Transcripts For CNBC Squawk Box 20130201

And squawk box begins right now. Good morning, everybody. Welcome to squawk box here on cnbc on this jobs friday. Im becky quick along with joe kernen and Andrew Ross Sorkin. And we are past the point of no return. We have a rocking lineup for you today. Kelly king, the bb c ceo, roche ceo chevron swan and Houston Texas owner robert mcnair. We have matt shattock. Were going to be covering jobs in the market. Vince reinhart will be joining us. And what is a jobs friday without a little shot of rock and roll . Kansas is celebrating 40 years in the music business. It has been a very changed scene over those 40 years. We have the founding member, drummer and band manager phil e. Hart. Andrew, obviously, we have it all today. We do, we do. Its great to see you, becky. Joe mentioned stocks are off to a very strong start this year. If you believe in the january barometer, its a great sign for the bulls. The theory satsdz that the s p direction in january sets the tone for the next 11 months. The s p ridesing more than 5 for this january. The transports, by the way, Even Stronger with a more than 9 gain. The nasdaq also positive, up 4 . Here are a few stats of note that are worth thinking about. It was the best month for the dow industrial transports and s p 500 since october 2011. The best january for the dow industrials since 1994. Its the strongest start to the year for transports since 1991 and the largest january returns for the s p 500 since 1997. Professor Jeremy Siegel reiterating his call yesterday morning. Were going to see earnings per share 5 to 8 higher. Were going to see expandables which will send us well above 15,000. We have green arrows, so maybe this bullish trend will continue. Dow looks like it will open up about 53 points higher. Nas dk will be up about 8 points and the s p 500 up a little over 4 points. Back to you, mr. Kernen. Andrew, its a good week to have this unemployment report. Its right after the gdp report, which we dont know what to think. Anyway, forecasts are looking for 166,000 jobs. The Unemployment Rate is seen to hold steady at 7. 8 . And average Hourly Earnings are expected to rise 0. 2 . Well be looking at revisions, too, given that we now have a revised view of the last three months. The jobs report is always a closely watched one. We also had two or three really good thursday numbers, claims numbers, and then that reversed yesterday and made that look more seasonal. So it will be particularly important today following data which, as i said, showed a contraction, a surprise contraction, 0. 1 in gdp in the Fourth Quarter. Point of no return, i thought that was six. Nope. Kansas. What you probably dont know is its point of know. Know . Yes. I just found that out. I thought, why are we playing stixx if its kansas . I dont understand what it means, but it is so weve got phil e. Hart i think its Phil Edward Hart on. E. Hart. Whats the e for . Youre up on this. Youre ready to go. Its part of his name. No, kwquail is the biggest first cassette he ever bought, first disk, yeah. How much money do they make on one album . I was going to say 3 to 5 bucks the. And theyre on tour. Which makes boocoo bucks, too. Ive seen him a few times on tour, too. Theyre kind of wrinkly now, arent they . Im kind of used to that. British . No. Theyre from topeka. Oh, korea, kansas. I knew that. Exactly. Weve got kansas on this morning and well talk to them about the changing news of business in the last 40 years. But in our corporate headlines this morning, airbus has studied alternatives to leth yim ion batteries for its next jet, but so far, it is stand big the modern power pack. The airline says it has had time to deal with the issues raised by boeings dreamliner. Theres a strike authorization question on a ballot. The ballot will go to members next week and obviously an engineer strike could cripple production of the airline. Metlife is buying the largest chile pension business for about 2 billion. The senate has passed legislation to allow the government to keep borrowing money at least through may 19th. The measure postpones spending and tax cuts for at tleeft two months. The obama administrations decision on the Keystone Oil Pipeline wont be made until at least june. Thats according to a u. S. Officials. The projects has been pending for more than 4 1 2 years. Of course, weve had lots of debate about the pipeline even here around this table. Lets check on the markets this morning. The futures are probably going to be what steady as we go. Well see what happens at 8 30. But not bad so far. That would be getting back almost exactly what we lost yesterday. We lost about 49 points. And theres a lot of it was a great january, but then got that gdp number. Were warning, does it necessarily mean that the market has been wrong about the economy . Or was it the one off and was it, you know, some special factors that caused that shrinkage and does it get revised back up and subsequent reports . Ive heard a lot of places. This is the best negative gdp report. Well, if youre going to have to pick a negative one, this would be it. But there was a lot of good stuff. It doesnt startle the market at all when it came out. I dont know whether theyre whistling past the grape yard the mark was over a contraction, but not negative. They were looking for growth of 1 . So it was expected to be to go down. No one thought it would be negative. But if youre looking for 1 and you minus a tenth its off by one. You think its going to hit the Unemployment Rate . Theres a big debate. I have no idea. I it probably wont this time around plus one or zero is not a big difference. The reality is you need 3 gdp growth. Thats assuming that he needs an introduction. Youre right, he doesnt. This is miles nordell miles from nowhere. Ndc. I thought that was a home builder. There is an ndc home builder. Did you think about that when you when youre from toronto, you dont think about these things, actually. Okay. Am i doing these or are you doing these . You are. Lets check them out. Lets check out the oil markets. Suddenly, you know, here we are, 97 a barrel and thought greated with a big jan. Not really sure why. And gasoline prices are down in the low 3s. The tenyear everybody has been watching. We thought it would be over 2 by now and it is. It is over 2 . Half the people think its going down and others think its on its way to 2. 785 . One thing that i dont believe anybody anticipated is the oh, the yen is down sharply against all currencies. Morning. 92. And gold the last i looked was under 1700, but creeping back up, 1666. Okay. And global news, average home prices in chinas 100 biggest cities was 1 in january from december. And it marks the eighth consecutive marketing rise. Two other surveys show growth was weak and the economists caution the country could set a tradeback if trade or government weaken. Were here for a lot of reasons, but one thing we need to talk about for an advertising, guys, is there anything better to tuz on than the super bowl . No. And its gotten more important. Ite become the Academy Awards of advertising. First of all, viewership is up. About 111 Million People will watch it. Crisis is up more than 7 . More people watch the laugh time or the gain 12347. Yes. I always thought that was when everybody went to the bathroom. You go to the kitchen, you get a drink, you do all sorts of things during halftime. 3. 75 million for a 30second spot. People have paid over 4 million. Price of ads is up 60 over the last decade. Theyre also sold out almost a half a billion dollars of ads spend for this super bowl. There will be about 78 advertisers. And i think the most important thing is this new trend towards teaseres and contests and Online Activity before, during and after. So its not just the actual advertising during the game. About 42 of all tweets are actually about the ads. Is on ads have become an interactive activity that have become hugely popular. And its probably the most iconic way to reach a mass audience than ever before. For branding, i can see it. But after watching an ad, can you actually quantify a jump in sales for the products . Are you sure it happened and well, i think the critical thing is, is the different before, during and after. All these teasers. And creating an inducement for people to go into Retail Stores or dealerships. Doritos sales go up when they have a funny ad . Absolutely. Absolutely. We did a commercial for hulu. They happen very young at the time. Sales were up 66 over the next four months after one spot. It makes a big difference for a brand you dont know. Is it harder to measure for the big brands like a doritos . Anheuserbusch is a big advertiser consistently. Youre not going to move it transformationally. But it is a positive impact. I think what chrysler did two years ago with m m had a very profound impact. That was a good ad. Is there scuttlebutt around who has an ad that people will be talking about on monday . Well, i think theres a lot of celebrity now. You have kate upton involved in mercedes. Amy polar is involved with best buy. So that probably gets the most profile. Whether it has the most impact remains to be seen. Theres a column in adage that suggests ratings for this years super bowl may be the first that could drop based on ratings that have come down for the ten games in a postseason this year. Do you believe that . I dont have any reason to not believe it. But i think part of it is probably who are the participants. So the giants and the new england patriots, youd probably have higher ratings. If youre new england, San Francisco, but then im short but i will tell you that there is more demand that there is supply for advertising. I was thinking, how much do we spend advertising squawk box . Its a negative number, isnt it . You think we can come up with 7 7550,000 . Do you think a 30second spot would double our rating . No. But you have so much celebrity profile, but the social media aspect just different sports or whatever. It would focus on becky. It would not focus on you and me. Thats clear. I think the key thing we should focus on is to try and get you a million subscribers on twitter. That means id have to tweet. Well, we can get people to tweet for you. Think about Rupert Murdoch says the come woman didnt go through the hole because she was fat and then we have a deal for the next two weeks . I know i say things that shouldnt be in writing. But you put them on the air. But then near gone, mostly. But im telling you, if we could get you a million subscribers, i think it would have a profound impact on ive been on twitter for like, what, seven or eight months and im at about 200 tweets and most of them are retweets. How many followers do you have . Not that much. Sorkin has like he has a like a million. Half a million. Do you know the incredible stories of someone nos not advertising and having a great following . Ian. Absolutely. Hes amazing. And a lot of it is nice, who we saw drinking at the bar. Its sociology media. And those crazy clothes and spiked hair. And he puts pretty well, too. That might have built his brand a little bit. What are the ads that people fall in love with . Miles will be with us for the next hour. We also want to let you know about a news alert that is coming up. Ed koch, the former new york city mayor has passed away. He was a threeterm mayor in new york city, served from 1978 through 1989 and his policies were credited with saving new york city from almost certain financial ruin. There were some combative times that he went through, as well. He was a beloved mayor that did a lot when it kams to the financial names. He had been reported earlier that he was in intensive care this morning and they are just coming out with this news. Hes a giant in new york. I grew up in new york city when he was out mayor. Really . Yeah. Wonderful man. Wonderful man. Weve got much more squawk box to come as the countdown to the jobs report plus the earnings were going to get from mattel and why mcdonalds dollar mcdouble might be harder to stomach. Plus weve got the super bowl this weekend. And brian shactman, are you ready for some football . Im ready for some football, a little bit of food, maybe some wagering and some new orleans fun, guys. Well follow all of those things next on squawk box. [ male announcer ] you are a business pro. Executor of efficiency. You can spot an amateur from a mile away. While going shoeless and metalfree in seconds. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. You can even take a fullsize or above, and still pay the midsize price. Now this. Will work. [ male announcer ] just like you, business pro. Just like you. Go national. Go like a pro. Lets go. [ male announcer ] introducing the allnew cadillac xts. Another big night on the town, eh . And the return of life lived large. Welcome back, everybody. U. S. Equity futures are indicated higher this morning,. We are looking at gains of close to 50 points for the s p futures. Up by 3. 5. You have that jobs report coming up and that could set the market for this first day of trait trading in february. Mattel earning 1. 12 a share. Mcdonalds popular 1 mcdouble cheeseburger is getting hard to sustain, at least keeping it at those prices. Rising beef prices have been threatening the companys price margins. The mcdouble is above 1 in places like los angeles. Well keep an eyen whats happening with some of these commodity prices. Right now, ill send it over to you. A buck. I cant believe they can do it for a dollar. I dont think theyre making enough money on that. In the meantime, lets get the National Forecast from alex wallace. I need to know whats going to happen this week jebd and in new orleans. New orleans is going to be looking pretty good. We have dry skies, temperatures will be pretty comfortable tkly for game time and for tailgates outside. So looking good in the big easy. Not looking great in the midatlantic. The good news is, it is going to be moving pretty quickly. Maybe an inch to two opinion sxabd the view and is right around the great lakes, all the great lakes are active at this point with lakeeffect snow coming off of ontario, erie, michigan, you name it. Weve got snow showers out there in place for us. That will be the case as we progress on through the weekend. One of the reasons why, the cold air over those lakes. These twt actual temperatures. 6 in marquette. But then we get to minneapolis, bismarck, these areas below zero at this time. Factor in just a little bit of wind and it feels even colder. Brutal chills in the air, near 30 below zero is what it feels like in minneapolis. Guys, back to you. All right, alex, were talking about you. You are a great guy, alex. Were talking about bobby here coming on later. But youre a good guy, too. And were glad to have you two days in a row now. Yeah, two in a row right now, were a few days away from super bowl xlvii. Im glad they wrote it out in normal numbers for me. Its like this long. It goes all the way around. Baltimore ravens taking on the San Francisco 49ers. We sent shaq not that shaq, the more famous shaq, brian shactman, so new orleans to give us the snapshot of the hoopla in morals. Brian, there may be a tailgater already. Have you checked . When we walked down there, but when you get up at 4 00 in the morning, most people are coming in from their night to the intersection of me getting up and putting makeup on is kind of amazing. The week has been bizarre, right . We have ray lewis and antler spray. Then you have a San Francisco 49er getting in hot water over antigay comments. Beyond the harbowl, average minutes want to know about the food, they want to know about new orleans and the prop betts. I thought id give a snapshot of my favorites, guys, as we go into this game. Harbaugh mentioned on tv the over under. 21 1 2. Im taking the over on that one. Caller for the gatorade for the winners, yellow is at 35 5 to 2 right now. Although i think the favorite is clooer or water. Im not sure which you know i would take for that one. Tweet per second, its 15,000. I would take the over on that one. And then theres the longest touchdown prop, its 46. 5 yards. Not that anyone cares, but i would take turned on that. Of course, the volume of food. You happen, commercials and food are where its at for people at home. 79 million avocados, 11 Million Pounds of chips. 1. 23 million rgz po portions o chicken wings. There will be fewer chicken wings consumed for this super bowl and then, of course, the 51 million cases of beer. The other thing i want to point out to you guys, new orleans, this is the first super bowl theyve had here. Post katrina, post bp spill. The europe dome mind me, the city invisited more than 1 million from hotels and casinos, museums. Ive been down here covering the spill and i covered hurricane isaac. In terms of the police and the presence here, theyre nervous about all the crowds coupleble with mardi gras. But the city looks great. Brian, when you were the thing about when you were in high school and you were playing hockey and given hard checks and hitding people, did you ever say to a National Audience, its hard for me to get up, get a shower, put a little makeup on and leave the house. Did you ever think you would say things like that to a National Audience . Theres things like that where i wonder where i come from you didnt even pause. I get up, take a shower and try to put on makeup and but down here, guys putting on on makeup, its not youre concerned. You need a little glitter. Well, my wife will text me after this and say i need a little more bronzer, that im a little pale. Well check back and that rovell guy did you a favor. You know who he discovered . Who . Oh, yes. Kate upton. Theyre buddies. They went to like a president ial dinner together. The white house correspondence dinner. She was 16. And i was like, oh, my god. Even kate upton gets because its was this big. Anyway, thank you, brian shactman. Well see you next hour. Go ahead. When we come back, it was the best january for the dow since 1994. Were going to check in with the trader and ask if the bulls can continue with the charge this month. Stick around. Well be right back. [ male announcer ] ive seen incredible things. Otherworldly things. But there are some things ive never seen before. This ge jet engine can understand 5,000 data samples per second. Which is good for business. Because planes use less fuel, spend less time on the ground and more time in the air. Suddenly, faraway places dont seem so. Far away. [ dog barks ] [ male announcer ] something powerful is coming. See it on february 3rd. Good morning. Welcome back so squawk box here on cnbc. Im joe kernen along with becky quick and Andrew Ross Sorkin. I was at the university of colorado and kansas came out in the mid 70s. Toe peek wa was north of where we are. Our top story, the january employment report polled forecasters. The economy likely added 166,000 jobs last month. The Unemployment Rate is seen at Holding Steady at 7. 8 . But we never know. We never know what happened with the Participation Rate. And who dropped out of the workforce. I dont see a lot of people retiring. Im not. Miles isnt. Im not retiring ever. Thats a new trend. People theres Something Like 18 of the nation still works past 65. It used to be down to 8 . So why is the Participation Rate going down when because you cant find a job. If you cant find a job, you go into retirement to get social security. The way enablers use that to bring et down. We supposedly had a threeyear recovery after this great recession. The karpgz rate is supposed to rise in a recovery. Maybe that means we havent seen the recovery yet. Its weird that none of us really hear about a recession coming and say, no, it wont. There was a time, andrew, where it will be like six year or seven years and say theres a recession coming. The stock market was predicted nine out of the last ten recessions. Business owners will say, weve learned how to manage this. Look at the flipside now. Now its like there may never be another recovery. We dont really see a recovery ever. Thats a great way of looking at it. It is. We were wrong when we were thing those things before that there would be another downturn. I think we have a different expectation today about what is a recovery. I think we have gotten used to this 2 . We used to do 3 and 4 . Were not going to do 3 or 4 for a while. Why . Because i dont think theres that much to what about china in the 80s. Well, i think theres a lot it doesnt matter. How can it not matter . We should be selling blue jeans and cocacola. But back then they werent theyre manufacturing stuff that we can buy for pennies on the dollar. One of the most important things to think about is wage inflation. There isnt wage inflation. Wages are very flat. Normally when you add 3 or 4 gdp growth, you had wage ip tlagz. Youre not seeing that today. And you also have a jobless recovery because technology is replacing a lot of the jobs that existed. Back in the late 70s, oil suddenly went from, you know, 10 a barrel to 50 a barrel. How are you ever going to come back when that happened . Every little thing, 80 of the business of the fortune 100 companies is outside of america. So they are hiring. Theyre hiring in china, theyre hiring in india, theyre hiring in brazil. And we were told that yesterday. No, no, no. Because thats where the business is going. The gdp, were not stuck. There is a new normal. Mohammed said the new normal is only three or four years. Exactly. But when the world becomes a marketplace for us to sell our goods into ill tell you, youre getting big employment growth in the tech sector. There are millions of jobs unfulfilled in the tech sector, especially in the engineering category. People are having great difficulty. If you talk to most tech ceos, theyre having great difficulty filling employment in those jobs. Right. All right. Joining us from the futures pit, allen nuckman, Market Strategist at options shop. Are we going back on the rally trend today or does it matter on the report, allen . Ive got a little bit of a feeling that it should be interesting that the market you might see some heavy profit taking after maybe a blow up. I have a feeling thats the way things are set up. But the charts are telling me that things are going to remain strong. I still have a 1600 target on the s p. I didnt think it would happen this quickly and this straight up without any corrections. But i think the catalyst that im looking for is additional dollar weakness. That, as you were referring to, thats going to help u. S. Corporations with their exports. Weve had a very strong dollar regardless of what people think about the fed support. The dollar is still 10 above those extreme low necessary 2008. Yeah. Do you think were ever going to go back to 4 , allan . Youre a trader. Im very optimistic. Where we make our money is in what the performance of the markets do. You know, predicting the economic event, is that doesnt pay the bill. Its our job to take advantage of whatever the opportunities up, down or sideways. I would like to think that things are continuing to get better. Theres not been a very high correlation between the stock Market Action and the economic numbers. We can talk economic numbers all we want. The Commodity Markets still havent participated. Theyre still 50 below their stock market highs. I think that additional push, the dollar safety unwinding as weve started to see in the bonds, you know, that money coming out has to go to work. I think thats going to be very supportive for equities and i think its going to be supportive for commodities, as well. Have you ever thought of just getting rid of that . I see it. It makes me ask if its knuckman or does it do anything . Do you like to hold that place in the alphabet . What is the reason for leaving it there . My daughter came home and told me its a silent k. Now she knows, were going on run with it. Youre going to leave it there . Exactly. Up to you. All right. Alan, thank you. Id use it if it was there. I would go with the use it or lose it. Thanks, alan. Were going to come back to miles nadal. Anyway, its good to see you. Tell us about the super bowl ads that you actually have run this weekend . I dont even know because they dont even tell me and they dont tell us sflp. Youre so high no, no. Its discreet. Some of them dont announce publicly what theyre going to do until the day of kind of thing. We have usually about a dozen spots. So we have about just under 20 of the ads. How much money is in it for you . Oh, goodness. Well, were usually on retainer. So its part of our Overall Program and we dont mark up production. But its whats most important, the profile that it gives you to do iconic ads that produce results and that leads to new business activity, which has been for us record. Do you do media buying, as well . We do. We do about 3. 5 million worth of media buying. Do you get a percentage for what the buy is . Yes. Where we do buy super bowl spots, that part is very valuable. The most valuable part is the opportunity to maefbate people in our organization who are dying to do the great creative iconic super bowl spots. So it creates a competitive environment . The most and its great for their reputation, their reel and its wonderful when you can go and do business pictures and you have this repertoire of great iconic ads that youve done. You own many agencies now. Which one do you like most . Its saying which child do you like better, but 72 and sunny was one of our two new agencies that we acquired a partnership interest. Theyre awarded agency of the year. Theyre the ones who did the samsung spots that were really iconic in terms of their impact. Yeah. And it was phenomenal. So were lucky. We have six extraordinary agencies out of the 60 that are chrispin, of course, was for many years the hottest. And a new firm called the anomaly. Do these things go in cycles . Probably. Probably. But i think is that part of your model, though . Its the back entrepreneurial firms who understand how consumers consume input in an evolving and emerging technolei technologyal environment. But the one thing i will tell you is crowd sourcing is having a big impact. And the other thing is this inactivity. People want to participate in ads and they want to participate in feedback in ads and they want to participate in contests and other kinds of activities where they get a chance. So the inner activity is very beneficial to build loyalty with the brands. Miles, dont go anywhere. We have another cool guest coming up in about a moment. In fact, up next to the rock and roll economy, tons of hits, millions and millions of albums sold. Kansas is celebrating years in the business. We have phil ehart and eeg ready to rock out with us. More on this in just a moment. Fe who gets heartburn and then treats day after day. Block the acid with prilosec otc and dont get heartburn in the first place [ male announcer ] one pill each morning. 24 hours. Zero heartburn. Tdd 18003452550 tdd 18003452550 and the streetsmart edge Trading Platform from charles schwab. Tdd 18003452550 gives me tools that help me find opportunities more easily. Tdd 18003452550 i can even access it from the cloud and trade on any computer. Tdd 18003452550 and with schwab mobile, tdd 18003452550 i can focus on trading anyplace, anytime. Tdd 18003452550 until i choose to focus on something else. Tdd 18003452550 all this with no trade minimums. Tdd 18003452550 and only 8. 95 a trade. Tdd 18003452550 open an account with a 50,000 deposit, tdd 18003452550 and get 6 months commissionfree trades. Tdd 18003452550 call 18008368799. All stations come over to mithis is for real this time. Step seven point two one two. Verify and lock. Command is locked. Five seconds. Three, two, one. Standing by for capture. The most Innovative Software on the planet. Dragon is captured. Is connecting todays leading companies to places beyond it. Siemens. Answers. [ construction sounds ] [ watch ticking ] [ engine revs ] come in. Got the coffee. That was fast. Were outta here. [ engine revs ] we dont let frequent heartburn come between us and what we love. So if youre one of them people who gets heartburn and then treats day after day. Block the acid with prilosec otc and dont get heartburn in the first place [ male announcer ] one pill each morning. 24 hours. Zero heartburn. Welcome back, everybody. We are in the chairs. This is the segment where we cover the business side of everything from sports to gossip to rock and roll. Today, it is all about rock and roll. Known for classic rock mainstays like dust in the wind and carry on way ward son kansas is celebrating its 40th year anniversary. Kansas has sold more than 35 million albums throughout the bands career, including eight gold and three platinum albums. We are fortunate enough to be joined by the founding member, the drummer and manager phil ehart. It is great to have you in studio with us. Thanks. Its my pleasure. You have a show tonight, which is even more shocking that you have up with it. What are you doing . I have no idea. I have a sound check, i think, in like 11 hours. You need a nap between now and then. I look forward to it. You have to start drinking. 11 hours from now. I think i can get a nap in. You know, who years. That is phenomenal to be a band that is still so popular, still touring, what, 80 days a year . Yeah. We do about 70 to 80 shows a year. How have you kept up with the times . Whats the difference from 40 years ago . Well, we move a little slower mow than we used to, but its a little bit more organized and were more in control of our own destiny and is our own business. Which is a big change for us because it used to be much different than that. But now, we in terms of the Record Companies sort of running your life sthp. Well, yeah. You are at the beck and is call of the Record Companies and having to do videos and having to do singles and having to do all these. Now we dont worry about that any wore. You just play live. Well, we play live. Thats our mainstay. Would you say anyone has lost a step or are you better . I remember garcia at the end, it was like it was singing at at p i think were probably just more experienced. We may be better. But you sound the same, right . Very much so. Yes. If we didnt, we would probably hang it pup. And i cant imagine you need the money at this point, so its the feeling on stiej, i guess, thats well, you know, its what we do. You know . People say, how much longer are you going to do this . We go, its what we do. What else would we do if we didnt do this . Were happy to be here and very appreciative of our fans. So being on stage, you still have to go on the road, youre still driving around, probably in hotels and stuff. Oh, yeah, yeah. So it might be a pretty good feeling when youre on stage to get you well, thats what its all about. That hour and a half each night is what you spend the rest of the day, you know, working towards. You have an incredibly loyal fan base. Meatheads. Our executive producer is one of them. I noticed that, yes. How do you know that . Do you know him pretty well . Yeah, ive spent some time with him. So how do you keep is it the same people that come out again and again and again . Not so much. Its our fan based matures and gets older, were getting now a much younger fan base, thanks to youtube and, of course, the video games like garage band and guitar hero. Thats a great point. Our songs have been on. Do you go to them, do they come to you . Do you have people who are trying to get the songs on these new mediums . Yeah, the Companies Come to us that make those videos the. Of course, weve been on south park, too. If youve been on south park as far as were concerned, youve hit the pinnacle. How many albums . I have no idea. Probably 15, 19, 20. Are there times you dont feel like playing dust in the wind you feel like playing songs youre proud of that didnt become as well known . The songs that are in our set are the songs we want to play. Do you still play carry on youve got to, right . There are a staple five or six songs that we play each night. And then there are songs they probably havent even heard. We play songs from all of our albums and we know there are severe kansas fans out there, but there are new ones, too. We pay just as much attention to the old ones as the new ones. Are you a fan of apple and spotify and things that some say have been bad for the music business . Its been great for us. We sold all our albums before that came along, anyway. Am has given us another revenue stream to put our music on and that wasnt there ten to 15 years ago. So its something that works very well for us. Youre also the bands manager. When ideas like the video games came up, when apple and all these things approached you, did it seem like a nobrainer at the time inspect did you have to sit down and think things through . It did. It did not seem like a nobrainer because we werent part of that before and we werent sure how it worked and what the quality would be. Early on, it was a bit of a throw in the dice to see what the quality would be and if we wanted to be associated with it and were glad we did. It worked out really well. Thats amazing. Some of the other things that youve done, though, have been playing with symphonies and playing with a lot of back up behind you. How did you get into those . Is that part of the artistic again, its part of the business. With any business, you have to look for new places to go. You cant do the same stuff over and symphonies opened up a whole new world for us as well as playing the university symphonies. Theyve played a lot of colleges all over the country playing. So that gives you a whole new fan base there that really wasnt there until we went there. So its the whole symphonic side has been exciting. Fleetwood mac has done that, too. Yeah. A number of bands have been doing it. Its a smart way of keeping things in. We hope so. Whats the next big step . Do you have any new things on the 40th year is a big step for us. You know. Who would have thought, because four of us went to high school together, and started out as just guys in high school playing clubs, and here we are 40 years later. So were just happy to be here. There will be a documentary thats being made of the band, of the six original members that were working on at this time. So that will be out this year and just hope we make it to the 41st year. Phil, were going to go to break, so if you dont want to share this now, you have any really good groupie stories like that you can share when we because youre married now, but like before you can you do this over here . Wow, look at the time. Wow. The groupies now are a little because on squawk box we have i have female fans that go crazy but they have blue hair, the ones that is that what shows up at this point . Yeah . No, its phil, we want to thank you very much for coming in. Its my pleasure. Thank you very much. We really appreciate your time. And again, good luck tonight at the concert. Thank you very much. Phil ehart. What are you charging 30 bucks for this tshirt . At least. More money all right. Coming up next, a final encore of the hour. And coming up the ceo of dow component travelers jay fishman is going to join us to talk about the debt, the economy and the insurance game. As we head to a break, check out the price of gasoline. Prices surging across the nation. A lot more coming up on squawk. Welcome back to squawk. Were going to get a final thought from our guest host, miles nadell. Advertising, youre ahead . Its going to be a good year. I think theres going to be a movement. I think theres going to be a bar bell. Firms that are able to drive transformational growth for clients, clients will fit more than they anticipated. If they cant do that, they wont. I think the big growth is going to still be the movement, the social media experienced all the money moving online . Not all moving. You just have much more accelerated growth. But look, you know, tv is still growing. You know, the up trends were strong. Best super bowl ever. Squawk is still growing. Squawk is still growing. So the pie is shifting. But look, in a low growth gdp striern, marketers need to spend money on marketing. They just want to make sure its working and driving return on investment. Okay, miles, thank you for that. Pleasure to be here. Got to weigh in after the super bowl, too. Okay, that would be great. Thank you, miles. When we come back more of our big lineup today. This is a lot of Corporate Leaders on tap with us next. Kelly king of bb t the ceo there. Also jay fishman the ceo of travelers. Roche ceo self earn schwann, Matt Shattuck the ceo of beam. Squawk will be right back. Youe who gets heartburn and then treats day after day. Block the acid with prilosec otc and dont get heartburn in the first place [ male announcer ] one pill each morning. 24 hours. Zero heartburn. And dont get heartburn in the first place all stations come over to mithis is for real this time. Step seven point two one two. Verify and lock. Command is locked. Five seconds. Three, two, one. Standing by for capture. The most Innovative Software on the planet. Dragon is captured. Is connecting todays leading companies to places beyond it. Siemens. Answers. [ kitt ] you know whats impressive . A talking car. But ill tell you what impresses me. A talking train. This ge locomotive can tell you exactly where it is, what its carrying, while using less fuel. Delivering whatever the world needs, when it needs it. After all, whats the point of talking if you dont have something important to say . We dont let frequent heartburn come between us and what we love. So if youre one of them people who gets heartburn and then treats day after day. Block the acid with prilosec otc and dont get heartburn in the first place [ male announcer ] one pill each morning. 24 hours. Zero heartburn. Jobs, jobs and jobs. Will todays report put a damper on the january effect . Its been a game of wait and see. Well give you what you need to capitalize on the todays numbers and tell you what it means for the month ahead. Plus the earnings cavalcade continues. Merck, exxon and chevron all expected to report in the next two hours. Well have Market Reaction and what it means for the economy. That is just ahead. Andist quiz time. I choose business ethics. How much do the nfl elite know about finance and the economy . Were going to find out in our annual financial quiz bowl live from new orleans as the second hour of squawk box begins right now. What you just said is one of the most insanely idiotic things ive ever heard. I award you no points and my god have mercy on your sole. Good morning welcome to squawk box here on krcht nbc, im Andrew Ross Sorkin along with becky quick and joe kernen. Futures pointing to a strong open on wall street. That, of course, ahead of the jobs report due out in 90 minutes. So anything could change. But it has been a january to remember the dow was up nearly 6 . The transports Even Stronger with a more than 9 gain. The nasdaq also positive, up 4 . Check out these statistics. The best month for the dow industrial transports and s p 500 since october 2011. Also the best january for the dow industrials. Strongest start of the year for the transports since 1991. And the largest january returns for the s p 500 since 1997. So it has started off strong. Well see whether that continues. Back to joe and becky. I think you guys have some earnings news. From merck, andrew, 83 cents which is two cents above expectation. 11. 7 billion in sales, versus an estimate of 11. 48 billion for 2013 the company is forecasting 360 to 370 a share. And that is versus an expectation of 368. All these things are right in line. The stock has a wide bid and ask right now. Maybe down a quarter. I almost thought, you know, its february 1st. This is the Fourth Quarter number. If everybody else can get it in by january, im not sure, but merck, its february 1st. They cant get their Fourth Quarter numbers in before fib. Its pretty complicated. I almost thought about not even i dont really think we were required to even mention these. Theyre so late. They do have a lot of difficulties. Ken fraichier the chairman of the ceo was talking about how they overcame significant challenges to come up with this. Theyre also talking about how theyre continuing to develop some things inhouse. The rapidly advancing they say many compounds they think potentially are first in class or best in class. Plus listen to this. When you start thinking about acquisitions. They say we will continue to pursue external opportunities to have the potential to deliver value to the company and its shareholders. Andrew youve been talking about how deals are picking up. Certainly sounds like they are on the hunt. People have been expecting a huge consolization in the pharmaceutical industry for a very long time. Its nonstop, really. Every company is one way or the other. Every company you talk about is like the combination usually the name is a combination of of everybody else. There should be you think it should be more. Maybe there wont be. Look at this deal the other day when they say theyre going to look at things a lot of times, could be biotech. Were going to have roche on and their headquarters in the United States are in south San Francisco because theyre headquarters impact the office space acquired looking at merck. A lot of people have been buying merck because of the 4 yield, as well. Trading at about 43 a share. Everything more or less in line with what does the market really want. We need to let you know about a developing story this morning. There are some reports of an explosion in front of the u. S. Embassy in ankara, turkey. At least one person is said to be dead. In fact the Associated Press is now reporting that two people were killed. Police are saying that a suicide bomber detonated a bomb at the u. S. Embassy in the turkish capital. This is according to the Associated Press and some turkish media that has been reporting on this. It only happened in the last half hour or so. We will continue to monitor the situation and bring you up to date as more details come in. Some other headlines for you this morning. We are less than 90 minutes away from the widely anticipated january jobs report. Economists are looking for 166,000 new nonfarm jobs. The Unemployment Rate is expected to remain steady at 7. 8 . Well also be getting some other key economic numbers this morning. The nations automakers are going to be releasing their january sales figures, and well get the university of michigans Consumer Sentiment index and the ism manufacturing index. A lot of Economic News coming your way. We also have some sad news to share this morning. Former new york city mayor ed koch, rescued the city from near financial ruin during three terms died at the age of 88 years old. Koch won a National Reputation with his feisty style and trade mark question, how am i doing . He served as new york city mayor from 1978 to 1989. And his tight fiscal policies pulled the city out of financial difficulties. He was a giant. I remember interviewing him a couple years ago, and he was a great interviewer. Always a colorful character. Lived a great life. He did. He did. The focus, of course, is on the markets, and jobs this morning. A strong january in the markets, that could set the stage for some big games in 2013. And we spoke to professor Jeremy Siegel yesterday about what he thinks is possible for the rest of the year. At the beginning of last year i kind of stuck out my neck and said that 70 chance by the end of 2013 were getting dow 15,000. And it didnt look very likely toward the end of last year. But i stuck to that forecast. And i still do now. I really think so. And i think 16,000 to 17,000 is a very strong possibility. This could be a really another doubledigit year. We have a power panel set up this morning. Vince reinhart is managing director and chief u. S. Economist at morgan stanley. And kelly king is chairman and ceo of bb t. He will be our guest host for the next two hours to talk about a lot of stuff affecting the financials vince, as an economist, that follows things closely, was that a good negative number for gdp if there is such a thing . In terms of the composition, yes. Ed line negative showed a big private demand. And thats whats really pulling us up. Essentially the private sector is picking up. Were showing the resilient of the market economy. Its just the politicians are in the way. We had a discussion, dont mean to get to it right away. Are we growing below our potential right now . Do we have a new potential because of globalization that is below i mean its a new normal were in where we should be happy with 2 . The new normal, because were after a severe financial crisis, everybody expecting a vshaped recovery is still waiting for it. Plain fact is after a severe financial crisis you have several years in which you grow more slowly. However for the u. S. The financial crisis is receding in the rear view mirror and we should be picking up. We think we were stuck in a growth channel centered around 2 , beginning this year probably next year, that growth channel is going to be more like 2. 5 . What about i know longterm its difficult enough to do it for this year. Do you think 3. 5 is on the horizon . Thats going to be a real stretch. Important because of demographics. The best thing we got going for us is that we are very good at extracting a form of energy in the middle part of the country that we dont like to that gives manufacturers a comparative i cant imagine that thats not going to be the thing all these other things. Theres always something that offsets some of the negatives and i cant believe thats not going to be a powerful thing for us in the future. I think so, too. Thats how we get to 2. 5 demographics are going to be a drag. Im being interested in your perspective. Were not talking about our clients about small businesses. A lot of bentup demand. Weve been kind of sitting on our hands for fourplus years now, because of all the uncertainty, you know, in the environment theres still a lot of uncertainty. If we had positive leadership out of washington, and some of the uncertainty went away. Dont you think there could be a mini boom here trying to replenish some of the inventories, equipment and technologies that have not been invested in . Absolutely. Thats the upside riz k to the forecast. We dont call 2. 5 a surge, vince. No. Upside risk to the forecast. I think if you want me to think about how you get over 2. 5, its all those ceos sitting with 1. 5 trillion of cash on their Balance Sheet beginning to worry about the competition. And all start investing at once. Mainly we dont think politicians will get out of the way all that quickly. What does that mean, get out of the way . Get out of the way meaning give you some certainty. Weve operated without a budget for four years. Theres a threat beyond sequestration, its easy to imagine a government shutdown. Its easy to imagine even more spending restraint. We dont have a longerterm sense of our fiscal position. We are on an unsustainable budget path. We dont need necessarily more consolidation right now. We need a plan. All right. So you would do what about, would you lower corporate taxes, would you do something with the territorial tax situation we have . I guess that would be a passive, right . And probably at least acknowledging, if the democrats would acknowledge that entitlements are a problem, maybe that would help, right, even if you dont do it immediately . So heres the good news. Good news is were so far inside best practices for delivering fiscal policy theres lots of things that we can do to get us to a better position. Republicans have to recognize you have to raise the average tax rate. Democrats have to recognize the best way to do it isnt raising marginal rates and underwriting an inefficient system. As someone who spent last week at davos and he said that he talked to a large number of european ceos who are eager about investing in the United States because of our projected suspensionly lower Energy Policy because of shell of course were going to get out of our way and saying let them do it. But thats encouraging that they can think about moving plants here now. Absolutely. I was at davos, too, and the most encouraging thing was that ceos really did see a path for brighter economic activity. Discouraging thing was there was a sense of complacency among european politicians. Thats another class of politicians that have to show some leadership. But they have a different kind of problem over there because they dont have really anything new. We have this new found energy thats really a problem for us. But getting back to that. I look at alternative growth rates over the past 20 years between the United States and europe and i look at that with pride because its truly 50 higher. Which has enriched our citizens 50 more. And it depresses me to think that did they just theyre early on this, this demographic that youre talking about, the constraints growth, the 2 , is that really what were looking at now . Were never going to beat europe by 50 in terms of growth from here on out because we cant . Never say never. A market economy is very resilient. And demographics were weve got to let it be a market economy, though, vince, is that one of the problems . Thats why i keep saying if politicians get out of the way. Also we have some control of demographics. Were getting older no doubt. But if we do Immigration Reform right, we can significantly offset the effect of the aging population. If you were in charge, vince, would you im ready to, i dont know whether i can get an amendment through, how many are there, a lot . But a couple of them we dont need i think. But if we have maybe ill replace one but if we could put in that everything the government does someone should have to look at it through the president ism of how it affects growth and employment before we do it . I dont think were ever considering how it affects growth. Were doing all this stu im not really i dont really understand the rationale i guess we want to be fair or we want to be pc or we want to be alternative or renewal or whatever but everything were doing now has nothing to do with growth and that doesnt help. We have to just vote on that right now. We voted unfortunately. In november. Am i on to something for not, vince . It should be about growth. Weve got a group of people in washington who have the skill set to do it at the congressional budget office. They do a lot of that. Youve got to give them credit. I think youre exactly right. Legislation really has to be scored for what does it mean to our wealth, that is the net present value of our ability to create goods and services. Yeah. Okay, vince, we appreciate it. Kelly will be with us in the interview guest. Give us your own opinion, kelly, for the next two hours. When we come back, travelers has been on a buyback binge. We have the ceo jay fishman. Hes going to talk to us about the companys growth plan, americas debt crisis, and the aftereffects of superstorm sandy. Good morning, jay. [ man ] ive been out there most of my life. You name it. Ive hooked it. But theres one. One thats always eluded me. Thought i had it in the blizzard of 93. Ha never even came close. Sometimes, i actually think its mocking me. [ engine revs ] what . quattro welcome back to squawk box this morning. Checking futures right now. Dow looks like it would hope up about 50 points higher. S p 500 open up about four points higher, nasdaq up 10 points higher. Merck in the news this morning, it earned 83 cents per share, two cents above estimates. Watch that stock today. Revenue was also above consensus. The company saying new products that it characterizes as first in class are rapidly advancing through its pipeline. In about 15 minutes were going to be hearing from another drug giant the ceo of roche is going to join us on set to talk cancer cures and much, much more. All right. Dow component travelers partnering with media affiliates to highlight americas debt crisis in a new onehour documentary entitled overdraft. Joining us on set is jay fishman, chairman and ceo of the travelers companies, also dubbed wall streets honest man by forbes magazine. Jay, its great to have you on set. Great to be here. We have a lot of things to talk about. Why dont we start off talking a little bit about whats happening right now with americas debt situation. Sure. We got involved three years ago, four years ago. We started becoming concerned with the longerterm outlook was really very problematic. So we started doing a Data Analysis of the budget. Really did a very deep dive into it. And i think we understand it better than most. The challenges are significant. We felt that it was important to help educate the American Public so that our leaders would have a greater support to do what they have to do. And the numbers really are over the intermediate term are really impressive. Weve watched fix the debt and a lot of these organizations that are backed by businesses who have run the numbers and are growing concerned about it. Ive been surprised that it hasnt picked up more steam with the American Public pushing pressure back on their politicians to deal with these things. Its a complicated problem and while everyone can probably look at the logic of it, they also dont want to lose the benefits that theyre getting right now. Youve got it absolutely right. But heres the numbers that are really so compelling. This past fiscal year, social security, medicaid, and medicare was a trillion and a half dollars. By 2020 simply because of demographic shift in the country thats going to be 2. 5 trillion. A trillion dollars more every year in seven years. That 2. 5 trillion is equal to every nickel that we brought in last year. Total tax revenues last year were 2. 5 trillion. And so if you talk about trillion dollar deficits, its not terribly difficult to look forward and doing something to really be talking about 2 trillion. 2030 or 2025 and it just keepts getting worst. It gets worse. There are 10,000 people a day turning 65 for the next 19 years. And this is the baby boom. This is what you do, too. As an Insurance Company its all about actual aerial assumptions. So you actually know this. I think people will look at you and get glazed thats not for sure that thats going to happen. As an Insurance Company you need to know and you are sure. The demographics are clear between 2000 and 2010, so history, the age group of 55 to 64 grew by 75 . Wow. Thats the group thats going to move into the entitlement arena. So id like to think about it differently than most. Rather than debating it as a taxing problem or spending problem, its a demographic challenge that weve never faced before. Weve never faced whats going to come at us and its combined with all the expensive medicine were developing on a daily basis that youre going to try to get to ten times as many people. Exactly. And the implications are serious. Theyre serious on the m community. In and of itself as people get older demand will go up. Demand will go up. Were trying to reduce revenue. Reduce costs. These are really first i dont think theres one answer. I think there are many. And i think, for example, simpsonbowles is a pretty good one. If it were me, and just one, and i could be wrong about this, id go about it first by aggressively means testing social security. And really driving it to those people that it is supposed to help. And you could do that tomorrow. And it becomes welfare not a basic right. They wont let you do that. I think that these programs have become part of the american fabric. I believe that. And to have a serious discussion about eliminating it is really silly. Were not going to do that. They see means testing as eliminating it. It is what it is. We have a baby boom generation that has had an impact economically over its entire life span. If you track the baby boom youll track investment in Elementary Schools when they first occurred. Youll see growth in secondary education. Youll see the housing bubble that was tied to the family formation of the baby boom. And now theyre about to hit retirement. It is great to come the generation right behind. Its like the fields already been raised the longer we wait the more those who are behind it are going to have to absorb the cost. Right. And thats the urgency. Thats not fair. We dont have a lot of time. I do want to talk to you about the earnings you put out. They were better than the street was expecting. You had catastrophic losses of 689 million after taxes. That was mostly sandy. But you did better than the street was expecting because you were able to get better margins out of things. Are price increases already coming as a result of sandy or is this even before what well see down the road . This is before. Before sandy. And i dont really know how impactful sandy will be in pricing. Sandy was in the playbook. It was something that all of us in the industry had contemplated. So nothing dramatic. We started raising prices now three years ago, driven by two things. The decline in Interest Rates unprecedented, and for a industry that invests in fixed income securities, thats a cost of. Its a its a cost of what we do. And its, as rates fell, weve got to reflect that in pricing. And importantly, weve embraced the nation that weather is different. I dont know why. Im not a scientist. But, we do tend were a industry that actually says recent results may be indicative of future results. Sort of different from the mutual fund business. And if youre not impressed by whats happened to the weather in the last few years then youre just not keeping your eyes open. Im not impressed. We had three storms twice as much as sandy in 1953 and 54. Three storms that were twice as bad as sandy. The real dynamic of weather has been the tornadoes, and hailstorms, starting in 2010 right. But i remember variability myself. Tornadoes people will use droughts in pakistan, theyll go all the way over to pakistan but they wont use the coldest winter in china that weve had in 20 years. They dont use that one. 2005 was katrina wilma. We were thinking it was going to be every year. And 2006 and 2007 had no storms. We havent had a category 3 in the longest period in a century. Absolutely right. But the impressive part here has been the change of weather patterns in the midwest. The tornadoes and we can go back and have ten years of under. Could be. But were an Insurance Company. Youre making money hand over fist. People want to see more about overdraft where can they find it . Pbs. Its on the website now shown in about 40 of the markets and its going to continue to roll out. Okay. We want to thank you very much for joining us today. Well talk to you again soon. Squawk will be right back. Was brought in k with multiple lacerations to the wing and a fractured beak. Surgery was successful, but he will be in a cast until it is fully healed, possibly several months. So, if the duck isnt able to work, how will he pay for his Living Expenses . Aflac. Like his rent and car payments . Aflac. What about gas and groceries . Aflac. Cell phone . Aflac, but i doubt hell be using his phone for quite a while cause like i said, he has a fractured beak. [ male announcer ] send the aflac duck a getwell card at getwellduck. Com. [ babies crying ] surprise your house was built on an ancient burial ground. [ ghosts moaning ] surprise your car needs a new transmission. [ coyote howls ] how about no more surprises . Now you can get all the online Trading Tools you need without any surprise fees. Its not rocket science. Its just common sense. From td ameritrade. Omnipotent of opportunity. You know how to mix business. With business. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. You can even take a fullsize or above. And still pay the midsize price. I could get used to this. [ male announcer ] yes, you could business pro. Yes, you could. Go national. Go like a pro. Checking the futures right now as we head to a break, we got green arrows, 48 points up. The dow looks like coming up next we got swiss drugmaker roche forecasting a rise in sales and profits this year. Ceo severyn schwan is going to join us on set to talk about the profit pipeline. This is for real this time. Step seven point two one two. Verify and lock. Command is locked. Five seconds. Three, two, one. Standing by for capture. The most Innovative Software on the planet. Dragon is captured. Is connecting todays leading companies to places beyond it. Siemens. Answers. Welcome back to squawk box everybody as we wait for the january jobs report, about an hour from now, lets take a look at some of the earnings that have come in. We heard from toymaker mattel. It earned 1. 4 when you exclude certain items. Three cents below what the street was expecting. Although mattel said it did well. It also raised its quarterly dividends to 36 cents from 31. Rubbermaid earned 43 cents a share from the Fourth Quarter. The consumer productsmaker said it did well considering tough Economic Conditions in europe, as well as potentially negative factors. And some other news sony is rumored to be readying a playstation 4. Although it wont confirm that the company is hosting a Playstation Event in february. On february 20th in new york it says it will only talk about the playstation business. Joe ill send it back over to you. Thanks, beck. Drugs. Swiss drugmaker roche reporting earnings earlier this week. Cancer drugs. All saw demand grow in 2012. Whats on track for 2013 . Joining us now severin schwan, ceo at roche the Worlds Largest maker of cancer medicine. Great to see you. And watching your Company Perform is in stark contrast to a lot of other drug companies. I wonder how much of it has to do with the relationship, your long relationship with genentech, which is now 100 owned by roche, and your headquarters in this country. Morning, joe, great to be here. Yeah, i think it has a lot to do with our strategy. Our clear focus on innovation. Our focus on medical differentiation, our focus on developing medicines and diagnostics which really make a difference. Really going for medicines, which for long life, which improve the quality of life. That is what our strategy is about and i think thats what makes a difference. The reason i just mentioned genentech from San Francisco. Yes. Yes, itsen extremely research entity, and that is key. That is key. And science and the progress of science and translating science into new medicines, that is what this industry is about. Which would you say the industry and some of your competitors have failed to pursue that . Ive seen them do spend money on making sure they get a patent extension by i new extended release version of a drug. Or ive seen them ive seen them focus not necessarily on innovation and new growth that actually will create their own demand instead of trying to maintain something they had in the past. Im actually quite positive about the whole industry . Im quite positive about the industry. And there are two elements here. One is the industry has been going through what we refer to as the patent cliff. A number of important medicines have lost patents. And theres a side of that, you know, as a industry. We have been in a similar position, our patents are not yet expiring but for the industry as a whole i think we have reached the bottom and will see more growth. What is even more important is the progress we see in science. There is a number of decisions that we start to understand, what is really going on on a molecular level, exactly. And that helps us to find new targets, and that results in new medicines. And as a piece of evidence for that, interesting to see that we see an increasing number of medicines being approved by the fda. Last year again was a record year with 35 new molecular entities being approved. Frustrating to watch because we sequence the genome what 15 years ago, and to go from the lab bench to the bedside is taking much longer than people thought. But you think that were on the cusp absolutely. 15, 20 years ago we saw a tumor. But we had no clue what was happening inside the tumor. Now we really understand the tumor on a molecular basis. We understand the signaling pathways and as such we can target medicines very specifically and do something about it. And weve seen great progress in cancer. Now if i look into diseases of the brain, neuroscience, it reminds me a bit of what has happened 10, 15 years ago in cancer. The brain has been a black box for many years. And thats the first time that we start to understand what are the col ek lar pathways, what are the real reasons for diseases. And that means we can do something about it. And as a side of that we have new medicines coming up in these ar areas. Its exciting. Last question, severin. You, i mean, im not going to say its all genentech but you do see more Drug Development coming out of your u. S. Operations maybe than ones in europe. Has the the difference in the way we regulate our pharmaceutical industries in europe versus the United States has innovation been stifled in europe from, from price controls and other now, first of all, let me say that there is a number of interesting medicines also coming out of our Research Labs in europe. Genentech has great science, and great medicines have come to patients, but equally we are on very interesting medicines in europe, as well. For example so you dont see any so you dont think that the different Government Policies of the yeah, i mean, bothed medicines which were developed in europe and the medicines which were involved in the u. S. Are really made for the world. But i do agree with you, is that the fda is very open to real innovation and is helping to bring really differentiated medicines to patients quickly. I wish we had more time. And do a special on but anyway. Severin, thank you. Thanks a lot. When we come back, Houston Texans owner bob mcnair will join us from new orleans to talk about this weekends big game and business conditions. But before that, it has become an annual squawk tradition. The super bowl financial quiz. Brian shactman joins us from the site of super bowl xlvii in new orleans with a preview. Brian, we love these questions. Becky, if you can ask anybody for a 15second definition of sequestration. Theyre going to struggle. Imagine what these guys had to say. [ male announcer ] every car we build must make adrenaline pump and pulses quicken. To help you not just to stay alive. But feel alive. The new cclass is no exception. Its a mercedesbenz through and through. See your authorized mercedesbenz dealer for exceptional offers through mercedesbenz financial services. We dont let frequent heartburn come between us and what we love. So if youre one of them people who gets heartburn and then treats day after day. Block the acid with prilosec otc and dont get heartburn in the first place [ male announcer ] one pill each morn 24 hours. Zero heartburn. If you play football and you make it to the super bowl, you dont want to run into brian shactman, its a rite of passage, and not the normal media day, interview. Its the financial quiz bowl. Where we ask players and coaches a variety of financerelated questions, they should all really watch cnbc for this happens, and then theyd be better. And if this year is anything like past years, were in for a real treat. Were not trying to make anyone look bad, brian, because we could not probably read those, you know, all those plays very well ourselves. But lets lets i cant wait to see this. Youre in new orleans. You have the results. Well, you know, whats interesting, joe. These guys eat, sleep and drink football and on media day theyre not prepared for what they get. And they certainly were not prepared for us. What do you think is a better stock to invest in right now, facebook or twitter . Twitter. Twitter is probably not a publicly traded company. Facebook is. What is sequestration . Could you use it in a sentence . I have no idea. Sequestration . Sequestration. I dont know. Sounds like a governmental spending on something thats unnecessary. Thats what it sounds like to me but im not certain. Thats a good answer. Your thoughts on the debt ceiling. No. You think we are in danger of a bond bubble . I dont even know what that is. Which mario has done a better job monti or draghi . Monti or draghi . You know i have no idea what youre talking about, so whats your favorite show on television . Hmm. American greed. Really . Yeah. Can you open that up for me . Oh you just made my day. I wish we could show more of that stuff. That was michael james, guys. And he was touched. Because he tweets about american greed all the time. And i went on to talk to him about his favorite show and hes like god forgive me, but the one when the preacher steals from the church, and he went through this whole thing about how thats his favorite show. Matt burke went to harvard he knows his stuff with the ravens and the kicker for the niners, hes a cramer guy and hes a conservative aaarated taxfree bond guy. I feel so bad for these guys because its kind of like talking to me about football. If you ask me those questions, like oh, yeah. They would get angry when youre doing this . No the problem with this stuff, andrew, is that they have to talk to you. You know most of the time we prep what were going to do. Sometimes we went straight up to them. Some of them clearly were like theyve already had some ridiculous questions so theyre like, okay, bring it on. Theyre ready for those. Whats the temperature down there, brian . Its cold. Its actually pretty cold right now. The suns about to come up. Its i dont know, i got the weather channel. Whats the temp right now . 44. Because you went with the you went with the sweater. You went with the sorkin sweater hes pulling it beautifully i might add. Ive been on air three days in a row ive been sorkin sweater every single day. Love it. Love it. Working. Working for you. But its colder here and yet youre i may wear a sweater next week. Its supposed to get really cold here in new york next week. And there will be nowhere to youre not going to be here . No, im not. You should get a different color sweater every day. Sweaters brian if youre back come on and you can wear your sweater, too. There you go. Sorkins sweater of the month. Sweater of the day each day next week. All right, brian, have fun. Do you have tickets, by the way, brian . You going to get to see the game . I dont. Listen if the patriots were in it i was going to fight tooth and nail to stay. But ill be hopefully with you guys on set monday morning. We look forward to seeing you back on monday. Have a fun day today. It may just be days before the super bowl 2013 but our next guest has his eyes set on super bowl 2017. Bob mcnair, hes the owner of the Houston Texans, and he joins us now with more on the business of bringing the championship game back to houston. Good morning, bob. Good morning. Good morning. Nice to be with you. So, youve been listed a very famous man to help you bring the super bowl back in 2017. Jim baker. How did that happen . Jim is a friend of mine. Been a friend for a long time. And he really represents houston better than anyone. And hes respected around the world, and all owners know who he is, and i just couldnt think of anyone that could represent our city better than jim baker. So how does it work . Give us whats the jockeying behind the scenes . How does this happen now . Well, well make a presentation, each of the cities will, but its up to the owners, who vote on it, and its just their own individual determination as to where they want to go, and of course, you know, they dont want to go to the same place over and over again so they move it around. And then we reward cities that have come up with new stadiums and given public support to it. So there are a number of considerations like that. But, it really boils down to the preference of the owner. Lets talk about the economics of the super bowl. How much is it worth to the host city . Well, its been estimated at anywhere 400 million to 600 million in terms of revenue thats generated. I think like here in new orleans i think theyre over 5,000 media people here, alone. But youll have more than twice as many people. I mean, if your stadium holds 75,000, youll probably have 150,000 people in the city during that same period of time. But its big, and the publicity you generate is just magnificent for the host city. Is there money to be made for the but a lot of money goes to the league, i would think, right . How much of it does actually go to the team . Andrew, most of it virtually all of it goes to the league. The team makes a little bit, not much. Thats not tivation. The motivation is what it does for your city and for your fan base. It does help the local team in terms of generating support, sponsors view your brand as being stronger, and its easier to sell sweets if youve got a super bowl coming up. So, theres some indirect benefits. But, direct monetary benefit is not significant. Bob, this is kelly king. Fellow north carolinians. How are you today . Fine. The tar heels doing okay . Theyre doing great, thanks. Bob, just mention for the publics perspective, you know, our banks been down there only a few years and the whole cando positive attitude in texas is so exciting. I would think people would want to have the tournament down there. Oh, yes its great. We would have bid 2016, also they asked us to bid but weve got the ncaa final four that year and so we had to move some dates around at reliant stadium in order to accommodate that. But no, houston is exciting. You know, and the city is doing great. We added 85,000 new jobs last year, and you know, its leading the country in terms of general business prosperity. Who are you up against . Who else is competie ining for . Well have San Francisco and south florida bidding for 2016. And then the loser of that will compete with us for 2017. So we really dont know. Now if the 49ers win does that help them at all here . Well, i think well i would say yes, probably. But, the fact that theyre building a new stadium i think thats the strongest thing going for them. And we typically reward cities that have just gotten a new stadium. So, you know, id say that would probably make them the favorite. Bob, did the debt game with the patriots and with the ravens, did that suddenly make you think wow these ravens the patriots handled you guys and you know you did something, j. J. Watt and my bengals for two straight years, i dont know, but, did that show you something with the ravens the way they handled the patriots after the patriots beat up on you guys . Well, that just shows you, if you dont play your best, any of these teams can beat you. And when we played the patriots they played very well against us. They didnt drop balls. They didnt make mistakes. And they beat us. We didnt play our best. We didnt make the plays when we needed to. Then when they played the ravens, the ravens made the plays and the patriots didnt. And that was the ball game. So both these teams are, you know, great teams and here in the super bowl weve got a great matchup. And you know, i think the 49ers maybe have a little more talent. But i think theres emotional edge for baltimore, and you know, that will be the question. Will emotion overcome a little edge in talent, or will talent prevail . But i think it would be a good game. Ariane foster, you always get worried when you think of Something Like is it open heart did he have to have or what would no, its supposedly minor surgery. What they do on somebody else, you know that expression, right . Yeah, thats right when its your neighbor. Thats like when hes out of work its the recession. When youre out of work its a depression. Exactly. All right well we wish him luck, and you as well, bob. Thank you. Thank you. Were looking forward to a great super bowl and look forward to seeing you all again. That would be great. Bob mcnair have a great time this weekend. Coming up, much more from our guest host kelly king of bb t and take a look at the lineup for the next hour because its all going to be about the january jobs report. Moodys steve chist mark zandi, former council of economic advisers chairman Austan Goolsbee and Jared Bernstein. Their predictions and reaction to the number in a special jobs friday hour of squawk box that you can only see here on cnbc. And dont forget you can find squawk box online and on mobile, too. Follow us on twitter squawkcnbc is the handle. Like us on facebook if you want a little thumbs up, and you can of course visit us on our show page squawk. Cnbc. Com. And theres been a lot of new stuff thats been going off on these pages so check it out. Welcome back, everybody. Lets chat withs guest host kelly king who is chairman and ceo of bb t. We were talking about how businesses want to be optimistic, ceos want to be optimistic. Whats holding them back . Well, a continuing concern about all of the areas of uncertainty. Its interesting, ceos want to do business. They want to grow. They want to add employees. Thats how we make money. Thats how we reward our shareholders. And for almost five years now everybodys been holding back. You know, not making investments. And so the question is why not now . But for ceos to make longterm investments they have to have a certain degree of reasonableness in terms of expectations. And so today, you know, people say we should feel better because of we quote unquote got past the fiscal cliff. We didnt do anything. We put it down the road aways. We still have these questions about taxation, about health care, about entitlements. Are we ever really going to rein in Government Spending. That leaves a ceo with a sense of frustration, if not depression, about where things are going. That has to leave a banker with a sense of frustration if not depression, as well, because the fed is punishing you for any funds that youre not putting in to investments at this point. Youre not getting anything back. Thats right. The fed has arbitrarily pushed rates down to extraordinary lows. And its really hard for bank Balance Sheets. And so we have to think in terms of how to work around that fictitious type of Interest Rate scenario. How do you do that . Well, so you really cant do it on the asset side in terms of bonds. Typically we have much more income today coming from our investment portfolio. So, loans are not growing very rapid by because the economy is slow. So what we have to do is cut costs, and then in a case like ourselves, we look for other areas of strategic opportunity are there new areas youve gotten into that you havent been in the past . Yeah, we have. For example, we really got opportunities for us. This year were doubling our operations, adding 30 new commercial branches which is a large investment. Were expanding our Corporate Lending business to a national platform. Weve mostly been in the eastern part of the country. We have a really growing group of special odds lending businesses. So weve got some unique opportunities. And i think thats what other companies try to do. The good news is youre building out that infrastructure for when things turn a little bit. When things get more confident you will be there. Which is precisely right. We and i think most companies are poised for growth. Theyre ready to invest. And i know it just stems my value, it really is as simple as having a clear vision, a runway if you will, in terms of where were going. Thats all about positive leadership out of washington. Well continue this conversation with kelly king. Hes with us for the rest of the program. When we come back well be joined by zandi, bernstein and goesby. Not a law firm this is our jobs panel coming up at the top of the hour so we can talk about jobs friday. And then we get money drunk with the ceo of beam. Thats one of the nations largest spirit companies. That interview is just ahead. Squawk box will be right back. Otherworldly things. But there are some things ive never seen before. This ge jet engine can understand 5,000 data samples per second. Which is good for business. Because planes use less fuel, spend less time on the ground and more time in the air. Suddenly, faraway places dont seem so. Far away. [ male announcer ] every car we build must make adrenaline pump and pulses quicken. To help you not just to stay alive. But feel alive. The new cclass is no exception. Its a mercedesbenz through and through. See your authorized mercedesbenz dealer for exceptional offers through meesbenz financial services. Jobs data that could move the markets. Well get the january employment report at 8 30 a. M. Eastern. Our panel is ready with some final predictions. Well break down the numbers. Plus the ceo of beam is going to join us and he spent some spirits to help us either celebrate job growth or drown our sorrows away as we get a weak numbers. Ed the third hour of squawk box starts right now. Welcome back to squawk box here on cnbc, first in business worldwide. Im joe kernen along with becky quick and Andrew Ross Sorkin. Our guest host is kelly king, chairman and ceo of bb t bank and we are counting the minutes and seconds to 8 30, because thats when were going to get the january jobs report. Youre looking at a live shot of the official neighbor department clock. What date did we do it in december, steve . Has it been four weeks . Ill have to check. So its really the 8th. It cant be the 8th. But it was a quick turnaround. We were just here. Really . I wasnt here. It was a pretty good you mean january was good . The 4th . Yeah, thats what i mean. I think they did it late, didnt they . I dont know it just came around really fast. Do you know what happened yesterday . You made some ridiculous comments. Ridiculous you had to do this torturous calisthenics to get the idea that maybe capitalist was treated better in the private sector. I understood what you were saying. Weve assembled our weve assembled our got it. He finally came around to that. It was painful. Question about austerity. It was painful. Going to be shortterm pain for longterm gain. Thats right. I was just yelled at by the producer. Weve assembled our panel of thank god bring us predictions and analyze the data. Austan goolsbee, who he was just here. Jared bernstein is almost a coanchor and mark zandi whos been nailing the adp numbers now the pressure is on. Now i get nervous about this day. Every monthist like what is the exact number you gave us on 192. Thats private sector. Which is good. Joining us in a few minutes. I think exxon is reporting, as well, there was another dow component earlier. Andrew, merck. Yep. Want to tell us about america . Dow component merck did report 83 cents a share. A two cent beat. Revenue also topping expectations. The company has been cutting costs in an attempt to soft be the hit from increased generic competition. And joe, whats exxon mobil, the headline number is 220 versus the 2 that the street was expecting. We have a net income number of 9. 9 billion dollars. Oh. What was the estimate . No, i mean 9. 9. They used to do 10 billion in a quarter. Which theyre ahead of that if prices continue like they are. 97 dollars for crude oil. We get this release a little slower. But they do have a conference call. Our producer is listening in and is telling us what theyre saying right now as its coming out. Is apple back above now . Its neck and neck each day depending on what apple does. 410 billion market cap. Called higher today for exxon on these numbers. You like that horse race . Called up a dollar. What does that horse race mean . Is that like old economy, new economy . They think were going to run out of oil. But we never ran out of stone in the stone age but that ended. For me, if i own a millionth of something i think id rather own a millionth of exxon on a millionth of apple, wouldnt you . I think i could i think it makes more sense for exxon to be worth more. The world seems to make more sense. Ninth century england in running out of coal. They thought it was a huge crisis on the way. Every actually the opposite is a lot of cases. We learn how thats capitalism at its best. Didnt used to happen. Right. We got to get through have another one of those moments. Im going to give you a moment. Lets get to a couple other sorries. We do have a very important update. A suicide bomber has detonated an explosive device at the entrance of the u. S. Embassy in the turkish capital of ankara. A Police Official told the Associated Press that at least two people are dead. The u. S. Ambassador to turkey says that one of the embassys turkish staffs killed. Were going to continue to monitor that situation and bring you updates as we get them. Some other sad news to bring you this morning. Former new york city mayor ed koch, combative politician who rescued the city from near financial ruin during three city hall terms has died at the age of 88. Koch served as new york city mayor from 1978 to 1989, and his tight fiscal policies pulled the city out of financial difficulties. Lets take a look at the markets this morning. You are going to see at least at this point some green arrows for where the futures are trading. Dow futures up by 62 points above fair value. S p futures are up by more than 5 points, close to 5. 5 points. And this is all coming after an incredibly strong month of january. We watch through this the first trading day of february. But we did watch through the end of january. For the month, the dow industrials were up by 5. 77 . The dow transports were up an unbelievable 9. 37 . The s p 500 up better than 5 . The nasdaq up better than 4 . This was the best month of january for the dow industrials since 1994. The best for dow transports since 1991 and the best for the s p 500 since 1997. A lot to live up to today but again you are seeing some green arrows before we get those jobs numbers. Right now as we get into the first trading day of february. Merck down a dollar. Why . They reported earnings. I dont know what was wrong with the earnings but thats not helping the dow. But exxon is. As you can see right there, theres a look. 1. 76 . 42. 49. If you were watching overseas you did see some red arrows at least with south korea and some of the other markets. I think australia was trading higher in overseas activities there. European markets have some green arrows. Cac up by about 1 . Some modest gains in london and in germany. Lets get the countdown to the january jobs report. We are less than 24 minutes away, we have assembled our panel of experts to go through their final predictions before we get the numbers. Mark zandi is the chief economist at moodys an litics. Austan goolsbee is the chairman of the former economic advisers under president obama. And Jared Bernstein is former economic adviser to Vice President biden. Hes a senior fellow at the center on budget and policy priorities and a cnbc contributor. Of course we have Steve Liesman with us and our guest host today kelly king who is chairman and ceo of bb and t. Lets go down the line. We were just talking a little bit, mark, about your adp prediction. The number was private payrolls. What are you looking for . 180,000 jobs. And Unemployment Rate stays steady at 7. 8 . Youre a little ahead. What is consensus . 160 to 166 depending on which one, i think thompson was at 160. I actually think if you had done one overnight, i think its crept up. I think the expectation on the street is a bit higher than this 166 right now. Why is that . Because of adp. Because of a bunch of other things. People seem to have gotten a little more optimistic. I read about half a dozen reports this morning, they were all in the 180, 190 range. Did the issue impact everybodys throwing that out. Im a little more pessimistic than the consensus here. I dont come up with numbers. But i would takes under of goolsb goolsbee. Is the view that the gdp thing maybe hits in two or three months . I just think the environment of the Fourth Quarter was one where people were not conducive to hiring. Its not clear to me that people brought on added employees. He says hes taking your number austin. Whats your number . Around 1 55. You know, around consensus but shaded a little on the soft side. Because i just dont see growth being that high. I dont think i think well likely get some recessions on that Fourth Quarter number. Because the Employment Data wasnt as bad as the gdp number was. Its still not great. The growth rate is not high enough. Until it gets well up above 2 i dont think were going to get th that. Unemployment rate 7. 8 . I think we probably stay the same on that. Jared how about your numbers . 160 overall, 170 in the private sector. So 10,000 down in the public. I discount the Fourth Quarter kwpd. The things that really brought that number down i think is well known now. The inventory component, which was very volatile jumps around. Thats a change of the change. And then the defense piece which seemed to have some anomalies towards the end of the year, so i dont think thats so much of an issue. Im kind of where austin is. If you look at the year over year gdp growth its 1. 5 . The year over year kind of smooths out some of those volatility issues. Thats below trend. I guess right now, trend growth, gdp probably around 2 . It seems like when were hitting two we were getting jobs numbers in the 150 to 170 range. So were probably a little below that right now. I think trend is probably still 2 , 2. 5 . When all the data come in, come out. The key thing in this report is the benchmark revisions. Once a year, the bls benchmarks this survey based data. Actual employment counts for Unemployment Insurance records. You mean rather than the political rather than this is this is a pure count of jobs based on the actual tax related actual number. We know of march thats going to be revised by 400 k. Its likely to revise the whole rates of growth since then. I want to stop you there. Because what happens, if this exercise is we get the revisions due march of 2012 for the prior 12 months then the market has to kind of reagist the expectation and think you know what from marchianward, including today, where are things . In general, the post bench mark numbers tend to go in the direction of the prebenchmark. So if you added 400, then you can kind of begin to feel like we may be 30, 40, 50,000 higher than the number being reported right now. Yeah, so the Monthly Average monthly job gain of the past year, for the past two years has been 150,000. So with this revision, well have to see but it could be closer to 175. So things are better than we think . Or yeah, so well a couple things. It may mean that the gdp numbers are going to be revised up to be more consistent. We dont know. Were going to get big revisions to that this summer. But also could be productivity grows a lot slower. Let me have one more thing. Were also going to do Population Estimates. The whole Unemployment Rate gets a step remember last year at this time we had at 0. 2 change in the Unemployment Rate . It was a big deal becky you were here. How can you not remember this . 0. 2 stepdown all this you know yelling and screaming about the government doing all this stuff. But anyway, well get the same thing again the expectation is that it wont be as extreme because last year what they did was they took the census numbers and plugged them in and now theyre just doing a revision. Should not be as big but just be prepared at 8 30, going to be a lot of data, leaning heavily an zandi and bernstein here and austan. Kelly real quickly, your point . You have to look at the longterm employment. Ceos just dont make decisions. You dont hear gdp was plus 0. 1 or hooir a lot of people its really about Strategic Initiative which is based on expectations and longerterm view. Im with you. Im a little on the conservative side. Thats bb t on the conservative side. Exactly. But i think that the real issue is, theres still been no change over the last several months in terms of optimism, and until that changes, youre not going to see much change in growth. You might go 150, 160, 170 but we need real change we did some survey data and it seems like the sense that we might hit the debt ceiling and not have it roll over that seems to be coming out of the market. Right . I mean the idea that europe is aflame. That seems to come out of the market. It feels like some of the worst case scenarios. Im not saying good scenarios but the worst case seems to be out. I think what youve got there is temporary psychological reaction. Real temporarily feel kind of good then i fell down and say but nothing really good happened. The worst thing didnt happen. I feel like defusing these miss cal bombs gets a lot more credit than it should. Like it feels good like when you stop banging yourself on the head with a hammer it feels good. What we ought to be thinking about is how we can actually increase the rate of growth, particularly on the job side, so instead of just kind of solving these traps we set for ourselves guys, i think as we should say every month, dont put too much on any one month. Remember, the payroll numbers, plus or minus 100,000. And so when the expectation is 150,000 plus or minus 100,000, thats a lot of variability. Its not unlike comparing exxon to apple. And if we said instead of whos the most valuable, whats the difference between apple and exxon that number is going to bop up and down and all over the place. Thats what we do here. Weve got a ton of hires and a ton of layoffs. We take the difference, we dont want to get too much over just the average that comes from the growth rate. On the household the confidence interval on the Household Survey is 400,000 for employment. That is if employment growth is below 400,000 on the Household Survey, it could be zero. All right, guys, stay right there. Were going to continue this conversation as we count down towards that january jobs report. Okay. Coming up as becky just said we are counting down to that january report at 8 30 a. M. Eastern. There you can see the time, a little over 15 minutes were going to get back to our panel for some final predictions in just a moment. But first, beam is out with its Fourth Quarter earnings. Earlier this morning. And its beating expectations on the top and the bottom line. The ceo is going to be joining us next to talk about the appetite for spirits, the slow u. S. Economic recovery, we might drink some of those bottles up during commercial break. [ male announcer ] you are a business pro. Executor of efficiency. You can spot an amateur from a mile away. While going shoeless and metalfree in seconds. And you. Rent from national. Because only national lets you choose any car in the aisle. And go. You can even take a fullsize or above, and still pay the midsize price. Now this. Will work. [ male announcer ] just like you, business pro. Just like you. Go national. Go like a pro. There you go. Welcome back to squawk. Beam reporting Fourth Quarter earnings topping estimates by a penny. The companys ceo joins us now. Matthew im holding, you should know, a bottle here of makers mark. We havent opened it yet but when this interview is over we might do it. Give us a sense of what just happened this past quarter. Thank you. Well we had a very good year. It was our first full year as a stand alone company and beam beat our expectations. Sales were up 6 on a comparable basis. Our epf was up 13 so were delighted about those results and pleased about the fact that it continued into the Fourth Quarter. Is this something that can hold up in the liquor business right now . Theres talk about a lot more growth in this business in part because we do have an economy thats coming back and i also think people drank during the swoon. Absolutely. The great thing about the spirits industry is that it rides very well throughout most Economic Conditions and our performance during the past year has been very consistent and very positive. Our industry does reflect the ups and downs of the economy. I was listening to your conversation earlier about the u. S. Economy and certainly over the last year weve seen the u. S. Market growing at about the 3 to 4 level and seen a return to premiumization which reflects increased Consumer Confidence and weve seen pricing its inelastic. One thing we do see is like people move between hard liquor and it seems like theres cycles. They go back to beer and wine, hard liquor, beer and wine. Where are we now . Well, weve had a very good experience in the spirits industry. Weve seen increase in share of overall Alcohol Consumption over the past ten years about 40 basis points from beer and from wine and i think that is a resurgence of the Cocktail Culture which is certainly showing no signs of slowing down. Is it less calories to drink hard liquor . Not to say. In alcohol the calories are in the not just the beer i think what youre seeing in spirits is a number of benefits, overall variety and a lot of choice you cant get around it. You cant, you drink wine you get fat, you drink beer you get fat, you drink liquor you get fat. But its worth it. It will work out. Its better than no liquor. Got to put in a commercial for you. Were not started drinking hard spirits years ago, jim beam was my favorite. Favorite for years, years, years. Really good product. But now but i do switch to makers mark. Okay. So delighted those are both our brands. If you ever get a chance to visit us in kentucky we just opened our new jim beam america experience. Wed be delighted to show you around. Thanks, i appreciate that. We have banks down there, ill stop by. Consolidation question for you. Theres been a lot of consolidation in your industry already. Do you expect to see more . And perhaps given whats happened with this big beer deal, inbev, what do you make of that . Well, consolidation is a trend thats talked about continuously in the market, and certainly we are a business thats very much set on our light as an independent company. I wouldnt be able to comment on the deal. Are you looking at that just given that there has been so much chatter about transactions in your space and whether or not regulators would allow something at this point . Absolutely. And clearly consolidation is something which is spoken about a lot as you say. We do about 38 million cases of business of spirit sales a year and we see about that many rumors so we just focus on driving value for ourselves. One last regulatory question there has been talk about allowing spirit makers, or potentially to sell their goods online. Thats been something that has not really happened thus far. Do you see that opening up . Not in the short term. I think in the United States we have a very clear governance in terms of the threetier system. Separation between the manufacturer, distributor and retailer and i think those rules will remain in place. Matt, how long will you see people being able to come along and just do like a gray goose put in a fancy bottle or do a petron, and i dont even know if the stuff is any better you charge a premium price, get a fancy bottle and you make a billion dollars. That trend, can that go on forever like that . I think that brands are fundamentally conposed of the quality of the liquid inside as well as the relationship they build with the consumer. Were very much committed to the quality and integrity of our product. Our bourbon is a great example of that. Going back to 1795. We care very much about what we put inside and try to present that to consumers in fun, relevant and interesting way. Matt, thank you for this. Thank you for the bottles. We do have the jobs numbers coming up. We might have to pop these things open. Well see you in a bit. Please enjoy them. More of our guest host, john ponytail. Petron. Out of nowhere. There was no such thing. Sam hager we talked to him. A new tequila and now he has a new rum. And you introduce it, fanfare. You say its better. You charge more. And grey goose was classic the way they do that. Because coming up were getting closer to 8 30 a. M. In the january employment report. Economists expect an increase of 166,000 nonfarm payrolls. The Unemployment Rate is expected to hold steady at 7. 8. [ male announcer ] every car we build must make adrenaline pump and pulses quicken. To help you not just to stay alive. But feel alive. The new cclass is no exception. Its a mercedesbenz through and through. See your authorized mercedesbenz dealer for exceptional offers through mercedesbenz financial services. Through mercedesbenz all stations come over to mithis is for real this time. Step seven point two one two. Verify and lock. Command is locked. Five seconds. Three, two, one. Standing by for capture. The most Innovative Software on the planet. Dragon is captured. Is connecting todays leading companies to places beyond it. Siemens. Answers. That was batman my rooster friend. Welcome back to squawk box. Among the other stories were following this morning. Airbus has studied alternatives to lithiumion batteries for its next jet the a350 but its standing by the modern power pack. Airbus says it has time to adapt to any rule changes prompted by the problems that have grounded rival boeings 787 dreamliner. And sony is rumored to be readying a playstation 4. Although the company wont confirm that it is hosting a Playstation Event on february 20th in new york. It says only that it will talk about the playstation business. When we come back, we are just a couple of minutes away from the january employment report. Weve been watching the futures ahead of that and after an incredibly strong start to the year with the month of january, you can see things are off to another strong start for the first trading day of february. Right now the dow futures up by 76 points. S p futures up by better than 6. 5. [ construction sounds ] [ watch ticking ] [ engine revs ] come in. Got the coffee. That was fast. Were outta here. [ engine revs ] we dont let frequent heartburn come between us and what we love. So if youre one of them people who gets heartburn and then treats day after day. Block the acid with prilosec otc and dont get heartburn in the first place [ male announcer ] one pill each morn 24 hours. Zero heartburn. Bob will retire when hes 153, which would be fine if bob were a vampire. But hes not. Hes an architect with two kids and a mortgage. Luckily, he found someone who gave him a fresh perspective on his portfolio. And with some planning and effort, hopefully bob can retire at a more appropriate age. Its not rocket science. Its just common sense. From td ameritrade. Welcome back to squawk box. We are now just 19 seconds away from the january employment report. Well check the futures now. 74 points, exxon helping the dow at least this morning. Although merck is not helping. Cnbcs Hampton Pearson joins us from the labor department. He already knows the numbers, too. So lets look at his page and see if he can tell anything. Hampton . Up 157,000. January nonfarm payrolls increased by 157,000 jobs. 7. 9 is the Unemployment Rate. 0. 2 is the gain in average Hourly Earnings. Private sector job growth in january up 166,000. We had significant revisions for november and december. An additional 86,000 jobs from what had previously been reported for november. An additional 41,000 for december. 127,000 for the two months combined. However, those revisions incorporate the annual bench mark revisions. Ill get to that in a few moments. Top job gains in the month of january, retail trade plus 33,000. Construction plus 28,000. Health care, plus 23,000. Job losses, transportation and warehousing, down 14,000. Couriers and messengers down 8,000. Government employment down 9,000. Most of that is the federal level, including 4400 postal workers. Longterm unemployment at 4. 7 million. 38. 1 . That was down 1 over the month. The labor force Participation Rate unchanged at 63. 6 . The u6 Unemployment Rate 14. 4 also unchanged for three straight months. Heres some headlines from the annual benchmark revisions to both the Employment Survey and the Household Survey. The annual benchmark revision for march 2012, thats the benchmark month each month an increase in jobs by 422,000. The Population Estimates for december increased by 138,000. When you put it all together, and to kind of close out the books on 2012, a net gain of 2. 2 million jobs for the full year. Back to you guys. Great. Thanks. Lets get back to our panel. Jared here, austin, Rick Santelli joining us. Kelly king also. Austan your friends at the administration they tell you 157 and if you use you go to 155 so you just dont hit it exactly . I dont know why you guys dont listen to me. I give you the number every month. Why wont you listen to me . You are good. Its amazing. Youre the guy youre like zandi but this is a closer cropped hair. Ive got to keep remembering that. Im not as well paid. Not as well. Wait a minute. Youre working didnt we join some kind of thats right. Rolling bankster in training i guess is what you call you. Jared, disappointing a little bit, i guess . In the rate went up also. Jared . Yes, what happened with the rate. I mean it went up to 7. 9 and i guess you had an increase, im trying to get whether it was an increase in the unemployed over here employed fell 110, unemployed rose 117. The workforce virtually unchanged plus 7,000. Okay. Sort of on the high side. Over the last several months. This is very much what i expect that i had 160 on payrolls, and 166 on private. So but the revisions are up have you noticed the revisions are up. If youre looking for an optimistic take, i think when you look at some revisions, november and december, november, 247,000 with 256 in the private workforce. 202 is the private workforce in december. Those are the two months this is the private workforce that the fiscal cliff joe . Rick, we are able, every month, and i saw you on camera there. We are able to, if there are bright spots, we find them, do we not . Well, thats a i got yeah, i guess lets put it this way, if there are any bright spots or not, the left side of that stage will find them. Can i say hold on, rick. Hold on. Which part of 256,000 private sector jobs in november is not bright . Which part of 202,000 private sector jobs in december is not bright . Which part of increasing i dont know the total workforce by 422,000 in the twelve months ending march is not bright . You consider it not bright when americas how many hey steve dont put words in my mouth comrade. Listen if you look at how many months our jobs numbers were greater than population for the year 2012, you wont find very many. Thats all im going to say. What are you talking about . In all fairness i wont put words in your mouth, rick, but i do insist you make sense. In all fairness to rick, the january number was on the soft side. Right . I mean, hours worked declined during the month. Thats where i dont care, mark, because whats happening is these revisions are up. And the point i was trying to make and maybe throw out to the panel here is, the 422, the previous upward revision is this one 166 essentially an understated number . What was your first adp number that you guys came out with for november . Oh, geez. All right. I cant anyway the question is whether or not the numbers are closer in line to that than maybe this, this well the numbers had been higher is closer to what the adp was. Thats my point. Right. Thats my point, is that maybe its, i dont know, you said 175. 175, is it a 200,000 private sector job economy out of there . Well, i think youre missing the big picture. Whats happening here is its an elaborate left wing plot to make the numbers much better several months after the election, so that nobody thinks that there was a conspiracy well that proves the conservative point that liberals are idiots, right . Because if theyre to upgrade the numbers after the election i think theres out of the mouths of babes. I think this is an interesting report. I mean for one thing, you have a real acceleration, in employment growth in the Fourth Quarter of last year, that goes completely the other way from the gdp. I mean youre looking here at numbers, 247 payroll jobs, 247k in november, 196 in december. And then a bit of a deceleration in january. I mean the january number, 157 is about what youd expect given the kind of trend growth in the economy. So actually, you got a nice little pop towards the end of last year in employment growth. That these numbers are not only revising kwlupward. I think the bottom line is if you look through the ups and downs, the monthly vagaries of the data the economy is still where it was a year ago and two years ago, still growing 2 , 2. 5 on gdp and employment is still chugging along at 150, 175k per month. Just enough to get the Unemployment Rate what does this say about the gdp number that we saw does it make that an outlier and you just said it for me because even though you ow saw minus 0. 1 you just said were still 2 we are. Right now going into q1 were tracking 2 to 2. 5 . So i dont think anything fundamental has changed. And i agree with kelly were not going anywhere fast until businesses kick in and we wont kick in its weird to hear because it was down 0. 1. So it wasnt it was a down 0. 1. A q4. Right. But q3 were up 3. 1. I mean the numbers are up and down and all around quarter to quarter. Its almost like wasnt it . Like the high score and low score you throw the if you dont like it . Its not that you dont like it. Trend, right. You want to take the effects of sandy out. You want to take the effects of a weird defense number that mark can we just get to gdp, what joes talking about, weekly hours declining . It looks like the percentage what does this say . Average weekly hours 33. 6, 33. 7, the percent change up 0. 3. If hours decline does that change the gdp forecast . Does that have an influence . Yeah, sure because you take the number of jobs created, ultimate ply by change in hours worked and gives you a sense in the change of aggregate hours. Okay. And that plus productivity growth issued to gdp. So if you get a decline in weekly hours, all else being equal so whats your jared just hold on one second. Average weekly hours have been the same for three months in a row. I want to understand two things right now. Mark, what is your gdp forecast for the First Quarter of this year . What kind of economy . 2 . 2 . And i want to know, austan or jared, this number here, these numbers we got today, revising up november and december substantially, does it change your opinion at all, start with jared i guess, about how many jobs this economy is creating . Jared . Yeah, i think we did a little better in the Fourth Quarter than i thought, im probably a little different than mark. I totally agree with mark that underlying were kind of in the 150 to 170 range but im going to have to crunch these a little more carefully. 2. 2 million over the year thats a little better than i thought we did and the benchmark revision is in there. I think weve been doing a little bit better on the job creation front than i thought before looking at these numbers. Although nothing, no great shape. Usually i agree with rick. For your best month to be in the 250 range, thats not that bright. Its okay. But 2 is not that good. Weve got to get a lot faster. I think thats to my point here. Whether its a little slower or a little faster is not the key. The key is moving slowly. Were moving so slowly were not really improving the economy, not really putting things back to work and weve got to keep focusing on the longterm issues here. Now, whats clear to me is that austans off the show. Right . After siding with rick on that. I agree, austan. I see what youre saying in that 250 is a good number. My only point that i would make is were doing 50,000 more private sector jobs than i thought we were doing. Thats what im saying. And that makes me optimistic. Makes me optimistic but it makes me feel like the job market is a little better than i thought it was. Look the fact that the Unemployment Rate is stuck at 8 you just cant get away from that. And thats been just a problem now for a long time. Jared, talked about this off camera. The problem is you want to do something about it. And i know that youre sincere in it but i said the stuff that jared wants to do is probably 180 degrees from what someone else might want to do. I think what you want to do who do you mean like john boehner . I think you would acknowledge that the private sector has to do it but you would say that the government has a very Important Role in doing something to help the private sector. Exactly. Whereas other people would say that its the government itself that is actually hurting the private sector. Thats two sides of the coin that were on right now. So heres this weird argument ive heard in the last few days sounds a little bit like where youre going which is that, you know, if you see in the Fourth Quarter gdp that contraction in Government Spending led to slower growth, and somehow people are out there saying and that shows you have to meet to cut Government Spending more in the near term. I think thats exactly backwards. I actually think that there is a role right now, not a big one, but there is a role for some more stimulus and more jobs measures to help start nudging that Unemployment Rate besides the trillion that we spend we dont take in besides that trillion dollars spending stimulus . And the fed the deficit. Right. In addition to that. Just want to be clear. Yeah, youre right. One point here which is that i dont know if any economist who when you tell them to factor in nearer term Government Spending cuts no end up raising up but they do, joe outlie years. Let him finish. Hes saying that you werent watching yesterday. But hes saying you cant its the nearterm effect of austerity and Government Spending that could hurt. Correct. The thing is, were told that during a recession the government comes in and supplies the demand that isnt there from the private sector. Its been 4 1 2 years. Its been 4 1 2 years. Do we ever take the training wheels off . We already have mark knows this the debate isnt actually more stimulus. The debate is how much restraint there should be. Right . I think jared would want he said do things to create jobs you would come up ish he means less cuts. You dont mean less cuts do you, jared . You would actually do some stuff, right . Sooim im saying that we should avoid any nearterm cuts in spending that will take the austerity measures in fact were already doing it and secondly, i would wait, secondly, i would add, i would do an Infrastructure Program right now. Something in the 30 to 30 you know the sandy reconstruction if you look at that, thats been is a form of stimulus. Its at 60 billion if you add it all up thats like an infrastructure. Not all going to come in 2013 but to some degree thats all we open we should we do know its not we dont want a bunch of that stuff happening. No, absolutely not. But all im saying its not a good way the deficit as a percent of gdp has been coming down. And the debate we had the one that you said was general and i said was more open whats the pace of that slope, whats the thats not thats what im talking about you were able to get to the point that maybe at some point, private sector but what i need to see, what i would like to see is a is some explanation to me that right now, the government sector is crowding out the private sector. I dont see that if i had a 6 Interest Rate, i would understand why what about Student Loans . What about health care . In 2009 the federal government added 2. 5 to gdp growth in that year. In 2010 they added half a point. In 2011 it was zero. In 2012 it was minus one. And in 2013, it was government thats the whole government should be that is exactly the script we should follow. In a recession we want the government to provide support and cushion the downturn. And when the economy gets going we want the government theres government activism that isnt measured in dollar terms. Agreed. Regulatory stuff when the two sides what the government i agree with you, joe. Theres one side that thinks that the government is a necessary part i dont know, kind of underpin the process and theres another that thinks that the government is actually if you talk to Business People on the street today, without the technical discussion, theyll tell you government is a big problem. Theyre in the way, whether its crowding out or not crowding out they are inhibiting investment, theyre inhibiting growth and they are the big problem. But if you think that governments the big problem i think youve got to explain why the u. S. Growth rate as modest as it is is basically the fastest in the advanced world. Its really not the growth rate to be totally proud of. We are europe. We are europe. We are europe. Austan, were were not europe, rick. Austan see this is why i said we are like europe. Its not necessarily our data is exactly the same, but its the notion that you guys, you economists, you ivy leaguers, are so proud of the horrible level that it is because its better youve got a banker tells you what it is guys. All right, stop. Everybodys mike get turned off right now, thank you. This is catching the attention of the twitter sphere at this point. Ben white from politico is treating the blow by blow Austan Goolsbee misses by twok very angry Rick Santelli yelling. No. Thank you guys. We appreciate it. We do need to tell you about the while we were talking jobs chevron actually reported quarterly results. The energy giant came in with Fourth Quarter earnings of 3. 70 a share. The results include a gain of 1. 4 billion from an upstream Asset Exchange its unclear if ets is comparable. Dow futures are up by about 105 points which means that we are about 35 points away from dow 14,000. If you add in all of these things that are coming. What kind of world do we live in where trillion dollar deficits are called austerity. Weve got coming up, weve got lots of companies hoping to cash in on this weekends super bowl but one apparel maker in particular is hoping to turn a profit from jersey sales. Brian shactmans going to bring us that story. [ male announcer ] every car we build must make adrenaline pump and pulses quicken. To help you not just to stay alive. But feel alive. The new cclass is no exception. Its a mercedesbenz through and through. See your authorized mercedesbenz dealer for exceptional offers through meesbenz financial services. Through meesbenz all stations come over to mithis is for real this time. Step seven point two one two. Verify and lock. Command is locked. Five seconds. Three, two, one. Standing by for capture. The most Innovative Software on the planet. Dragon is captured. Is connecting todays leading companies to places beyond it. Siemens. Answers. Welcome back to squawk box. Brian shactman outside the mercedesbenz super bowl in new orleans. I want to talk a little bit about nike. Last year they signed a fiveyear 1. 1 billion deal with the nfl. And some estimates have it adding but a half a billion a year in top line revenue. Its interesteding to look at this, because its actually a process. Teams and this is fascinating they can only change their designs every five years. Nike has to sell it to the market overall but cant do it all at once right away. With the teams and ownership in terms of how they want to present themselves on their field, their colors, their branding, just their complete identity of what a uniform is on that field of play. We work hand in hand with them in that process. Todd van horne is their designer. Sam poser who covers nike said its a good deal for nike, but thought they could have done a better job with things like the rg3, Robert Griffin iii craze. His jersey sales were still the best ever. But they still ho to scramble to add inventory. It probably wont happen again. Joe, moving forward, next year they want to outfit the sidelines and get a lot more material that consumers can buy right away like jackets and stuff like that. Yep. All right. Pretty good hits, brian. Youre doing this all day, right . A little bit all day. Until you dont want me. No, i still if i can make a call and get you tickets, do you want to go . I cant, but if i could. Would you if the bosses would let me stay. Let me see what i can do. Nothing. But let me pretend i could. See you later. More from the guest host chairman and ceo of kelly king. Were kicking off a new month of trading as we head to break. Look at some stats from what was a really great january for the bulls. Stamps. Com is the best. I dont have to leave my desk and get up and go to the post office anymore. [ male announcer ] with stamps. Com you can print real u. S. Postage for all your letters and packages. I have exactly the amount of postage i need, the instant i need it. Can you print only stamps . No. First class. Priority mail. Certified. International. And the mail man picks it up. I dont leave the shop anymore. [ male announcer ] get a 4 week trial plus 100 in extras including postage and a digital scale. Go to stamps. Com tv and never go to the post office again. Welcome back to squawk box, everyone. Weve been watching the futures. This is something to keep an eye on today. Those dow futures are up by 118 points. Yesterday the dow closed at 13,860 roughly. We are within spitting distance of dow 14,000. This is coming despite the numbers that you saw with the jobs numbers that came out with those revisions. It was a strong number. And thats what the market is focusing on today, at least when you watch these stock markets. We also have a few individual stocks on the move this morning. Shares of dell rising again. Talking of a deal to go private could be announced as soon as monday. Weight loss resulting from the qsimian capsules help cholesterol, Blood Pressure and triglycerides in obese and overpeat patients. Cutting its full year outlook. Again, though, watch what the broad indices are doing today. Our guest host this morning has been kelly king of bb t bank. Well give him the last word when squawk comes right back. Taking stock of the january rally. And making the bullish occasion from february. Famed investor jack vogel from the vanguard group, scott black. Plus, two hours with Florida Governor rick scott. Squawk box starts monday at 6 00 a. M. Eastern. Wh s impressi . A talking car. But ill tell you what impresses me. A talking train. This ge locomotive can tell you exactly where it is, what its carrying, while using less fuel. Delivering whatever the world needs, when it needs it. After all, whats the point of talking if you dont have something important to say . We dont let frequent heartburn come between us and what we love. So if youre one of them people who gets heartburn and then treats day after day. Block the acid with prilosec otc and dont get heartburn in the first place [ male announcer ] one pill each morning. 24 hours. Zero heartburn