Transcripts For CNBC Squawk Box 20150127

City. The city has been relatively desolate. The only people out there are the people plowing the sidewalks at this point. We walked over ourselves this morning. Didnt get hit with anything much but the ban on cars in new york city still is accurate. Ill wait until the posts in other places start making fun of the weather people because its still a very serious storm. May be loss of life somewhere. In fact if you take a look at some of the pictures in new england its a different story. Wow this is a picture of philadelphia. There could be more to come. Still falling there. You look at i looked at my radar thing on activitiescuweather. Its moving northeast and most of it is there. In the northeast region up in new england bracing for 3 feet as snow. They have been getting as much as 4 inches an hour. With the hurricane forced winds causing wide out conditions. Its been a huge issue with coastal flooding too. I was just reading that theyre talking about storm surges of about 7 feet with some flooding already taking place. Thats a big concern up and down the coast and well have wide reports in just a moment. But first other big stories we have been watching this morning. Now that the roads are clear all the people that claim theyre not going to work today do they decide theyre going to open them later . Schools are done today. Out in the streets themselves we vn seen as many snowplows coming by. Everybody our newspapers arent here. Those guys have their feet up. What are you kidding . Wed be taking advantage of it too if we could. Over at the hotel, no maid service today. Horrors. Well theyre not going to clean the room no room service last night. No way to get any food. Because the roads were shutdown and subway systems were shutdown. I think i told you any theory. Whats your theory . That if it had been really bad that could have been Climate Change caused the adverse weather but because it wasnt that bad thats because of global warming. So the warming warmed it up so it wasnt as bad. So either way too nice a morning. Its too early. Oh im sorry andrew. I think thats what happened. Had it been really big, thats when you use the Climate Change. Having not been that was dont you think . I think its business as usual. I think its what we live through every winter. We cant do 24 to 36 hours forecast that well but 24 to 36 years were much better at being accurate. Could be. I will take the less than expected with no complaints. Theres places im sure are getting it a lot worse like there always is. In the meantime beyond the blizzard this morning earnings in the economy are the name of the game on wall street today. Dupont just hitting the tape. Looks like earnings and revenue beat from the dow component. Theyll happily take that one given whats going on trying to get into that company. Also before the bell well hear from pfizer Procter Gamble caterpillar among others. Also the home price index. New home sales, Consumer Confidence and the fed survey so even though its a snow day a lot of things going on and in washington this morning fed policy members are going to be gathering for the first fomc meeting of the year. Its a two day gallery with a decision due tomorrow afternoon. They have not closed that down yet. Yet is the word. Were looking at some of the things well talk about in shares. I wonder if theyre all the way back down now. You know they shut the city down. Right. Overnight. Stories well talk about later. Ill bet theyre back down. I should tell you, i bet you the supply last night to the audience that doesnt know we all stayed in a hotel because we were worried about the snow. I ubered to the hotel dont use it as a verb please. I thought we were going to have crazy surge pricing. Services suspended until further notice. Youre not allowed to be driving. Yeah. On the streets of new york city. Anyway among the stocks to watch today microsoft posting earnings and revenue both in line with estimates. Sluggish pc sales hurt demand for windows software. Still look at the revenue number because its always a number any other person has trouble. Sales have been at 14 year highs along with inobstetrical. And Texas Instruments matching wall street expectations. Growing demand for the auto industry. United technology posing line for forecasts but lowering four year guidance. Get used to that utc to rise about 52 of sales outside the United States. So that makes sense. We need an anchor here. They said to go ahead and read with this. We are watching the markets this morning and yesterday the markets barely budged. Probably because people were so focused on the snowstorm here potentially in the United States. The dow traded in 129 point range and believe it or not thats the lightest range weve seen so far this year. The nasdaq was up for the 6th straight session and if it closes higher today which doesnt look likely at the moment but if it does close higher that will be the longest winning streak for the nasdaq since all the way back to february of last year. Right now the dow futures are down by about 70 points. In some of the early trading in wrurp youll see similar delines. The dax is down by half a per cent with similar declines in france and london. Overnight in asia with the asian stock markets the nikkei closed up. Hang seng by. 4 . Oil prices dropped by 1 . They hung in there around the 45 level and settled at the lowest level since march of 2009. This morning up about 18 cents for wti. The ten year note is going to be interesting to check out the 30 year treasury. The yield hit record lows falling below 2. 34 . The dollar in terms of the currency markets youll see the dollar is down against the euros. Still all the way down at 11272. And if you want to check out gold prices at least at this point it looks like gold prices are up slightly. 1,000, 1,281 an ounce. Lets get to the story of the morning, the blizzard. Morgan joins us now from new yorks times square where she is hanging out in a little bit of the snow. Not too much snow. Morgan. Reporter good morning guys. Its cold out here and windy and you can see its still snowing though the snow slowed down significantly. As of 1 00 a. M. Last night here in manhattan we had 6. 1 independence from lands of snow. The forecast 8 to 12 inches for manhattan and new york city. Thats significantly lower than what was initially anticipated. Out in queens we had 10 inches of snow as of 1 00 a. M. And now the National Weather service is downgrading its blizzard warning for new york city to a storm warning but it is still in place. That blizzard warning out in long island but guys keep in mind it isnt just the snowfall. It has been high winds that had everyone concerned over the last 24 hours. Thats why we had 8 governors declare states of emergency. Maine, new hampshire, massachusetts, i ri connecticut, pennsylvania new jersey and the lower part of new york state. We have seen major highways closed down. We had travel bans put in place in multiple states and here in new york city not only did the streets close at 11 00 p. M. Local time last night but so did public transforation. Subways, commuter trains buses. Now that doesnt happen often in new york city. So the issue now is as the snow is starting to slow down and the blizzard warning is scaled back in the city whats going to happen with the transportation and slow downs throughout the Northeastern Region . We should start to get answers on that this morning. We have andrew cuomo holding a press conference at 8 00 a. M. Today and more coming from other government officials later on in the morning. Back to you. All right. Found a little snow there. Its cold as you pointed out. Thank you. Thousands of flights have been cancelled throughout the northeast but at new yorks jfk passengerers got stuck on an outbound Virgin Atlantic flight and had to sit on the tarmac for about six hours as they dealt with the icing and sick passenger. They were then sent back after all that to the terminal. And our hotel room is looking a little roomier and roomier. It is. Yeah. I was watching some hoops. I did go down and i was able to bring in some food. I got it myself. I just miss everybody. New yorks airport was closed completely and thats where we find kate rogers. Hi kate good morning. Good morning to you, joe, thats right. Pretty much closed down. Weve only seen a few people here this morning. A few stranded passengers and a few loan workers here. Flight aware. Com is reporting that between yesterday, today, and tomorrow theres over 7,000 flights completely cancelled. Wednesdays cancellations around 300 so far but that number likely to increase as the day goes on and the snow continues to fall. Now la now its a ghost town. No one here but a few stranded passengers. United has a few workers at their booth. Theyre saying theyre here just in case. The kiosks here all say not in service this morning and theres a few dozen passengers stranded here overnight but being taken care of in a separate part of the airport. Boston logan is still the only one to officially shutdown last night at 7 00 p. M. Last night continuing into today but Major Airline carriers saying no flights getting in or out of the newark new jersey or philadelphia areas. Everybody sit tight. Thats the message. Lets get a check on how retailers could be impacted by this winter storm. Joining us right now is budd budd bugatch. Hes the managing director at raymond james. We saw yesterday how some of the stock is trading higher as People Get Ready for the storm. We know this is the knee jerk reaction this time around. What does it mean for home depot or lowes. It doesnt mean much on the continuing basis or longterm basis. Every storm is different. Theres three phases. Theres the preparation phase which in this case was pretty short. The first weather advisory i saw was on saturday and then the event itself which is a drag because the stores will be closed for a period of time and the 400 stores for home depot in this area that will be the biggest impact and then theres the aftermath and in hurricane or super storm sandy, we saw for home depot about 500 million in the four quarters afterwards of improved sales. This will be nowhere near that but i dont get very excited about these kind of events for these retailers. Theres a whole menu of reasons why you want to own these retailers. Had isnt ranking high on one of them. Lets talk about what you think about these retailers in general . Bhast whats a reason you should own them . Theyre Great Companies. The shareholders are always served well by these companies. The suppliers and the community of course and in events like this and from the financial side you see expanding margins. You see improving sales as the economy continues to recover and they return to Share Repurchase and dividends. You see a lot of reasons why you want to own them. These are certainly world Clas Companies and the stocks already reflect that. Theyre selling over 20 times forward earnings and theyre at the highs of their historical ranges so its hard to want to put new money into these names but you want to own them because theyre Great Companies and if you want exposure to the Housing Market and great retailer and Great Companies theres no other places to go. Budd thank you for your time today. Great talking to you. Thank you, becky. Coming up the street reacts to microsofts Quarterly Results in earnings. Why is the stock under a little pressure this morning . First though, check out the shares of dupont. Beat by the profit forecast that sell fell short and check out these live pictures from philadelphia. Someone is using a snow blower. Squawk box will be right back on a stormy winter morning. Stay tuned. Sandwich massachusetts. They have heavy snow still coming down there. Northeast of us apparently. And thats some serious wind action. Yeah another 10 to 15 inches is still expected in boston. We got 8. Thought we were getting 30. We did not. My vo soft earnings in line with expectations expectations. Revenues did Beat Estimates but the shares fell after the bell after the tech giant warned about the currency market. Joining us is robert with stern ag. He covers that stock. That couldnt normally cause a strong to sell off just because of a strong dollar would it . Theres three things. The foreign currency is going to create a hangover effect for the next three or four quarters. We also have the sp upgrade cycle which ended last marchand we have to anniversary that for the next three quarters and longer term microsoft is undergoing a transactional business to more of a subscription model and thats also going to create a headwind. Those are whats going to hurt the stock here as analysts continue to reduce their estimates going forward. What was the revenue number . It came in slightly above the numbers. It was at 26 billion. 26. 3. In a quarter. 26 billion in a quarter. Not bad. I missed that xp upgrade. I dont know somehow it was below the radar for me but didnt workout, right . But they still did 26 billion in revenue in a quarter. Correct. Its very powerful and great cash flow machine. As the Company Transitions this transactional revenue. You might miss this one as well because it flies under the radar. But if you moved and lets say you signed a 100 million deal at the end of the quarter, under the transactional model you would recognize all of it. Under the subscription model only 1 million of it. It has a dampening effect in the shortterm but its a great longer term model because its more predictable. What happened in the last year and a half . We had ten years of almost a trading range. Did the earnings per share just catch up with the multiple or was there something that changed that got the stock finally out of the dog house . Well one, the sp upgrade cycle only occurs about every ten years so thats one thing and then the other thing was obviously the change in management and leadership. A much more focused management kind of moving to where the puck is going to be in terms of moving to the cloud. Moving to mobile and moving the model underneath it toward that multiple. It should outpace over the last ten years. Did you have a buy on it . Do you have one now . Were neutral on the stock so once i join sterne agee about a year ago we were neutral. We saw this fundamental shift in terms of where revenue and earnings were going to be so were near term here cautious. As estimates come down across the street were likely to get more constructive as we go forward and the company navigates these tough shortterm head winds. So this is now a Cloud Company or still totally dependent on pcs . I dont think thats a bad thing. We have michael dell talking to us. The demise of the pc was greatly exaggerated too. Theres two components. One for microsoft on the enterprise side. Its probably the most rock solid area and then when you look at the consumer business which would be about 35 of the total revenue thats still going to undergo some transition but the pc market is definitely important but both of those are moving in tandem to the cloud. Both for the consumer and the enterprise as office 365 was up over 114 this last quarter. So theyre definitely getting significant momentum moving the applications. At the end of the day what microsoft wants you to do is use their applications whether thats Microsoft Office or excel or word they want you using it at work and at home in every format whether thats a pc tablet or phone. When you look at the new windows 10 theyre trying to eun pie the whole experience for the developer where he or she can write an application on windows 10 and it can be deployed across all three devices simultaneously. The margin has to come down on all of those things because the problem is it used to be we buy three different versions of it and now they give parts of it away from free. Isnt that the problem . I dont know if its a problem, but isnt that the issue . Margins will definitely come down as we move to the cloud revenues. That will have a dampening effect over the next one the two years but coming out the side should be better. Microsoft will introduce new pricing strategies. You can buy a discounted version for home. Theyll introduce new pricing strategies to entice you to purchase them across your devices devices. All right. Thank you. If you write a program you dont need to do you really did. That is a benefit to be able to write one program and it goes across all the different devices. Yeah and for people that already have max you write a note on your iphone and it will show up on your ipad. It will be everywhere. The world has passed me by. I guess you guys already know that mostly. You have an iphone. You know what were talking about. I do but i dont know what amazes me is theres still so much Microsoft Software that people dont have that they still, 26 billion, thats 26,000 million. Thats because every time you buy a new laptop you need software that goes with it. Even if you have an apple device most people still buy microsoft. Even Microsoft Office. What are you doing after the show . Can we go somewhere and talk about all of this. We can definitely walk down the street. Theres no snow. Maybe we could hang out at the genius bar together. We have a little bit of tech news for you this morning. If youre stuck looking inside looking to pass time hanging out on facebook you may have had an issue last night. Facebook instagram and tender were among several networking sites that suffered outages. It was caused by a technical change made on the site and not a result of a cyberattack but a Hacking Group claiming responsibility on twitter for the outages. I just thought it was so many people at home trying to get on at the same time. If you were on tender that doesnt help you. You heard what i said. The one night everybody really needed tender. Youre stuck inside. Isnt there a geographic component to it . You get stuck there and you cant leave. Youre always thinking. When we come back this morning, a live report from new england. Right now new england is still getting pounded by this blizzard. Well talk more about that. 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Good morning and welcome back to squawk box here on cnbc. Im joe kernen. Along with becky quick and Andrew Ross Sorkin and we are in midtown manhattan. The snow is coming down. It snowed yesterday here although the most dire forecasts do not appear to be coming through, at least where we are. At this point, theres about 8 inches of snow on the ground in central park. Honestly we were told 30. We should point out long island 17 inches was down there. In Hartford Connecticut youre looking at 5. 5 inches down and boston area its only been about 6. 5 inches but another 10 to 15 inches is still expected. So depending on where you are different amounts. The blizzard warning you keep trying but i know we have reporters fanned out across the area to looking for snow. The blizzard warning is cancelled for new york city. I saw our producer coming up to shoot us coming in and it was like youre going to be let down here. Anyway, this was video of our walk to the studio this morning. Andrew, tried to look dramatic. An actor without a role. I walked out and was like what are you doing . I went to school in colorado. Maybe thats it. There i am. I had no coffee at that point. Wheres becky . I took my own pictures. You did . Yeah i dont think im in the pictures. I was just Walking Around shooting it. I will say i found a snow drift up to my shoulder. There should be drifts there should be volkswagens in drifts that people cant find based on the height for what this is do you know who i blame again . Msm. Msm . Mainstream media. Oh. Its always their fault. This is where up to 4 inches of snow an hour fell overnight. The region bracing for as much as three feet of snow. Near hurricane forced winds causing the conditions. The only other thing ill say were very new york centric, we barely talked about what happened to the folks up in buffalo a couple of months allege. Right. Where we thr trapped in their houses for weeks on end. It didnt happen in new york city. So its like yankees are playing arent here but there is no baseball. There are parts of the country getting hit by this. You think other parts are snickering at us at this point . Maybe just a little. Out west where theyre used to much more snow. Maybe. We should check in now with nbcs john yang. He joins us from portland maine. Were selling it for you. Hey, becky, its gotten a lot worse here. The snow really coming down heavily now and also the winds are picking up. You got it blowing. Its a very light snow and very fine flakes. Not the big fluffy heavy wet flakes that you sometimes get. They expect this to last all at a long during the daylight hours. They dont expect it to taper off and stop until tomorrow. The blizzard warning is still in effect here. Schools are closed. The government has declared a state of emergency. Government offices are closed. There are parking bans across the region to let snowplows get through. Its falling at a rate of more than two inches an hour. Expected to keep that up all day long. Total accumulation could be upwards of 18 inches. Back to you. All right, john thank you very much. By the way, john is pointing out that we are sitting here laughing about it while we sit outside. He is out in the snowstorm dealing with this. Why, john . I know we need the shot but are all the doors locked . Go inside. John thank you. As soon as im done. Believe me. Look dont let him in here. Now to lower manhattan, even before the storm, the nyse promised it would be open for business today. I always wonder about that. When theyre standing out. Go inside. Theyre going outside to show you what it looks like so you dont have to go outside. I never went to Journalism School which is obvious. Jackie, good morning, how are you . Good morning, guys how are you . Well the good news down here is that the Financial Community braced for this storm. It certainly wasnt as cripples as everybody was expecting but a slower pace down here this morning. As you can see behind me on the west side highway you have every once in awhile a rogue vehicle and taxi cab right now. Hard to tell if its snowing here or a snow drift because this area is on the water and its windy down here but its the wind chill that is making it very fridged. A couple of pedestrians december tri Walking Around and a lot of people telling me they would be working from home today taking things a little slower. Also the Community Around here the super markets, the delis not hustling and bustling as they normally would at this time of day. Coffee shops, et cetera, everything is closed and quite at this point but the exchanges are operating as expected. Nyse nasdaq all expected to operate today and actually a lot of the traders staying at hotels in nearby areas because they din want to have to commute and deal with the issues surrounding us this morning. Business as usual here in this area although its a little bit slower than normal i would say. Back to you. Thank you for that. We appreciate it. Joining us now on the Economic Impact or lack of impact well see in what some are calling a historic blizzard here is evan gold of planalittics client services. You quantify the impact of weather. Help quantify it for us. Good morning. Good morning. We think the Economic Impact of the storm will be relatively small. Were estimating about 500 million and thats based on the duration of the storm, the timing of the storm, the Population Centers that are impacted and just to put it into perspective last year when we had the polar vortex and all the blizzards and significant snow fall the Economic Impact of last winter was anywhere from 15 to 50 beside. This is a relatively small event. What was your estimate 24 hours ago . How has your estimate changed . So we were also calling for a little bit less aggressive than the major outlets out there calling for the two to three feet of snow. You have to think about this from a consumer perspective consumers are buying on the forecast. From a business perspective a lot of that purchasing has already happened and thats what you see with a lot of these events is people are buying on the forecast for the threat of the storm as much as on the aftermath. This is a pull forward to some degree. In some cases it absolutely is a pull forward. Theres some cases where this is simply going to be lost. People arent showing up to work today or school. Restaurants are a big one where if you go out and get a cup of coffee or lunch on a day like today you wont buy two cups of coffee or lunches tomorrow. Theres Economic Impact thats going to be lost or built into the number i just talked about. On the winter side theres going to be folks like Restaurant Delivery services will do well. As will on demand and online businesses. What does this do to a company like ups or fed ex . What does it do to their costs . For some of those folks, look, this is not the first storm those guy versus gone through so its not as significant of an event for those guys. They have as much about the preparation as anything else so everything i heard is they are operating as close to normal as possible today. While it is about 50 Million People impacted here because of the fact that the schools are closed roads are closed theyll have an easier time than they might on a traditional day. Is there an upside surprise for somebody we dont normally think about . Yeah i was talking earlier about some of the on demand businesses businesses, some may have an apple or comcast and people are staying home theres opportunity here. Another opportunity for good news perspective, for traditional retailers its not all that bad. Its actually probably descent news because youre talking about the slowest retail week of the year during the lowest days of the week. Its not going to be all that bad for some of those folks. Next week is a great opportunity to clear your winter boots, scarves, hotsats, gloves sweaters. Joe made the mention the Mainstream Media speculating its overgrown. What were you doing differently you think . I think from a media perspective were out there advising our clients heres whats out there in the media but also from our own perspective this is what we think is going to happen but we advise them to focus more on the consumer. Youre not doing weather prafts. Really trying to protect what the Economic Impact is from a traffic perspective. Thank you for joining us this morning. Thank you. Stay warm. Coming up a blizzard in the northeast but theres a storm of a whole different kind in greece this morning. Michelle will bring us the story from athens and that is coming up next and as we go to break, check out the scene in plymouth massachusetts. Squawk box will be right back. Theyre coming. What do i do . You need to catch the 4 10 huh . The Equipment Tracking system will get you to the loading dock. There should be a truck leaving now. I got it. Now jump off the bridge. What . In 3. 2. 1. Are you kidding me . Go. Right on time. Right now, over 20,000 trains are running reliably. We call that predictable. Thrillingly predictable. Welcome back. Take a look at the u. S. Equity futures today. Things barely budged. You saw the dow within the range of 129 points. Thats the tightest range all year in 2015. Were looking at weaker number with the dow futures down by about 83 points nasdaq down by close to 25 points. Lest head overseas. The global story of the week is greece. Michelle joins us from athens and youre continuing to monitor the fall out there. What does it look like now . We want to tell you about the first day as Prime Minister of greece. Hes a radical leftist. Whats the first thing he did . He went to the site of a german nazi massacre of innocent civilians during occupation. The first ambassador he met with is from russia. He did those to establish his leftist credentials but its being scene as a message of antagonism toward the germans. The local paper of record says right now what theyre working on is reinstatement of government workers and elimination of the evaluation process for government workers. They tried to get rid of that. He is proposing legislation to raise the minimum wage back to where it was before the crisis. He wants to bring back excuse me collective bargaining for wages for the unions. He wants easy repayment terms for overdue taxes and free electricity for those living under the poverty level. His creditors still giving him billion of dollars are going to ask how are you going to pay for all of those things . Those are all reasons they could potentially say we arent giving you more money because it contradicts what they want to do to make the economy more competitive. Were learning who the cabinet member is going to be and finance minister is a man that wilbur ross famed investor and has a big investment in a greek bank here and he described him as moderate and ross is right. He is a moderate but only in greece. He describes himself as a libertarian marksist. He is to the left of elizabeth warren. Hell be in charge of the other promise he made which he promised hell convince the europeans to lower the debt burden they have already taken on from the previous loans. Hes one of the guys pushing for the ecb to take a hair cut when it comes to the 27 billion that greece owes to the ecb. Heres his proposed plan. My proposal would be that we issue a new bond with a small Interest Rate that we can agree and the same face value of what we owe to the ecb and park it on the asset books and then move on to the rest of bailout clauses and aspects. He wants to give whats almost called a propetual. That is a bond that lasts forever and has zero interest payments. He said when would they get paid back . He would attach gdp warrants to the bonds and when the gdp was growing thats how they would get paid back. To not pay back on time san explosive idea. I dont think its going to get far but certainly thats the original stance guys. The idea of tying it to gdp growth is a longer shot id say. Well pay you back when and if were ever growing again. What theyre going to come back with youre exactly right becky, is all the things you proposed go against the current thinking of what would make this economy grow. Sounds like a bit of a mess but still a work in progress. Maybe well see action on some points. Maybe something that draws the two sides together. Michelle thank you very much. All right, coming up a major winter storm slamming the northeast. This is a live picture of the scene in boston right now. When we return were going to talk about ubers plans to cap surge pricing during the blizzard. But, you know supply and demand. Prices got to go up. Thats the way uber works. Squawk box will be right back. Story because i took they have wiped out effectively the massive surge pricing that we have seen historically. So highest during this storm theyll do is times which is much less than on new years. 7 or 8 times. And theyll contribute the money to the and it is price gouging. Changes the way everybody thinks about this nonsurging, nongouging market environment. It was purely in a vacuum and went right to the price it needed to go to make sure that there was enough supply for demand but the problem is people get in the system and it never is. Not only that how do you define the difference . Its all about price discovery. It should be big enough to where you should be able to do that. But its never perfect. No. I want to talk about the double down dog that kfc unveiled in the philippines. Its a hot dog. But that bun is made out of fried chicken. Check it out. Wow. It also has cheese dumped on top of it. This is something theyre calling an extra meaty legendary dish. Heart attack on a plate. Pretty much. Each of the branches was allotted 50 sandwiches and they all sold out. You have to wonder if this is coming to a kfc near you. Meat on meat is weird. I used to get an arbys burger that had a piece of ham on top of the burger. And ive done that at home with my wife. And she says ham is not a condiment. But for me it is. Isnt bacon a condiment . Yes. Think about that. Exercise and do other things. Once in awhile its fine. So bob kraft i agree with bob, and im not apologizing for anyone but if it turns out the nfl doesnt find anything i think that bradys been wrong, that belichick has been wrong. What do we think about this kid who apparently is on videotape . Going into the bathroom. I dont know. You want me to read it closely . He went into a onetoilet bathroom with 24 footballs and exited 90 seconds later. Now, he was able to lower each football that the patriots owned to find them and lower them by two pounds . You know what he probably did in there . He probably unzipped waited like we do went waited to finish like we do and i couldnt do it in 90 seconds. What i can tell you he didnt do, he didnt wash his hands. Really. He did 24 balls in 90 seconds . I know you have to do each ball in seven and a half seconds and got to get them out of the bag too. And 90 seconds is crazy. He didnt wash his hands. Thats my take. Its too bad that the whole thing happened. If someone did something wrong, its bad. But bobs probably right. If theres nothing found from the investigation how hard did those guys work to beat them . When we come back were going to talk about the storm. A lot of people still getting slammed by this. Stick around. Squawk box will be right back. We needed 30 new hires for our call center. Im spending too much time hiring and not enough time in my kitchen. [ female announcer ] need to hire fast . Go to ziprecruiter. Com and post your job to over 30 of the webs leading job boards with a single click; then simply select the best candidates from one easy to review list. You put up one post and the next day you have all these candidates. Makes my job a lot easier. [ female announcer ] over 100,000 businesses have already used zip recruiter and now you can use zip recruiter for free at a special site for tv viewers; go to ziprecruiter. Com offer2. A blizzard pounding the northeast. This is an unrelenting event. Thousands are stuck at home. But the worst of it is missing new york city. Well bring you the travel bans and cancellations. Earning alert. Pfizer caterpillar, and 3m. And a squawk market master weighs in on the crash in crude, the falling euro the russian downgrade, and a possible exit. The second hour of squawk box begins right now. Welcome back to squawk box right here on cnbc first in business worldwide. Im Andrew Ross Sorkin along with joe kernen and becky quick. Snow totals in new york city and northern new jersey fallen short. Im going to say a lot short. Major exchanges reaffirming they will be open for business today. Travel bans though still in effect for massachusetts, connecticut, and parts of new york. In new jersey the travel ban south of interstate 95 was lifted. That happened at 7 00 a. M. Right about now. About a minute ago. Were going to be getting an update on Airline Cancellations in just a few minutes and there are a lot of them. Among the other stories you got some earnings . We can do pfizer. Im sorry. Procter gamble. The estimate was for 1. 13 and the adjusted net here is 1. 06. I wouldnt be surprised if thats a currency problem. The estimate for revenue it is a currency issue. Theyre saying the october to december 2014 quarter was a challenging one with unprecedented currency devaluations. Virtually every currency in the world devalued versus the dollar. While we continue to make steady progress on the strategic part of the company, the considerable business portfolio Product Innovation and productivity progress was not enough to overcome foreign exchange. They reported 20. 16 and the estimate was 20. 6. The outlook for the year will remain challenging. Will reduce 2015 sales by 5 and net earnings by 12 or at least 1. 4 billion after tax. We have and will continue to offset as much of this currency impact we can through productivity cost savings. But again this is going to be a big hit. Pains not over and it will continue. This may be the first of the companies thats really lads it out in such stark language. Pfizer is out as well. Pfizer is above expectations. 54 cents was a penny ahead of expectations. The number were looking for for revenue is 12. 89. And i dont see the revenue number. 13. 1. 13. 1 versus 12. 89. So thats above. And it looks like that stock cant tell whether its actually trading. Looks down at this point. Company has seen continued momentum with its pipeline in 2015. It breaks out some of the Different Things. That would be the stuff that theyve had for awhile. Then innovative pharmaceutical revenue up 3 . Global vaccine up 18 . Here it is. Fiscal earnings per share 1. 37 to 1. 52. Actually, thats not adjusted so we cant use that one. Adjusted 2. 10 and the estimate looks like 2. 18. They shouldnt be estimated, right . Are they talking about next year . Fiscal year 2 to 2. 10 would be below the 2. 18. That might be whats pulling down the stock right now. Because if they gave us a Fourth Quarter here we shouldnt need to get a forecast. So that should be for next year. Lets just go back to Procter Gamble for one moment. If you want to talk about how much this is hitting the company, if you want to talk about how much its going to impact their earnings for the year they now say earnings per share is expected to be in line to down low Single Digits versus the year ago. The street was up at 4. 15 for 2015 earnings for Procter Gamble. They say they are maintaining their outlook for core earnings per share in the double digits growth. But when you include the currency impacts, you talk about a company at best is going to be reporting the same number it was last year and the street was looking for growth. Not to swap in between p g and fooiz, but continued head winds from expires, weve talked about all those and what that means in the drug industry at all. We were able to deliver modest adjusted growth. Then he says this was through incremental Revenue Generation from key inline products and recent product launches responsible expense management as well as support of capital location. None of those kind of comments would be ringing endorsements of what the future holds. I cant i dont have a i wish i had had one, but for some reason the screens not set up right. But i dont know what next years estimate is for pfizer but theyre saying 44. 5 to 46. 5. Ill give it in a second. For next year theyre looking for 49 no no. For 47. 56 is where the street was. So below this year. Revenue is indicated to go down. Which is down from last year. Which so down from the year before that. So 47 . So 44. 5 to 46. 5. The street was looking for 47. 56. Low end of that as well. These are both dow components. If you want to look where the major indexes are trading, check out the Dow Jones Industrial average, both stocks will have an exact because they are trading below based on the earnings. Now down 106. Another 26 points for the dow. I will say it. Keep in mind that the fed hasnt raised rates yet. Now the market gets in front of things for the dollar. The market gets in front of things obviously. And we know theyre going one way over there in europe and were going the other way here. Any reason to think the dollar has seen its highs . Not based on everything from every analyst weve talked to . Who was it franks wife . That said eventually it will get to the point where they will start complaining about it. The strong dollar will in fact she said that two weeks ago. She said long before then. Already reaching that point. And that youll start hearing some protection type stuff. But it gets so bad with the dollar that strong that well see. Because its early for i mean, this is one quarter. But i dont know why you dont really look at the ongoing business and judge it based on currency, do you . You dont if youre a trader. You do if youre a trader. You dont have youre a longterm investor. The opposite. Anyway the story everyone on the east coast is talking about and heres our problem. Heres our problem. Its still going on and its a big, bad storm thats still going to affect a lot of people. However so weve got to keep it in mind but i guarantee you the tabloids tomorrow are going to be all over the big letdown. On twitter you hear from people complaining in new york z city about not being able to take a subway to work about not getting out on the streets. Parks are closed. You think bloomberg was im going to be out there sledding in a couple of hours. Im afraid hes going to come over here. Hes tall too. Can we get arrested for sledding right now . Youre not allowed right now. My guess is things will change in the next couple of hours. Why cant people in the private sector who want to work get on the subways which are now closed and those guys are all no look. They took an abundance of caution. And if things had played out differently and this was atlanta all over again, people would have been complaining about that too. Also theres a huge cost thats why im here and why youre here. Does it ever get i cant help myself. You have to make it im just trying to balance it out. Anyway, morgan we got her up so early. Said its going to be really bad, youve got to be out there. So dont disappoint us. Like have the camera man blow some snow in your face or something, can you . I had that enough the last couple hours. We no longer have a blizzard in effect here. The National Weather service canceling that for new york city. Also not getting as much snow in the city as anticipated. We got between six and eight inches of snow here in manhattan. Nonetheless, this is times square. And honest lu, its been a bit of a mess. Weve seen more journalists and folks digging out pathways here this morning than we have tourists. And keep in mind we still have Public Transportation is suspended. Weve also seen a number of folks slogging through the snow to get to and from in the city presumably to work. Even though we technically still have the streets are still technically closed weve seen a number of taxi cabs starting to venture out and move around the city. So things are starting to shape up on that front. As far as the forecast through the rest of the day and what we should expect in terms of additional snow boston 8 to 12 inches. Providence, five to eight inches. Portland maine, 12 to 18 inches. And here in new york another one to three inches. Though it isnt really snowing here right now. In massachusetts also were getting reports of 10,000 people without power right now. Here in new york city given the fact that everything is shut down, were hoping to get some more guidance on that later this morning. We have press conferences scheduled from both the new york city mayor as well as the new york governor. So hoping to get a little more information on when all the roads are going to get up and moving again. I will leave you with this. This was a picture tweeted out by the mta just a little while ago. That is an image of an empty Grand Central station. Thats not something you see very often. And thats given the fact that metro north has been suspended as well. You think maybe thats the picture for this storm. Guys, back to you. Okay morgan. I wonder weather remember bloomberg got hammered the time he didnt prepare well enough. Can you get hammered the other way when you close everything down . There will be people irritated they cant get on the subways this morning. But cant we tell them now . Yeah i think in the next hour or two. Theyre not going to open up schools. But theyll lift the ban on traffic. That would be cruel. You cant like so heres the question. If youre a retailer you get a snow day, no were taking it back . If youre a retailer and you already told your employees you effectively have the day off which a lot of companies did last night. What if youre app snl do you call them this morning and say hey, guys were opening up at noon today and you all have to be there . Yes. What about if you have kids that youre at home with from school . It becomes complicated. But you make the parents go so the kids stay home by themselves . No. This is the issue though. Within reason. Okay. Anyway the blizzard forcing thousands of Flight Cancellations across the country. Kate rogers joins us now from laguardia with more on that. Good morning again. Good morning to you becky. The doors are open here but the airport essentially shut down. In fact, all airports in the northeast, flights basically arent getting in or out at all today. As you can see behind he laguardia is is a ghost town. All cancellations one after another. The kiosks behind me all saying not in service and the tsa check point is shut down. Were told theres no one there behind the security gates. We did catch up with one lone passenger trying to make his way to denver. His flight was canceled yesterday. He may be here through tomorrow night as the very least. Im just chilling sit issing down. Meeting new people eating. Aint nothing else to do but facebook. And were also being told theres several dozen passengers that were stranded overnight as well. Theyre being helped in a separate part of the airport. But i do have to tell you theres probably more journalists and members of the media here at the airport actually covering winter storm juno than there are travelers stranded here that tried to get out yesterday. Back over to you. Cant say im surprised by that. Thank you very much. Great to talk with you. Well check in later. For more on the travel descriptions, we are joined now by daniel baker, ceo of flight aware. Good morning to you. You have a better than insight than most on where things stand. Just walk us through what the cancellations look like how quickly were going to bet back online if we will today at all. The airlines really got ahead of this storm and began canceling flights yesterday afternoon and evening because they wanted to get the airports and crews out of the know so it wouldnt disrupt their own flight patterns elsewhere in the country. Basically every arrival and departure in and out of the new york city area, philadelphia, boston. So were talking north of 5,000 Flight Cancellations. Thats more than 15 of the whole schedule for the airlines in the u. S. And the expectation is Early Morning tomorrow were going see some cancellations as well. The Airlines Need to get those planes back into the northeast to Begin Service out of the northeast. If you think youre flying out tomorrow morning and they havent canceled yet, your expectation because you are a pretty good predictor of whats about to happen you suspect it will be . Its dicey tomorrow morning. Absolutely. If youre flying into the northeast tomorrow morning, youve got a good shot. The Airlines Want to get back in business. If youve got an Early Morning flight out of the northeast tomorrow, its dicey. Tough ask youre where is that airplane coming from . How could it be here if there are any flights into new york city this evening how would they depart tomorrow morning . And no chance anythings landing tonight . Or taking off . The Airlines Want to get back in business. The schedules have pretty much been canceled through the end of the day. Theres a chance they might start repositioning airplanes into the northeast. But theyre going to be in recovery mode tomorrow morning. So even if the weather is looking good as were looking out here and by the way the sidewalk here is you know completely clear as a bell. You could take off or land right on it actually if you get a tiny enough plane. That should not be an indicator for those thinking about whats about to happen . That is right. They cant start resuming flights this afternoon. And then they have the human factor as well. The folks that work at the airport that are meeting the planes checking people in dealing with the bags. Theyre saying the subways are shut down. So until the whole infrastructure of the city is back up and going again, they cant get the airports going. Then thats really the blocker for the airlines to begin their operations again. So its sort of the end of the list of all the things that need to get going again before they can resume service. Okay. Ill be all over the flight aware app. Thank you for helping us out this morning. Thank you. Coming up dow component Procter Gamble reporting minutes ago. Stocks down a couple of dollars now and hurting the dow as well. Cfo john muller will join us next to break down the quarter. Then at 7 30 eastern, two more dow components set to report. Were going to hear from 3m. The return of frozenomics. Find out how much this blizzard is going to cost. Right now youre going to look at a live shot of boston massachusetts, where thats some serious snow. There. We didnt really get it hooere. We got lucky. Procter gamble Quarterly Results moments ago. More than 180 countries. Missing on the top and bottom lines because of currency. Joining us now how to break down the numbers is john muller cfc of p g. We actually posed the question, its currency, its out of your control, should it matter to investors . But just if you look at face value, both revenue and earnings dropped from a year ago. So whats an investor to do . Well you know it was a quarter with both rewards and challenges. We grew Constant Currency organic sales, we returned 4 billion of cash to shareholders. We tightened our strategy by devesting some businesses. And we increased our cost profile. But there were definitely challenges. And fx was the prime one. Virtually every currency. Sh points on the quarter. Able to includes savings to offset part of that. But we continue to invest as well in our business our Brands Products capabilities and people. Because its the right thing to do for the longterm. And so we did in terms of all in earnings, we were below a year ago. From a fiscal year standpoint were holding our organic sales guidance. Were holding our cost of currency. Earnings per share guidance. Were holding our commitment to return 12 to 14 billion of cash to shareholders. But we are reducing our all in Guidance Range to a range of flat to down Single Digits. What will cover these impacts over time through a combination of both pricing and cost savings. But in the near term it has an impact. So is that assuming that the dollar stays where it is or continues to get stronger . Those numbers you just gave. Im sorry, i cant hear a thing. Okay. Let me test. Testing, testing. Jon. Jon. Jon. Cfo of Procter Gamble. I dont think its working. No . Maybe the snow got in the way . Were going to try to reconnect. But okay jon. I understand that youre back. My question was if the feds going to raise theoretically and maybe its all already in the currencies, maybe the dollar has seen its highs, nobody knows. But is that those forecasts you just gave is that assuming the dollar stays where it is . What if it continues to strengthen . You could be less on the allin turms, right . So the forecast we just provided is current with spot rates. As we look forward and you look more broadly, were pretty hopeful that tail winds are going to increase. Were going to have a benefit from lower oil costs. Were going to price to recover currencies. That will help. Weve got increase in savings from our productivity program. The benefits from our portfolio focusing will grow. You know the oil costs are not only a benefit in terms of cost but were hopeful there will be a stimulant for demand and Oil Importing countries. The Oil Importing countries, the u. S. , china, japan and western europe constitute about 2 3 of our business. Interest rates are low. And were hopeful well see growth in the United States. So were bullish on the future. Nice to have twothirds of your sales in developing fastgrowing countries untiling is like this happens though. I mean thats just a multinational problem. But live by the sword, die by the sword. Yeah. And its not something that we havent dealt with successfully before. You know the last russian crisis is an example. The ruble is one of our big Currency Exposures. Our business halved overnight. Then six to seven years, we built that back. It started precrisis at 700 million business. Now a 3 billion business with profits above the company average. So these things take time. But were well rehearsed in how to deal with this. We have many opportunities that are within our control. And were bringing all those to bear. What are some of those opportunities . Weve spoken with caterpillar in the past and they talked about doing more local sourcing. I get the feeling that Procter Gamble already does a lot of that. Right, jon . There are opportunities in the margin. Both from a manufacturing standpoint and also from a supply of materials standpoint. So well move some of that around. But what im talking about is the big cost savings programs were executing against. The portfolio were executing which will increase our growth rates and profitability. There are many operational levers aside from just managing the Currency Exposure itself that should help us. And we have some very good, strong large businesses. Pampers in the u. S. Detergent . The u. S. Are growing nicely. So this is we cant make the mistake of taking the eye off the ball and cutting too much cost. We need to continue to invest in our brands. So therell be a shortterm hit. But again longterm i think there are more things in our favor than working against us. Going to figure out trying to give you some advice on who to start kissing up to, jon. Healey is leaving now. She was supposedly a potential successor, right . So now theres four. You got your money on any of these guys that youre willing to say on the air . David taylor debra inretta, martin rant . Youre staying close to all of them . How are you working this . I have the blessing of working with a Wonderful Team of people across businesses across disciplines. And were focused on growing the business and theyre all key contributors. Good answer jon. Hes totally inflappable. Youre always expecting something, arent you . Nothing surprises you didnt even switch. I didnt see your eyebrow move when i started going there. What can i say . All right. Thank you. But we are watching because obviously a. G. Is a tough guy. You tried to get someone before and you tried to get him back. Good luck. Thanks for playing along, jon. And you always give us everything we need to make an informed decision. See you. Thanks guys. Have a good day. Coming up when we return bacon news. Why your favorite breakfast meat is getting a little bit cheaper. And were also expecting quarterly reports from 3m and caterpillar. Well bring you those numbers and the move in the market. Were back in a moment. Breath in. And. Exhale. Aflac and a gentle wavelike motion. Ahhhahhhhhh. Liberate your spine. Ahhhahhhhhh. Aflac and reach, toes blossoming. Not that great at yoga. Yeah, but when i slipped a disk he paid my claim in just four days. Ahh four days . Yep. See why speed matters, at aflac. Com. The lightest or nothing. The smartest or nothing. The quietest or nothing. The sleekest. Sexiest. Baddest. Safest,. Tightest,. Quickest. Harshest. Or nothing. At mercedesbenz, we do things one way or we dont do them at all. Introducing the allnew cclass. See your authorized mercedesbenz dealer for exceptional offers through mercedesbenz financial services. Can it make a dentist appointment when my teeth are ready . Can it track my crews performance and protect their heads . Can it tell the Flight Attendant to please not wake me this time . 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Its very difficult to forecast 24 to 36 hours in advance. But 24 to 36 years weve got that down. So i want you to believe me when i tell you about my forecast for it is amazing we cant get 24 to 36 hours. We cant even get close on that. And yet the question is we get very upset when they missed the forecast and theres too much snow. And then we get very upset when theres too little snow. You didnt laugh at my other line either. That if it had been a huge storm it would have been Climate Change. Now it was because of global warming. Can i tell you where predictions have done a better job . With 3m right now. Coming in better than the street was expecting. Its a penny beat on the bottom line. Top line just slightly light. 7. 72 billion versus the 7. 77 billion they were expecting. Now for the full year they expect to earn 8 to 8. 30 a share. Street was in the middle of that at 8. 20. Well see how the stock is trading on this expectation. This is the first of the three dow components weve seen today that have beat expectations. That stock is trading higher right now. Its up by about 1. 26 versus pfizer. And Procter Gamble were watching this morning, that was a big miss. But that was because of currency fluctuations. Okay. So you mentioned 3m. We want to do caterpillar at this point . I dont know if its in. Lets see it does look like caterpillar is just hitting right now. I want to look closer at this. There must be an adjusted number unless thats a huge miss. But i dont see it. Revenue they see revenue at this point at a billion. But adjusted, it says adjusted sales look good though. Sales came in. Fourth quarter sales, 14. 2 billion. Thats also slightly ahead of what they had been anticipating. I want to look at whats in that. Restructuring costs, profits were 1. 35. I dont see what else is in that. Let me dig through deeper. Whats the stock doing . Stock down 4 . Is the stocks down 4. And im also seeing a crazy adjusted number of 4. 75 and ive got, like, over 6 as the number that people are looking for here. Ive taken all of seven seconds to look at this. So id like to take a closer look. Caterpillar decline in oil prices for the decrease in both the sales and revenue outlook. Wow. Now, they told us doug told us that theres a lot of Different Things that go into oil and gas. And theres downstream operations that arent necessarily as dependent on the price and it keeps going on. But this seems to indicate theyre disappointed by the Fourth Quarter. The recent dramatic decline in the price of oil is the most significant for the year over year revenue and outlook. Theyre saying its a significant headwind for the transportation sections for their own company. And negative for our construction business. So the effects for Oil Producing countries that no longer have the money to invest. So they miss by a couple of pennies. Theyre supposed to earn 657. They needed 1. 55 to do that. Thats below by 50 cents. Next year theyre supposed to earn 6. 67. Theyre now saying 4. 75. Yeah. All right. Thats the reason youre seeing the stock trade lower. It doubled on. Expectations for the Construction Industry in china are lower. So theyre getting hit from a lot of different directions. Were also using 1. 35 as the actual number here. Thats what we do. Adjusted is 1. 35 which is 20 cents below. Fiscal year 50 billion. 55 is what they had this year. So they did say theyre going to see lower and revenue. Looking for revenue. Still 55 billion is what the street was looking for. The street was look willing for relatively flat. And theyre saying 50 billion. I wonder did we have any 4x details on this . They mentioned everything but 4x. They say lower prices for oil, copper coal iron ore. We asked about the results and they said it couldnt get much worse. But think about overall commodities have gone down along with oil. And that probably hits mining as well. They say thats negative per sales. Continued weakness and Commodity Prices as well. They are expected to be negative for our sales. This is new low on caterpillar as well. Going to be a new 12month low. And there are people that have been talking about this. Looks like hes going to have a good day. Just about two weeks ago. Caterpillar ceo and we credit him with this he will join us will be able to explain what were talking about here. Recovered a little. Its down about 4 right now. As we head to a break, more on the storm. Governor cuomo has lifted the travel ban as of 7 30 eastern. That was just a few minutes ago. You can imagine we will see it pick up soon. Of course a squawk market master will be joining us on a potential greek exit coming up. Hell also speak about the russian downgrade. Also an update on the blizzard in the northeast. Frozenomics series returns after this. But first check out a live look at hartford, connecticut. Still snows hard there. E financial noise financial noise financial noise financial noise opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Talking about Procter Gamble being down on 4x. Now we got caterpillar down. I think pfizer was also down. So heres whats happening with the dow now. Down 156 points. When we walked in this morning, it was down only about 80 points. Since then weve gotten these three components. None of which have been great news. And the currency is 3m was okay. But well see. The markets been crappy this year, too, since january 1st. And we needed you know earnings to do relatively we dont need earnings going down year over year to justify 17,000 or 18,000 on the dow. But my point now, dont you think the fed will need to get together today and do something . They panicked. They had the taper tantrum they did. They see these numbers happening and if they raise rates and the dollar gets even stronger, are we sure you listen to the comments from the companies saying this has been unprecedented. The strength of the dollar versus every other currency. But are they going to waiver . We have Steve Leisman coming in soon. I thought he was arrested. I thought they arrested some russian spies. Yuri . Yeah. Hes a plant. No hes not. Lets talk about frozenomics. Cnbcs series continues. And Steve Leisman joins us. Who bailed you out . My contacts did. My kids think my wife and i are both spies. When we dont want them to know what were talking about, we speak in russian to each other. Before you start, seriously, i know were talking about we got this all prepared with the snow and everything. But what about june . The market has been crappy. All these companies down year over year results. If we raise rates, the dollar gets even stronger. Theyre going to waiver. I think thats right, joe. And i think this caterpillar story is a bigger story beyond just caterpillar. Let me start with the storm. Its not as big of a storm in the new york city area. And even then they were playing down the Economic Impact. Heres the reason. It takes a lot to derail the regions economy, the nations economy. A single storm is usually just not up to the task. Referee whats really important from an Economic Perspective as it relates to metro areas and the costs to cleaning up snow its more important the number of storms not the amount of the storms. If youve got ten storms where youve got five inches that has a bigger impact than one storm with 50 inches. All we have to do is look to last year which is a good example of how Winter Weather affects. Lots of storms affecting a wide area. Remember, that surprise 2. 1 decline in the First Quarter mostly thought to be weather induced. And some of the gdp in the next two quarters which you can see there averaged a strong 4. 8 . That was a weather induced snapback. Now we get a 3. 3 gdp number expected. That seems more in line with trend. Now, were going to get a piece of that data in about 45 minutes from now. The street sees for durable goods a 0. 3 in december. It will focus on new orders for capital goods. Thats a proxy for business investment. Its been down in six of the past eight months. A couple big months have left the left up on the year over year basis. Heres the big question. Bigger than the Economic Impact of the storm is the ongoing storm in oil markets. Its possible a decline in spending for oil services in equipment could show up in the data this morning bringing down overall cap x. Why . Because it was a big part of all the growth when it came to capkp rks. And i wrote that before i saw the caterpillar. Were seeing that in other oilrelated companies. Caterpillar is down five now. And 3m is now down 2. Pfizer was down fractionally. To joes point, the question he asked before. Does this give the fed pause when you start looking at the strong dollar and what that means for American Companies . Ftin fact well we dont know. We havent heard from the leadership of the fed since the last press conference. What we do know is what the market is thinking. And you can take a look. Well have our fed surveyed tomorrow. Delayed a day because of the snow. But look whats happening at fixed income markets. Look whats happened to it in just the past month. Where its 63 64 basis points a month ago. Now flip the numbers around. Now were at 46 basis points. So increasingly its pushing ahead and reducing the amount of spikes its seeing this year. Like i said yesterday, this employment cost index for friday is a big number. Could put the fed back on track for rate hikes or delay them. The feds running out of time to have the data to justify the rate hikes. I could see the scenario where its not working in europe, greece is going to leave, theyre going to be in a slowdown we got no bullets left japans got no bullets and were going back into a slow period. Then would you preemptively hike to prepare for that . No. Id say they cant. Now the scary thing is now they can hike maybe. Look what they did with the storm. Im allowed to Say Something scary about this. Steve, thank you. Lets get another voice. Mohamed mohamed, what do you think . Is the fed in a box . What do they do in this situation . I think it is facing this uncertainty between a healing u. S. Economy and a weakening Global Economy. I still think the hike during the summer will go slowly. Theyll start well below the 4 historic rate. But theyve got to build in some cushion. So i think theyll still go. But it reflects you this divergence thats occurring in both Economic Performance and policy prospects. Do they do it almost begrudgingly . I mean you have to hear what these companies are saying about how the dollar is already strengthened in an unbelievable way against every other u. S. Currency. How do they continue to do that and what are the impacts it has back here on the stock market . So first on the currency youve heard me say this for months. History tells you whenever you get very sharp movements among the major currencies something breaks. This has been the history over and over again. In the past it was emerging markets. This time it is corporations that are weaker. And importantly it is adding to the volatility. Remember, the whole notion of the fed is to repress market volatility. So the currency movements are important, but theyre not unexpected. I dont think that in itself changes the fed. I think the fed is going to look at that and say thats part of the adjustment process. So what gets broken in this scenario . Or you think we just limp our way through this . So i think the true risks and these are risk scenarios. One is you have companies that are unhedged. Youve been reporting this morning about the u. S. But thats nothing compared to emerging market corporations that are unhedged. So the first risk is unhedged companies particularly those who have a mismatch in their revenues versus their liabilities. The second issue is this notion of lower volatility the ability of Central Banks to repress volatility. Theyre battling. Look at the Swiss Central Bank today. They had an so if we shake this low volatility pair dime then were undermining a main element of policy. Ill ask you very quickly, what is the baseline scenario . You think stocks going to do okay just because they look better than other places to invest . So i think first and foremost, were going to see a lot more volatility. And the resilience of investors are going to be tested a lot more this year. This is not going to be the goldilocks like in the past. Thats the first thing. Second, where we end up is a geopolitical call as much as it is an economic and corporate call. And theres keep an eye on russia. This is a major source of concern if youre in europe and europe goes into recession, the u. S. Is going to be impacted. Okay. Mohamed, thank you. Futures are closing in on down 200. Not yet, but close. Thats all because of earnings. Right. Coming up it is a big morning for earnings. Were going to run through the big movers ahead of the opening bell. Well see where futures are going when squawk box returns in just a moment. So whats going on today . News alert message email calendar update most of us admit to being overwhelmed by information at work. Thats why ibm created verse. It uses powerful analytics to uncover hidden patterns in your email, calendars and social feeds. It continuously learns how you work. And helps you prioritize the people and projects you need to focus on. Theres a new way to work and its made with ibm. 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New Meta Health Bars help promote heart health. Experience the meta effect with our new multihealth wellness line. Push your enterprise and you can move the world. But to get from the old way to the new youll need the right it infrastructure. From a partner who knows how to make your enterprise more agile, borderless and secure. Hp helps business move on all the possibilities of today. And stay ready for everything that is still to come. Welcome back. That is the current situation. Dow down 191. Futures dropping sharply this morning. Caterpillar missing by 20 cents. Revenue might have been above projections, but next year the company is cutting its outlook sharply. Just went over something. Microsoft is down. United technology is down. The multinationals are in trouble this morning. This is a big story today. It is. When we come back were going to talk more about it. We have the ceo of caterpillar who will be sounding off on earnings. Much more to come. Stick around. Squawk box will be right back. Ting who will win the big race between the tortoise and the hare. What do you think andrew . Rabbits are faster. Its not a rabbit, its a ha \ maybe figure that out before debating the best wide reciever of all time. Wait, are you Odell Beckham jr. . Live from new york where business never sleeps, this is squawk box. Welcome back to squawk box here on cnbc first in business worldwide. Im joe kernen along with becky quick and Andrew Ross Sorkin. Breaking news this morning. That is u. S. Equity futures are pointing to a sharply lower open after what has been a crappy start to 2015 already. So were down almost 200. People talking about the four horsemen. Theres more than four actually. This is like a budweiser commercial with like eight horses at this point. Caterpillar is going to account for about 27 dow points based on where it is trading right now. United technologies is going to hit by about 19 pountints on the dow. Microsoft 22 points. And Procter Gamble about 15. Utx is all over the place with elevators. And industrial. You have to look at 4x. Microsoft is technology. But all these things are affected. These arent just some of these arent just misses. These are lower earnings per share and revenue than 2014. All of 2014. Now forecast for 2015. So where is how do you do 3 or 4 gdp if youve got and it sets up what does the fed do . Europe is were supposed to be the shining beacon in the Global Economy right now. Getting interesting today. You know who i want to talk to today. Im looking forward to catching up with cramer. He tends to look at this over a slightly longer term. Hell look at how the businesses are operating and i am looking forward to hearing how he addresses all of this today. Its absolutely nothing that the company although you could look at a stronger dollar for a long time. If you need to take money out, tough Pay Attention to it. Its like business could be running better even though youre getting hit by the stronger currency. Why dont we look at the market boards this morning . Those futures are under pressure. Dow futures were indicated down by about 80 points. Then we heard from Procter Gamble and pfizer and caterpillar. Add that up to what we heard last night, and its a concern to the markets. Dow futures down by about 200 points. And the nasdaq down by 38 points. Watching in europe whats been happening there, similar stories there as you do see the dax down by 1. 25 . The cac off by 1. 2 . The ftse off by. 5 . In asia overnight, the nikkei was higher. Shanghai was down. If you look at oil prices it was down about 1 . Its trading down once again. 45. 08 for wti. Down by another seven cents. 10year note is right now yielding below 1. 8 . Lets check out Car Insurance sis currencies. Youre talking about the euro at 1. 13. Dollar down against the yen at 117. 73. And gold prices barely budged earlier this morning. Lets see where they end right now. Up by 4. 20. Caterpillar reporting quarterly profit 20 cents below estimates. Revenue, doesnt matter what we just saw now. Its next year that were talking about here. Here now with the first on cnbc interview with more doug ole oberhelman. We might as well get it out at this point. We want to make sure we have the right apples to apples stuff. How much are you bringing down next years forecast on revenue and earnings versus where the street is . Is this 2 less than where the street is on earnings that youre now forecasting . Good morning, everyone. Nice to be here. Its a little bit less than that but, yeah we are bringing it down. Were bringing our top line down from a little over 55 billion in 2014 to around 50. And were bringing our bot top line down to 4. 75 if we put some restructuring plans in there. But we are looking at a soft year in 2015. And there are several reasons for that. When we were all together in new york i talked about the impact of oil and it would hit us. And it is. Oil is a piece of our energy and Transportation Business. Oil and gas is about a third of that business. Actually the natural gas piece of that business is doing pretty well and so far holding up. The oil piece, though is what were taking down. Thats our primary number reduction for 2015. And theres a reason that a company is called cyclical. When theyre done theyre great. And when things are bad, its like everything is going i think about the businesses that youre in. Think about it. Youve got oil and oil goes down, other mod tycommodities goes down. And then youre an International Company and the dollars up. So youve got 4x problems. I dont know if i would have got out of bed today if i were you. Youre right, joe. Theres a lot of external winds buffeting us. And the one thing our Leadership Team talks about all the time is to work on the things we can control. And actually if you look at 2014, we did that. We had a very solid year. Albeit a soft quarter. Most of the Fourth Quarter decline was as we are taking inventories down trying to improve our turnover and as ive talked many times with you and others leaning out of the supply chain. In the shortterm it was quite a hit. Longterm it ought to help us. But yes it seems like when it rains, it pours. This is one of those days. Doug you know shareholder has one concern obviously. So maybe they dont know what to do with caterpillar. It is at a new low. Its down below 80 at this point. But what about the world . How long is this situation going to last for you, do you think . And for the rest of us in terms of the economy . I mean, is it are we in a is 2015 and even beyond not going to be as plushflush as we thought . Its very concerning. And i have been saying and we talked about this last month as well that its hard for me to envision that 2 gasoline at the pump in this country, 2 Interest Rates is bad for an economy. And i think theres a transition upside way in the shortterm where the big reduction in oil, the big reduction in Commodity Prices are hurting Many Companies including ours. But over the longterm, its got to help us with growth. Having said that were only forecasting world gdp growth to be up. 2 of a point to about 2. 7 in 2015. Thats not enough to create jobs, not enough to drive our top line. Its a pretty weak any overall. Even though the u. S. Outside the oil patch shows some life. Several billion dollars worth now by my estimates. Maybe close to four. In terms of what was authorized. In retrospect was that a mistake . Not at all. We have a lot of cash on our Balance Sheet. Certainly id like to buy low and never sell high. But we still have a lot of cash. We ended over 7 billion at the end of 14. That was a bright spot for us in 2014 was our cash flow. Third best year in history. Were likely to buy more of that in the future. If you look at this over the longterm, we just have cash in our Balance Sheet we dont like to leave there very long. Well continue to do that in the future. Id look for more of that in 2015 as well. I know you cant control commodities prices, but you pointed out the lower prices for copper, for iron ore, for oil, for all of these things. Thats really tough news for caterpillar. When do you see this changing . What are your own estimates and internal plans call for . Its tough news for the world because its indication that world growth is slowing or certainly not growing or is slow, i guess. We forecast 2015 at fairly flat rates in terms of the dollar i think theres more risk to the stronger dollar this year. Commodity prices weve held pretty flat. Although in terms of copper folded up at the end of the year. I expect to see those prices stay relatively soft until we see some kind of growth in the world somewhere. And again, with low Interest Rates, low oil prices we can see some of that the end of 15. We did not work that into our forecast. So what weve tried to do all along as we grow we try to retain 25 of every incremental dollar in margin. As we drop we try to keep as we drop a dollar in sales we try to limit our damage to 25 to 30 on the way down. Were doing that in our forecast. Thats reflected in a 9 drop in the top line. And that dollar and a half or so at the bottom line. It gets a little scary when you sort of connect all the dots. We got 0 Interest Rates all around the world. Weve got europe. You know what have they got left. Theyre already expressed in basis points. And theyre trying to cut rates that are already in basis points. Then you have oil that was at 90 six months ago. Youre trying to avoid deflation. And then oil gets cut in half when youre already having tough. It can get kind of scary. I wonder what policy makers have left in their quiver globally if there is a slowdown. Then thats very concerning i think. Joe, youre right. None of us sitting here six months ago could have 2. 5 copper today. But policy makers have their hands full and we have around the World Governments that arent functioning. So theres a compounding effect. On the other hand what were trying to do no matter what happens around us and i talk about the four walls around our country, try to make them as strong as we can to weather the storms. Weve seen since 2009 tremendous things that have come at us that are unprecedented in our lifetime. With the Glass Half Full its exciting. Goellyld i did goldilocks. You have a good idea about whats happening in the United States. What does the United States economy look like in your perspective . That could give insight about what the Federal Reserve might be doing come this summer. Its very interesting, becky. I have just been with about a third of our dealers in north america at different meetings and venues this month already. Outside of the oil patch, outside the frac states outside the frac zones, our dealers and our contractor base are pretty busy. A lot of them had record decembers with that doubled appreciation that the government came through at the 11th hour, that helped push business going into 2015 with some backlogs. Its not a boom, but its certainly more positive than its been. Then you go to the frac states texas, pennsylvania area north dakota and things are very tough and i think going to get tougher. In our case, if you visit a frac site youll see maybe a dozen, 15 20 trailers with cat engines, cat transmissions all supplying pressure to help drill and frac that well. Thats all going to go away in the next few months. We had a great year and quarter and month in our oil and gas business in december. Thats going to tail off quickly in 2015. Thats what we built into the forecast. Outside of that, things are okay, apparently. And we need something more than 3 in the u. S. To really grow create jobs and grow our top line. Im not sure were going to see that in 2015. You think that this is just your opinion but fed going to change its schedule round of Interest Rates hikes at this point . Would you put it off . I would put it off, definitely. Theres no question its a fragile economy. The european action is probably a slight net positive. Theyve got to do something to revive europe. Its going to take awhile. Weve just got to keep doing more of the same. I do not look and encourage not a raise Interest Rates sooner than they have to. Because the underlying foundation is not that strong yet. Maybe it will be later in the year as we see the positive impact of gasoline prices work through to the pump. Right now its certainly not there. Its amazing. Its amazing how in 24 hours in the past two hours sort of the mind shift. Whats more amazing is it is the half empty, half full thing. The same things we said two months ago, wow its goldilocks. Low Interest Rates, low oil prices. And now its oh my god we have low Interest Rates and low oil. What are we going to do . Anyway, what about china, doug . Thats the one place we havent talked about. They better get going. Now more important than ever. It is. Its a huge economy. Its a very important market for us and a good one. We are actually forecasting a slowdown to about 7 or so in growth in 2015. Thats a bit of a head wind for us. But i sure like our business there and where we are. Its a good solid business for us. Just a lot smaller than it was four years ago. I like the way were positioned there longterm. All right. Thank you. By the way, thanks for coming on whether its good news or bad. We appreciate that. Its only you, microsoft, united technologies, pfizer 3m so its not a caterpillar story. But we appreciate you coming on and letting us know whats happening because it helps. Nice to be with you. There are good days and not so good day, but always nice to be with you. Okay great. Lets take a look another the u. S. Equity futures. They have been under quite a bit of pressure this morning. First came in this morning, it was down about 80. That was because of microsofts news last night and utx. Concerns about whats been happening in those industries and foreign exchange. A lot more of that this morning with all of the dow components that have been under pressure. Joe rattled off the list. Caterpillar, pfizer Procter Gamble pfizer. Right now dow futures down 230 points. S p off 17 nasdaq down 51. Well talk a lot more about this this morning. When we come back biggest stock movers of the morning. They are about all losers as you might guess. Were watching a selloff here. Squawk box will be right back with much more. The real storm this morning has to be the storm in the futures markets, not necessarily on the streets of manhattan. Theres a difference when you trade with fidelity. One you wont find anywhere else. Onesecond trade execution. Guaranteed. Did you see it . In one second, he made a trade we looked for the best price and the trade went through. Do the other guys guarantee that . Didnt think so. Open an account and find more of the expertise you need to be a better investor. E financial noise financial noise financial noise financial noise recently, a 1954 mercedesbenz grand prix race car made history when it sold for a record price of just under 30 million. And now, another mercedesbenz makes history selling at just over 30,000. And to think this one actually has a surroundsound stereo. The 2015 cla. See your authorized mercedesbenz dealer for exceptional offers through mercedesbenz financial services. Welcome back to squawk box. It is setting up to be an ugly day in the markets. Forget about the snow this morning. Futures at this hour are looking distinctly in the red. Dow looks like it would open down about 236 points. The nasdaq would open down about 50 points. Weve heard a lot of big losers this morning in terms of earnings. Microsoft warning its dealing with the impact of a strong dollar. We then had 3m. Weve heard from caterpillar, Procter Gamble missing. Its not been a pretty sight. Well see whether the sort of sentiment, if you will is shifting here. Look at that chart. It doesnt give anyone anything to feel optimistic about. Look at that. Lower highs and lower lows. Lets talk a bit more about this with jim iuorio. Check out this results if you look across the board. Cat pill sererpillar is the big loser right now but you have losses from other components. Jim, whats going on . When we began earning season we knew the energy seasons were going to be bad because of oil. Then that moved into the financial names because of cost. Then were on the multinational because of the strong dollar. We have plenty of excuses for individual sectors. But taken as an ing aaggregate it gets complicated. The reality of it is is we have to work through that. Im not ready to write off the earnings season with this today. Apple could save the day. At the end of earnings season well be able to look back and see is oil is going to be a net positive or net negative. Im holding out its going to be a slight net positive. As you mentioned, where do you look for growth . Im looking at apple for growth. Were crossing our fingers for that. I know its a lot riding on one name. But realistically were going to look for consumer names that have a domestic focus. When we start seeing names like that do poorly then ill be convinced that things are going to go badly for the entire earning season. This is an awful start, but im not ready to head down that thought process road that everythings a disaster. I still think things would be good. At the end of the day, you know with yields where they are here and in europe, the question you have to ask yourself every day is do i find a better investment across the world than u. S. Stocks . I havent seen it yet. I mean, you can think maybe you put money in gold but its just still the cleanest shirt sort of theory. Thats a fair point. When youre talking about companies that are warning for the full year its only january. Theyre saying forget about it until 2016. Yeah. I get that thats a bad thing. And i am im troubled by that, to say the least. I was under the impression coming into this most of the multinationals were better at hedging Security Risk than they appear to be. But we knew caterpillar was going to be bad because theyre hinged to oil prices. We throw them almost into the energy sector. Then it leaves microsoft and Procter Gamble. And thats just two names so far. Yes, its a big deal and yes, its a bad deal. But its not the end of the world yet. Thanks. Its good to talk to you. Thank you. When we come back this morning, a russian spy ring in new york busted. It was trying to recruit u. S. Citizens and collect economic intelligence. We have the details after the break. [ radio chatter ] [ male announcer ] andrew. Rita. Sandy. Meet chris jackie joe. Minor damage or major disaster, when you need us most, were there. State farm. Were a force of nature, too. Push your enterprise and you can move the world. But to get from the old way to the new youll need the right it infrastructure. From a partner who knows how to make your enterprise more agile, borderless and secure. Hp helps business move on all the possibilities of today. And stay ready for everything that is still to come. Welcome back to squawk box. Our next story is a crazy one. Coded messages spy recruitment, and stealing economic intelligence. It sounds like a scene of a movie but it happened here in new york. Eamon javers joins us with this russian spy ring. Thats right. Alleging they were officers of the svr, thats the successor to the kgb in russia. They arrested one man in the bronx and the other two were posing as diplomats and were able to leaf the country. The one arrested was arrested in the bronx yesterday. Its not clear what they were doing but it appears they were focused on economic intelligence gathering in the new york area. And one area thats raising a little bit of concern is this exchange that was released from an audiotape made by the fbi of these alleged russian agents when obviously they werent aware the fbi was listening. And theyre talking here about questions to the new york stock exchange. They are working with a News Organization that a u. S. Government official tells me was tass. Look at this exchange here. Agent number one said well i thought about it. I dont know whether it will work for you but you can ask about etfe exchange. Agent two says yes i got it. Agent one, how they are used. The mechanisms of use for destabilization of the markets. Agent number two, obviously taking it down mechanism of use for market stabilization in modern conditions. Then he says you can ask them what they think about limiting the use of trading robots. So clearly in this transcript of this conversation between these two russian agents that was release bid the fbi, there is some interest by the russian agents about u. S. Financial markets and the destabilization of them. But its not clear exactly what theyre after here. Whether they were trying to figure whether markets could be destabilized whether this was something they were trying to do offensively or defensively or simply information gathering. Well learn more here as the details come out guys. Okay. Eamon, thank you for that report. It is fascinating. In the meantime weve got breaking Economic Data coming up. Were going to get you the durable goods numbers and talk the fed especially given the drags on the do u. Youre looking at this right now. They are dragging everything down. Take a look at u. S. Equity futures. Red in a big way. Down about 245 points in the dow. S p 500 down close to 20 points. Nasdaq looks like it would open down 52 points. Back in a moment. Welcome back everybody. We are just a few seconds away from durable goods numbers. Rick santelli is standing by in chicago. Weve been waiting to see what happens. And after all the numbers that weve gotten from earnings today, theyve been pretty disappointing so well see what the government has to say as well. Go ahead, rick. Take it away. December durable goods orders headline a bit late, obviously, its the weather. Well we are expecting up around. 3 . Still dont see it out. Ill do a little tap dancing here. Heres what i find fascinating. We still havent challenged the 6 00 p. M. Eastern low yield closes from the 15th of january whether youre looking at fives, tens or thirties. Which means that the big 20second announcement was so preloaded were not seeing the extremes. Look at europe today. Their equities are down. But their bund yields are not. So theres Something Interesting afoot here. Im not sure what it means at this point. Maybe theyll wait until the qe begins in march. But it seems there is a head wind. Were not only pushing a string. Were pushing a string in a hurricane, so to speak with regard to what Central Banks and and cannot accomplish. Because you can never division if the talk is going to turn and work. Once its on the graph it is what it is. Obviously this data is late and i cant i suspect that theres only one reason. So of course we could talk a little bit, joe. Im glad you guys didnt get the big two to three feet they were expecting. Thats cool thing you didnt get it. No, we didnt. So rick how will we know in looking at what fed funds or something, how will we know if fed is losing its resolve for a midyear hike . Well i think youd lose it in the following fashion. That you start to see the Interest Rates, the big sovereign rates start to move sideways to higher versus lower. Well im hearing that this data is here. Anybody picking it off on the screens down here . Still dont see actual data. If you guys have it you can tell me. Steve, do you have it . I have a number here. All right. Here we go. Minus 3. 4 . Yep. And that was a good expectation of plus 0. 3 . So that is a massive miss. I have durable goods down 3. 2. So it wasnt defense. I dont have the table steve, lets not release that today. Can we not release that today after these earnings . I think theres an argument there, joe. And im also wondering how much the story we heard from caterpillar has to do with it. Weve been talking about the issue of oil serve which was whether thats a piece of whats down here. Also we do know there was a timing issue with boeing orders and the civilian aircraft orders expected down. Wow. Big revision. Steve, the revisions are coming in. Theyre breathtaking. This was already revised. Wow. They changed some of the revisions. Now were down 2. 1 from the prior down. 7 which ruz already revised. Thats headline nondefense aircraft orders now down. 13 . So these numbers are getting a little bit sloppy here. Nondefense aircraft proxy for new spending as steve pointed out is down. 6 . Down. 2 on shipments. This is pretty spongy. You know when i walk away if i wanted to keep it simple all the ire the treasury market was getting when we were talking about a lot of reasons besides just the European Value trade, this market has been flawless. It was way early on this hiccup we are now seeing with some of the November December data. I want to say this is going to impact gdp. The revision. I think whats going to happen i dont have the spread sheet in front of me now, but likely that business equipment spending will subtract from gdp in the Fourth Quarter. Another pretty good run. It was up there pretty decently adding a little bit to gdp. Now its going to go the other way in the Fourth Quarter. We need to know the sources of it. I dont have the table in front of me as to which particular sectors. But this big revision downward for the prior month and this big mess this month is going to raise questions about the strength of business spending in this country. Joe . There was no Mission Accomplished banner behind the president burg sduring sotu but its something in the middle of something. I was watching scott pelley on 60 minutes to mcconnell and boehner. Read off a list of accomplishments in his hard hitting interview of mcconnell and boehner. But, man, i thought and the Approval Rating back to 50 . Were we rushing, jumping the gun, rick . Well you know i dont think were jumping the gun. I think that no jumping the gun that we were out of the woods. I know what you mean. I dont think we were jumping the gun. I think its normal for us to continue to the look at our economy as this selfdriving perpetual motion machine that comes back. And it did. But we overestimate what we have done to help it. I think many of the things weve done to help it have hurt it and yet its still come back. Its still about sustainability. Its about that old adage about the new normal. We didnt fix anything. Theres not a government in the world thats fixed anything yet. Oh, yeah it did. They came up with a sixyear cure for a twoyear flu come on joe, be fair. Youve seen whats happened to those countries that prematurely withdrew their stimulus and theyre really not doing very well at all. And youve had the sustained job growth. Youve had the sustained gdp growth. You had tremendous numbers in the second and Third Quarter. Youre probably still going to do 2 3. 5 steve, when you were young did your parents want you to get straight as . Did they push you to get good grades . Yes. When i came home with a 95 they asked why i got five wrong. Whaen they graded on a curve and you got a b and everybody else got a cminus, did that make your parents feel good . Grading the u. S. Economy on a curve is not an excuse. Were not doing what we need to do were doing better than everything were going. A generation and a half down the road we can say we sunk slower than everybody else. I will say that the 4. 8 average growth over the second and Third Quarter is a good number, a strong number by any standard. Only if its sustainable on a glide path thats flat to higher its too bumpy heres what you want. What do you mean bumpy . Its always been bumpy. Gdp is up and down. Come on. Look at the trends after the last three recessions. Theres no moment of smooth growth in this country. Guys we just crossed 300 points down on the dow. All countries in europe are going to do qe now. But none of them have fixed their structural problems. Over here we didnt do anything with Corporate Tax reform. Didnt even bring it up. Were talking about the same stuff. None of the structural things that were supposed to have time and take care to fix, none has been done yet. Its been all fed induced, hasnt it . I think part of what we have here has nothing to do with the fed, nothing to do with the administration. Its just a general bounceback. I think the fed did give it some juice. I think youre right, joe. But i dont think youve repealed the laws of the strong resilience in the underlying economy as well. We do need some changes, but we get by. What about qe . What number are we on . Were at infinity already. Were at infinity. But did bolen really say we might have to go back and do it again, steve . I didnt see that comment, joe. But i have no doubt that they hold that as a possible tool that theyll use again if they need to. All right. This is worse than you said durable goods is going to be fine and we can write off the bad earnings numbers. We had a lousy number currently. Iuorio . I think its worse than spongy. I think its a bad number. The only thing worse than the number is the timing of it. Just to talk about what rick and steve were just saying. What rick started off by saying is our country is showing amazing Economic Resilience despite the fact its saddled with bad economic policy. The Corporate Tax rate, its almost punitive and we still managed to claw our way out from under that. When we do claw our way out, it makes less incentive for people to change it. Its a double edged sword. It seems like were cursed to this lukewarm fed induced mild growth. But back to e the numbers. This is a bad number and the stock market is reflecting that. Its no longer bad is good and bad is good. Bad is bad. I got to tell you. The december durable shipments number was up 1. 1 . It was the orders that were down which is sort of bad for the future. But the current number for December Rick i dont know if you have an estimate on what people expected shipments to be. Because the street does expectations on orders. I was looking for 1 . It actually came down. 2 . I got shipments up 1. 1 . Do you have that number there . No. Sorry. Thats going to feed in. Thats not going to be too bad actually. No. Its nice to see theres yeah. Listen, steve. We want bright spots. But if were not honest about what the economy can produce versus what it is producing and do some cost benefit analysis as why and we just blindly never cannic the tires because we dont have a plan b, then were doomed to the future that fate will deal us. Maybe its three steps forward, two steps back. Its just we were all sure that after six years of because of the financial crisis it was a tepid recovery we were all sure we finally made it to be on stall speed. Right when we thought it was clear sailing. I dont know. Your confidence gets shaken. Maybe thats all this is. Gentlemen, thank you. In the meantime we have some breaking news from twitter this morning. The Company Making two big announcements to keep users engaged and give advertisers more tools. Well see if this is a game changer. Julia boorstin joins us. The company pushes to innovate to keep investors and users hooked. Twitter is launching mobile video tools that are in the apps. Users can capture, share, and edit videos up to 30 seconds long with instant playback. All within twit per sop theres no need to swipe out of twitter to your phones camera or to youtube. For advertisers it promotes videos. With these tools, Twitter Joins facebook in battling youtube luring consumers and advertisers to their own place too boost ad revenue and user engagement. Users can now send direct messages to groups. The companys boosting its investment in private communication, an area that has been criticized by users and investors. Twitter hinted at these developments back at its november investment day. Under growing pressure from shareholders looking to show just how fast twitter can innovate and roll out new products like these. Andrew . Thank you for that report. Coming up next when we return, weve got a roundup of the earnings reports of the morning. Thats driving down the markets in a broad way. Look at the futures right now at this point. 283 points down for the dow. Nasdaq down 60 points and the s p would open down 22 points. Well see where it really opens in just a little bit. Were back in a moment. Ew york state. Already 55 companies are investing over 98 Million Dollars and creating over 2100 jobs. From long island to all across upstate new york, more businesses are coming to new york. They are paying no property taxes no Corporate Taxes no sales taxes. And with over 300 locations, and 3. 7 million square feet available, theres a place thats right for your business. See if startupny can work for you. Go to startup. Ny. Gov. You know. Theres a more enjoyable way to get your fiber. Try phillips fiber good gummies. Theyre delicious and an excellent source of fiber to help support regularity. Mmmm. These are good the tasty side of fiber. From phillips welcome back. A number of stocks on the move this morning and they are all losers at this point. Caterpillars earnings missing the mark. Company cutting its sales and revenue outlook because of the decline in oil prices. 3ms earnings beat by a penny. Then we have duponts earnings matching estimates but currency head winds pulling the full year forecast well short of consensus. Procter gamble falling short on the top and bottom lines. Consumer products giant is experiencing what its calling, quote, significant negative currency impact which will hurt its sales for 2015. And we heard from pfizer. Beating the street. But the Pharma Company issuing lower than expected 2015 guidance because of patent losses and a stronger dollar. So thats bad news. Then we had microsoft posting revenues and earnings in line with estimates. You think thats okay but sluggish pc sales hurting demands for pc software. You add all that up and youre looking at the futures right now what are we off . Going to be close off down 300 last i saw. It was weird. Dupont beat for the quarter but says the full year forecast is going to be below. That was 2014. So theyre saying for all of 2015 its going to be below. Its january. That was last year that dupont theyre going to miss 2015. Up next jim cramer was unable to make it to wall street thanks to the blizzard. But that doesnt stop him from covering what investors should be watching at the open. We ought to be here in hotels. We reveal his secret location next. Heres a hint. It was once two settlements under cliff do you know what that is . Okay. You could read it that way. 18003452550 [ male announcer ] your love for trading never stops tdd 18003452550 even on the go. 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Tdd 18003452550 call 18776703357. Tdd 18003452550 or visit schwab. Com trading. Tdd 18003452550 schwab trading services. Tdd 18003452550 your goto for trading knowhow. Tdd 18003452550 you just got a big bump in miles. So this is a great opportunity for an upgrade. Sound good . Great. Because youre not you youre a whole airline. And its not a ticket youre upgrading its your entire operations, from domestic to international. Which means you need help from a whole team of advisors. From workforce strategies to Tech Solutions and a thousand other things. So you call pwc. The right people to get the extraordinary done. Welcome back, everybody. We told you wed be getting to jim cramer. Now were going to find out where he is. Where is jim . Right there in our old set. They felt there was maybe no way to get from mad money downtown. And getting back this is important that you are there, ready to go. Thank you. Ive been dying to talk to you all morning. Crazy earnings news. Companies like Proctor Gamble and caterpillar warning forget about it 2015 its only january, but numbers are not going to be anywhere near bar the street is expecting. How do you take this . Its a stock by stock situation. The a giant reset for companies that do more than 50 of business overseas because when you get that to that level you truly have gigantic misses. At the same time up until today, we had a lot of Domestic Companies. Domestic companies doing terrifically. I call this on mad money America First situation, do business with companies here. Think about all of the companies not overseas that have blown out the earnings. And then a couple of Companies Overseas like caterpillar, just doing terribly and theres some other companies, like 3m well look back and say, wait a second organic growth here was 6 we want to own that kind of company when the smoke clears we may not want to own caterpillar when smoke clears but we want to be a company that x currency is growing and taking share. We have to reset everything and then look at who actually did well overseas. But really just stay in america if you want good earnings. How do you read Proctor Gamble . They were okay with organic growth. Strip out currency, they said theyd be on goal. Theyre blaming currency. I was not crazy about organic growth. Kimberlyclark, down from 119 to 109 in a Straight Line i felt not great quart, similar to what proctors doing and in the end will get backed up where the dividend is yield is buy backs respect i dont think proctor is a horrendous number i dont. The problem is we want to hide in something that will make numbers and suddenly proctor revises numbers down thats not so good which makes me come back to look at banks, look at domestic banks. They turn out to be winners. We got to circle back. Wells fargo, started out earnings season a great number. You want to be in the United States companies or take a look at companies again, go back to what reported and recognize wed had good quarters last week that nobody thought were good quarters if you didnt have currency, you saw good numbers. Let me throw one more at you, microsoft, we didnt get a chance to talk about the numbers after the bell. I know you did on mad money but a different situation. Microsoft is a tale of two cities. The quarter wasnt so bad. When you listen to the Conference Call very downbeat and when you lose all of the analysts you say, its going back if it holds 43 terrific, otherwise on the chart, youve got to look some are bizarre, like microsofts guidance you think it stops at 40 . I dont know. It was truly a bad job. Did a bad job. People expects something bold and didnt give you anything bold other than the fact how bad china and japan are. I think they should get a doover. It was not a microsoft call that im used to since the new guys came. Body language out and out downbeat and thats a reason analysts are down grading it. Great to see you ready to go. See you in a few minutes. Coming up oil, currencies and the other issues that are slamming some of the worlds Biggest Companies this morning and durable goods number with revisions. Squawk box will be right back. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. 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Oil is a piece of our Transportation Business is about as oil and gas is a third of the business natural gas piece is doing pretty well and so far holding up. The oil piece, though is what were taking down and thats the primary number for our reduction in 2015. That was caterpillar ceo Doug Oberhelman on squawk box. Joining us talk about the big market move ben liechtenstein. I dont know if you got to see that, ben, jim cramer said stick with Domestic Companies at least at this point weve known that our economys best in the world right now, but how long were all attached now how long can we not be affected by both currency and slowness in the rest of the world . I think that weve been saying that for five years now if you will. This market rally that weve been seeing its been unprecedented. And rate that weve seen rise is just incredible. And everybody and their mother who has been standing in front of it if you will at some point or another picking a high. But we still continue to see value being established to the upside. We still give the benefit of the doubt to the bulls right now. Were in sideways action lost some volatility weve been seeing recently related to crude oil and the dollartype activity weve been seeing. For the most part the market continues to hold bid and yet to take out significant levels of value established on the way up. Holding a bid off alltime highs of 20. 88 in the s ps and 1960 level but eagerly waiting anticipated date tap not so much earning but was looking for fomc tomorrow. Today, yes, sell side activity related to the durable goods orders come in significantly lower than expected. We were ahead of than theres uncertainty out there. Unusual were seeing volatility continue to come off uncertainty in the middle east right now, as well as in the European Economic zone. But, yeah theres a lot of movement right now. Just multiple major markets on outer extremes here. Ahead of the fomc we expect to see continued energy. With the dollar continuing to move the way that it has been the strength that its been exhibiting, i think thats creating quite the stir across majors and i think that will continue to be the case as long as the dollar holds upper levels. I have no idea what you just said i dont think. Be positive. Down 300. Youre not worried about any of the earnings that we just saw or the durable goods . What are hes seeing through it. Looking ahead. I think i think basically, joe, were in a bit of consolidation phase up on the highs. I dont think that weve exhibited any real weakness worthy of getting concern that this bold trend, this underlying market trend that weve been seeing has derailed or is no longer what do you think the feds going to do . When do you think the fed acts now. Fed has to raise rates. I dont think well see it in the next six months but potentially after that. Id love personally to see the fed throw out a quarter rise feeler, if you will tomorrow but i dont expect that to happen. The feds make it clear in terms of targets for unemployment in terms of inflation and i dont think weve hit those levels yet. Look at our numbers that came out, durable goods orders thats concerning in terms of if you are looking for a fed Interest Rate hike. Ben, thank you very much. Great talking to you. Thank you. Enjoy. Thank you, everybody, for joining us. Join us tomorrow. Time for squawk on the street. Good tuesday morning, welcome to squawk on the street im Carl Quintanilla with david faber at the new york stock exchange. Jim cramer at hq, courtesy of the snowstorm that has largely spared new york city but hammering much of new england. Good morning. Kaycaseshiller home prices out. Dow futures down almost 30 on weak earnings from 300 on weak earnings from a lot of dow components. Big miss on durables a lot of revisions, raising questions about the u. S