an 11% rise in exports for january. still both were higher than economists expected. over in europe, a check on how we're doing there. the dak dox down better than 1%n germany. down about 1% across the board >> in political news, well, you want to look at these first? >> what? >> treasuries. of course. don't want to jump past those. the ten-year -- >> it was sitting there. >> i didn't see it i was so excited for the political news 2.831% is the number on the ten-year recent high was 2.88 that happened in the midst of that payrolls report then the market turmoil. >> after that soft auction yesterday and the budget agreement with the raising of the spending cap, that's when you saw yields take that little bit of a jump higher should we do political news now? >> let's do it >> the clock is once again ticking in congress. lawmakers having until mid night tonight to pass a spending bill and avert another government shutdown this time there's a major bipartisan budget deal in the work democratic and republican leaders in the senate say they have reached a two-year budget agreement increasing money for the military but it still needs to pass the full senate and house. president trump tweet the his support saying it ends the dangerous sequester. nancy pelosi staging a record breaking eight-hour speech yesterday in an attempt to force a vote for protection of dreamers it was the longest continuous speech in the house on record. we'll get a live report from washington at the bottom of the hour >> how do you actually physically do that >> you're the only one who would know >> i don't have eight hours in me forget the heels >> i don't have eight hours or the heels. >> i was going heels >> kelly doesn't need the heels. >> that's true the big news this morning, tesla reported an adjusted fourth quarter loss of $3.04 a share. that beat wall street expectations but also tesla's biggest quarterly loss in history. they announced plans to spend more capital in 2018 stoking westerns about profitability on the call elon musk said they're on track to meet produ t production goals for the model s. that is 24 hours after the spacex launch. >> don't you think he gets a halo effect when something like that goes well >> he does, but they keep missing production numbers spacex is doing spectacularly. he has made it a point where he's kind of brushed it aside. i don't think it matters whether they missed or not one day it might matter. but he's done an excellent job of making it it indifferent. >> does it matter that much of the tesla suite have departed? so many executives gone. does that say something about the production issue is there a larger message in there? >> could be his cerebral content and his cerebral bandwidth sucks up the air in the room and maybe they feel like they done have a seat at the table. >> the cash has kept the stock where it is. i know it's lower now. >> it's been tight on a relative basis. >> but going back to the bears, that's the one thing you focus on with tesla, can they do this. can they keep this going i don't know where the cash came from, if it was debt offerings but it was much better than expected >> when he talks about being gaap profitable in a year or so, that is troublesome. that is the biggest issue. >> why is that troublesome >> i don't think he can do that. the smoke an mirrors play that he's been able to hit and kind of progress with is a totally different thing than profitability. >> now we'll hit it first quarter next year. now we'll hit it midway through next year. >> you are not long the stock? >> i have been long, long on and off. not long currently i would not short the stock. it's susceptible to these rips up with a 22% short interest it's just reckless to be short it >> he essentially gets a pass for running the two big businesses, spacex and tesla, first thing that comes to my mind is dorsey, twitter and square you said spacex is doing great i'm thinking twitter is doing great. but we gave them a pass in the market everybody is saying dorsey needs to choose between one or the other. >> much harder on dorsey this guy needs to choose he's focused on rockets one day, building cars next >> because dorsey, as good as he is, is not musk. >> one guy, with apologies to jack dorsey who i like very much, what elon musk just did for humanity i think in the last 24 hours is a different level. it's next level. >> but it's stilt attention -- we focus attention on spacex if he was knocking the numbers out of the park on on tesla, i wouldn't bring this up there would be no reason to. >> because he's a genius, people give him -- >> dorsey's a genius, too. >> he could be, but in different ways you're talking about a literal rocket scientist, when you look at somebody like this, you give him a pass saying maybe i don't understand how he can juggle all this >> the stock is doing fine if tesla all of a sudden cratered and lost 90% of its value, people would react differently. what do you think the chances are -- there are tesla loopians who feel this way, that win day te one day tesla may merge with spacex >> depends on if they need spacex's capital >> remember solarcity? that was competition at one point. >> exactly >> you forget about the boring company, which is not so boring. >> then you don't have to worry about paying for growth or the multiple at all. if you're talking about flying everything >> bingo >> tesla lower premarket today take two interactive reported better than third quarter results. the video gamesmaker's revenue missed forecasts as the fourth quarter sales outlook. shares were down 5%. take two delayed the launch of the game "red dead dedemocrat shun 2" for a second time. yelp's fourth quarter profits fell short of estimates. they protect an operating loss as they ramp up spending on restaurant reservations and marketing analytics. yum china's fourth quarter results just edged past estimates on strong growth from its kfc restaurants, but that was offset by disappointing sales from pizza hut. shares down about 5% joining us for a conversation about the broader markets is ed keon and ja jay jacobs ed what have you done in the last 48 hours? you don't have to reveal how many drinks you had. we get it. >> tuesday morning we're buyers. >> tuesday morning you're a buyer. >>y. at the end of the day we increased exposure on tuesday. we were overweight stocks going into this. we did add to our exposure during the course of the day on tuesday. >> we'll skip wednesday what are you doing this morning have you made phone calls yet? >> we probably won't do anything we got the portfolios where we want them to be. we're willing to ride out whatever volatility we expect to occur for several more days, if not longer >> you say several more days, if not longer >> bottoming does not happen in one day. >> is everybody agreeing that we just bottomed? that scares me everybody said we are bottoming -- >> i think we were down 359 when we dumped at the close yesterday. >> right >> if this is all about a de-leveraging, how long does it take to delever? it's not a fundamental issue you can't bottom that quickly if it was fundamentally a change in the market >> i think there's a legitimate reason to think inflation risk is higher than a few weeks ago you have to build in a certain premium because of that new risk that's already happened. >> jay what are you doing? >> we've been talking to clients and work on the behavioral side of the market, trying to coach people what this means it's been so long since we have seen this volatility and shook up the snowglobe like we saw on friday and monday. this is where people need to think about is this the time to deploy cash or stay pat? if you don't need the cash now, don't try to trade in this market this is an advanced market the most sophisticated traders are trying to figure out what's happening. >> in terms of reallocation that you did what does it look like >> in a 60/40%, we were about 64%, 65% stocks. >> domestic? internationally? >> yeah. the last several years we have been non-u.s., but we shifted towards the u.s. a few months ago. now we're overweight the u.s., overweight the markets and efa what are you doing >> the biggest shock is the things that outperformed last year are still outperforming this year. people are saying it's not a double year for f.a.n.g. i think f.a.n.g. stocks will be doing just fine. >> last year in march, financials were strong, industrials were ripping, then it kind of pivoted >> you have to think if there's another leg in the tax reform policy or do we start hearing about infrastructure if it's infrastructure, then the industrials will have that strength >> what does the street think is happening on infrastructure? >> we started to think it was a $1 trillion deal then president trump said maybe 1.7. now 1$1.5 trillion infrastructue hypothetical deal. if you start to see wall street and d.c. acting in connection where things are getting done now. we had the tax policy done you're starting to see budget deals get done if infrastructure gets done, that's huge tailwind >> i wonder what the risks of inflation and how they seeped into the market already, how that impacts the debate on infrastructure you already have a guided government over this spending agreement, then you're talking about a massive infrastructure package when you're already getting worried about what the effect of inflation will be. >> in my view, the most important number is productivity part of the reason why we had this inflation scare, we got a slightly negative productivity print. with all economic data, there's always special and one-time effects. that's probably below the real trend. we thought we saw some evidence of productivity coming up a bit. infrastructure will help that. things pulled together and will help that. if we do get stronger productivity growth, get closer to the post ---second half of the '90s level, then you can get strong growth, strong wage growth, not have inflation and a bull market can continue if we continue to have slow productivity growth, that means the economy speed limit is probably less than 2%. so stronger growth will end up generating inflation and ending this bull market >> what happens if the ten-year goes above 3 does that force a new low to be found? yesterday afternoon we said the budget deal, soft auction, yields kicked up, the markets gave everything back >> as yields rise it puts pressures on the valuation of the market going back to infrastructure, we have an infrastructure development etf. >> is that p.a.v.e.? >> yes a lot of flows have come into that fund. what is in that? >> infrastructure development companies. not owners and operators, but the companies that build infrastructure >> so caterpillar? >> those types of companies. we look more domestically, caterpillar is more international. we've seen a ton of interest in that space even if something doesn't pass in washington, local infrastructure is getting more and more -- >> even that performance there, it shows a drop off. >> nothing was immune to fid ri and monday >> it's a little bit off the bottom doesn't have huge expectations baked in now >> if you take the chart back to november, starting with tax reform and december, this was performing very well expectations are starting to grow in the space. >> okay. thank you. you're hanging out >> i'm going to. i have to place to go. market doesn't open until 9:30 >> you have a home here. coming up, tesla is easing investment concerns posting a fourth quarter loss that beat expectations the company says it is on track to reach model 3 production goals. we'll dig through the report with an analyst. we'll do that next hold together. a little to the left. 1, 2, 3, push! easy! easy! easy! 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>> softbank bought into fortress so they're getting into financials the whole idea -- i think there's a view between the fortress investment and this investment that this is not about just investing in technology companies but almost having their own financial services operation to potenti potentially fund, advise and do these transactions >> for themselves? >> for themselves. they also own wework, a real estate company they're going into other places. >> they're doing the buffett thing. >> a little bit. >> costco said january sales rose 6%. the analysts saw an increase of 4.9% same-store sales were up 3.6%. tesla reporting a smaller than expected loss for the fourth quarter that comes one day after another elon musk company, spacex, scored a launch of the world's most powerful rocket with musk's personal tesla on the board. on the earnings call, musk tried to put the headaches with the model three into context >> if we can send a roadster to the asteroid belt, we can probably solve model 3 production it's just a matter of time >> joining us snow colin rush from oppenheimer good to see you. is it just a matter of time? >> the complication is robust. if they can solve the problem of getting the roadster to the asteroid belt, they can probably do the same with timing, but they're not. they don't know what the issues are at this point in terms of automation and solving that. they talked about having some of these machines in germany and getting those things on a boat and implemented. we're not looking until q3 i heard that they're hedging some production timelines. we're not totally surprised by that we expect them to have ongoing problems there's two issues with the stock. one is what they're setting up with the street in terms of what they'll do -- >> but that the not new. >> the real issue is what they're doing relative to other automakers other automakers are making steps towards autonomous vehicles but not walking quickly. the question is how fast does tesla execute on this. >> how do you model the stock when it sounds like you don't trust the numbers? >> we take a conservative view we had about 1,000 model 3s in the 2017 estimates they did better than we expected we took down numbers on 2018 model 3s at 40,000, and i think ma may go lower so we're cautious same thing with gross margins. they have some wood to chop there in terms of cost reduction and getting back to where they can support 25% gross margins. >> did i mischaracterize that in any way? do you trust the numbers do you trust musk to deliver what he says he will >> no, not in terms of fact. we discount what he says substantially. >> so he says he needs time. you effectively say he needs time where is he -- are there other automakers you look at and you think they'll catch up to where they are now >> 2019 is the year where we see cars compete with model three and the snx out in the market. it's been curious to us to see auto makers move so slowly in terms of doing that. they can make cars effectively but they haven't the question is are they cannibalizing their own vehicles with these new cars. >> my question might have been wrong and your answer -- here's the second piece of this do you think that the buyers of teslas are looking for evs that's the market? that's the proper definition i once had a conversation with elon, we were talking about climate change, batteries. he was saying i'm not sure that 90% of the people buying teslas are doing it for those reasons they buy it because they think it's a cool car. >> i agree with the cool car thesis >> then maybe we're not thinking about the market properly here >> evs handle well the leaf has a lot of power and goes fast and is fun to drive, even though it's not a grade car relative to some of these other things the ev thesis for me -- >> the guy walking in buying the leaf is the same guy buying the tesla? >> no. evs have a lot of power because of the torque. if you want a cool car, fun to drive, evs are where it's going. that's part of the thesis for automakers, but they're cannibalizing their own market and migrating slowly the question is are they migrating fast enough to fend off the tesla products >> what about the gap profitabilities comment? do you put much stock in it or leave it >> no. they pulled all the looefr every could on cash flow they gained about 5$500 million out of working capital had almost $1 billion the billion dollar burn was about 900 million. that was cash they gained to keep the balance sheet in check. we think that continues to happen they roll out capex and not -- >> why don't you have a sell on this stock you laid the thesis out for that >> we downgraded on the solarcity acquisition, we felt that was an irresponsible move on management's part but i think they are innovating in the automotive space. it's exciting. they have taken a challenging route with autonomous vehicles and are not owning um to the fact they have serious problems. other than that, we've been bullish on the stock until the solarcity acquisition. coming up, countdown to the sh shutdown the clock is ticking for congress to reach an agreement in washington. as we head to break, look at yesterday's s&p 500 winners and losers my experience with usaa has been excellent. they always refer to me as master sergeant. they really appreciate the military family, and it really shows. we've got auto insurance, homeowners insurance. had an accident with a vehicle, i actually called usaa before we called the police. usaa was there hands-on very quick very prompt. i feel like we're being handled as people that actually have a genuine need. we're the webber family and we are usaa members for life. usaa, get your insurance quote today. of emerging markets obsolete? at pgim, we see alpa in the trends, driving specific sectors of out performance. where a rising middle class powers a booming auto industry. a leap into the digital era draws youthful populations to mobile banking and e-commerce. trade and travel surge between emerging markets. everyday our 1,100 investment professionals around the world search out opportunities for alpha. partner with pgim, the global investment management businesses of prudential. people don't invest in stocks and bonds. they don't invest in alternatives or municipal strategies. what people really invest in is what they hope to get out of life. but helping them get there means you can't approach investing from just one point of view. because it's only when you collaborate and cross-pollinate many points of view that something wonderful can happen. those people might just get what they want out of life. or they could get even more. today, the new new york is sparking innovation. you see it in the southern tier with companies that are developing powerful batteries that make everything from cell phones to rail cars more efficient. which helps improve every aspect of advanced rail technology. all with support from a highly-educated workforce and vocational job training. across new york state, we're building the new new york. to grow your business with us in new york state, visit esd.ny.gov. welcome back you're watching "squawk box" live from the nasdaq market site in times square. welcome back to "squawk box. it's time for our squawk planner. in the u.s., weekly jobless claims are coming out at 8:30 a.m. eastern time. in europe, the boe rate decision will be out in about 15 minutes. in europe, we have the bank of england meeting, a trio of fed officials are speaking today philadelphia fed president patrick harker, minneapolis fed president neel kashkari and esther george. we heard from robert kaplan this morning speaking in frankfurt he said the central bank should continue removing accommodation but added that the fed should be highly vigilant about market volatility and whether it has effect on the real economy as for earnings, cvs health, twitter, viacom, kellogg and yum brands reporting before the open bell. aig, expedia, news corp. are out after the close. dow looks like it would open down about 147 points off. the nasdaq off by 23 points. s&p 500 if it opened now would be off by 15.5 points. senate leaders reached a long-term spending deal with hours to go before another government shutdown. kayla tausche has the latest this morning >> reporter: the senate and house are expected to vote today on the budget deal that was reached last night it has bipartisan support. it lifts 2011 spending levels by 3$300 billion it raises the debt limit until march 2019 and includes add-on funding for disaster relief, community health centers and children's health insurance but does not include protection for dreamers, leading nancy pelosi to make an eight-hour speech on the floor to force a vote on that topic pelosi threatened to remove her party's support. those votes may be needed if conservatives continue to balk at the price tag president trump called the deal so important for the military, but that's not enough for mark meadows whose group opposes it >> i consider the president a close, personal friend even if he called me and asked me to vote for this, the answer would still be no. general mattis supporting it sh, i appreciate the fact he got what he wanted for his military, but it's fiscally irresponsible to support it >> enough has been cobbled together from some house conservatives and moderate democrats, there are no votes set for today, but we'll keep you posted as soon as they are >> kayla tausche, thank you. for more on how the budget talks may impact the markets, chuck gabriel. good morning your expectation what do you think will happen? >> they'll likely pass this. the senate might take quite a bit of time, well into the evening. could be one of those situations where the bill passes late in the day, moves to the house. the house could pass it after midnight so youcould have a very slow - short lapse. we had a three-day lapse and it didn't move the needle before. >> does the market really care about this we've seen this movie, gets close. >> but it has the debt ceiling in there >> it is important they put the debt ceiling in there proactivity. i think everybody thoughtthey would kick the can one more time and there could be suspense over the dreamers and daca. this is great to get this out of the way. you get emergency relief for storm victims in florida, texas, louisiana, puerto rico there's something in here for everybody, opioids, pell loans it's hard to resist this we'll have a bit of suspense because they're not dealing with daca and immigration issues. >> is there short-term upside? is the market expecting this >> i think they have become immune to any type of these budget deals the question to chuck, is president trump having more problems with corralling his own party these days versus corralling the democrats it seems that's a bigger issue for the fiscal hawks >> that's a great point. the president has had to learn to do with the art of the doable, even controlling song. he got his defense increase. my colleague points out this is a 10% year over year increase in the defense accounts he to give up 117 billion in nondefense above his budget. this comes just before his monday release of his own budget where he will call for major cuts and nondefense d discretiona discretionary. it adds more to the ten-year deficit because you're increasing the baseline than the tax cuts, all this before you roll out an infrastructure plan. >> given that you're in washington what is your sense of an infrastructure plan the president is talking a lot about it scott made a smart point i thought earlier in the hour, this conversation about inflation which has seeped into the markets, does anybody sit around and say maybe we don't want to do infrastructure now because we're worried about inflation. or do people say infrastructure takes a long time. these are not shovel-ready projects >> if you add 2$2.7 trillion to the ten-year baseline, and by the way the punctuation mark on this package, andrew, they called for another simpson bowles type budget reform type commission it's like stop us before we spen again. when you talk to people like kevin hassett and folks in the trump economic department, they would much rather have spent additional money on infrastructure which could boost productivity and we could have noninflationary growth, but this is the price you have to pay in a divided congress -- not divided congress, but in a congress where the art of the doable in a 51-49 senate requires you to spend an awful lot on nondefense discretionary spending once they got 60 votes cleared in the senate, they threw everything on it >> we heard from the president saying there might be a phase two of tax reform. does that have legs? was that just rhetoric from the white house? is there substance behind that maybe they would like to do more on the individual side when the president came in, the last year of deficit for the obama administration was 5$550 billion range. for fiscal 2017, it was 666 billion. the projections would be that the deficit would not hit the trillion dollar mark until 2022. there's a good chance now we'll hit it in 2018 certainly by 2019. i think you'll have a quick pivot to the questions of austerity again and it will arrest any serious discussion on infrastructure we'll see if the markets who are testing jay powell and trying to decide if inflation may be back in a way that will make this fed dismount more complicated whether they turn sour on the deem >> how you can have a conversation about austerity given the budget agreement just reached. >> it's over >> let's spend all the money, but maybe not spend anymore. we already spent it all, now maybe sit back and realize we're blowing the deficit? >> that's right. the infrastructure -- concept of an infrastructure deal this year died hard. but also what died is, as my friend bill hogan would say, , deficit or budget responsibility as we know it. bu budget discipline that will mark the first two years of the trump administration they opened up the kiddy, pedal to the metal here we go. earnings alert, we expect results from cvs health, yum brans and twitter at the top of the hour and then new numbers from linkedin, woel gell get their ml work force report when we come back tomorrow, it's a day filled with promise and new beginnings, challenges and opportunities. at ameriprise financial, we can't predict what tomorrow will bring. but our comprehensive approach to financial planning can help make sure you're prepared for what's expected and even what's not. and that kind of financial confidence can help you sleep better at night. with the right financial advisor, life can be brilliant. i thyou never got the brakes looked at?l... oh yeah. no. at cognizant, we're helping today's leading manufacturers make things that think and do automatically. imagine that, a world of new digital products and services all working together for you. can i borrow the car when it's back? get ready, because we're helping leading companies see it- and see it through-with digital. this is where i trade and manage my portfolio. since i added futures, i have access to the oil markets and gold markets. okay. i'm plugged into equities - trade confirmed - and i have global access 24/7. meaning i can do what i need to do, then i can focus on what i want to do. visit learnfuturestoday.com to see what adding futures can do for you. li . welcome back amazon will start delivering groceries from whole foods through its prime now services customers in austin, cincinnati, dallas will be the first to get the service. amazon will expand it across the country this year. prime members can get orders delivered in two hours for free. a one-hour option will be 7.99 >> i'm excited about this. is this going to be the whole inventory? in other words -- >> i think so. >> they have the 365 products on amazon now that's just like some boxed cereal >> they're delivering from the stores >> that's cool >> am i wrong? >> that's what i'm wondering there's a huge difference logistically they have to have the refrigerated trucks for produce. >> this is like fresh direct with whole foods you know you could get whole foods prior -- >> by walking into the store >> by instacart. >> yeah. but that felt like, okay, another thing you have to sign up for this, if you already have it and they make it seamless -- >> promises from amazon. lg electronics plans to raise prices of washing machines in the u.s. about 4% to 8% in response to tariffs imposed by the trump administration on large imported residential washers. lg will focus on sales of the high-end washers samsung is also affected by the tariff and is still reviewing the impact blackrock reportedly raising $10 billion as part of a flu business that would take direct stakes in companies. this could put blackrock in competition with companies like berkshire hathaway and more importantly private equity firms like blackstone. >> it is a different approach. it you're going to go and basically passively kind of buy and own a company, that's different from private equity. >> this is sort of like an actively managed -- >> it's more like saying we had knowledge of this company works andwe want to own it rather than this company needs to be optimized and sell it down the road >> the real business, blackrock's automobireal businee ishares -- >> etfs? >> they obviously also have the active side of this. you have larry saying he wants to be not an activist but to be more active in terms of pushing companies to do different things they have a corporate side of their business so they operate pension fupfund for the corporates it is rife with conflicts. >> i think your worry is not outrageous it's right there i think it's uniform to what they're doing as a whole i don't see anything that sticks out generically just yet >> i wonder how big the companies will be. >> let me ask you this, if there's the wapner co, and there's an active investor at blackrock that has a stake in wapner co, but another fund is going to buy 20% of the company through this -- >> good for blackrock. >> but there's different pockets of money, different investors in each group >> right i'm sure they do -- blackrock, if anybody, does their due diligence on any of these things as far as on a compliance level. i'm sure they have all their bases covered before did comes to mind what the potential conflict could be. >> okay. >> i always wondered why more people -- in a weird way, people have not emulated warren buffett and berkshire more than you thought. there's a few here and there, but to buy and hold forever and be in charge of the capital reallocation, you don't see it that much. >> would these be passive stakes sounded like it. >> larry fink is one of the key voices against activists >> right >> so you wonder, okay, if they take these stakes and do what you do or -- >> right so let's say they take an active stake or a passive stake in one of these, then an activist shows up because they control another major stake in it via ishares group, can they gang up and use this i'm saying -- >> and if it's a high humidity day that day >> yeah. that too coming up, crude prices posting their worst loss in two months. u.s. equity futures after a volatile day yesterday an implied open for the dow jones industrial average down 168. the dow trading in a more than 500-point range one day ago. looks like it may be volatile yet again off the open stay with me, mr. parker. when a critical patient is far from the hospital, the hospital must come to the patient. stay with me, mr. parker. the at&t network is helping first responders connect with medical teams in near real time... stay with me, mr. parker. ...saving time when it matters most. stay with me, mrs. parker. that's the power of and. like you do sometimes, grandpa? 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now we're all the way back to the 60s. >> brent got just above 66 briefly. >> okay. we've slid back a little there is the market volatility the dollar and the impact that's having and all these big landscape changes we're talking about. how does it add up to you? >> it adds up to the sell-off. crude oil prices have gotten knocked around for the better part of two months now >> that anniversary relationship, dollar up, crude down, vice-versa, it's not that great co-efficient the dollar index is down to 86 crude got to 66. dollar index is being over 90. crude is around 61, ready to break into the mid-50 here, fairly rapidly interesting point that 2022 year for our energy independence, harold hamm was on cnbc two days ago, he thinks it will be two years time >> mid-50s >> that's the zone of congestion lies and the real support lies in the weeks ahead >> lee cooperman was on with me yesterday halftime thinking we are going to 70 sometime soon. he was correct in craalling crue to the 66. why wouldn't it go higher? >> leon probably will know more than i'll ever know. i'll acknowledge that. let me say the dynamics are working in this market temperature. success of opec have been saudi discipline and luck in terms of outages, in terms of north sea, keystone pipeline still impacting industries at cushing, cut in half in a year's time that's support of factor but the u.s. charge higher we actually exported crude oil to the united arab emirates, if you believe that it shows how we are penetrating markets in india, china, much to the chagrin of the iraqis and iranians who are in the process of exporting their capacity and their production everybody and their brother out there such as the saudis may be cutting back on crude oil production they are ramping up exports of the products, particularly the chinese. >> is it possible to get to that level with u.s. production that ramps when you get to 18 these levels, the u.s. production is at all time historic highs is it to be to get to $80 in wti? >> you would need another outage of real nification for a long period of time and the venezuelan situation is pretty darn hit a rock bottom as it is. this thing can limp along with all the damage that maduro keeps doing to the company the short answer is, no, i really see a block or a limiting factor from the u.s. output. also from these other guys out there getting antcy, they don't like u.s. producers eating tear lunch, market share, essentially. we will bring you rules and reaction from an analyst right now, though, take a look at u.s.ic quity futures this morning as -- owe equity futures this morning no matter how the markets change... at t. rowe price... our disciplined approach remains. global markets may be uncertain... but you can feel confident in our investment experience around the world. call us or your advisor... t. rowe price. invest with confidence. at holiday inn express, we can't guarantee that you'll be able to contain yourself at our breakfast bar. morning, egg white omelet. sup lady bacon! fruit, there it is! but we can guarantee that you'll get the best price when you book with us. holiday inn express. be the readiest. what's critical thinking like? 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(cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley good morning we've got a market alert for you. dow futures pointing to a triple dim it drop again. there is one lesson in this week's volatility. it is the picture could change in the blink of an eye twitter is rolling out the instant results. plus, jobs in america. a new report this morning from linkedin on who is hiring and who is not as the second hour of "squawk box" begins right now. >> live from the heart of new york city, this is "squawk box." >> good morning. welcome back to "squawk box," right here on cnbc live from the nasdaq market site and time's square joe and becky are off today. take a look at u.s. equity futures. they would move the do you in a range of more than 500 points yesterday. so what you see at this moment is not necessarily what you will get even minutes from now, given the kind of volatility we are becoming acuss told to in this mark place let's talk about twitter julia boresen joins us with those numbers. hi. >> reporter: the twitter is beating on the top and bottom line, fourth quarter earnings, 5 cents more than analysts prompted revenue returning to growth earlier than expected t. company is growing its revenue 2% to $732 million in the quarter. we were expecting revenue to shrink 4% from the year ago quarter. now as for those all important user numbers, monthly active users came in at 330 million it was flat the first quarter. up 4% from the year ago quarter. twitter says the daily active users grew by 12% from a year ago. that would be the fifth consecutive quarter. user growth year over year, though that 12% is down from the 14% growth we saw in q3. we spoke to ned siegl, he pointed to a faster 7% globe saying that's indicative of even greater strength he says video grew as a percentage of ads. it's getting users to stay on twitter longer and video consumption on twitter has more than doubled in the past year. thanks in part to 1100 live events up from 800 events in q3. twitter is saying 2018 will be an investmentier, this year they'll in invest in their sales team that's coming up at 8:00 eastern, the sales call. >> this is a pretty good report, if you are a twitter bull. obviously, the stock ran incredibly heavy into the report maybe it's not a surprise they've grown so much. if you show revenue growth, active users are up. this is a pretty good report >> well the daily active users are up twitter doesn't reveal a hard number for those daily active users, this percentage growth. it's interesting they saw 12%, 14%, 12, so gentleman back and forth between 14 and 12% daily active users growth i asked him why it was the monthly active users didn't grow between q3 and q4? he said that was due to some seasonal issues. around the holidays, people tends to be less connected to their phones over the holidays though i wouldn't expect that to necessarily impact twitter he said there were changes to the integration of safari. they lost 2 million users. there is an additional step to get them to use it on the mobile phone on safari. so it will be interesting why they aren't adding more monthly active users they are focused very much on that engage him. they put here in the headline, they choose their gap profitability, increase their shipping cadence and they are very much focused on that daily active user growth i think it's interesting, that they say the user engagement, the fact that that's higher is due to the fact that they have been making these product changes. so they rolled out longer tweets, 280 characters they say that's an impact on how much people are using twitter on a daily basis. but interesting to see what dorothy says coming up >> thanks. stocks are moving higher as we speed. >> what are we seeing there? >> about 4 or 5 '. >> up 6% >> because this is a good report it's not necessarily all that surprising if you look at the read-through from the commentary from the prior quarter's call, you got the feeling that things were starting to trend in the right direction. the market probably has been sniffing that out. steve, there's a reason why this stock has really ramped up of late. >> was up the 6% yesterday it's up 11% year-to-date >> this technic amy, forget about the fundamental als you a interested in. especially suggesting the noto news, it was down 14% and rallied back off those lows 24%. so bigger pick, stuff going on at twitter, i think it's still a tail >> by the way, we still had snapchat blowing it's own expectation, what was the stock yesterday up 40% people were saying snapchat seen the niche filled but twitter was up yesterday perhaps in sympathy with that. look at that what is that telling us? >> the biggest problem is everyone focuses on the metric of monthly active users. if you are searching on google, you do not have to be logged in. there are plenty of things you can search and not be logged in. >> it's a bad metrics from day one. >> they were also gap profitable, which is incredibly important record eb that margins incredibly important the stock is reacting the by a it is reacting for a reason. >> 10%. >> maybe not for the first time, but for the first time in a long time, people are getting back to the fundamental also of this companies, rather than saying the stock is running up ahead of a deem now the story has changed. so you want to buy the stock the fundamental apples have dramatically improved it would seem. >> sorry people get their news from twitter. it's a society now where you want those quick hits, quick takes. that's the way people are digesting it so twitter is definitely an asset to itself. >> an old crowd. >> right >> i'm saying, i think it's an older crowd getting their news from twitter. >> really? >> if you are 18 to 24, you are getting news from snap, instagram, facebook. i feel like it's - >> it's again racing >> snap. >> i know julia mentioned noto, anthony noto is leaving. boy, if he leaves on a high note if this is the last news report he will preside over, he leaves on a very high note of where he is leaving this company in the hands of others as he moves on to take a ceo role. >> that's a good point did they do the character doubling thing in that quarter within they went from 140 to 280? certainly it hasn't slowed them down at all. a couple headlines to tell you about this hour. the newly struck bucket deal nation house opposition in the house. congress trying to avoid a shutdown, nancy pelosi spoke for a record breaking 8 hours yesterday on the house floor, talking about the flashlight of squad dream-- so-called dreamer. not only have we heard standing there for eight hours. >> in the four-inch heels that makes it much harder the labor department out with initial jobless claims for the week ending last saturday. that number expected to remain near a 45-year low the bank of england out with the key interest rates unchanged take a quick look at the pound, show you what's going on there >> well, yeah. >> it's moving, but fought much. also, more importantly, take a look at where u.s. futures equities are right now we are triple digits in the red. costco says january same store sales were up 6% >> that beats the estimate excluding gas, u.s. same store sales rose 6.6%. former ge ceo jeff immelt has been named athena health chairman immelt said, i wanted to work with a founder he wanted to work in the sort of digital health care space, where he is doing bc stuff he compared the health founder and a couple other guys ap says he sees a huge opportunity to make a difference there. >> i don't know. >> what do you make of snit. >> he first wanted to be the ceo of uber. this is a different thing. i guess the only thing i would say is he wasn't retiring from ge >> he wasn't retiring period >> which is what the plan was. i don't think in any shape or form mr. immelt wanted the last corporate of his life to be written that way. >> to be xe. >> that's a good point >> the question does this make you more or less confident in immelt does brand immelt help or hurt you? >> i think it's probably too early -- how about this maybe it doesn't make me more confident all right. it doesn't make me more confident. but he has the ability to rewrite something. scott's point is valid he didn't want to go off on that point >> if this doesn't work for you, politics, politics >> all right news just crossing the morning, yum is buying $200 million of common stock from grubhub. pizza hut's u.s. president will i don't know the board the growth partnership will have pick up and delivery from kfc restaurants. doug kote, the chief marketing champion and director of research at chain sea asset management okay our guest host all morning has been steve grass so. what do you you make here? >> for investors, stick to the plan we have a plan we split between equities and fixedincome so your cushion there. we spread the bets out we are broadly diversified there is a lot going on. what i would say at this point in time do not make any changes to the plans stick to the plans >> the commercial is over. tell me what you did in the last 24 hours what did you do last week given all the rebalancing you two talking about. what did you do in >> tuesday morning i wrote exactly that, an article on stick to the plan what we will do, what the markets are doing there is some good, some bad mainly, the fundament apples are strong, as you know, so -- fundament apples are strong. s a you know re-flation is good inflation that's what happens when you have economic growth what happens is there are non-speculators who need to be shaken out what you are seeing out there, my message is, these speculators are being shaken out it might take a day, a week, a month. but they will. things will furn u turn to normal when interest rates rise, it hits i.p. stocks so this is all a return to normal what is going away is the notion of "new normal." that is on the trash heap just like the new economy in the tech bubble. we are back to normal. that means economic growth and that's good knew so we had a 15 or 20% market last year in our diversified portfolio. so we've had a pull back >> where do you think the mark could ends this year >> for us, it doesn't matter er with fought making a forecast on the one year right now. similar to saying we are basically looking for long-term investment along the way him could vit a pull back, where this gets to correction territory? yes. we believe the market is going to be up yes, we do when we look at this market environment, we look at the fundamentals vs. the liquidity assets it's a strong market 75% of people beat estimates on revenue. that's strong. you are looking at overall growth of 13.4% from earnings on the s&p 500. when you look at the other side the liquidity asset from friday and monday, it was a short-term complex that had a liquidity event. it's name i nicknamed the fear index. >> that will cause people to re-evaluate and possibly cause downward pressure. >> there have been people. they have probably been in error sitting on the side lines with cash for a while, thinking something bad was going to happen, waiting for this grand moment to re-enter the market or at least put more cash to work the only thing i would ask is, have you been doing that this week neither of you said we have been throwing money into the mark. >> well, there is $10 trademark of cash on the side lines. we need to get that in the market, use this as an opportunity to get into the market what i say is don't just pick a sector of large caps or emerging markets, build a broadly diversified portfolio. some are expensive, some are cheap. some are safe and just move in this is an opportunity to buy in low. >> the part for us is people are historically bad in the market because emotions get into placement. >> it's impossible to do the part for us is longer-term cycle. stick to your plan, invest for the long run this is one where there could be volatility in the market stick to your plan don't make short-term moves. >> you had record inflows every single week leading into the correction >> similar to how we saw record outflows in march of 2009. the largest number of our clients said they couldn't take it anymore remember they wound up going to cash saying i'll many is the first 50 or 20% on the upside. >> were they in cash >> they were in cash the six-week run, it was the strongest run in the market. >> keep in mind, we have the best economic backdrop in 30 years, deregulation, lower taxes. this is going to spread. europe is going to have to cut taxes. germany and france already said as much. because wooer the best of the best country in the world. we just cut our prices eb has to, that is pro growth economic >> that is good for the global economy. >> all right cool gentleman, thank you, guys. all right, coming up, jobs in america, a new report this morning from linkedin on who is hiring, who is not it's data president trump has tweeted about in the past. will you see it coming up here first next the dow futures off their low. s&p would lower about 14.5 points things have been so volatile lately, you have to keep it here to see what will happen in the next five minutes. things could change. at the way it has been stay tuned you are watching "squawk box" on cnbc ronoh really?g's going on at schwab. thank you clients? 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>> i'm sorry like places from hartford, connecticut, from providence, places in high tax states to where the other professionals are, so denver, austin, seattle is a rich get richer scenario, where people want to be around -- >> denver is already booming we talk about the housing mark 100 people go to bid on a house. what is going to happen for the trends in those cities and the ones left behind >> you can start to see other cities pick up the slack as places get too expensive san francisco has fallen off as one of the top cities to move to denver is picking up, vegas moved from the number nine to number four in terms of where professionals are moving it's not just casino workers no matter what skills you have >> you are advising jeffrey besos on a q2, given all that you know >> yeah. >> about work force, which cities are hot, cost of living, all of it, you would tell him what >> about win city to pick? >> yes. >> or where? >> i want to know which city, if you are him, which city should he pick, based on what you know? >> if you look at these trends >> yes >> austin looks like a good place, there are already workers there, people with the tech stills i skills you need it's the high growth city. it's not number one the cost of liveing is still relatively low surrounding it my guess is atlanta i bet that's where he ends up is atlanta. >> why is it your physicals show a 13% incareer, but the nationals show a 1% right now? >> ours is gross so what we're looking at is people changing jobs, not net changes. so the bls is look at net changes, people losing and gaining. >> if you add that in, that could make quite a big difference, in other words, we might have created new jobs 13% more than last 84. 10% may have lost theirs for a net of 3 >> i think if you look just on where people are going, one of the things we're trying to measure is people vaiing, hey, i changed jobs and if employers are hiring, that is a pretty big sign of where they're going. absolutely, you want it the net tells a different story. >> our chief economic reporter steve leishman sent me a question to ask you. it's a good one, job bls is up 1.45%. are you measuring 13%. what's with the massive difference in those two numbers? >> you want to underscore the point? >> it's a net. it's a question of net one is looking at also jobs losses, we are just looking at job change we are looking at people changing their profiles saying they've switched jobs. so that's where the government is looking at people who are losing jobs. >> dan, you guys can offer tremendous insight everyone was spooked with wage increases, owners talk about wages going up fors now. do you have any clear insight on how much or how long this is in the tooth and does it go up? does it spike from here? >> it's a great question we are starting to track right now salaries and trying to measure what's going on with salaries nation wide, outside the u.s. and i'm hoping to have more do you that we will have a look at that it's very clear employers have to sweeten the deem whether it's wages, whether it's going overseas or in distressed states, finds people and pull them into your companies employers are doing what we have i wouldn't be surprised if you have employer parades, than military parades >> krein what hartford will do >> hartford is tough chip cutter spent days there looking at all the numbers the number of problems with hartford are that number one there is no down u downtown and 50% of the buildings are tax-free buildings, are hospitals or education places and you can't do anything with those so hartford has no money coming in they can't touch these buildings. employers are saying what's the excitement of being here employers are saying i don't want to be here, you i want to go to denver, you have snowboarding and recreational marijuana. >> coming up when we return, a round-up of this morning,'s big earning numbers, you are watching "squawk box" on cnpc him we are in triple digits in the red. we'll tell you more about that in just a moment take a deeeep breath in... and... exhale... aflac! and a gentle wave-like motion... liberate your spine... aflac! and reach, toes blossoming... not that great at yoga ya but when i slipped a disc, he paid my claim in just one day. so he had your back? 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i have been looking into elect track -- we actually had a guy on recently, remember it was freezing out a month ago -- from the warmingcompany we have been looking at vests and electric socks >> i hope they don't have lithium batteries. >> in minneapolis, it was negative, when i went into that studio it was negative 7 degrees. >> it was negative 14 win walked out of the super bowl, that was either the temperature or it felt like that it was negative 14 one way or the other. >> hey, half fun. the market's getting a huge dose after several sessions. dom chu is with us with the wild swing. >> first of all, i can tell you i own two pieces of clothing that have battery powered fleece mostly for golf. they do work anyway, as we talk about what's happening in the marketplace, not a lot of stocks were out there with regard to market volatility over the course of the last year, we wanted to find some of the stock that had the least volatility there is a number of ways you can measure it we took a simplistic approach to illustrate a point for some traders, they're looking for the swings to be more muted so we looked at the 52-week high and low. the top ends and bottom range edge for the stocks in the russell index. it turns out about 33 stock versus a low to high range within around 20% of the low so not as big as a swing as the others out there among the highlights are names you might know you got the likes of say a big one out there in terms of aig. you got that one up there. that's about skep% from its highs to lows, meaning a 52 week low and 52-week low are 15% from that price pepsico. exxonmobile. 17% as well. u.s. bank 18% and proctor and gamble 18% among the big names, when you look at them over the course of the past year, have had some of the narrowest moves relevant theive to others in the marketplace. when you talk about low volatility, ets stocks, this is one way, programs of looking for yourself as where you think some of the least amount of swings could happen back over to you >> past isn't always prologue. i want one of these battery-packed jack. thank you very much. coming up, global bond yields, we will talk about the ten year and the trends and impact on stocks with the tenure equity futures under pressure. the dow last check down 93 you are watching "squawk box" on cnbc oh, manatees. aka "the sea cow"" oh! there's one. manatees in novelty ts? surprising. what's "come at me bro?" it's something you say to a friend. what's not surprising? how much money matt saved by switching to geico. fifteen minutes could save you fifteen percent or more. i thwell wait. what did you meetthink about her? it's definitely a new idea, but there's no business track record. well, have you seen her work? no. is it good? good? at cognizant, we're helping today's leading banks make better lending decisions with new sources of data- so, multiply that by her followers, speaking engagements, work experience... credit history. that more accurately assess a business' chances of success. this is a good investment. she's a good investment. get ready, because we're helping leading companies see it- and see it through-with digital. welcome back to "squawk box. as we watch futures, let's talk about yields what is 10% ntt future joining us the chief income strategist for j.d. montgomery, scott along with bob michael, j.p. morgan's asset morning fix on set with us welcome to you both. bob, how significant it was we got up to 2.88% in terms of the volatility >> i think it's really important. i think it reflects there is not a lot of good news for the bond market growth is accelerating inflation is picking up. you have tax reform stimulus coming through you may have budget stimulus coming through it will all increase the physical deficit and supply and, oh, by the way, the price insensitive buyer of government bonds for the last nine years are backing away from the mark t. fed the bank of japan >> so it's interesting, you talk about the supply dynamic here. if yields were going up, nothing changed supply/demand wise, it was better economy, that would all be positive. if you talk about yields going up, there is too much supply, it's not as good of a thing, right? >> no, you need the next round of buyers to be willing to step in and absorb the supply right now the central banks have done a pretty good job of controlling the normalization. it's been grad warm. the feds raised rates five times t. ecb is pretty much cutting purchases down to zero but throwing a massive amount of supply onto the mark i think is going to be difficult to absorb. >> you think we are going over 3 '? >> absolutely. >> do you think we are going over 3%? >> i think it's a little less likely first of all, being in philadelphia, we have the super bowl parade outside the window, which is going crazy in that case >> even at 7:00 a.m. >> i wish i was there with you >> our jim cramer is right outside. >> not yet we're on the 20th floor. we are on a technical no man's lands, once we broke that 262 little t. next stop is probably in the 3-to-305 demand there is a lot of ways you can get that yield t. treasury marks, high yield sector one of the major ways some play verse looked to obtain yield is by selling volatility. whether that's equity vol till we saw what that did a couple days ago whether it's fixed income volatility vol is rising sharply in that mark as well that's becoming a less attractive prospect. so some of the demand from previous vol till sellers, particularly if that long yeel curve bumps across, i think we are getting a spurt of demand coming in, probably around that area our other than forecaster has the year significantly lower >> so, robert, that's exactly where i am, where guy is, with how much investment you will see with rates and around the world so low, can it spike much higher everyone is worried about spikes, can they spike that much higher or is there a lid on it? where do you see lids on because of the appetite? >> over the next six months, i think that's true the bank of japan, ecb is printing money, that money is being exported to the u.s. so sure 3/3.5% can hold. this month they are printing 44 million. january last year they were printing $167 billion. by okay, they will be a net contraction. i think 3/3.25 holds, not to the end. >> why do you think they are going in >> 2 to 2.75 percent if i can respond with a little of a riddle. what in the federal reserve came out -- they're certainly not going to do this -- told you they would not exceed that for ten years? probably around 2% regardless of how much central banks are buying or selling. >> is there growth or inflation there? do you think that would be true - >> i'm using that as a parable rather than literally an example of what will happen. >> a literal ariddle and a parae two different things. >> we'll go back to the riddle the overnight interest rates are more powerful than the central banks do on the long end >> all right we'll see, bob looks a little skeptical thank you for joining us >> thank you >> we'll let you get to your parade. when we come back, we'll go to twitter they are soaring they're up over 25% up we will talk to an analyst next. also, though, take a look at futures. while that itself in the green, the mark is in the red though it's not as bad as it was before the dow looks to be off 80 points you are watching "squawk box" right here on cnbc ♪ take off for mexico with expedia. ♪ one click gives you access to discounts on thousands of hotels, cars and things to do. like the papaya playa project for 49% off. ♪ everything you need to go. ♪ expedia. ♪ but through goodt times and bad at t. rowe price we've helped our investors stay confident for over 80 years. call us or your advisor. t. rowe price. invest with confidence. "squawk box" at twitter. we don't get headlines like this twitter, i don't want to say is negative news. they are beating the street in a big way. right now they are up 20%. at one point before break they were up 25%. joining us is victor anthony, internet research analyst. good morning to you. it's good to see you >> good morning. >> you have not historically been a cell phone of twitter >> i had a sell and up graded from a sell to a buy >> what happened here? >> my channel checks were expensive, ad dollars were flowing back to ticket so based on that, i upbraided the stock. i thought actually the o and & piece was positive and it turned positive this quarter. that's why the stock is up 20%. >> what does it say about twitter's operations snap's operations? or is this something where somehow the ad business overall and the economy is so hot that everyone is throwing money at all this stuff >> i'm still cautious with snap. i give them credit for the out-performance. what i was hearing in the december quarter is inventory is so high that advertisers will force facebook to seek placement in other platforms twitter benefitted to that extent as well i think operational efficiencies at twitter ultimately played a role >> is this a meaningful turning.in the your mind >> this is meaning a huge inflex point f.inflexionr twitter. >> it's up >> people have been seeing that the vast majority of analysts who covered stock have not seen it >> in other words, if this is a turn -- let's say the turning point has already happened, how much more room does twitter have to grow if all these things are working if its favor >> the stock price >> yes. >> the stock price 55 at one point. can you look at that as a target to aspire to i think the proven fundamentals. strong ua growth, double digits. inclusion, if they can keep up this profitably over the next several quarters i'm not sure they will or not. >> how much of that is a part of your thesis, though? >> my thesis is return to advertising growth, which happened sustain a double digit dau growth which happened sustain profitability over the next several quarters. that's somewhat squishy. i have to see whether or not that continues it's a material positive that happens in the fourth quarter. you have to wait to see if that continues. >> if i give you 100 grand and can you put it in facebook, snap, twitter, and you can put it or you can put it if google or alpha bet, what do you do >> well, you know, i think, you know, facebook i think is probably the better performing platform out of all of them. >> i'm saying relative to where the mark is, in terms of valuation for all those companies? >> i would probably put 15% in facebook >> aren't you worried about news weeks to that was the headline risk for facebook, this accounts for the lion's share of profitability as far as facebook is concerned >> right. >> while twitter, i think everyone has it wrong. the daus and maus were the focal point. that's not the right thing to look at. if that is the right thing to look at the stock is still a growth, even with the recent growth >> facebook in my opinion, based on all the advertisers i speak to, they're lamering to advertise on facebook t. returns are superior to every other platform that exists that will continue >> i have long twitter and if i gave you 100 grand, how would you split it up among the -- >> i think facebook was the cream of the crop. snap was where everyone thought it was the few kid on the block the cool kid on the block. everyone saw that facebook could be snap really quickly i think twitter could be snap, could be facebook. could be youtube so they should have video, they should have -- they should be the instagram. you should be able turn it on and off. i think twitter is missing the boat on a lot of things. i'm long they should be all those included >> the narrative is completely changed. it went from they can't, they can't, they can. to they are, they are. they are >> right. >> now the question is whether it's sustainable or not. but by so many different metrics that this company just reported, it builds a fundamental case that hasn't been there in the past >> right but that's been occurring all year we saw it happen in the fourth quarter. it's sustainable throughout 2008 you will probably see double digit growth >> that will be an extreme positive i'm not sure that's the same case for snap. >> for twitter >> see i think the business has turned around. i think it's a fundamental turn around for the business. >> thank you, victor >> great to see you. >> coming up, top stories, including the bank of england keeping rates unchanged. take a look at what the pound i doing. equity futures have been all around now they are way off the lows. in fact, the nasdaq would open positively right now thank you, twitter and perhaps some other stocks that play right into that role the equity futures for the dow, is way, at least 100 points off the lowest levels of the morning. we'll be right back on "squawk." index investing for that low? 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>> i think we're in for a little bit of a rougher ride, but nothing has changed fundamentally for the story. it's pro growth, it's pro markets. it's higher equity markets >> don't be cute, people, except for you, you can't help it >> thank you >> great to see you. >> when we come back thank you. cutie pie. the videotape, a look back at this week's wild ride and a look forward to what the tape might predict. stay tuned you are watching "squawk boxon" cnbc t. dow looking off by about 95 points back in a moment . t. about 95 points back in a moment t. dow looking off by ab points back in a moment. t t. do5 points back in a moment. h t. do 95 points back in a moment e t. 95 points back in a moment t. do 95 points back in a moment . dow9 points back in a moment. dow lo5 points back in a moment. it's time for the 'ultimate sleep number event' on the only bed that adjusts on both sides to your ideal comfort, your sleep number setting. does your bed do that? right now, save 50% on the ultimate limited edition bed. ends soon. visit sleepnumber.com fora store near you. that's it. i'm calling kohler about their walk-in bath. nah. not gonna happen. my name is ken. how may i help you? 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[ music playing good morning welcome to "squawk box" right here on cnbc live. the nasdaq at time's square. joe and becky are on assignment. you will be seeing them from the west coast tomorrow morning. our guest host is chief until market analyst at bemo the futures are in the red, not nearly where they were just a couple hours ago the dow looks like it will open off about 70 points. nasdaq off i will call it close to hunch right now s&p 500 up seven points. let's look at europe right now we have been talking lots about oil. there was a little saudi aramco as well. if you want to buy a barrel of crude, wti, can you do it. in the meantime, we have a few earnings reports at this hour. twitter, their shares are surging in a very big way this morning. that stock up over 21% julia boorstin will join us from the west coast. >> reporter: good morning, twitter shares are higher. the company's revenue returning to growth earlier than expected, growing 2% to $732 million for q4 analysts had expected it to shrink wereings aim in 5 cents more than wall street projected as for twitter's all important user numbers, monthly active users came in at 330 million they were flat with the third quarter and up 4% over a year ago quarter. analysts have been looking for the addition of 2.5 million new active users twitter's daily active users grew 12% from a year ago the fifth consecutive dau growth i spoke to twitter's owned and operating business he said the product weeks to, as long as tweets are helping grow engagement, the video consumption on twitter more than doubled in the past year fred segal saying that 2018 will be about investing in their products and sales teams the call is starting right now i am about to jump on that we'll come back to you >> it feels like the high stakes call the shares are up. we'll see. i think it speaks for itself thank you, our julia boorgs stisti boors stin /* /- boorstin. wbs beat forecast by 3%. adjusted quality and pay raises for workers crediting the financial impact of tax reform. its shares up 1.5% after beating bottom line estimates, missing on the top line via com's revenues is impacted by fees and its shares are down 3.5% t. bank of england out with its latest policy statement this morning the pounds is moving higher against the dollar on the news the future rate hikes may be faster and sharper than what was previously anticipated we will see if that is feeding around through global beyond yields >> market continues to rise, mike santelli joins us now with a look back at the wild ride a look back in considering - >> a little forward. who knows? i think really what the big take-away here is after the market gets one of these sharp sudden jolts, this is kind of what happens you have an attempt to have a dramatic low maybe that happened on tuesday morning. i think that's a plausible short-term trading low but you have an emotional and faraj i'm tape afterwards yesterday the market failed at some critical levels and closed weak today i.t. will perhaps make another attempt. here's where we were this time each of the last few days, in terms of futures dow for wide ranges. ponds morning at this time we were down 300 or so. 333 the range for monday as we know was historic, down 1,600 points, 1597 you basically were flat as your high for the day tuesday, and you closed down 1175 tuesday down 600-plus at this hour and you traded in an 1100-point range which some say that was the low. >> i think you make the argument that was the highest foretelling of the rest of it was. that's maybe when it peaked. the patient hasn't gotten an all clear. yesterday it was a little dramatic down almost 200 at this hour again you had that 500-point range during the day closed near the flat line. yes, these are points, not percentages, but when you consider a couple weeks ago, we bought the first day when you had more than a . or 1% hos in 100 trading sessions then we had the first 3% pull back i think what's happened there was, all the traders, human and algorythmic and every other way, how it will basically be bucking around on you. this is also, though, the way it goes when you have one of these nasty sell-offs. it's not just about this exchange-traded note or this volatility derivative. yes, those are factors basically, when the markets kind of assumptions challenged in this way by the market action, itself, this is what happens also, we priced in a ton of good news in jaumpbl everybody said we had to pull back. and we did it if a dramatic way. >> let's bring next whichtiosis at t. rowe price and bemo capital markets. he says the market is in dire need of perspective. expand on that, perspective about what >> good morning, by the way. >> good morning. >> i think what we see now is the double c, condensed craziness. right. for all intents and purposes, since 2009, we have been trying to define what's happening in this mark him right. -- market. right. we are incensed with putting a label on it. monday, tuesday, we were blaming the algorithms, the machines for all intents and purposes, people doubted this market, scott, since 2009. we believe what's happening right now is a product, a product of what has taken almost 20 years to get this thing going. we have moved from fundamental am investing after 2001 to mackerel inclievenl we pushed the analysts away him we pushed away fundamental analysis from the bottoms up we had to figure everything out before re-investing in it. when the mechanisms broke down, like in '07 and '09 and this bull market between 2009 and now, we have the period of condensed craziness on friday, monday, tuesday, we want to know right now what's happening guess what, this is investing. perspective wise is, this has been a pull back, not a correction take a deep breath the fundamental fundamentals of the economy are strong that's why theed a less adolescg of our business, there are a lot of people that don't have experience it's time to be an investor. take a deep breath and look back at how things work on a fundamental basis. >> what do you mean this is a pull back, not a correction? we had a correction. we're in the midst of a correction, aren't we? >> how far are we in heinz in. >> heinz is down 30% >> do you invest in stocks >> i get your point. what has been your correction? >> why fight that battle correction, the 10% thing is a broad rawl of thumb. it's a resetting of reality, didn't we? >> listen, since 2009, this has been all about momentum, fear and emotion. that was condensed craziness the last few days. the pull back had anything to do with fundamentals? nothing the fundamentals of the u.s. stockmarket is not unchanged. >> the rate is higher at an inflation fear after sitting on the lowest interest rates in generations. if that paradigm was going to change, that's a fundamentally different way to look at valuations of a market. >> here's what i'd say, paradigm is a very, very big word to be saying we have not seen inflation in this market for 35 years and we're still waiting for it inflation actually, interest rates are good for stocks. we've forgotten that, inflation rates go up the economy goes up. >> right >> we have been in a cycle that most investors have never seen now. we are headed into traditional cycles leak the 1950s, 1990s, mid-'90s and a lot of investors only in the marketplace for the last ten years have not seen that scott. that itself what's causing this condensd craziness everybody in the market is trying to define this. i'm not trying to define this. i'm trying to make my clients' money. whatever you call it, whatever we need to see markets settle down this is very reminisce septemnt the -- reminismeniniscent of th mid-'90s >> i would just, you know, push back a little bit, brian you can't tell me that every single penny of the 7.5% we went up in january was based. it's condensed craziness >> because people in january will be at inflows. >> you can explain how it happened you can't say upside is fundamental am, downside is irrationality. >> it was irrational people were chasing the stockmarket. i care about three-to-five years. we are so incensed to define the park every day. >> the market was up eight or nine years in part because interest rates were so artificially low because of central banks around the world keeping rates low. >> what do they do we forgot remember we are so worried about macro and fixed income the companies pay off the debt equities are at near time lows free cash flow yields, continue to climb that's why i think we have returned into a warren buffet, peter lynch sometime have you static weights in your portfolios you add on pullbacks and sell on rallies. >> we should get john lenahand, forgive us for carrying on amongst ourselves here your thoughts, related to what you have just heard? >> i think there is a remarkable sense of complacency in the market through all of '17 into '18. we've gone over 400 days without a 5% correction. you see lot of investors were actively shorting volatility even the volatility was at multi-decade lows. i think the bills came due earlier this week. when i would agree that fundamental apples for the market are veryfundamentals for the mark are very strong valuations are historically at high levels. it's relatively inexpensive compared to fixed income when you seen interest rates back up like they have, i think it's a lesson evaluation argue i think over the course of this year, will you see a choppy ride for the market as you have a tug of war and a less positive valuation. >> you want to react >> i will not react to it. i will say valuation as john knows being in the business a long time is not necessarily predictive of future results i think we are headed into a longer time stock market, where you have a number rater and denominator. we have been driven by the numbererater now we're in the denominator we will see earnings and cash sales gree into the multiple that's why you want to be more cyclical and by your tech. >> you said adolescentizing your industry >> i made up a word. >> you think there are too many young people around that don't know anything and don't have experience navigating volatility >> i think these young people that are in the business now learn the business in a very academic sense right. market, oh, by the way, life -- they're not academic you have to live through that, i'm not trying to minimize the people in our business i'm saying, you have to do the work and stop reacting to everybody and everything and stop trying to put a label and find out what exactly is happening today instead, finds out what's going to happen tomorrow, that itself the job. >> nobody would or should disagree gree with your thesis on the market. fundamental amial fundamentally, the earnings picture will be good it's all relative to where interest rates go. yes, inflation at some level is good but inflation out of control, rates running away too far too fast, that's a problem for the stock market right? >> it is a problem for the stock markets, doug, or, scott, sorry, but we're so focused on inflation running out of control to get the headline. we got a long ways to go before we get to that headline. a long ways to go. this has been again the most doubted market in the history of any mampblths mom and pop american in lincoln, nebraska are not playing along with this. there is still fixed income. bonds are the risk asset people aren't understanding that we in the investment world have to provide them -- >> people have been saying noun stop, bond bubble, bond bubble, for the last years >> most aren't acting on that, mom and pop sell things -- >> the inflows though, every week, record low cash levels at all the brokers. it's not as if it's a mystery to i think mom and pop that the market did well last year, you had to jump up honestly, i think the tax cut package and the good fundamentals in everyone's face had people capitulateing on the bullish side it was very intuitive. it wasn't, you have to look at what the feds will do and everything else. >> more passion. >> you know the key thing is, i think people have forgotten you actually have to talk to clients. sit down and talk with them. sit down across the table. you get the real story. >> we'll talk to you more. will you be here the next story? >> i might be, i don't know, after this >> it's good >> we will replace with you something younger, of course >> i don't know what's in the coffee >> good old fashioned cnbc coffee. >> i want some of that coming up, the winkle boss twins and later has this market volatility had any impact on companies deciding to go public? that's coming up at 8:20 eastern time stay euned you are watching "squawk" here on cnbc. what is the power of pacific? it's life insurance and retirement solutions to help you reach your goals. kwaux is sponsor "squawk box" is sponsored by - it's protection for generations of families, and 150 years of strength and stability. and when you're able to harness all of that, that's the power of pacific. ask a financial advisor about pacific life. flexshares etfs are built around the way investors think. with objectives like building capital for the future, managing portfolio risk and liquidity and generating income. that's real etf innovation. flexshares. built by investors, for investors. before investing consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully. you know what's not awesome? gig-speed internet. when only certain people can get it. let's fix that. let's give this guy gig- really? and these kids, and these guys, him, ah. oh hello. that lady, these houses! yes, yes and yes. and don't forget about them. uh huh, sure. still yes! xfinity delivers gig speed to more homes than anyone. now you can get it, too. welcome to the party. welcome back to "squawk box. this morning the winkle boss twins are fighting back against j.p. morgan and cnbc jamie dime on tyler winklevoss tez some people were too old to understand crypto currency. tyler said, quote, as you get older, your brain loses elas tisity and you get whetted to the framework you have they are credited with becoming the first bitcoin billion fairs. i think when it was up a probably over 12, 15,000, it may be up to 19,000. take a look, bitcoins are at least on sale relative to those prices, you can buy it for $8400. you could have bought it about $6,000 bucks last week maybe, two days ago >> yesterday >> yesterday when we return, we'll talk about that and more. the market whiplash and the impact on the ipo pipe line. we will talk to the president of the nasdaq nelson griggs meantime, we are in the red, before things have turned around and the nasdaq is actually up. we are back in just a moment. . welcome back to "squawk box" this morning have the market jitters have any impact on the market going public nelson griggs is the president of the nasdaq stock exchange, which we should mention we're here how are you doing? >> they're great >> a landlord. >> yeah. >> that means i have to be nice or not really? >> not nice. long-time lease him ownership. >> so help us with this very question has this mattered at all >> it has. if i was here a week ago, and said we were set up for a really terrific at least three or four months of the year, this was a pretty heavy calendar week wednesday the deals were in the eye of the storm they did not price so the two dealings did push six or seven deals did price most are within range. tomorrow there should be anything between two or three more so i think that does indicate institutions are willing to invest in ipos i think it's a positive outcome last night for sure. >> how bad volatility is your enmy? >> they have to impact three things, one is the last crop of ipos, they're compared to, do well you look at the public comps, where are they trading what kind of discount will the companycake take off that and volatility if you were on the road all last week, you are talking to investors for five days, you have a tough day on friday and didn't wake up to mopped's news, it's a pretty tough environment. >> that's the immediate impact what about the pipeline? these things are planned out far, far in advance. this week things that might be happening three, four five months from now, how has that shifted? >> i think everyone is digesting that right now you will have a slow next week with president's day in there. after that march and april are tee'd up to get a strong pipeline a lot of tech deals to go out. we will get a gauge of that. the conversation with the bankers is in the next few weeks. >> how is spotify doing a direct listing. where are those big companies coming down the pike >> everyone focuses on the big companies, tech overall. last year we had 30 odd tech deals. this year we think we will have at least 40 tech deals t. unicorns will get out. you will start to see only deals you have been waiting for get out this year. then the big ones will be -- >> as we know it's a whole panel in davos about gentleman public and the challenges, their wire company staying private too long do you view that as a niche related to the biggest silicon valley companies or is it something you think about? >> we think about eight lot. it's deficit e difficulted towards the large cap companies on the west coast. last year was by far our busiest year, this first month year was 5 x last year's january. so there is a ton of private access to capital. that's one of the reason they are staying private. it's a good time line. >> good to see you why don't you go upstairs to an office >> due to the mark opening, we're excited. >> thank you >> okay. we should also just mention that you moved your headquarters to downtown >> good reaction >> we announced we will move to headquarters overtime. we're excited. >> when we come back the weekly jobless claims on deck we will bring you those numbers. here's the future's total turn around, s&ps up 20 right now we'll be right back. hey, need fast heartburn relief? try cool mint zantac. it releases a cooling sensation in your mouth and throat. zantac works in as little as 30 minutes. nexium can take 24 hours. try cool mint zantac. no pill relieves heartburn faster. (sighs) i hate missing out missing out after hours. not anymore, td ameritrade lets you trade select securities 24 hours a day, five days a week. that's amazing. it's a pretty big deal. so i can trade all night long? ♪ ♪ all night long... is that lionel richie? let's reopen the market. mr. richie, would you ring the 24/5 bell? sure can, jim. ♪ trade 24/5, only with td ameritrade. to keep our community safe. before you do any project big or small, pg&e will come out and mark your gas and electric lines so you don't hit them when you dig. call 811 before you dig, and make sure that you and your neighbors are safe. welcome back to "squawk box. rick santelli here live on the floor of the cme group we are waiting for continuous jobless claims and 221,000 wow! these numbers are low based on history. >> that is down 9,000 from an unrevised 220,000 last week. welcome to the early 1970s, i guess. it's always good news, of course, other aspects of the economy are doing well as we've seen over the last couple of days if we look at the yields, 2.85 pretty much on top of the closing yield range. highest closing yields going back to january of 2014. we have 16 billion 30-year bonds at 100 eastern the 3s and 10s thus far have been a bit on the soft side dollar index finally popped over 90, but it's pretty much unchanged. i expect another exciting session for all markets. andrew, back to you. >> thank you, rickster i want to go over to steve leishman, who is here looking very studious at your computer >> i'm trying to figure out. rick is right, it's early '70s/late '60s there is a ratio that tells you about the percent of total covered employment >> that puts it in a little more perspective. >> do you remember much about the '60s >> no, i was a young man back then, a young toddler. >> carry on. >> what happened in the '60s is what happened in the '70 for me. the point being that you are down around 1.4 maybe even 1.3%, a very, very low number. but you guy, you were talking about interest rates rick was talking about interest rates. they've kicked up into the 2iation. i want to talk about supply. we talked about the supply coming from the government i want to talk about the supply coming from the fed. i spent time crunching some data, what it means with the balance sheet decline. first i want to show you a chart that doesn't show anything >> okay. >> take a look at the lines right. in there, if you can peer in the most right-happened of that chart, you will see a very slight dip >> that itself the first initial wave of the federal reserve's program to reduce its balance sheet. and this will ramp up to $600 billion a year now what i did in the next chart, i've modemed in, what will happen this year. will you go down by from 4.4 trillion can you see the right part down a 4 then the next year it ramps up to the total that they will be doing each year. trillion 4 and 6 is 1 it's a trillion dollars they will have by the ended of 2019 this to me is some of what the bond market is bracing for when it comes to supply trying to figure in, not will i be a better buyer of bond, but scott or the guy next to me. how will that factor in. the additional supply from the ed fed not buying, the additional supply from the federal government you tell me you had unison earlier today what will china do they've made some noises they still have a massive inflow of dollars is there they will shoot themselves in the foot. >> there is no better place for them to go i think that's right >> if they sell and it harms the value of their holdings, it's going to push down the value of their own holdings so i don't see there is anything they can do than poke us in the eye a bit. >> the only slight tick in that argument, kelly, i would say is this idea that if europe comes back and the european market gets a little bit more stable. then taking euro debt as an option for foreign currency reserves becomes a little bit more palatable i think again only at the margin just some stats on this that $400 billion that the fed will wind off this year is 2.7% of the public debt outstanding. >> that wraps up to around 4% next year. it's a factor. and this is part to have to me the your honor certainty about where we get to in the bond yield, that reflects back on uncertainty about where the right level of stocks is >> and by the way, i mean, to talk about any number as a percent annual of total outstanding is itself a huge number this is the fed supply coming on to market, on top of people are talking about the treasury issuance, so these were some big numbers. >> we have taken down a lot of debt before. when we sold, we saw a lot of debt if 2010, 2011 the market was able to take it down there will be buyers for this debt we don't know what price >> stick around. let's get back to our guest host for this hour, brian belski. i want to re-visit this conversation we were having before if which you seem to august u suggest -- maybe these were your words exactly -- that a lot of investors don't understand the market, don't understand what's happening now, there has been a quote at les exhibit-izati exhibit-"---ed adolescent-izati and rou can you go down 16 points in a matter of minutes and think that everything is on the level and that's just okay >> well, thanks for allowing me to talk about this again thank god i'm not twitter or anything, these comments are blowing up on my e-mail, i'm getting texts because i offended a generation i didn't offend a generation i was young, too, believe it or not. when i got into the business, i was fortunate to have great mentors. i believe it's societal not to listen anymore we just go do. i think a part of leadership and life is listening and learning i think a part of what's happened not only societally, but in our business, we do, just act. with respect to these things happening, let's call it about in the break rage against machines we have become too dependent on formal laic-type things. -- formulaic-type thing. we need to get back to bare bones investing. allowing us to invest and take it away from machines. >> the genie is out of the bottle it ain't never coming back >> it's difficult to say it's different this time. there is a good chance we kind of go full circle and come back to bare bones investing again. i bloo eb that >> you suggest almost people are unfairly taking pot shotsed a your industry. i mean, you know, your industry, so to speak, is the ones that coming up with these products to either, you know, get people to take on leverage or increase this or that >> won't the market -- >> people are losing money because of the algos and the computer trading it should go away by itself. >> here's what i said, performance begets performance what we've seen in the last few years is active performance and active management is outperforming indexes and things like that. this guess what, it comes back to investing, doing your jobs, finding portfolios again i have to firmly believe that. okay what's happened in the last 20 years? we don't trust financial service. we don't trust corporate america. that's what has typically driven this momentum-fueled environment. now we're in the beginning stages of transitioning back to fundamentals, where valuations where flat and earnings sands sales kark work. people probably don't understand that quality was the number one factor in terms of fundamental factors that have driven the mark last year, what has quality got? it's return on equity, run on invest of capitals free cash flow yields. we are missing the forest through the trees because we're missing on these flashes we need to get back into good old fagsd investing? >> what do you think about the bonds this year? i'm thinking about that. what steve is saying does it ma itself? is eight thing where it seems it will matter? the market is there to soak it up we've talked about for years, there has been so much demand for treasuries our guests earlier says he thinks it will ends at two and a quarter simply because people buy all of these riffs >> i think would talk about 2%, 4%, it will probably be somewhere in between, common sense. we had a 36-year bopped fixed moment in bonds. equity still you may say these infos, people still down trust equities so what will end up happening longer term, we believe, is the slow unwind of these bond positions, it took 36 years to get here this will take some time there will be a marginal buyer down the line with respect to looking at yield that's why we believe that equity income will be so important going forward. that's why dividend growth from a global perspective, especially north america is a great place to be. >> people were just starting to trust equities again we mentioned these inflows the most hated rally was finally getting some love. then all hell broke loose in a couple of days things traded in ways they shouldn't have traded. >> at least the velocity of that trade. they are once again sitting back why should i put my money in the market if this is what's going to happen? if i'm finally believing in the number numb fundamental story that brian belski lays out, if i can go poof in a day is a problem >> how do you steer faith? what is faith in our business? fundamentals the fundamentals of the stockmarket is in the best position they reason in a long time equities are not the place to be if you look a three years, five years, have you to be there. >> you implied because of higher interest rates companies will feel pressure to raise dividends. >> i think that's going to be a part of it >> are there sectors that you are looking at that you think are candidates or companies that are candidates for raising those dividends where you might enjoy a little bit of either protection or at least compensation from these higher rates? >> financials. financials, financials then, technology look at apple, google, microsoft and the dividend growth. okay over the next one-to-three years, it's financials and tech in terms of accelerated growth american companies are at or near all-time lows in terms of payout ratios. >> if i go back and do a history of higher interest rates, will i see rise in dividends go go along with that? >> here's what you will see, xa ens that grow their dividend actually outperform in a rising rate environment the more sim spliftic your yield is, you need to find people that will grow it over too time >> news you are use. remember, we had dow futures down about 200 points earlier. they made a big comeback last check, we were slightly positive yesterday, a 500 point swing we'll see what happens, nasdaq up 27. dow up 17. s&p up 3 we will talk volatility and ckmeet strategy when we co ba it's all yours. wow! record time. at cognizant, we're helping today's leading life sciences companies go beyond developing prescriptions to offering subscriptions with personalized, real-time advice for life-long, healthy living. honey? you almost done? nope. get ready, because we're helping leading companies see it- and see it through-with digital. . welcome back to "squawk box. triple digits. things have turned around, gotten materially better the dow is off only 16 points, nasdaq is up in a big way, 20 points the s&p 5 he up looking to open, that's significantly better than where we were before joining us is peter. the global chief market strategist and head of equity. good morning they did that in phonetics for me >> they did it last time for me. >> it doesn't help me. the phonetics doesn't help me. it's the opposite. it's like checkers >> have you been listening to this guy, by the way >> i have, with interest >> has he upset all your millennials? >> look, i subscribe to your catch, i lived through the financial crisis i was running a hedge fund it was hairy i remember my kid was born near the low of the market in 2008. i remember being in the hospital watching you know things unravel. i think, we are moving into a different paradigm now with rates i think starting to rise and really this is about the bull market and rates and the changing mindset the cost of capital will increase >> real quickly on this. you go back, look at the last cycle and think of the last decades, rising rates have not stopped markets. they usually happen at the same time >> 2006, 2007, the whole way through, people say it's a different paradie i get the theory, what the stockmarket should be worth. is that actually how things will play out what does it mean to you >> it takes time it doesn't happen overnight. i have been talking about this rate share we have gotten it. we have been looking at two year rates falls specifically and the two-year german bond as well volatility in both of those bonds picked up early in the year telling us global financial positions were starting to tighten. i agree with etching they said the other part is the ecb will not be as aggressive bike bonds, bond yields have been anchoring treasury yields. they're now at about 77 basis points >> that correlation between bond yields and treasuries is an important point that people don't talk about enough in my view it's not just about fed policy, it's ecb policy. >> okay. there is a little short-term drama. >> yeah. >> for the next couple of years, will we be talking act rising interest rates with that intact like we've seen in the past? >> the reason we will be, it will be very slow, central banks have to be extremely measured so they don't create too many shocks we've had qe for a london typg e normally functioning markets need that to go away at some point. >> so what do you think of that? >> i think it's very good. because at the end of the day, 2005, 2006, 2007, the market is different, you think of percentages of multi-diversity in companies the amount of debt paid off thmpgs that qe and low interest rates and cash flow has been built. also, think of all the margin expansion we've seen and how corporate america has been become even more conservative versus 2005, 2006, 2007. so the game of under promise, over deliver earnings growth. i think we will come into a period where earnings surprise will become important again. so we're in 100% agreement >> market expansion is interesting. eps margins have expanded. they're as robust as they have ever been. in you look at ebitda margins, they aren't. the reasons is low interest costs. >> you have that coming up the point is, is it so good it's peaking and coming down? do you think we've put in the bottom on that tuesday turn around or are we in that process? >> these sorts of tactical calls are difficult. obviously for everyone >> i won't ask it. >> we did come out with a note why we did get tactically bull official so i own that. one of the reasons we did that, market structure has changed not only have the other things changed. market structure has changed what i mean by that is we have been in a low yield, the word blame is a word, i blame it on central banks, people have stretched for yields, how have they done so in over writing and under writing their portfolios we saw that rally early in the year that i believe was catalyzed in part by part in earnings, but it was dragged up by call over writers forced to buy shares it's a little complicated. >> i follow you. >> buy shares into their short call positions i think we had an exacerbated effect on the down side, in order to stay delta neutral, under writers were forced to sell into that there was a concentration between 2600 and 2700 when we blew through that, we got tactically bullish that was an important reason for the volatility we saw down there in our view. >> delta neutral. >> lovepeter, thank you very mu. jim cramer joins us live from the new york stock exchange. we'll get his take on today's top stories and look at futures right now. they've been all over the map this morning and here's the picture now. nasdaq would open higher by 15, twitter had great earnings this morning. other tech stocks are on the move higher as well and dow would open lower by 15 s&p is marmg nalginally to the . we're back after this. investmet professionals, let's measure up. cfa institute. transparency. expertise. these are the building blocks enduring relationships are built on. as investment management professionals, let's measure up. cfa institute. we are back, check out shares of twitter this morning those shares are trading at the highest level since 2015 a stunning gain this morning of 25%, the company posting its first quarterly net profit record ebita margins clearly wall street likes this story for a stock that has run up into the number is continuing this morning let's get down to the new york stock exchange jim cramer joins us now. i thought for a minute you might be at the parade today, forgive me. >> we're shorthanded here. >> twitter -- >> wow look, twitter was amazing and even better when you realize -- take out tired night football or telepart and you see they really grew 7%. totally investable asset this is now as opposed to the vix being an asset, you have this sector of the market which is social media and advertisers love it and it's impacting everybody. the numbers are way up this is the inflection quarter and it's really incredible because it comes at a time when viacom and cbs, people were working about fox broadcast, which wasn't that bad. this is the preferred way to reach, yes, the millennials. >> are we going to calm down in the market >> not yet we have to wipe out all of these people in the instrument that's no one really understood, including people in them great discussion you guys are doing. i'm listening to brian and saw him in minneapolis for the pats loss and i hear you scott, i do think you guys haven't addressed the stock shortage and sure amount of stock that's been bought back versus the bond surplus and i think they are going to trade off each other and i wish we had all jokers out trying to settle everything at 401. that's what happened last night in the 17 minutes before the close. >> real quick, wanted to get your thoughts on tesla the wall street journal said today more cars it sells, the worse its margins become and then goes into a whole detail about how tesla included customer deposits for the planned truck and roadster and operating cash flow is deceiving because the deposits aren't drawn from current operations. how do you look at these numbers at all anymore >> you look at them like this. he launched a successful rocket the day before, fabulous timing versus this quarter and the first question on the comps call, first of all let's just say the rocket is great. this is a great misdirection play and everyone thought he was going for the running and everyone is confused but in the end musk is -- he's david blade and blade is very good have you ever seen blain i was at a blain five person table where he had a card that appeared underneath my watch this guy is better than blain. dornboss, fabulous card people -- >> the problem is when you talk about him as david blain, he does tricks. >> that's kind of -- >> i know, but blain per share, this guy is anawesome blain pe share. awesome. >> we've got to go seat you in a few minutes. >> not a problem. >> we're back in just a moment gglobal bonds, and high-dividend strategies. sure, these are investments. but they're not what people really invest in. what people really invest in, is what they hope to get out of life. but helping them get there takes a pure focus. because when you invest their money without distraction, hidden agenda or competing interests, something wonderful can happen. they might just get what they want out of life, and maybe even more. 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 e-commerce 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. we want to thank a very passionate guest host this morning. you had a real -- we'll see -- >> don't confuse conviction with callous, we just have conviction, we're not an angry man, we love our job and blessed and fortunate to do our job and want to be able to communicate to investors >> take a look by the way -- >> you have turned -- with that passion you turned the markets around dow looks like it's going to open up by the way by 22 points higher and nasdaq would open 16 points higher and s&p 500 about three points higher and that is after we are triple digits in the red a couple of hours ago. thank you for hanging out. make sure you join us tomorrow "squawk on the street" begins right now. ♪ good morning, i'm david faber, along with jim cramer carl quintanilla is on assignment, he made it, at the winter olympics in pyeongchang he's not in the olympics but in south korea and will join us tomorrow ahead of the opening ceremonies very exciting. >> it is exciting. it is. >> i didn't get the

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