings that back into focus for everyone we will see if this does, indeed, open up a new chapter of bipartisanship once they get back to washington back over to you yeah. That was unfortunate could have been worse. Were thankful for that. Thanks lets check the markets. Joining us is Jamie Desmond and matt toms, chief Investment Officer of Voya Investment management its your lucky day again matt youre relevant again. 2. 74 on the tenyear things are happening finally after years of waiting around. Lucky you stuck with that. Absolutely. Starting to see volatility tick up across the markets. That tells us this could be a sustained move volatility in equity markets and fixed income markets has changed. Its not falling back after this bounce higher in equity. This looks more durable than past selloffs. Interesting youre talking about equity. Youre a fix ted income guy. Do you think the volatility in equities is indicating rates may be one that is sustained and gets through prior resistance . Both equity levels. The vick at x at 13 and other ff volatility have bounced higher its the correlation of multiple markets. Look for currency markets to experience that. When you see multiple large markets lining up like that, it can be the sign of a more durable change ive seen comments here and there that volatility always, when we use it now, it seems to we only seem to use it when were talking about negative, downside with stock prices we use the vix so much, volatility invehicldex seems to correlate with breaks in market. I understand what you mean when you say volatility can be up and down, but we use it more when we talk about the downside. Is that weird that it works that way . You can have volatility going up, cant you . You can perhaps thats a good thing. When there is volatility, people see that as a chance to enter the market how much does this correction that started on monday, if it is one, what is the percentage basis and the time horizon going into this year we didnt expect to be up more than 10 . To get halfway there in the first half of the year is a surprise also that 200, 300 point down days, i dont know if thats true volatility. Investors are waiting on the sideline waiting to invest, i expect more volatility between now and the end of the year. If you were a big bull for your clients, you were predicting a good 2018, wouldnt you really have a good january than a bad january make you feel historically thats a good sign after a big year last year torque start off january like that, i would be surprised if its a down year january is a good indicator on how the year will go. So overall you figure we are much flatter for the next 11 months i believe well see pullbacks and moves forward. So i think well see more volatility than in the past. Matt, do you have a yearend for the tenyear do you look at the rates do you look at bunds as well we do importantly the selloff in rates has been global. So the bund curve has moved higher the tenyear at 70 basis points corresponds with the u. S. Move higher look for the end of the year, beginning of the reduction of qe in europe to be the meaningful second step to this Monetary Policy globally starting to abate. That will allow Interest Rates to move higher and less dollars floating around the system should allow volatility to peak higher so the fed moves, whats tenyear we should push 3 , and its hard to see a lot of velocity beyond there unless inflation rears its ugly head. 3 is the next natural target. Whats 3 do to stock prices . Moderates the gains . Were seeing more return on a dividend basis coming out of the equity market. So investors are still looking to get yield in some places other than the bond market it used to be there was no place else, you have to go into yields, bonds are so low, then yields start going up, people are worried about holding bonds. So were going into stocks youre buying stocks both ways, it seems even with rates going up, it makes you go into stocks you are worried about holding the bonds you already have a lot of investments in the United States are with our retirees and their psyche is to think they should be in bonds. I saw the fund flows for the last week, it was massive inflows into bond funds. Thats been consistent throughout the last two, three years. Even a outflow in u. S. Stocks jami never heard of voya. Are you thinking goya . No, voshya, with the rabbit n squirrel you paid someone to do that, to put it in my head. And it worked. Bye. See you. Thank you. When we come back, dazed and confused, maybe. An analyst brings us the inside line on facebook after the company gave investors a case of whiplash in afterhours trading. Think your Large Cap Equity Fund has exposure to Energy Infrastructure mlps . Think again. Its time to shake up your lineup. The alerian mlp etf can diversify your equity portfolio and add potential income. Bring amlp into the game. Before investing, consider the Funds Investment objectives, risks, charges, and expenses. Read the prospectus carefully at alpsfunds. Com amlp where can investors seek pin an uncertain world . Pgim sees alpha in real assets. Like agriculture to feed the world. And energy to fuel its growth. Real estate such as ecommerce warehouses. And private debt to finance transportation and infrastructure. Building blocks of strategies to pursue consistent returns over time from over one hundred fifty billion dollars in real assets. Partner with pgim. The global Investment Management businesses of prudential. Revenue for dow beat forecasts, and the company raising its estimate of cost savings from the dow due pochupont merger, ty expect a split in companies 14 to 16 hmonths from now. Royal dutch shell says Fourth Quarter profits more than doubled and that beat forecasts. The company benefited from the surge in oil and gas prices as well as costcutting measures. Nokia reporting better than expected Fourth Quarter results which were boosted bay onetime patent payment by huawei the company said while the Network Business will remain weak, a potential increase in spending by customers could lessen the decline pandora is cutting 5 of its work force and take other measures to cut costs. Pandora says the move will result in annual savings of 45 million. Lets talk facebook. They smashed earnings estimates, but the stock whips on this is the First Release after Mark Zuckerberg vowed to fix everything joining us is james wong good morning to you. Good morning. So, first time weve seen the hours decline in a meaningful way. Yes they say they will control expenses keeping guidance where it is what do you make of this amazing quarter everybody came in thinking theyll change the algorithm, will they still gain the attraction of users and make the earnings numbers we saw, yes, for the first time daily users decline, but if you look at the financials, its amazing how little that affected the operating profits. The other piece of this to me when they first announced, yes, well do these other things, clearly they must have known to some degree that it didnt really matter. Even if they lost these customers or the hours, it wouldnt hurt the bottom line. They knew ahead of time they knew on some metrics it would matter the new the daily active User Engagement was going to decline. But it declines ever so slightly down 10 basis points year over year when you look at the actual Pricing Power they have on the a ads, a few quarters ago it was thought ad load would be an issue, but as the ads came down the prices went up if youre an advertiser you have no place else to go. You have google, facebook and then some other guys but the quality of ads on facebook is so extremely high. That gives facebook incredible Pricing Power. People talk about the bad things in the quarter, but two numbers this quarter were the best in nine quarters straight one is this dollar per price number that increased 43 with facebook you dont have to do anything and increase your ad prices 43 and advertisers will pay. What do you make of the story over the weekend of the fake followers that celebrities and others had, the ability to buy followers. It was really in the context of twitter. I wonder if that will bleed into other spaces i think thats always been a problem. Twitter, facebook, when youre a brand or youre someone trying to begin a following, theres a real demand for this im not surprised this happens i think its not something that influences results maybe it influences the Single Person or a couple accounts. For all the hand wringing among the Advertising Community about how long people see the ads, there really is no place else to go isnt that a longer term isnt that an existential problem if theres no place else to go . Perhaps it is, but internet advertising is still a modest fraction over advertising. Its becoming a larger and larger part. It is thats why weve invested in this area aggressively and where do you put snap basically they rebuilt their product a year after the ipo thats damning to me i think evan has a great vision for product but delayed investing in the ad stack and it shows. To put up an ad on snap, you have to be a major brand or someone who can afford to build custom ad solutions. Is there any upandcoming flat form where you say these guys got it . Nothing on the scale of facebook or google these guys invested decades into their ad tech stack, and it shows. The quality of ads on my feed, sometimes i cant tell the difference between advertising and organic content, like in a good way as someone buying advertising . No, as a user sometimes i forget to buy clothes for months on end, then i see a carrousel of attractive products, i dont get that anywhere else. Coming up, we get theres constant communication when we go to break, ill tell you. Coming up, from one tech giant to another, the streets reaction to the Quarterly Report before we go to break, here are yesterdays winners and losers nah. Not gonna happen. Thats it. Im calling kohler about their walkin bath. My name is ken. How may i help you . Hi, im calling about kohlers walkin bath. Excellent happy to help. Huh . Hold one moment please. [ finger snaps ] hmm. 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You almost done . Nope. Get ready, because were helping leading companies see it and see it throughwith digital. Welcome back youre watching squawk box live from the Nasdaq Market site in times square. Good morning u. S. Equity futures at this hour, when i woke up they were positive did you see early on i shave, and, you know, do all kinds of stuff looking at my iphone now you saw fair value . I think thats the only problem. They were up, right . Up about 60 points i shave, i look at myself. Im sitting down typically you sit down and shave . Yeah. In the shower, i hope. No, you just im relaxing, waiting to never mind whats wrong im shaving, looking at my iphone getting up you dont andrew no. No. Okay. Fine its a new day its a new day. Its the morning. The yield on the tenyear tmi tenyear is at 2. 748 . Oil prices sharply highe