Transcripts For CNBC Squawk On The Street 20150305

Tenyear continues to inch higher, now above 2. 11. The markets, two losing sessions in a row, but stocks edging higheren its a big day for the ecb, detailing stimulus plan. Draghi is speaking now. Costco beat the street and samestore sales stronger than expect. Shares are up in premarket. 21 billion zeal in biotech. Abbvie wins the war but the stock takes a dive. Jobless claims coming in higher than expected as more americans filed claims for unemployment benefits. Mario draghi speaking now in cypress, detailing the ecbs plan for stimulus. Euro strengthening after hitting 11year lows to 1. 10 but raising gdp for this year, i think, to 1. 5, right . 1. 9 and 1. 5 for next year . Its funny to see this is something that theyve been talking about, and now, as ive been saying, plants growing in europe. No longer green chutes but deflation versus inflation. Need so get some inflation, thats their plan. Theyll do. I also think this is going to bring the euro down to a dollar. You know theres just no reason you can own their paper, these rates are crazy. Thats not an insignificant thing to say were going to parody. The way people 1. 28. Wow, 1. 28. Could be going to 1. 10. There we are. Now going to a buck have you seen yield . How could you own those with any consciousness if you are a if youre a fiduciary there, i think you have to sell those bonds to the ecb and buy our bonds. Of course you have to buy dollars first. Multinationals only 15 of the s p, Something Like that. But i want to look at guys selling europe because if youre right, its not Getting Better. No. Its getting worse. You have to accept the fact this is about trade work. But we dont walk abouttalk about. We accept the fact europe does what it wants. This is a trade war. Amazing. Well hear more about not just the bondbuying program but also developments regarding greece. Of course we know they stayed pat though german factory orders were a disappointment this morning. China target 7 for the year jim. China, look china, i just think these numbers i dont trust then i dont think theyre doing seven, i think less than seven. I dont think well ever really know. Im watching joy global trade down today its a coal company with coal miner, use equipment and numbers are down dramatically. Thats a proxy, ive always felt for china. The chinea slowing is going to be hidden for us but its not good. And europe has to pick up because 25 of exports go to europe. So theres a lot of entwined world, baltic freight up but a couple of a sliver. So i just i dont trust china one bit. Claim at 320. Last was at 313. The 275s are a thing of the past for now. Well weve given up 5k 2100. 18,000 at risk. Transports new high since november. Were pausing. Were pausing. Three companies now, of course unfair to talk about the three best companies, but maybe they are. We have l brands finest apparel company, kroger by far the greatest Grocery Store and costco costco, multifunction. All three had amazing february numbers which i didnt think would happen but were dealing with best of the best. Krogers comps up six, amazing. Thats a record high for kr today. They are so good. I was in i took a big side trip, went out of my way to go to fred meyer recently and they are revolutionary in what theyre doing. Private label, much more attractive than the regular organic and natural mixed in directly with each of the offerings. A lot of package free product for those who believe theres too much plastic. And fiber liner board used. It is no secret why they are the best. Because they are without a doubt, the most forwardlooking Supermarket Chain in the country. I may include whole foods, thats how good it is. 6 comps, unbelievable for a Supermarket Chain. Back to gasoline prices which of course may enable people to buy more at supermarket, and oil prices, yesterday, sort of a hard day to figure out what was going on. Early in the day, of course, the numbers on supplies. Glut. Glut. We had Morgan Brennan in cushing, you and i talked about a few weeks ago, the idea cushing will get filled up and what will that mean . Do you have to start selling oil and therefore the market price starts to fall . Are we reading that correctly, jim. If theres a price war between canadian crude and mexican crude. The canadian crude turns out didnt this need this keystone because end bridge provided a good pipeline. Theres a war between those two. Mexicans cant afford to lose the market share. You have a huge glut. I think Rex Tillerson is certainly a smarter man about the short term than anybody else help was quite gloop gloomy i felt. Tillerson, exxon if you missed it says 55 on brent for through 2017. Heres Rex Tillerson with becky earlier this morning. People should be prepared for some more volatility in this market. As i made a comment to someone about the storage volumes when they were building a couple of months ago i said what goes into storage must come out of storage. I think there is the potential for there to be further pressure on the market for a period of time and i think people kind of need to settle in for what is likely to be a bit of a volatile time and i think need to settle in for what may be volatile around this level were at. Good comments. At the investor day, he said prices will wallow around here. Thats why an tarot comes to market a buyer at the high with a lot of shares today. Offer for incan na the most egregious in buying high 85 million shares priced today, in order to be able to shore up the balance sheet. 11. 5 million. Look tillersons telling you these Companies Need to raise capital. They are. A lot dont want to get in trouble with revolvers. You saw a fire in a refinery but dave cote ceo of honeywell, best chemicals to make this dirty oil so to speak in clean gasoline, says refineries are running 24 7 which is dangerous. Refineries need down time. They cannot be running 24 7 but they have to because so much oil coming in. First 1 4er production well above stockpiles 440 Million Barrels highest in 80 years . They could turn venezuela could go under because of this. Venezuela is priced out of the market. Nigeria long since priced out of market. Mexico desperate for the cash flow from us. Its going to come down to the fact that canadian crude, we thought keystone was the key. No. I mean these companies knew that obamas going to reject it. Theyve been building for years. There is another pipeline that goes to cushing. Enbridge. Theyre smart guys. Theyre like are you kidding me . President obama . He once sold they all knew i dont know who in the republican party, but canadians were very smart. They knew obama would reject it and knew it in 2012. So they were well prepared and thats why you dont need cree stone. Costco, better than expected earnings helps by cash benefits. The profit of 125 per share adjusted for the tax wind field. Revenue a slight miss. Samestore sales at 8 once you take out gas and currency. February, strong plus four. Wall street journal has a column that says thursdays results this morning poe potential to disappoint. Costcos not priced much more originally they did have a dividend, this number 8 extraordinary. February given the shutin of america extraordinary. Costcos on fire. A constant reminder that American Express should have found some way to do that deal because costcos expanding everywhere. Stocks up 26 in a year. Seems like every other day you lament having sold too soon. Stupid as wood. I was one of the classic mistakes, not unlike owning abbvie, which is proving to be a challenging thing. Challenge like Rex Tillerson said volatility that means going down. Challenging means youre an idiot. Interesting to note walmarts decision to raise wages for workers and costco has always been the poster child four high wages if you will. Right. And one of the things that jim senegal said to me, not only do they pay but have the best benefit package. They succeed. No turnover. A third of the companys costs Typical Company like a walmart goes to training people. You do not need to train people when theres no better place to work. And costcos tremendous hire. Always the same people when you get the crab legs or eat free samples. Im always in shock that they could raise price, not unlike prime, amazon price, raise price for the card and no one balks . Journal has a nice statistic. Average Household Income in the country is 68 grand, give or take 100 or so. Average household of costco customer, 91. A lot of bmws. I think this is a juggernaut and understood natural and organic. Came in very hard. Food is not that great a category. Best buy yesterday said two days ago, said televisions are good. Costcos giving away tvs. Maybe getting more profit on them. Look, bet against costco betting against america, Warren Buffetts view of america. Nice view. He continues to say it. Well if youre born in the country, youve already won the lottery. How many people want to willingly live in the United States . Theres a couple unfortunately a lot of corporations but otherwise not many people. Good point. Tax motivation. And there its a mail drop lets not forget. Theyre not moving to ireland. Theyre saying hi to ireland. Abbvie extremely busy. Well be talking about coming up. They decided to spend money weve got to talk about it. We will. Take a commercial break first, though. Spending money. All right. Excited to talk about it now. Well talk about that. Also the ceo of priceline, Darren Huston, stocks on a tear up 20 in the last month. Consolidation in travel sites. Futures, we have moved out of the red this morning though a drop today would be the first threeday drop for both the dow and the nasdaq since january 9th through the 15th. Were back in a minute. Theres a difference when you trade with fidelity. One you wont find anywhere else. Onesecond trade execution. Guaranteed. Did you see it . In one second, he made a trade we looked for the best price and the trade went through. Do the other guys guarantee that . Didnt think so. Open an account and find more of the expertise you need to be a better investor. Abbvie in a deal to buy pharmacyclics for 21 billion in cash and stock. A deal worth 261. 25 to shareholders of pharmacyclics, including the companys ceo who owns over 20 of the company and receive all of his consideration in stock. It is a huge price, certainly, a premium, when you think about it before pharmacyclics stock started to run up on some reports that it was in play of enormous proportions. The deal wont be accrete into revenue to earnings until 2017 for abbvie. They are moving in to a company that has a key therapy for cancer, jim, that many believe will represent a very large sales total eventually because of its ability to be combined with other therapies. Its very low side effect profile. And, therefore, you can work with a lot of different drugs to fight various cancers. I dont know what the number is but ever since gilead paid enormous number for a company with 90 employees, this company has 625 employees. You have seen enormous numbers being paid. Abbvie shares down, lack of accretion until 2017 worrisome to some shareholders. Price insane. When you say insane why do you believe that . Insane because the stock was up 88 already the year going into today. I think imbrovica, could be 6 billion, 7 billion. Only get 50 because they have it with j j. It shows me that abbvies much more worried about the humira patent expirration or the bio competition. They had to make the move. Theyre not done. I believe they will make another move. They are willing to pay 48 billion for shire. Abbvies desperate. They have do this deal. As humira goes away for them in terms of major largest selling drug in the world. I want to comment on the way that reporting is done in this country, im going to say it i know this is selfpromotional for my partner, but everyone three major outlets said it was a done deal with j j. No one could confirm that i know my end that j j was doing this deal. Its embarrassing to pick up papers and say j j paid x. Thank you for not breaking stories, maybe one day people will apologize or correct themselves who said this. J j was not going to do this because gorse ski does not face the expirations, but not desperate like abbvie which is not going to make much off of hep c. To be fair they will of course, take in 50 of the sales of this of revenues of this drug. Got to hope it works for other they believe there will be other challenges. They had 100 of whats away from multiple from blood cancer. Johnson and johnson love pharmacyclics. Its a surprise. They were there. They were there. This is a situation, we dont see too often, where the gentleman i was discussing, mr. Dugan, said its time for me to sell this company. And so they went out to the marketplace, this is according to a number of different sources familiar with what happened and j j was there, and abbvie was there, and there was one other name, not novartis. Can i make one up like everybody else . No. That was also competing and it came down price. Abbvie was willing to pay the highest price. I dont want people to think j j was not interested. They were very interested. J j before it ran up would have liked it. I know privately they love the drug. You mentioned 2017. Yes. This will be good in 2017 because otherwise abbvies multiple will shrinking. Short term is bad, longer term you should feel better they have a great franchise. The clock was ticking. Abbvie seems to trying to position themselves perhaps as bristolmyers. Exactly. Major pharma but key you said it wrong but i agree. First of all its bristolmyers. You saw the lung cancer extension. Bristolmyers rerated as biotech. Abbvie wants to dot same thing. In 2015 bad. 2016, bad. 2017 you should start feeling better. I like the title of bernstein bernsteins report. Do two halves make a whole . Who cares, take the money. Dugan, an incredible story. Comes into the company owns the stock at a buck. A buck. The stock was a buck. One dollar. Another guy i just feel tremendously jealous of. At the very moment. Unbecoming, my mother would say. A dollar basis. Thats pretty good. Pretty good. Also by the way, first five days of march, 54 billion in m a announced in the first five days of the month. Its back. Theres another 50 billion announced by the newspapers that didnt have this. True. By the way, in this case not anything about inversions. Nobody who inverted is buying. Nobodys buying to invert. This is for the reasons of lets get a hold of a drug that we believe is going to be has great growth. Had to do it for 2017. Until then pain. Its the house of pain. Jims mad dash as we count down to the opening bell. One more look at premarket. Big m a deal ecb raising gdp guidance. More squawk on the street. [announcer ] what if one stalk of broccoli could protect you from cancer . What if one push up could prevent Heart Disease . [man grunts] one wishful thinking, right . But there is one step you can take to help prevent another serious disease pneumococcal pneumonia. One dose of the prevnar 13® vaccine can help protect you. From pneumococcal pneumonia, an illness that can cause coughing, chest pain difficulty breathing and may even put you in the hospital. 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All right. Its a thursday. Seven minutes until the opening bell. Im officially done with winter. Absolutely. But i see a good moon rising from allentown. Want to know how to make an acquisition, make little acquisitions over and over. 2. 3 billion. Its got a terrific Critical Care unit respiratory unit adds to pain franchise and radiology franchise. The stock with acquisitions has done better and better conservative people. Not spending their darn fool heads off and its a great company. People didnt like the acquisition for a drug company. There were firms shorting a company that they own that they bought. Right. Right with the key therapy they had that been around since the 50s. Its a home run. No reason to doubt. Really. Fabulous for them. All right. Now we want to move on l brands leslie westfords company this company had an unbelievable february. They did 6 comps. Blowout i was looking for 4. 8, by the way. The blowout one, victorias secret, 7 . And i was looking for 4. 8. David i turn to you, why are those samestore sales so much better victorias secret. It is victorias secret. Why . Youre asking me. I am asking you. Marketing, its very effective. Ive never been to one. Largely lipstick . Cosmetics . No. As far as im aware. I wouldnt know either. Catalog delivered to my home. Oh you still get the comes in the mail. You get the paper one . Amazing juggernaut sells womens lingerie. Extraordinary publicity. And this is the best franchise in the mall. This company is the best mall retailer. Amazing how these guys can continually reinvent themselves because, you know limited had hit difficult patches along the way. Thats exactly what leslies been able to do over and over again. Ply hat is off to him. He may be the most unsung Great American retailer and a charitable man. You go to Columbus Ohio youd be surprised. Leslie wexner has done more to help a city than anyone i know. Watching the limited and more when the opening bell rings a few minutes from now. 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Why are we so committed to keeping you connected . Why combine performance with a conscience . Why innovate for a future without accidents . Why do any of it . Why do all of it . Because if it matters to you its everything to us. The s60 sedan. From volvo. Lease the wellequipped volvo s60 today. Visit your local volvo showroom for details. At ally bank no branches equals great rates. Its a fact. Kind of like shopping hungry equals overshopping. Youre watching cnbcs squawk on the street, live from the Financial Capital of the world. Opening bell in 90 seconds on thursday. Ecb meeting going on now. We continue to watch the news from around the world regarding chinas growth targets. Jim mentions comps at costco and limit the brands. Also comps at dunkin, goldman believes, are going to get better as they up it to a buy. One of those lower the bar and now can beat stories. Dunkins a disappoint month and i thought the goldman call will have residence, comparisons get easier. Targets go 47 to 54. 19 upside. Coverage universe 1 upside. Kcup, i have been critical of them versus starbucks. Ive been saying sell them and own starbucks. My Charitable Trust says i was dumb as a bag of hammers about costco costco. One time or another, my hedge fund in grade school, a long time. Actually in the womb i dont know if you know that one, in the womb when the idea started. Piper cuts mcdonalds to neutral. Pingpong action. How much will that be up today . Mcdonalds, you cant stop. A very important downgrade. This is up on thin air. Theres a lot of stocks up on thin air maybe this is one of them. Usa today this morning, mcdonalds buys 3 to 4 of all chicken produced in the United States. [ bell ringing ] mcdonalds going down the right path what theyre saying. Big organizations can turn around. Remember when kroger was upgraded . Opening bell. S p, down here at big board, asterias focusing on reagain regenderachltstive. Lollys locks. Abbvie and pcyc. Rerate the biotech industry. Ive been saying look i dont want to rumor things but biomarin, a company i have liked very, very much thats a company that some of the guys have to say, maybe i have to buy biomarin, to be a larger player. Maybe i have to buy isis isis has a bunch of drugs that are terrific. Youll see receptos trade on this ultra thats a colitis drug and crohns and m. S. Thats what people do. They need these companies because their pipelines are awful. As carl pointed out the pace of deal making in this area has been very strong. Also if look at valeant stock. Valeant and salix done for a different reason, not the same. Valeant conceivably needs to be acquiring but would say thats not the case. To your point, stock went up sharply because of the incredible accretion with the salix deal. Not the case until 17 for abbvie. Activist saying the botox is bigger than skin. Pay a top dollar price, the stock never looked back. Fixed income side of this as well. If youre an actavis or abbvie and borrow 11year money average at 3. 5 cost to capital, why in the world wouldnt you do that all day and buy whatever you can buy . Great question. J j sitting there, dont think j j isnt go doing an acquisition. J j shows you we look at 50 that they own of imbrovica. I think j j will do a major acquisition. They will do another. In europe they share profits 50 50, as you said. Europe, j j runs the show. In the u. S. Pharmacyclics runs the show. And so those rights ability to kind of when ooh say run the show, run the marketing, be involved that they retained that was important. If they did not have that you would not have anybody interested except j j. It would have been a royalty blood cancer drug. Going from 1 billion to maybe 6 billion, year to year thats how i got 3 billion number that abbvie pays. But remember abbvie short term youd say listen they have so much money, why do they have do there is . Longer term, drugs that go away got to rebuild the pipeline. Thats something j js been able to do internally. Now the ceo can go off happily to get married. Gonzalez gonzaleze zal marrye zon gon zalg zal less marrying chantal. Hes going to go on a honeymoon after spending this kind of money. Soon. May. I dont think we can run pictures. Theyve been all over the place. Lovely pictures. Kroger guy sloul gohould go on a honeymoon. Thats the guys that can do things right. What did you think of the insurers and hospitals . These stocks can do no wrong. If we go back to when obamacares supposed to be about, reigning in costs whop are the biggest winners . Affordable care act, tenet and Hospital Corp and United Health were affordable and people cared thats what it was been giving them big money. Boy, have they done well. Look at unh dow stock amazing. You dont hear people in washington saying i think they made egregious profit but was they wrote legislation. A lot of people trying to read into what kennedy was saying during oral arguments yesterday. We wont know for a long time. We wont get the decision until june or july right . Late june. Kennedy one ofs dissenters in the prior challenge. Thank heaven im not a Supreme Court reporter. Apple, going to be the lowest close in a couple of weeks. This report out of bloomberg, theyre delaying production of the larger 12. 9 inch ipad. Of course all of the reports about being in talks with hbo for some over the top service. Deutsche bank says look the watch, not going to than great. I want to know how do they know . Do they think apple doesnt know the market . Its like you sit there and second guess tim cook. What happens your edge . Tim cook he hasnt been right about the iphone 4, 5, 6, hes not been right about his distribution, hes not been right about china. No, hes been right about all of those. Why do we count to those . Maybe thinking bound to be wrong one of these days. One of those. Not everybody can be right every time. Joe dimaggio, 57 game, did not get a hit, made him a bum. Not a nice man. The journal this morning hints that theyre thinking of adding usb ports to some tablets which would sort of be a move toward, a surface kind of thing . Acknowledgement that tablets cant exist as they are . You mention surface. Must be thinking about microsoft. Im looking at numbers. But u know ifyou know if the nfl switches they all have these tablets, i dont like microsoft here. They stalled got to do something. Its amazing given inventory numbers on crude yesterday we didnt not just sell off but above 51. A lot of people have to cover short. 51, a lot of different technicians say 51 jumps to 55. I know dave cote who was calling for 50 when it was 75 80, is still reiterating, from the interview, going to be 50 55 60. Not going to go back to 43 where it traded end of january. Its in the going to go there. Dows up 15 points or so. Courtney reagan joins us on the floor this morning. Good morning. Yeah, thats right, six minutes into trade. U. S. Equities higher but not so much so. And if you think about what happens going on in europe thats jump starting the morning european equities mostly higher. Ecb leaving rates unchanged but upping growth forecast for 2015 and 2016. 1 trillion euro worth of bond buying begin march 9th, continue until september 2016. If you look around the world, its an other information were getting on Economic Data front. China lowering its Economic Annual growth target. Opposite of what europes done this morning. White the chinese premier citing 7 . Here in the u. S. , u. S. Productivity falling 2. 2 slightly better than forecast. Jobless claims worse than anticipated 320,000. We were at 313 the prior week. Some earnings movers of the morning, there are a lot of them keeping us busy. Joy Global Mining equipment maker, missing estimates by 11 cents. Citing commodity price weakness. Revenue also below forecast as well as that 2015 forecast. H r block, smaller than expected loss. But ceo points to disappointment with early tax season volume. He does expect it to pick up. But so far not looking as good as they hoped. Kroger continues to turn in results. The ceo notes improved fuel margins did contribute to results but strong without that as well. Move on to retail id be remiss if i didnt talk about the movers. Costco reporting both samestore sales and full earnings. Earnings beating by a decent margin thanks to a gas margin really robust gas margin there. Samestore sales up 1 when you account for the gasoline and the Foreign Exchange rate. If you take that out, up 8 . Strong results out of costco. L brands beating consensus with february comps, up 6 . The street only expected 4. 9 . Victoria secret the plain driver behind than remember you have valentines day in february and the big swimwear push, with the swimwear special, it was pretty interesting. Talking about marketing a good one for l brands. The surprise decline for buckle teen retailer. Abercrombie, continues to disappoint trying to find its brand footing getting a couple of downgrades today. Abercrombie fitch lower again for the second day. Back to you. Thanks very much courtney. Didnt want to weigh on another potential takeover battle that is brewing in the reit sector. The journal reporting approach made by Simon Property groups to acquire macerich. Key properties in arizona and california. Phoenix, scottsdale area if you will also Tysons Corner that big mall as well. This not news to many people who follow this area closely because it was in lets call it november, november 19th, i believe, when simon didnt need to but publicly disclosed 3. 6 stake in macerich and asked whether it might be able to go above 5 as macerich allows another shareholder to do. So asking let everybody know they owned 3. 6 stake. Since then the stocks up a lot of speculation. What i can tell you is confirm the journal reported that a verbal approach was made not on paper, again, not like heres our offer but a verbal approach played by david simon to macerichs ceos. The two brothers who run it. In fact there was a very large the annual big reit conference in florida. Mr. Same. Was one of the presenters there, he was on the stage, according to people in the audience and said weve got over 7 billion available, what do you think we should do with it . Sort of kiddingly made that joke. But then later seen talking to one of the brother whose runs macerich and one can assume that perhaps that was the point of which he made the verbal offer. No word from macerich at this point no real ideas to what simons next move may be will it come with a public bear hug for the company . Maybe difficult to get a socalled hostile deal done. Certainly not easy ever but particularly here. That said many people believe that simon can pay more than 95 a share price that analysts are out there with because at least according to people i speak to theres a belief it would not only include a deal cost synergies and some accretion, but there would be revenue synergies available as they pounded down on certain tenants and said, lets go, gap, pay us more. We will see about that as well. Also, some pointing out simon might be willing to do a flat or dilutive deal, not just a deal immediately accretive. And is comfortable with leverage. Jim, as i always like to say on these, we shall see but certainly wanted ive been watching this for a while ever since they disclosed 3. 6 stake, because it was a strange thing for them to have done unless follow through or wanted the market to know and get slair base to change a bit. Simon, remarkable operator. Phenomenal story. Don wood at federal realty another major operator fantastic. Some Real Estate Investment trust fortunes built up by these gentlemen, impressive. Also owns the queens center. I spent time there myself. Tysons corner. I know youre from queens. Thats why we are net fans. Why we are net fans. Did you know this . Hes a net fan. My dad and i watched them. Its too tough for me. Come over just in time. Now eagle. Most of the owners of the philadelphia teams have become followers of other teams, keerly. Obviously not following their own teams or they had be despondent. A team in chicago that hasnt won something in a long time the National League i recall. Rick santelli in chicago. Yes, you know when it comes to wait until next year the cubs are way before the fed. The bank of japan and the ecb, thats for sure. If we look at intraday of tenyear note yields weve had volatility but really still somewhat in that range. But granted, as you look at yeartodate chart, ranges bucking up against the annual settlement from last year and its fairly true on all of the major maturities 5s, 10s, 30s. 30s at 2. 71 closed at 2. 75. Maybe bunds afford us more interesting views. Yes, volatility but the 24hour chart is so revealing. We clipped off 43basis point trade before it moved back down. Keep in mind it had traded briefly and settled once under 30 basis points. That isnt happening now. You have to go back to see a settlement above 40 basis points. The market has a lot of different undercurrents because we might have more information but the buying actually hasnt buck begun. That will be on the 9th. The next major area to concentrate on. Look at other tenyears. Look at french tenyear its not on its low yields as you see on that chart, starting in february. But it still did start to move down, trading around 60 basis points. I looked a few minutes ago it was 67. Italy, though italys double that rate, hovering above 1. 30 it is making new lows as you can see. New alltime low yields. We look towards the currency side, the euro had a lot of volatility but as i look at the board i dont find one major currency, whether the yen, peso pound, euro swiss franc that is higher against the greenback, making fresh 11 1 2year lows of course. Dollar yen interesting. All stimulus on some of those, another reach of 120, it hasnt happened much as you see on the tenyear chart. Oil giving a touch back here. Good morning to you, carl. We are higher on both side of the atlantic. Now wti turning negative but not a major breakdown here. Down 38 cents. We cant get under 51 at this point. Traders are still talking about that inventory number yesterday. We did have a big build but not as big as we were expecting in cushing. Thats having some impact on prices here. We should be lower today, given the fact that china lowered its growth target from 7. 5 to 7 . The dollar index over 96 ahead of draghi as well. But traders are looking at the charts here and trying to assess momentum of the oil trade. Theyre saying they think were going to continue to bounce at these levels or potentially go higher. Im getting that from more and more people. Sort of consensus down here. I do want to talk about gas prices because were talking about them with respect to retail. 2. 46 the National Average according to aaa. Only off a buck where we were last year at this time. Back to you, carl. Thank you. When we come back etsi files for ipo. The market right now. And later snack like a shark. Shark tanks Barbara Corcoran with her favorite investment in the history. It is edible. So whats going on today . News alert message email calendar update most of us admit to being overwhelmed by information at work. Thats why ibm created verse. It uses powerful analytics to uncover hidden patterns in your email, calendars and social feeds. It continuously learns how you work. And helps you prioritize the people and projects you need to focus on. Theres a new way to work and its made with ibm. 80 of the poor in africa are rural farmers. 96 of them are doing rainfed agriculture. Theyre all competing with each other; theyre all making very low margins making enough to survive but not enough to get out of poverty. So kickstart designs low cost irrigation pumps enabling them to grow high value crops throughout the year so you can make a lot of money. Its all very well to have a whole lot of small innovations but unless we can scale it up enough to where we are talking about millions of farmers, were not going to solve their biggest challenge. This is precisely where the kind of finance that citi is giving us is enabling us to scale up on a much more rapid pace. When we talk to the farmers and ask them whats the most important thing. First of all they say we can feed our families. Secondly, we can send our children to school. Its really that first step that allows them to get out of poverty and most importantly have money left over to plan for the future they want. Lets see, etsy filing to go public. The Company Hopes to raise 100 million though that amount could change. The company lost money last year revenue of 195 million. Goldman, Morgan Stanley and allen and company underwriters. Go merchandise sales, a couple billion. Charge flat listing fee, take 3 cut. Tough site to use. Got to go back and forth. My daughter worked for a company that sold on etsy. It really is rather remarkable for a Craft Company that cant get goods otherwise, it is an excellent craft. Its like craft beer. This is just a rebellion against the major chains. It will be a holistic Internet Company when people will like it. Like what the whole foods as is to food etsy is to retail. Or starbucks, kraft coffee with the roastery. This is a company that is a millennial company. Millennials will be interested in shake shack also. Zeitgeist go on here. So true. Im focuses on millennials. Well get stop trading with jim in a moment. Dows up 34 points. Dont go away. Lugging that laptop around you . Do it in style with this cnbc atap shea case and signed by the squawk on the street gang. You want it . All you have to do is guess fridays nonfarm jobs number. Tweet your estimate to squawk street and nailthenumber and you have to be at least 18 years to enter. For the official rules and details go to sot. Cnbc. Com. You have until 8 29 eastern friday morning. Good luck. Now with the xfinity tv go app, you can watch live tv anytime. Its never been easier with so Many Networks all in one place. Get live tv whenever you want. The xfinity tv go app. Now with live tv on the go. Enjoy over wifi or on Verizon Wireless 4g lte. Plus enjoy special savings when you purchase any new Verizon Wireless smartphone or tablet from comcast. Visit comcast. Com wireless to learn more. Time for cramer and stop trading. Remember how the coal stocks kind of fell off the face of the earth . Used to be a super cycle coal and now no one talks about them. Joy global makes the machinery. People are looking at caterpillar and sell aggressively, caterpillar at top of the cycle bought usyrus joy has the kind of customers as cap. Cap, setting up for one more disappointment in the next quarter. Doesnt help the strong dollar i mean what i dont know what to say. I dont know what to say about cat. You said it. I guess i did. You did. You dont know what else to say. Sell, sell, sell what i heard. House of pain. Speechless. Speechless. Thank you, you filled in xa i was thinking. Were at that point we can communicate without speaking. But we should keep speaking. House of pleasure. Live long and prosper. Not deere. Deere, katz. Warren buffett likes deere. If he likes cat, wow. Cat man. Cat man. Katmandu. What is on mad money tonight . Well, we have a company trying to gauge, we have mark oneill, im worried about autos. Im worried about autos. This has been one of the great parts of the u. S. Economy. We cant lose it. Cant lose it. You got worried about auz of february numbers . I thinkful, phil lebeau, you watch the undertone of phil one company made the numbers. Gm. You need to see the number at 17 million to keep this important part of the economy going. So im going to find out. See you tonight. Mad money 7 00 p. M. Eastern time. When we come back breaking data on factory orders and the ceo of priceline, darren houston. Stocks up 20 in the last month alone. Dows close to session highs up 44. Back in a moment. [ male announcer ] your love for trading never stops. So open an account with schwab. And when a market move affects, say a Cloud Computing stock youre holding, we can help you decide what to do. With tools that help you see how market activity is affecting your positions. So when the time comes to decide whether to scale in or scale out. You can make your move wherever you are. And start working on your next big idea. Two, one. Good thursday morning. Welcome back to squawk on the street im Carl Quintanilla with simon hobbs, david faber live at post 9 at new york stock exchange. Sara eisen off again. Markets doing its best to avoid a threeday drop. Something the now and nasdaq have not done since january 19th. Claims up to 320. Estimate 295. We know what auto sales did for february. Crude Oil Continues to hang on despite incredibly bearish inventory numbers from yesterday. This is our road map. Costco profits surging in the february quarter, thanks to a tax benefit and of course those lower gas prices. The stocks getting a boost. Well tell you how to play it. Plus the fed releasing results from the latest round of stress tests. Find out what to expect from the big banks. And an exclusive interview with the ceo of priceline from amsterdam. Hell weigh in on consoleidation in the industry, his stocks big run, what its like to do business in europe now. Rick santelli on factory orders. Rick . All right. We have tackfactory orders for january. Everythings late today. Up. 2 . Which is exactly what we were expecting. To give you some context on this number, of course being a First Quarter number its easy to know where the extreme high and low is. The alltime low is in august of last year minus ten. And the alltime high was the month preceding it july positive 10 1 2. Were always comping to those. A small move in factory orders and of course continuing to digest volatility as the markets try to handy cap what the world will look like when qe begins march 9th. The ecb will start its sovereign qe Program Monday making the announcement mario draghi was more upbeat about the eurozones recovery than some expected saying inflation will return close to the banks 2 target in 2017. In the meantime the ecb will now buy over 1 trillion euros of Government Debt, even if its priced with negative yields. This point in time we see absolutely no reason to think or plan or act in any different way from what weve planned, namely, 60 purchasing of 60 billion euros a month until september 2016 or beyond, if needed. Lets get back to Rick Santelli to clarify that last number. Rick . I think rick might have given us the wrong number. Well check back. Watching draghi trying to contend with europe u. S. Markets and tomorrows jobs number. Lets bring in jeffreys chief economist. Draghi speaking and claims elevated here, again, some of the car numbers werent all that hot for february. Is all of the action in europe as far as year concerned . The primary focus whats go on with the ecb, how that affects currency markets and how it is going to affect the u. S. Bond and equity markets going forward. These investors who do sell bonds to the ecb are going to look for some place to put their money. It does look like in this environment, the dollar should strengthen and also the u. S. Market, bond market continues to be a high yield market. I think expectations are a lot of the money will find its way here and i think thats exactly whats going to happen. Samir, 110 on the eareuro, 11year low. Is parity a summer story. Nearterm lower, you know the pace will depend on the u. S. One thing ill throw out economic surprises in europe have been Getting Better and the ones in the u. S. Have been getting more negative. So i would say at this point appreciation probably starts to happen at a slower pace. Paritys the question only a matter of when not if. This point it seems like it will happen a little bit slower. Ward there is a discussion about whether Interest Rates in europe will stay low forever as a result of what were seeing there. What does the fed do in this environment . If you say the moneys going to flood into the country, its going to suppress yields what is the feds response . Theres some suggestion that it may have to get more aggressive in what it does in order to shift the market though the moves recently might undermine that. Well, i dont think the feds going to been more aggressive. I think the fed is going to do just what janet yellen and Stanley Fischer said it would do, and that is be very much more responsive to u. S. Economic data especially the inflation data, but that girls them a lot of flexibility because if you look at the three conditions that fisher laid out, headline inflation stocks going down, core inflation heads closer to 2 average Hourly Earnings start turning higher on a trend basis its going to be until q3 before these factors come together. So i think for the time being, the fed will sit and watch and see what happens. Ward in terms of weather here sorry, sameer . I was going to throw out if youre a bond investor i see why you want come tomorrow the u. S. You get a higher rate. As you look through some of the Economic News and look at companies are, the u. S. Youre starting to see where earnings expectations are coming down you might see negative numbers in tern terms of Earnings Growth whereas in europe you pick up thes pap the bond side the flows continue strongly into the u. S. The margin european Bond Investors going to european equities. Ward, on the weather, 60 Million People affected by todays storm. If youre anywhere near the midatlantic you know what im talking about, the maps called the misery map. Beige book yesterday pointed out weather in terms of consumer spending. I think weve been paying for it in terms of some of the Economic Data. Sovt sovt softer for a number of weeks for 2014. Were in another one of the winter funks. I dont think it will be something that carries on for a prolonged period of time. But we have to finally get to see the Promised Land which is spring, i think, before we finally start to see the economy revert to the growth trajectory that had we had for much of 2014. I thilnk well get growth over 3 in 2015. Sameer what are the clients saying to you . What is the conversation about the record levels we hit on the markets . It would appear some people at the margin have been taking money out of stock fund etfs. Theres a bit of nervousness. Some people think clearly they should just reduce their exposure. Sure, probably two big themes. Like you said what do we do now that the markets up so much . What weve told people is things are positive. And that the Economic Growth is still, you know, a little bit uneven and improving and thats the best time to be in stocks and to maintain those diversified portfolio allocations. And that kind of hits on the second theme, theres been a bit of diversification fatigue which is people asking us look the u. S. Has done so well and the Economic Data continues to come in better on the u. S. Side than on the international side. Why should i maintain those International Allocations . Thats exactly what weve told people, its all about the margin, its all about expectations and going forward, it looks like europe has the chance to actually surprise to the upside. One last question for you ward on the fed transcripts yesterday. People argued if yellen were on wall street shed be a hot hand because of her forecasting ability. Did anything strike you about this . Well just in general, what struck me was that first of all, the fed was, i think surprised by the severity of the situation, relieved when they started providing some relief. And, quite frankly, i think what emerges from that is that the fed was flatfooted as anybody but thankfully responded with urgency and in a very forceful way. Ward mccarthy, gentlemen, thank you for your time. As promised back to Rick Santelli for more on the factory order number we got at the top of the hour. This is breaking news before it was broken news. I apologize but the weathers caused some venues to kind of glitch the data a bit. 2 what we expected. Some of the surveys flashed it. But many minutes later the true number is down. 2 for january factory orders. And even though that isnt a huge deal kind of is especially now that we see a revision from down 3. 4 to down 3. 5 for last month, which is the Fourth Quarter, which is going to most likely not going to give us any better revisions on our last look at Fourth Quarter as youve been talking about, weathers a big issue. Many gdp models for the First Quarter are looking like soft numbers and this may play into that as well. Down. 2 january factory ors. Employment report tomorrow. Rick thank you. Next costco getting a boost as lower gas prices help boost its profits. Can the momentum continue . Later, exclusive interview with the coo of priceline in amsterdam, creating 10 billion of shareholder value. Anything worth pursuing requires knowledge, hard work and a plan. At baird, we approach your Wealth Management strategy the same way to create a Financial Plan built to last from generation to generation. Well listen. Well talk. Well plan. Baird. Boosted by a tax benefit, lower gas price, costco reporting better than expected 29 rise in earnings. Shares climbing 2 at those hour, now up 29 p85d for the for the year. Chuck, good morning. Good morning. A lot of talk of Gross Margins beating for the Third Straight quarter. How much was tax a factor here . Well the tax benefit was about 10 cents. Strip that out of the 1. 35 a reported number of 1. 25 easily beating the street at 1. 18. We were at 1. 21. A solid quarter here all around. You even say the street was bracing for a rocky print because of fx. Did that come in better or worse . We should find that out 45 minutes on the calm we estimate a nickel of a hit. As we point out in the note the numbers did come down a couple pennies, a couple of downgrades. Expectations were pretty low but the Gross Margins in the quart where good. Report a healthy february samestore sales on the quarter, up 8 . Inventorys in great shape. Membership fee solid. Another great quart for costco. Weve been talking about the effect that gas prices has had on them. The price comes down faster than costco brings its own prices down. Targets 1. 56. Were at 1. 50. 5. Is the gas factor going to come back to bite us . I think you have another couple quarters of a benefit. Costco generates only 8 to 10 of business through gas stations and its clearly not the only thing going well for costco. Traffic is healthy, fresh food business remains strong. Starting to see deflation in the produce and meat area and we think that also helps the margin line in the quarter. We have 156 12month price target but think over the next 3 years the stock can move over to 200. 200 the strongest quart for a long time, chuck, widely quoted as saying. What about the samestore sales you mentioned in february . Up 8 at the core. Is that when theres bad weather people go to costco and stock up more . Is weather a positive for them potentially . Thats a good question. I think the weather winds up being net neutral. People do stock up. But if youre in the northeast today, clearly youre not shopping at a costco today. You lose some sales after the storm you gain some sales before the storm. Neutral to mod positive. Retailers have called out the back half of february. Clearly that wasnt the case for costco. Weve seen walmart make moves to retain employees better with their wage hike. Target announce layoffs but investment program, is costco at risk of losing any share from retailers trying to find their legs . In my opinion, no. First of all, costco pays employees significantly higher than anywhere near walmart and retention rates are very strong. On the margin target refocused on the food area and certain parts of the store could be something to keep an eye on. We think costcos got a really entrenched customer retention rates are well over 90 at this point in time. And we actually i think the upcoming switch to visa which is going to happen in march of next year could be a benefit, considering theres roughly 750 million u. S. Visa holders versus close to 50 million amex holders. Has to be a tailwind for costco as you get into next year. We dont think its too big of a risk. I was going to ask whether taken aback by the divorce between them and amex whether theres a period of disruption even a longterm benefit. Customers, if confused is there a period where this does elevate risk . You know you can look to canada, they recently switched from amex to visa in canada. You know the past past three to four months canadas been a call out. I think its a risk but views canada as a proxy. I dont think its too big of a risk. Chuck, always good to talk to you. Chuck grom. The Priceline Group ceo will join us live for an exclusive interview on cnbc. Well get his take on consolidation in the Online Travel industry and how he plans to stay competitive. Back after a quick break. At mfs, we believe in the power of active management. Every day, our teams collaborate around the world to actively uncover, discuss and debate investment opportunities. Which leads to better decisions for our clients. Its a uniquely collaborative approach you wont find anywhere else. Put our global active management expertise to work for you. Mfs. There is no expertise without collaboration. Can it make a dentist appointment when my teeth are ready . Can it tell the doctor how long you have to wear this thing . Can it tell the Flight Attendant to please not wake me this time . The answer is yes, it can. So, the question your customers are really asking is can your business deliver . So mario draghi finally detailing how for month the ecb will start buying 1. 2 trillion dollar of eurozone Government Debt in a massive extension of qe. An american doing business at heart of the eurozone joining us Darren Huston ceo of the Priceline Group which make the bulk of its profits from the locally based booking. Com. Great to have you back on the perhaps. Id love to know what ceos are saying where you are about what we see in the markets. I think you actually are part of the stampede to raise cheap debt with all thats going on. Yeah. Yeah simon, first of all, its nice to be near sunny europe. Youre facing a lot of Winter Weather on the east coast today. But, yeah were seeing a very healthy travel market in europe. But also on the financial side we just did a euro bond offering that were really proud of 1. 8 . Its helping to balance our Balance Sheets exposure that we have. We think its a great raise and helps us bring money back into the United States as well. You know you warned about the currency effects last year and your stock didnt do very well. If you look at a chart of where weve been since your Earnings Call a couple of weeks ago, youve changes the conversation. Its 20 move in the stock. Youve added i think 10 billion back on shareholder value. What is making the difference now . What are you saying to people that its clearly moving the needle . Well simon, i think, first of all, currency obviously is a very important factor in any global business. For priceline, our currency issues are largely a translation effect. I think now the market understands that and those effects are temporary. But the Underlying Health of our business, we continue to grow over 20 . We continue to grow very profitably. Were preserving our margins. And we continue to be very bullish about Online Travel and the outlook for our various brands around the world. I think you may use some of the money youve been raising to do a deal but at the moment its only 20 million deal for rocket miles, in contrast to the other behemoth in the space, expedia trying to bed down 1. 6 billion buy of the orbitz brands. Is there a difference in strategy here, or have you basically done your billion dollar deals with kayak and with i cant remember the other one open table. Open table. Exactly. Yeah, you know i cant really speak for expedia but i do think we have a slightly different approach. Were both very Large Businesses but even if you put expedia in the Priceline Group together we make up less than 10 of the total travel opportunity. Our focus is really been on Premium Brands and things that can add benefit to the group overall, new channels new geographies versus doubling down or tripleing down on the same businesses. Thats been our strategy. Its worked really well for us. Rocket miles is a small acquisition but new set of competencies for us. Well continue to look for that. We Just Announced 3 billion Share Buyback also looking at opportunities to return some of our cash to our shareholders which we also think is a good investment. Darren, id love to know what you think of airbnbs valuation at 20 billion. You, yourself, have invested aggressively, as you put it in vacation rentals, villas, shall lays apartments. Youve bought a quarter of a Million Properties within the system that people can book online and confirm online. How would you compare where you are and where airbnb is and the valuations. Theyre worth a third of your business apparently at the moment. Yeah. Well simon, there is a lot of interest in what we call selfcater product in the market. The approach weve taken to the market is make that product confirmable and immediately bookable. Theres no email we dont charge consumers fees and 250,000 properties over 1 million bookable units, 70 of all properties on booking now are selfcaters product. We see a lot of demand more that product in the market. Were a huge player in the market. And we think that the Value Proposition that we bring to consumers is also very compelling. Do you think air b and bs overvalued, darren . I cant go as far as saying that simon. Im not close to the valuation. Obviously theres a lot of excitement in the market around these, lets call them peer to peer sharing models. Im impressed by the work that airbnb does but we have over 60 billion valuation, were a big player in the space as well. And we execute really well as well. So its great to see people taking interest in the space. But im really bullish on what were doing as well. I want to ask you about your ability to chase down Hotels Tonight and the new more immediate booking platform that you have booking now which has been advertised heavily and people will see that. From the people that holtz owners that are watching you around the world what is the deal there . How have you been able to have that cut price . Done that break the parity agreements youve got signed up in the Online Agency . How are you able to discount below those, i assume . Yeah no the way weve approached the lastminute market is very different. We have all 600,000plus properties on booking now, booking now is our new app for booking today or tomorrow. Its taking advantage of the spontaneous economy. We see more and more users booking last minute wandering into europe picking a hotel, sitting at a bar, figuring out where to stay that very moment. Were seeing amazing pickup in that scenario and that behavior. None of this relates to breaking parity, none of this is cheating on our properties. Its about creating something that responds to this massive trend that related to mobile and. Spontaneity were seeing around the world. Booking now app is available in every country we operate. You can book a hotel in any city in the world now at the last minute on booking now. Its good to see you, darren. Thanks for bearing with us through the satellite delay. Enjoy the relative warmth of amsterdam. Darren huston. Be well. Straight ahead, oil prices rebounding from their lows but should investors be ready for another pullback . Rbcs chief commodity strategist weighs in, when we continue. Ba ck. Your friends have your back. Your dogs definitely got your back. But whos got your back when you need legal help . We do. Were legalzoom, and over the last 10 years, weve helped millions of people protect their families and run their businesses. We have the right people onhand to answer your questions backed by a trusted network of attorneys. So visit us today for legal help you can count on. Legalzoom. Legal help is here. At ally bank no branches equals great rates. Its a fact. Kind of like mute buttons equal danger. That sound good . Not being on this phone call sounds good. Its not muted. Was that you jason . It was geoffrey it was jason. It couldve been brenda. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Now with the xfinity tv go app, you can watch live tv anytime. Its never been easier with so Many Networks all in one place. Get live tv whenever you want. The xfinity tv go app. Now with live tv on the go. Enjoy over wifi or on Verizon Wireless 4g lte. Plus enjoy special savings when you purchase any new Verizon Wireless smartphone or tablet from comcast. Visit comcast. Com wireless to learn more. Good morning. Im sue herera. Heres your cnbc news update. South Korean Police release the footage they say shows the man who slashes u. S. Ambassador mark lipperts face leaving his house to head for the venue in seoul where that attack took place. Lippert suffered deep wounds that took 80 stitches to close. The attacker was caught and arrested. John kerry arrived in saudi arabia to reassure the king any nuclear deal with iran will be in the saudis Interest Despite the kingdoms fears it may boost irans backing for shiite muslim groups. The el nino weather event in the Northern Hemisphere may extend through the summer. It can trigger drought in some parts of the sworl cause flooding in others. Bill de blasio asking prominent new york city Business Leaders to raise starting pay for workers to 13 an hour. He asked Governor Cuomo and state legislators to raise the states minimum wage to 13 as well. Thats our cnbc news update at this hour. Back to you guys. Welcome back to squawk on the street. The department of energy out with its nat gas weekly storage report because of the focus on crude, people havent been watching nat gas but we did get a draw down of inventories 228 billion feet in line with expectations. Nat gas trading higher because of some of the bad weather that weve still been seeing across parts of country. Most traders are saying they do expect it to go lower from here. Next week temperatures expected into nobody the 40s here on the east coast and new york city as a matter of fact. Its going to get better from there. When you also look at total stocks almost double where we were this time last year. There is a lot of nat gas on the market. Still, 2. 78 for nat gas not a high price when you think last year at this time we were paying six bucks. Oil clearly continuing to see volatile trade. Exxon mobil ceo Rex Tillerson apyred on squawk box and discussed the disruptions on oil supply. A scope to go higher to extent there are disruptions of supply elsewhere in the world. Now theres also scope for a lot of pressure down because of those disruptions. If things calm down in libya, if things calm down in iraq if things if a deal gets done with iran theres a lot of developed capacity not in the market today that will quickly want to come to the market. Lets get reaction from that with Rbc Capital Markets chief commodities strategist. Good morning. What did you think what mr. Tillerson had to say. I understand the theory you can get more oil back on the market. But these are country severe political insecurity crisis. Libya, isis take over is going to somehow get an easy offramp its enormously challenging. Even if we talk about iraq so much optimism on kurdistan productionen isis operates right around these fields isis backyard. I get in theory if everything was happy and peaceful but where is the offramp . You bring insight having works with the cia, you have some knowledge. More biased on risk for that reason. What is the bias on prices . I dont think theres a lot of geopolitical priced in now. All of the emphasis on u. S. Production, when were going to see u. S. Production come down. But we should be watching in terms of a surprise. For example, what happens at the end of march with the nigerian elections . Its a place where weve seen significant supply disruptions around elections, they have tremendous disability and you could lose 700,000, 800,000 barrels from that couldnt trip the risks on geopolitics weighted to the upside. When i hear libya can come back its a fullon civil war. Icy goes there because its a failed state. What did you make of the stockpile number yesterday and the fact that we didnt if we get more does oil go up more . I think its a very high inventory number but now theres a bit of an idea that we could be seeing geopolitics. People are starting to talk about libya, where they werent talking about libya a couple of weeks ago. We have high stockpiles but you also now have a little bit of an appreciation at the rest of the world might not be tranquil. Theres a lot of talk yesterday about the number of traders net short, oil. Explain why thats important here at these levels. Certainly what you want to be watching is where the Sentiment Index is now. What weve seen since the summer sentiment trading significantly south. The narrative in the market is the overhang the overhang the overhang. One of the key things is when does sentiment change . You talked about saudi arabia and john kerry there now. The saudis refusing to cut production, would push sentiment lower. When does the sentiment rebound even if the physical market is tightening. Cushing, can you gives your sense of what that means as they fill up more and more of whats available in that particular spot. This is one of the big policy debates going forward, the debate over u. S. Crude exports. At some point we may reach that sort of ceiling where weve produced crude in the u. S. Theres no market for. This is able to argue one of the big policy debates in 2016 what point do we lift the crude export pan and give extra market to u. S. Producers. Thats the jones act. The jones act, youve got to use u. S. Ships to move the stuff. Something coming out of the this congress on that seems to hard to imagine. Thats where the big fight is shaking out in terms of the u. S. Market, the u. S. Producers lines up with the u. S. Refiners. If it never happens what does that mean for the price of oil here. Thats potentially putting a ceil on u. S. Prices in terms of not having easy vehicle to move your product. I mean thats going to be one of the problems just at a certain point theres a market here for the heavier products. I mean saudis imports reduced but theres a demand for saudiheavy barrels, its a mismatch in terms what the u. S. Produces and what the u. S. Needs. To the underlying point, what happens when nearer term when the Storage Capacity is reached and people cant store it anymore . Thats not positive. Could be a thats not positive. I mean that could the question about what point, you know, does the number in terms of production in the u. S. Does that accelerate a trend were seeing in terms of cap x as well. Consumer gas prices. Whenever it was, 100plus delays declining. Now climbing at the fastest rate since 2013. Going into summer driving season interesting to watch. Ideas onnage average for summer. Thats st. Louisomething well be watching, a lot of moving parts in the story. Summer is peak driving season. Thats when we could see a pickup in this. Over to dominic chu, a quick market flash here. Good morning. As our own david faber reported Simon Properties looking to take over macerich. Look at whats having on other mall operators. First taubman up over 2 . Next general growth properties, stock rallying by 1 mrs. This morning. Again, ancillary moves on the materiels of the move. The Federal Reserve will release the result odd of that closelywatched stress test for the largest 31 banks in the Global Economy this afternoon. Taye la tausche here with a preview. March madness for bank investors, the fed stress test supposed to highlight how well a banks balance shes could handle another crisis and how much extra cushion it would have to pay out to shareholders, its not black and white its not a pass fail. Now bat. Ing down the hatches after embarrassing missteps. Citi group, last year its plan rejected outright and the bank spent 2014 trying to fix what the fed called qualitative issues calling it priority one, two, three, saying the bank is spending 180 million on this issue alone. Theres a spotlight on citi group to pass this year. Ceo mike corbat said if the bank fails he howl go as ceo. Theres bank of america which had to scrap a buyback plan in 2014 after discovering an error in its calculation. Ubs analyst Brennan Hawken downgraded bac last week saying the misstep from last year make him nervous about this years performance. Bank of america most exposed to regulatory rift and that analyst saying citi group lower payout shares so shareholder. Needs more capital than its peers under new regulation. The bank has 500 people working on this process alone. Thats a closely watched one as well. Others that you should keep your eye on auto lenders under scrutiny for subprime loans on the books. Zions failed last year also held a lot of cdos in the past. Foreign banks, many undergoing the test for the first time. The wall street journal reported that Deutsche Bank slated to not pass the test this year. Results out at 4 30 eastern time. This is part i of ii. This i just the capital levels. Next week we will get how much of that capital banks will be returning in the form of buybacks and dividends. Back to you. Kayla tausche. Shares of apple up 70 in the last year but will todays news, reports i should say of ipad delay hurt that stock . Its having a rough morning down more than a percent. Well tackle that question on squawk alley. Ameriprise asked people a simple question can you keep your lifestyle in retirement . I dont want to think about the alternative. I dont even know how to answer that. I mean, no one knows how long their money is going to last. I try not to worry but you worry. What happens when your paychecks stop . Because everyone has retirement questions. Ameriprise created the exclusive confident retirement approach. To get the real answers you need. Start building your confident retirement today. With the dow up 53 a look at utilities, trading higher today after recent weaks. Dom chu has more at hq. Simon, a bounceback here. You can see, probably the it is the best performing sector today by a factor of two, health care in second by a half a percent. If you look at some of the star performers here overall, names like Eversource Energy one of the strong performers there, also Energy American electric power, all trade alongside of interest rated. Interest rates mixed but lower today. Remember for utilities a winning trade last year they are down some 10 since highs this year. Carl utilities a bounceback maybe bottom picking. But for right now it seems investors like that particular trade in todays market. A rough go. Lets get over to the cme group. Rick santelli has the santelli exchange. Good morning, carl. Your last guest, mr. Croft, unbelievable insight into the energy market. Jim, geopolitics is an old treasury trader used to be flight to quality, price goes up, yield goes down maybe a dollar flight to safety. But when were talking about geopolitics of oil, at a time where we question infrastructure, we dont even consider the notion that there could be a time out there where we drooamatically need the excess inventory domestically produced. I agree. Oils had an optionality, if theres something bad in the middle east or something breaks because of a hurricane, the price shoots up. You need redone dance infrastructure to compensate for that. And we seem to be saying by not having keystone well go with the bare minimum. The dynamic of breaking down potential risks and what the conversation i havent heard traders have on a significant level. Lets switch gears im thought wed learn more with regard to the ecb, the press conference but theres still huge amount of questions. Address that. There are a lot of the questions this afternoon, theyll put out a Detailed Press release on the mechanics of putting out the program. What the market heard from the program, theyll buy 60 billion euro a month, do it until september 2016 if the european economy is growing at their perceived rates of 2 inflation and maybe 2 or more on growth theyll stop. But forecast has it barely at that level by 2017, and they said if they come up short of the forecast, theyll keep going. Looks like the program might be more openended. I found kind of interesting, i thought all longterm expectations forecasts look too optimistic. Is this a way theyre trying to condition us to think theyve put the bar up here to do more and more and more . Is that the goal . Do they believe theyll see inflation gdp levels down the road . I think theyre setting up to use a fed term data dependence. Forecast, look optimistic, if we hit those well stop at the end of 16. If we dont hit those well keep going the markets starting to sense the program might be more openended than thought initially. Assume the forecasts are too high, therefore a longer green light on a longer calendar convenient with regard to qe. Where are they going to find securities . I say talking about buying 60 billion euros a month, look at whats maturing in a country like germany, im dumbfounded, i dont get it. I agree. The Technical Press release is important so they give us details. If you put pen to paper, theyll buy 60 billion a month, how much is available especially in the german if they buy the biggest percentage based on the size of the economy, theyre going to be in trouble finding the bunds. I agree. And thats why its going to be very difficult. The fed never had that problem with a 14 trillion treasury market but in europe definitely there are limits. Last half minute, i want to go into this. Obviously whether its u. S. Or europe riskier assets at this point corporate securities. Hearing about zero coupon deals in securities. I think the amount of entities whether the u. S. Or Europe Market making or giving liquidity keeps going lower, is this a problem. I think it is. Not only zero coupon and negative yield corporates we have negative adjustable rates in denmark. The banks paying you to take out a mortgage. If we lap to get a big hiccup in stocks in the Corporate Market obviously wed pay a price. Where are the next trades going to come from . You are creating distortion in market. Mohammed elariens market as well. The markets were never designed for this. Its a big problem as we go down the road. There are never problems just issues but they are big issues. Thank you. Carl and the gang back to you. Thank you, Rick Santelli. Next on the show why this sflaksnack company is Barbara Corcorans favorite from the past six seasons of shark tank. Shell join us live with the cofounders. [ male announcer ] your love for trading never stops. So if you get a trade idea about, say organic food stocks schwab can help. With a trading specialist just a tap away. Whats on your mind lisa . Id like to talk about a trade idea. Lets hear it. [ male announcer ] see how schwab can help light a way forward. So you can make your move wherever you are. And start working on your next big idea. Welcome back to squawk on the street. Shares of joy global currently the worst performer in the s p 500 falling after the Company Posted disappointing earnings. Earnings and sales came in lower than analyst expectations. This is a company that makes machinery that goes to the mining industry. It also cut its full year guidance. The stock as you can see down by about 6 this morning. So perhaps more commentary on the Macro Economy on that front. Back over to you. Thank you very much. Brother and sister team jeff and Jennifer Martin two of the latest entrepreneurs to turn their appearance on shark tank into mega success. The team with shark tank Barbara Corcorans help hope to grow revenues of their healthy popcorn snack by a staggering 800 or 900 a year and were joined now by Barbara Corcoran. Shark tank investor founder of the Corcoran Group and jeff and jennifer mountain cofounders of. I snacks. Nice to be here. Nice to have you here. Brought you pip corn. Truffle flavor sea salt flavor flavor. Its a miniature kernel, actual size here delicate shell. Doesnt get jammed in your teeth as much and easier to digest. Five years ago a sparkle in your i when you help your sister move. I was living in chicago and he helped me move and we found this kernel. Tastes like real corn easy on your teeth, super delicious and he said we should pop this and two years later we launched an outdoor food market hand stamping bags. Up and down the streets. In brooklyn. In brooklyn. Cut to shark tank, barbara when did you realize this would be a winner . Come on. I saw their personality and i like popcorn no doubt but love them. The minute i looked at their energy these are the kids that will take it to the finish line. Hes got a finance background, shes a marketing person. Its like my ideal combination. How fast are you growing . Where are you now . Its crazy. Its weird to think that three years ago when we launched our first year we were lucky, 160,000 in sales people loved it. This year estimating 4 million. Two short years. Yeah. Were growing they deserve it. They work 24 7. What push and push. What have you learned from barbara . Nothing. A lot. Oh, come on barbara. Being around barbara and absorbing her energy is like the best gift we could have. This is important for you because you think the way you carry yourself in business is the key. No not the key, but its a big key. Dont they look like kids that would be great at popping popcorn . Why wouldnt you buy into that pair. Thats important. You need to walk into a meeting looking like youre the person that people want to deal with, that youre worth it. Absolutely. Likability, im it telling you, is grossly underestimated in business. If somebody likes you they want to do business with you and naturally likable because they have great parents that love them to death and turned out two really great kids. Where next for the business . We just moved up to harlem. Its a 2,000 square foot facility. So we put a bid through the city and we got subsidized rent to create jobs. Right. Created like 14 jobs through the city. Its really just expanding west and going to different states and stuff like that. The bad news the corner in harlem, park avenue and 115th street. Smells like popcorn 24 7. The people cant get rid of the smell. Theres a realtor for you. One last word where do you think theyll be in ten years . They will be sold out. They dont think they will sell this business. They will. Thats how i cash out. Theyre selling it and on to the second and third business. Look forward to seeing the episode when it airs on nbc. Great to see you both and Barbara Corcoran jeff and Jennifer Martin carl back to you. Lets send it over to Kayla Tausche with a look at whats coming up on squawk alley which takes to the air in five minutes time. Hi kayla. Hey simon. A big show coming up. Etsy headed for an ipo. We dive into the filing to tell you what you need to know is the online handmade Crafts Company prepares to be a public company. Increasingly rare species the apple bear. This time popping up at deutsch bank will join us to talk about why she thinks the apple watch out monday will not move the needle for the company. And finally, we have an early snapchat investor to talk about the ipo market valuations, whether were getting frothy. Right as mark cuban writes this time not only different its worse. All of that up next on squawk alley. You total your brand new car. 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Start your Business Today with legalzoom. Only one day to go less than 24 hours until the jobs report tomorrow friday morning. That means, of course, another opportunity for you to nail the number on cnbc. Tweet us your predictions for you believe the february payrolls number is. The handle is squawkstreet and dont forget the nailthenumber. The lucky winner will receive this cnbc laptop case autographed if you can put it that way by the entire squawk on the street team. You have until one minute before the jobs report release on friday to tweet us your predictions. Good luck as we enter the most important event after the ecb today for the markets. Meantime were up 54 points on the dow. Lets send it over to squawk alley this thursday morning. Thanks a lot, simon. 11 00 a. M. At etsy headquarters in brooklyn, new york 11 00 a. M. On wall street and squawk alley is live. And welcome to squawk alley for thursday. Joining us henry blojette founder and editor and ceo at business insider. Jon fortt is out today making his way back from the World Congress in barscelonabarcelona. Kayla tausche in post nine. A day where the market is trying to find its legs again, online marketplace etsy filing for an ipo. The company says it intends to list on the nasdaq under etsy. It says it plans to raise up to 100 million in the ipo but could seek more. We talk to the ceo chad di