Transcripts For CNBC Squawk Box 20150129

Hershey. Two economic reports today. Weekly jobless claims at 8 30 eastern time and december pending home sales at 10 00. And eu Foreign Ministers are meeting in brussels. The rouble weakening today on the threat. Andrew. Well talk about the big changes happening with mcdonalds in a minute but first a quick snapshot of other stocks this morning. Facebook beating the street on the top and bottom lines but Revenue Growth was the weakest since the start of 2014 and it rose faster. The Company Plans to cut spending by 15 billion over three years as Lower Oil Prices take a toll and qualcomm lowering its outlook for the year. They warn the newest mobile chip will not be used in Major Customer flag ship smartphones. Is that an app . Apple is selling all of these phones. Citrix with better than expected growth. The company is also cutting about 900 jobs. Also salix pharmaceutical will restate financial statements. First three quarters of 2014. Earlier this month the company said it was exploring options including a sale. Las vegas sands topping wall street estimates and theyre hiking the dividend as a result. Thank you. Nbc is an important partner, actually parent for us and it took a lot to get rid of that other music that we always play but the super bowl is coming up. So now im willing right now to say play this every day. Every morning. You feel good marching out to this. We have al michaels. Why not just say listen powers that be suits, why not use this instead of that other stuff. Live from the most powerful city in the world, new york, this is squawk box. This is good. Well its working. Tomorrow is the 30th or something. We have one more day and were down for the year. As goes january so goes the year. Its because of the music i think. Single handedly. I dont think its helping. Anyway i like this. Inflating the market. You were in jersey tomorrow. Two days . Thats an idea. I might wear a jersey. You might pick a team. No, ill go back to the bengals. Charity begins at home. The fed is back in focus. The central bank sticking with its promise to be patient on hiking rates but in its statement yesterday the fed also raises the economy and labor market. Still policy makers saying inflation is well below the target rate and the pressure is holding inflation down has intensified and we have oil prices being the main factor. Im watching. I expected them to say their firm and their resolve. I think if things dont get different theyll fold like a cheap deck of cards in june and theres no way they do it in june. Worried about a stronger dollar. Worried about uneven well be 2 down from 5. Its really hard when the rest of the world is just getting into the gain of quantitative easing to be the one pulling out of it. Whats your forecast for First Quarter gdp . Its not five, its not four but the employment picture has been looking better and better and the question is how long can you keep zero Interest Rates . You cant keep it for 10 years. Stuck with zero Interest Rate policy for forever you start to try to wonder i think they should have already gone off it. Im saying what they will do. Not what they should do. You watch the market yesterday. The fed continuing to say its going to be patient but i dont think the market believed it. There was Strong Language about how strong the economy is doing and thats what the market was focussing on yesterday. You saw a sell off yesterday of almost 200 points by the dow. You want to check out the futures to see they are indicated stronger with the dow futures up by 44 points and youre now talking about the dow below 17,200. S p was down by about 27 points yesterday. Its closing just at 2,000. So these are levels people are going to start to watch closely. The s p futures are indicated higher by 2 points. Nasdaq down by 2 points. Some of the early trading in europe. The situation in greece. The situation in russia playing out there. The dax in germany is down by about. 2 . The ftse is down by. 5 and greece picking up a little bit too. Up by 3. 5 . Well have to check in and see what the latest is a little bit later this morning. Take a look at asia. Watching our markets close lower yesterday and you did see red arrows across the board. The nikkei down by 1 . Shanghai composite down by 1. 25 . Oil another percent and settled at 44. 45. Definitely bottoming. Definitely bottoming. Im echoing what everyone said. We heard every move. Here its definitely bottoming. Check out the 10 year note. Hopefully the yield is bottoming there. It pel to 1. 72 . Lowest level since may of 2013. The 30 year hit a historic low two days ago. The 30 year was hitting a historic low for the yield. If you want to check out the currency market at least right now it looks like the dollar is down once again against the euro. Its up against the yen at 117. 88. Gold prices we havent seen as much activity as you might expect with all of the other volatile moves we have seen but gold prices down by about 10. And mcdonalds head honcho is stepping down in march. The shares rising on the announcement. The stock has been flat over the course of mr. Thompsons tenure. In comparison the dow is up by a third during that period. Joining us is senior restaurant analyst at morningstar and i dont envy the daunting task ahead for the newly named ceo either r. J. Because mcdonalds almost reminds me of ibm. How many times can mcdonalds reinvent itself . It was in a tough spot 10 12 years ago, i dont remember when it was 12 and they lost a couple of ceos and then skinner came in and reignited anything. How do you get millennials to start ordering big macs . He has a long road ahead of him. It wont be an overnight turn around for mcdonalds. Something theyre already embarking on is making more decisions at the local and regional level. One of the missteps this past year is trying a one size fits all approach where you have the products rolled out nationwide. They need to look at the local demand and different preferences, different demographics in each market and start to come out with more localized product decisions and localized marketing decisions as well because theyll start to resinate with consumers. Certainly you can attract a different audience that way and thats the starting point. But its not going to happen overnight either. Don thompson was a good operator and he didnt inspire franchisees or something to the extent they needed to be. Will that help . What can a franchisee on his or her own do to reignite sales. From what i heard from franchisees there were very interesting ideas not acted on at the top level. It does sound like theres optimism with the new ideas that steve is bringing to the table. He gave a presentation at the companys november 2013 analyst day talking about the advanced metrics to look at customer engagement. It gives you hope that he understand what is the customers are looking for. The big challenge is whether or not the company can give what consumers are looking for. How do you do localized . Its a grand Franchise System where i imagine the savings are notice are in providing the same everywhere. You allow for a percentage of variation within the regional markets. I dont think you do it at the local market but certainly a region by region. You can do some variation. Probably a quarter of the menu have some variance at the regional level. Thats a starting point to kind of get people back interested in the story. Certainly, you know attract a wider audience. I think thats a starting point. That wont happen overnight but then you can make a more nimble supply chain. When you try to launch something nationwide with a company this size its like trying to turn around the titanic. You just cant turn around the supply chain. You can get products quicker and compete with the burger kings and wendys that are getting products out to the market in a quicker fashion. But i think you have to keep some uniformity because thats where you get your Bargaining Power and your scale. I dont think thats the expression really. I think its turn around an ocean liner. I dont think youre trying to turn and the titanic. Rearranging the deck chairs. Maybe a mixed metaphor that im going to use though because i like that. Okay. I think trying to turn around the titanic means youre going to try to turn around but its not going to work. Thats possible too. Why would the brand guy why would his ideas not be acted upon by the senior why do they have a brand guy if theyre not going to listen to what he said . He rejoined the firm in 2013 after being ceo of a few chains in the u. K. They have been slow to react to a lot of the things. Setting a blueprint on some of the ideas he had hasnt been fully acted upon. Ill be curious to see what kind of new innovation he brings to the table. Ive been to the mcdonalds in the u. K. They have a little bit of a different feel to them. If you will. Do you think that is what will come here. High end . Paris. Paris too. Its like a hot spot. It feels higher end. It feels fresher. Theres a whole sort of its distinctive. But how have they performed relative to everybody else. Yeah in the u. K. Thats been one of the bright spots for the company the last couple of years and management pointed to that being the blueprint for a lot of the priority markets. Not only the u. S. But japan and germany. Thats what youre looking at. To your point the look and feel of the restaurants in the u. K. Can be a benchmark for the company to aspire too. They have a more modern feel. You have more digital attachment. The locations themselves look very modern. I think that that will be a nice blueprint to look at. But then again you still have the different menu and marketing preferences you still have to address. I think the combination of what he brought to the table it was the head of Mcdonalds Europe and the u. K. Turn around combined with some of the changes they can make in the u. S. Thats probably where at least in the near term to hear what hes prioritizing. In the u. S. The competition is english food. It is true. English food its an old thing. I think i could compete. Maybe 10 or 20 years ago i would agree with you. They stepped it up. In 10 years the entire u. K. Stepped up their food make ability in your view. 20 years. Do you know what the problem is, they should have kept chipotle. Fast casual is kicking their butts. Thats what the problem is. Thats one of the big issues they pointed out. They pointed out a number of things and fast casual was one of them. Thats what they have to aspire to. Take learnings from fast casual because thats the sweet spot of the industry. Im not saying they can turn around the brand imagery but take learnings from that. Customized fresh food. I want to go from knowing everything about this company. You like to talk about what you know. I know everything about mcdonalds. Every item on the menu. I had yesterday most of them. And rj thanks. Just going to stay quite over here. Like anybody believes that. A blockbuster quarter for facebook beating estimates on the top and bottom line. Sheryl sandberg made a big milestone for facebook. We hit 3 billion videos a day on facebook. Consumer use of video is exploding. That gives us an opportunity to do more monetization because our add products follow our Consumer Products. We have the ability to show more video ads. 3 billion by the way, 3 billion views a day was up from 1 billion back in september. Joining us with more on this is dan who covers the stock for Hudson Square research. These were strong numbers on the bottom and top line but your initial reaction was boring. I think because everyone was looking for a bigger beat. Apple spoiled us. So apple is actually growing percentage wise as fast and theyre doing 75 billion a quarter. These guys are doing less than 4 billion a quarter. So i think when youre this big and youre trading at 40 times board earnings you have to beat by more. It was 2. 5 . It was fantastic. Ad revenues are are up 53 . Mobile ad revenues up 100 year over year. Mobile is now 69 of their ad revenues. Mobile only is actually like 700 or 800 million users which is more than any other network by a factor of three. Just look at their mobile only base. People that never see the desktop its a tremendous network so listen theyre doing everything right. The concern is top line user growth. On an aggregate number its 44 million. Thats more than twitter will add all year. They added in the quarter. Only 14 . So again when youre trading at these big multiples, you need to have the growth. And its not just you. We should point out the streets reaction was similar. The stock was essentially flat after the earnings came out. Does this mean this stock is priced to perfection at this point and theres little that can be done to impress investors . I wouldnt say perfection. Its come into a reasonable level. In the 30s and on pe is something i can digest. When they were at 80 times and you look at Something Like a twitter at 150 times or an amazon which has very little earnings. So this is actually a digestible figure but the other issue is they said last quarter and stated again this quarter, were going to spend big on a lot of Different Things that dont have any hope of generating revenue. Sounds like another stock i know. Amazon. It starts with an a. Well, the things that amazon do from where i can tell mostly have revenues attached to them. Theyre just earning very little money when they do those things. So when Facebook Says were going to connect the world theyre literally doing it. Theyre launching drones. One of the things that facebook is doing ahead of the super bowl is trying to get people to treat it as if its twitter. Right. We just talked about it yesterday. Do you think thats going to happen . Do you think the dynamic is going to change . I went to a presentation at ad week middle of last year that someone from coke came out and talked about this campaign that they ran that was sort of like this is america and it had a lot of different racial demographics demographicics and people were negative on it and they started putting ads out during the super bowl targeted to each region. This is before video was an ad product at facebook. They did this with facebook in advance and showed the sentiment shift change throughout. Book has the reach. 1. 4 billion. So you know when advertisers go from tv to the internet they say who is going to see this . Facebook has more people on book than any country has residents. Wow. So they have that reach. So even if youre trying to target within that they have it for you. Would you buy the stock here trading at 40 times forward earnings . No, id like to see it pull back a little bit. Once we have the seasonal slow down you might get an opportunity. Market is volatile. So these high stocks tend to get hit. We had that with facebook last spring. I think the next time the thing falls and its not on fundamentals i think theres an tun but here theres no reason to rush. Theyre going to be around. Thanks for joining us today. Thank you. Coming up when we return the ceo of the Worlds Largest spirits maker getting hit by currency. And discounting on vodka in the United States. I dont know why that would be. Well talk about that though. And a look back at this date in history. 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. Americans arent drinking as much as we used to. Profits dropping 18 . The global drink brand blaming sluggish sales of its three biggest brands. Johnnie walker smirnoff and the captain, captain morgan rum all posting declines around the world. Here to take us inside the numbers is ivan mendez. He joins us from london this morning. Good morning. We had a little bit of a delay. Whats going on. We get into some of the currency issues. Yeah the overall market fall spirits, beer and wine is healthy around the world. So the underlying Consumption Patterns are good. People are drinking better. Now if i just break it into the various regions, in north america the spirits industry is still very healthy. We are seeing good trading up whisky is hot. The good market is competitive but the premium market is strong. And americans are drinking more premium spirits. Are drinking more cocktails and thats a secular trend. Its underpinned by demographics and tastes and as the us. Consumer recovery happens i dont mean to focus on the negative but whats the problem with vodka right now . The middle market of vodka has gotten extremely competitive. We have been taking price increases and smirnoff lost a bit of share. Flavored vodka has slowed down and smirnoff is the Market Leader in flavored vodka. But pure vodka is strong. Premium vodka is doing well but whisky is doing even better. Whisky is strong. Bourbon bourbon, north american whisky and Scotch Whisky but vodka is still the biggest part of the u. S. Market and will continue to remain a very important piece of the market. And thats an advertising issue . Marketing issue . Or trend in the way people are drinking . Well, firstly, our overall vodka business is up. Whats happening is people are moving less into that market so that sector is declining. There will be a shake out of the brans but smirnopf in particular, we have new packages. New execution in place and the last few months our share has kicked up. We will get that business back into growth. I want you to speak to an issue thats been in the papers over where you are. This is out of the telegraph. Threading the backbone of the economy by squeezing suppliers. The story saying you warned suppliers that youre going to take up to three months to pay your bills. Whats going on . Its very straightforward. With each of our suppliers we have terms in which we operate. We have longterm relationship with our suppliers. We have made changes in our policy which is are suggested. We will sit down with each one of our suppliers and get to the right package. We do different terms with different packages thats something were very committed to doing. Do you want to weigh in on what should happen in the euro zone . What do you think is going to happen . What would you like to see happen . How is it effecting you . Ic is very important. Its good for business. Its good for trade. It is an environment where you can bring more stability so were very much in favor of the eu when we negotiate Free Trade Agreement with other countries in the world, having the clout of the eu is an important force. So its in favor of an eu. But we want an eu thats pro business with less regulation and less buracracy. They threaded threatened. Oh i didnt even know the word threadened. It sounds like a needle. Yeah he was like i saw him thinking about it. Lucky he had that three second delay to figure out exactly did he deny that they no he basically said thats in the contract. Do you know what you do you use a thread to show on a button. You do. L all right. Coming up the white house says president obama i say dunky. President obama through spending limit for domestic and defense programs and will be joined on set by Lieutenant General michelle johnson. She runs the air force academy but heres a look at yesterdays s p 500 winners and losers. Morning and welcome back to squawk box here on cnbc. Im joe kernen with becky quick and andrew ross sorkin. The story of the day is football and thats talking ads. They sold all of the advertising time for sundays big game and brands are paying up to a record 4. 5 million for a 30 second spot. The super bowl is traditionally the biggest audience of the year. Nbc is also nbc is also selling ads on its live digital screen of the game and dont miss super bowl xlix on nbc this sunday. Coverage begins at noon eastern they were great. They said they only did 35 million. This doesnt even come close to the super bowl. We are talking numbers that even i think supercede your favorite event of the year. The academy awards. Thats your sporting super bowl . No. You watch. Andrew watches the super bowl. I watch the super bowl every year too. Theres no red carpets. Whats playing . The pirates, versus the athletics. How many innings . Football its six. Lets talk about positive retirement news today. The average 401 k balance hit a record high of 91,000 last year. Thousands of additional workers became newly minted millionaires at least on paper. January hasnt been that friendly to them. So well see where we head. In Washington News this morning the white house saying president obama will bust through spending limits for domestic and defense programs. This would negate the effects agreed to by dem congratulates and republicans and signed into law. 20 of all air force officers are female. Our next guest is a pioneer in that arena. She is paving the way for Women Leaders in a male dominated world. Here with us is michelle johnson, superintendent of the air force. She is the first female superintendent of any Service Academy and if i was Lieutenant General and someone asked me id say go with general. Why go with lieutenant. We can do that here. And its a beautiful place. Colorado springs is a beautiful place. Similar college experiences. Boulder for me. Same altitude. Thats where it ends i think. Teach of what you could teach us in terms of women in the world force here and the problems we quality and equal pay and glass ceilings. Thats a song i think but if you can make it here there, you can make it anywhere. Whats great about serving, i was a pilot for about 20 years. Now i fly a desk and im a College President basically. But airplane doesnt care. Competency matters. If you can be competent and earn the respect of your peers. Youre a Rhodes Scholar too. Yeah that was fantastic. Its almost impossible to get in there. Its actually geographic diversity. You come through congressional districts and it gives people from all across the country the opportunity to come. That changed so that everyone wasnt from one segment of the country. So thats what is fascinating about it. Really high standards. We have people with sats 150 points higher than the National Norm but they have to be balanced. Its about character and service and being athletic and its really a great balancing effort. So what is the state of the entire military at this point . We went through a couple of wars and we seem to think we wont need quite as much of the funds committed to our military and then Something Like isis comes along. Are we on the way back up to where we need to do more . Its making us check what is really important. Whats great and happening in the air force and other services as well is to say theres foundational things we wont walk away from. Its not the cold war that i started in. Its cyber. Its space. Its i was basically supreme general. Supreme general. But the way we fight our profession of arms needs to be updated. How do we stay agile from the lower end to the higher end. You bring up the point of Cyber Security and i wonder how prepared you think we are. How rapidly we can change how we look at that and how protective we can become. I think we all need to do better. When i was on the joint staff we helped found Cyber Command and to think about those things if you will. But i think it doesnt need you dont need to look at the headlines to see the challenge we have. Weve added a major at the academy of Cyber Security and network security. We have cyber teams that compete in competitions to see how we can do but we can do so much better and we need to work with the private sector. A lot of the information is for that. In the military contacts you watch homeland for example and you think that people are using drones in all sorts of ways both good and bad and then drones in the commercial space you saw in the white house for example. Two days ago there was a drone. How do you defend against that . On a practical lefvel with drones and air space theres going to be air Traffic Control modifications and cop trolls controls they talk about what is closer to the ground where soldiers need their own. But one thing is how do you provide safety there. And the profession of arms is part of the link. People facing the United States have targets in theater. Theres satellites flown by people in the u. S. Overseas may be bouncing off a Coalition Aircraft pod to either fire or surveil. Those norms in the military are starting to be sorted out. We need a sense of where are the controls and theres privacy concerns as well all the way. What should the faa do here . We just need to have the discussion. I think were a little behind in our conversations. Even about cyber. We dont have a lexicon. It didnt have language about even airplanes or cyber space and we need to understand whats illegal. If you have the f35 is that an act of war. Is that espionage . What is it . If i walked out of the building with a suitcase full of secrets we know what that is. Do our enemies have access to drones in a way. Everyone is exploring it. Everybody thinks its a good idea and we all see anything advertised like yeah wow, lets do that. How do we make sure we go from saying yeah its a good idea to actually doing it . If i koul just offer this only 1half of 1 of americans serve in uniform. Sometimes theres not a familiarity. We have people that signed up after 911 and are Wounded Warriors and knew the risk was there and took it on and thats fantastic but theyre not all the same. An airman a soldier, a marine a sailor and the Coast Guard Academy and they bring something different. Some have college credits. Some have advanced degrees. Some have a hightech any cal knowledge. I was at columbia and they have a college for general studies and its for nontraditional students from all walks. So i think an awareness that people bring different skill sets. Not all air force people are pilots. Not all soldiers drive tanks. And they bring a lot more than you might know. There are enlisted people who have advanced degrees. All officers have at least a bachelors degree but sometimes we use the same brush. When is the last time you flew a High Performance jet . Its been about ten years. Ive been flying desks ever since. Did you fly the g forces . Right in the oxygen mask. We have acrobatic gliders at the academy now. It was minus 2 to positive 4 gs. So when i was really g tolerant i could pull about 6 to 9 gs and we could do that all the time. You lose your tolerance for it. Its a fitness thing to keep your blood and your brain. Do you remember when we tested those ferraris i got you a couple of times. There you go. But i spent most of my time flying transport airport. So it was a crew aircraft. Thank you. Thanks for everything. Thank you so much. Good to have you here. Thank you for everything you do for us. Still to come when we come back you know about gmail and yahoo mail but what about amazon mail . The latest venture. We always have a new one. Well talk about it. Later its earnings central. The dow chemical ceo is going to join us and hologic boss is going to be with us. Squawk box returns after the short break. Were back in a moment. Welcome back. After a couple of rough days for the markets we have been watching the u. S. Equity futures. Dow futures up 65 points and s p up by 65 points and nasdaq up as well. Well continue to watch as we get closer to the opening bell. Amazon has mail. The internet giant is getting into the corporate email market. Its launching work mail. Amazon says it would offer the service to companies at a monthly cost of 4 per in box. Work mail is the latest transfer in amazons transformation. Still to come r many stats on what we eat when it snows and what we drink when we eat. And later Andrew Liveris on his companys Quarter Report and well talk politics with bill daily and markets and the economy with liz ann saunders. Markets squawk box will be right back. Stick around. 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. Startupny. Its working for new 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. What was interesting in new york city is hot chocolate was up 122 . Bagels up 105 . Bottled water, chicken. Those were the top items on the lists. Most people out where we are, you bought a bunch of food. Unfortunately we were stuck at a hotel so we didnt get to eat that food. But i want to take you back. When you used to drink, when you were younger maybe in the heartland, what was the food you would binge on . What i used to drink . If you had a drink in college if you went out drinking. Afterwards . In las vegas they finally opened a white castle. They finally opened it up. Sliders, first time theyve had one within 1500 miles of vegas. They had to shut it down on the first day because they ran out of food. They had to restock it. I like the fish fish . Ive never had anything but the sliders there. Okay. Im going to talk super bowl quickly. Its going to be on nbc on sunday. I love the packers, i do. And this like the ravens. Nothing against either one, but a lot of people just prayed for this matchup. And im sure we did at nbc. Seattle the defending champs versus new england. And we thats whos playing . Okay. We wouldnt be here if it wasnt brady and the patriots hadnt come back. We wouldnt be here if the if russell hadnt thrown that dying dead duck for a twopoint conversion. Its unbelievable that this has happened. And its very exciting. Now, deflategate is still, you know the post hates new england and the patriots. But they got these numbers where apparently americans hate the patriots and are sure theyre guilty. What is their number . 41 say they think they cheated. 27 say no and 32 41 is a plurality. Its not a majority. And patriots are people dont like them. But theyre not even close to the most hated team who is dallas. Dallas the cowboys. Still not close to dallas. So hope by the time we get to we just want to get tom brady to be better. He has a cold. And you have a cold. Seattle has a cold. I dont know about the whole if there was cheating i dont know how it finally works out with the deflategate, but i dont think the colts game at 457 i dont think that that would have made much of a difference. And last year it was a horrible game because denver didnt show up. But you didnt give tom brady the cold . You arent responsible for that . I have man crushes on certain people and hes right there. Apparently gisele got the cold first. And the kids had it first. I dont think anyone would be afraid to what did i say . Men, women want to be with him and men want to be him. Whatever. And even brady, hes still 37 favorable opinion of tom brady. 25 not favorable. Well if they go against your team. Baseball feeling high and mighty right now. Barry bonds, did he win the home run crown or not . Right. How many asterisks are there . Im not saying these guys are guilty. But clemens, the greatest pitcher of all times. We dont even know how to gauge baseball anymore. Selig did a good job bringing it back. Pete rose. And then football you have the concussion worries. But live sports its still up. Both of you drive and i but i use waze from the back seat oftentimes. The National Sheriffs association is now saying that waze is a huge problem because you can identify where the Police Officers are supposed to be hiding. Thats true. Do you have a problem with this . And you should know the spokesperson for waze says most tend to drive more carefully when they believe Law Enforcement is nearby. Heres what i thought. Its an easy system to manipulate because its selfreporting on these. I never understood why the Police Officers dont go on and say the policeman is not there or put hidden ones there. You could triple the size of your police force by putting fake spottings all over the place. Youre giving them ideas. We were driving along and i catch a police car in one of those places where you back in. And guy, you snake. I dont like their tactics either. Joe, were you one of those guys with a cobra in the old days . I dont have one anymore. Because waze is taking over i dont drive that. Thats why i dont give you grief about that anymore. Thank you. What do you talk about in the morning . Eli. Elis perfect. We dont talk. He doesnt want to talk to me. We talk enough. But absent to comfortable silence. Weve got to go. Coming up were going to talk alibaba. Also weve got andrew coming up from dow chemical. [ male announcer ] at northrop grumman, weve always been at the forefront of advanced electronics. Providing technology to get more detail. Detect hidden threats. See the whole picture. Process critical information and put it in the hands of our defenders. Reaching constantly evolving threats before they reach us. Thats the value of performance. Northrop grumman. Earnings alert. Results from ford and alibaba set to hit the tape. Well bring you the reaction. Shakeup at mcdonalds. What you need to know about the Management Change and why investors are loving it. And the president is getting a new plane. Get off my plane. Details on the pick for the new air force one as the second hour of squawk box begins right now. Live from the most powerful city in the world, new york, this is squawk box. Welcome back to squawk box here on cnbc, first in business worldwide. Thats another thing. We have al and chris, thank god, doing the super bowl. So we wont have to hear about the accuracy of the quarterback. Im joe kernen. And where hes passing to and going from. Along with becky quick and andrew ross sorkin. U. S. Equity futures at this point are indicated up 80 after another hideous session yesterday. How much were we down . 4 , 5 now if we were down 3 before yesterday and we went down another 1. 3 . So it hasnt been a great start for the year. Forward is out with Quarterly Results and phil lebeau joins us with the numbers. Ford beating the street at least on the bottom line coming in three cents better than expected earning 26 cent a share on the Fourth Quarter. Sales being down in the Fourth Quarter as they transition into the new fseries. 33. 8 billion. The estimate was for 34. 5 billion. So we should say not down but below what the street was calling for. A couple things stand out. Obviously north america carrying overall earnings. 1. 45 billion. They lost 443 million in europe. Ford reconfirming its guidance for 2015 higher automotive revenue, higher auto operating options. But there are a couple of changes here. Operating cash flow for 2015 it will be higher than it was in 2014. In the past they said it was going to be the same. Now theyre saying it will be higher than the 3. 6 billion in cash flow for all of 2014. And in europe where in the past they were guiding to a loss of about 250 million. They are now saying a loss in europe. It will be greater than 250 million but less than the 1. 1 billion the company lost in europe last year. A couple other notes. One being so much talk about currency especially for your multinationals and conglomerates. Ford is really noticing not much of a huge impact when it comes to currency. In fact i asked the specific question to a couple people at ford a few minutes ago and they said its a benign impact because of the currency fluctuations. They are to a certain extent protected because of the fluctuations. Really the only place where ford is noticing an impact because of currency is in south america because of whats happening. But again, ford beating the street coming in at 26 cents a share versus the estimate of 23 cents a share. Remember, six, seven years ago there was no factor at all in terms of china for ford. Last year they earned 1. 28 billion in china. That is a huge turnaround over the last six or seven years. Thank you. Were also taking a look at the earnings from alibaba which have just hit. Things are a little different than the street had been expecting. At least on an earnings per share line. Looks like the company came in with earnings on a basis. I dont know if the street was considering some of these measures that theyre talking about. They say that the decrease was primarily due to an increase in sharebased compensation expense. Theyre calling this a onetime charge for financerelated fees and an increase in income tax expenses in the quarter that was ended. Now, revenue was slightly higher. Revenue came in at 2. 9 billion very sus the 4. 5 billion that the street had been expecting. Obviously expectations were very high heading into this. This included a quarter where you saw singles day back in november. That was a huge selling day for alibaba. Made a big deal about that. Now you can see the street is reacting with that stock down by more than 6. 5 . Again, im not sure what the analysts put into this and what they were expecting. The company is citing some things. They have asterisks by that 37 cents. A onetime charge for income related fees. Revenue line missing as well but not nearly as much as the earnings per share. Well see how this shakes out. We also have blackstone numbers popping right now. Hard to compare because of the way theyre set up. Reported full year 2014 record results saying that economic net income was 24 in distributable earnings rose 64 respectively from the prior year record amounts. Thats the economic net income and distributable earnings both compounded in double digit annual rates. A record of 45 billion to our investors through the year our significant inflows of 7 billion and strong Investment Performance totaled under management to a record of 290 billion. Looking forward and this is the good news we see continued momentum across all of our businesses both investing opportunistic opportunistically. We will try to break down some of those numbers in just a little bit as well. In the meantime dow chemical beating estimates on the top and bottom lines. The giant citing expansion across most of it. Joining us is talk through the numbers is president and chairman of dow chemical. We just saw him in davos where he had to be a little circumspect about where the world was going. Because you were getting the numbers. Now you have them. Lets walk through them and talk about implications given the currency head winds and other Things Companies have been deal with. You have been dealing with the currency issues in the same way. Yes, good morning, joe. Lets pull the volatility of oil, most people dealing through the quarter. We have a portfolio that was built to handle that volatility. We manufacture around the world. We have a geographic footprint. We buy stocks in u. S. Dollars so the currency volatility although it affected us and will affect us again into this year im not saying it wont, but we managed it with our balance portfolio. In addition if you look at the Oil Movements that occurred there u the quarter, oil went down a lot as we all know. But some of our stocks went down even further. We used feed stocks as well. So that creates the model we create sd to deal with the volatility. So record profits for the year. If you look at our quarter, were up 31 on the bottom line. If you look at the whole year up 20 . Record cash flows, record return of cash to shareholders of 6 billion. A record operating rate and thats a really big one. Demand was really actually quite good through the quarter going into january. And if oil low oil foreshadows healthier demand its a windshield effect. Three, six, nine months out. Demand should start to get really good. Frankly we saw that in our businesses. Youre convinced it holds up. You did say when we saw you stable low oil price is good for dow chemical because the drop will act as a stimulus. At what point does that number become a problem for you . Well look. The foreshadowment of low oil means a big break and consumers talk around the world whether thats 45 or 65. Its the volatility that becomes difficult because you dont know where demand goes as people try to hedge the bet on the buy. We saw some delay of purchases through the quarter from some of our more commodity sensitive products. Inventories are at alltime lows at some of our chains right now. Foreshadowing that its there and pent up. We saw growth across all segments. We saw volume growth on all geographies. Notably europe the european operating rate was 86 . We havent seen that since 07. Actually the whole companys operating rate was 85 . We havent seen that since 07. That is saying that the stimulus of low oil price out there is working and frankly the portfolio we built, we have a lot of downstream businesses that are not affected by oil price. And that is still healthy. Electronic materials, agricultural sciences. Its a combination of our portfolio plus demand right now looking forward seems to be quite fine thank you very much. Thank you, very much, andrew. Multiple of this years earning estimates compares to 17 for most of your peers. What do you think has to change to put you in line . Well performances like this weve had nine consecutive quarters of eps, ebita margin growth. This is a big beat. Ill say it. We have consistently outperformed. Weve done that because we built this portfolio. People have tried to label us as a pure commodity. This shows were not. Were not a pure play commodity. Twothirds of our portfolio is innovation based. 30 of our products are new in the last five years. Were a diversified integrated company nap will show through. Thats whats happening. Just perform and we dont chase multiples. Ive been just sitting here andrew you can blame andrew for these questions. For not mentioning the big beat. I havent said a word. I havent said a word. Its all my fault. So why dont you take over, joe. No. I want you to know this isnt me, andrew. This is the other andrew. Anyway. Okay. Andrew, let me ask you a different question. We talked about it briefly last week. Third point now getting a roll on the board. I think when we talked to steve miller after we saw you, he had not officially been to a Board Meeting yet. What do you expect what do you think will change as a result of adding them to the board . Well look ive been in my role for quite a few years. You know that. And as chairman of the board, we have added diversity to the board in terms of thinking. Weve been shareholder friendly. I just mentioned the numbers for the year a record. We are listening to all of our shareholders and adding two members that were proposed by their point that were thoroughly screened and have the credential credentials to serve. Were looking forward, we cant wait to have them here. And frankly were on board with another director and another one in the middle of the year. Since ive been around weve been remaking our board to suit the company we are. And we welcome all of our directors as dow directors. Andrew real quick. Do you think of yourself as a better barometer of the local economy and how were thinking about the way the world is going or do you think of Procter Gamble of the earnings we saw there. We had a couple of really bad numbers just two days ago. I think a lot of people are trying to sort through, you know, which companies were supposed to look to as barometers as the health of the global economy. Id say, joe, that geopolitics to one side that none of us can predict in the socalled black swan geopolitical events. Theres plenty of those to worry about. But on economic principles 95 of the worlds economy has chemistry underlying it. And were the most diversifyied Chemical Company out there. We are definitely in every market. We basically are the intel inside for Consumer Products Companies Like Procter Gamble and others. And as a consequence of that we are a belle weather for the economy. I think these numbers should be telling us something. And frankly again ill give you my operating rate numbers, but wont repeat them. Were seeing healthy demand and its continuing to january. The volatility out of europe with currency is an issue. But if it stabilizes this should be a great year. Well andrew this is andrew and im going to congratulate you on the big beat. I will say it again. Stocks up too. Stocks up sharply. So thank you for coming on again. I tell you one stock not up sharply is alibaba. The street is still trying to figure out what to make of that. But down about 7 from yesterday. Thats a decline of more than 7 . Closed yet at 98. 48. We will continue to watch that when we come back. Also coming this morning, the shakeup at mcdonalds. What the change will mean for the fast food giant. And then we have former chief of staff bill daley on the president s trade agenda and Foreign Policy challenges. Then 7 45 a deeper look at alibabas quarterly numbers. So far they stunk. Stick around. Well be right back. Welcome back to showdown jerry rice here with 8 year old Andrew Hunter debating 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 hare. Whats the difference . Maybe figure that out before debating the best wide reciever of all time. Wait, are you Odell Beckham jr. . Etta james at last sometimes, at last doesnt happen at first. Your dad just kissed my mom. Turning two worlds into one takes love. Helping protect that world takes state farm. Weve heard plenty about mcdonalds stock performance. Now lets get the management angle and whats next for the fast food giants leadership team. Joining us is senior associate dean for executive programs at the yale school of management, also a cnbc contributor. And when we see Something Like this, jeff and youre a good guy to talk to because it always strikes me i always think, you know companies kind of know what they kind of run themselves sometimes or at least i get lulled into believing that and maybe corporate compensation is, you know the Old Boys Network and maybe not a market. And then i see Something Like Howard Shultz come back or steve jobs come back or watch a ceo, you know totally turn around a company and bring it back to its preeminence and see it can make a difference. Why was don thompson unable to do that in your view . What you just said is music to my ears. For years trying to teach leadership, its hard to talk about individual leaders making a difference. Were so caught up in empowerment and teams and business boards and everything. You dont see audit committees or anything. Significant individuals make a difference. And youre right. As you find some of the spinoffs you were talking about on an earlier segment, Boston Market which used to be mcdonalds was underperforming when it was theirs. Chipotle used to be theirs, underperforming. Turned it around when he was inside mcdonalds. They fixed them and sold them off. Theyre examples of how they can be fiked. Howard shultz are good examples. But total brand confusion here. Whether or not its on food quality, the great nutrition is go to mcdonalds maybe once a week, once a month, but it was the Healthy Fast Food alternative. He wouldnt say that now. Hed say shake shack. The pink slime that you know ran through everywhere after the chef brought it public. They defiantly denied it. They denied it but they only discontinued it in 2011. Is that the quality of the food the price confusion, are they going to be the places where you go for the value meals or the dollar meals trying to upgrade. The confusion of standardization. Having it your way was the frustration. Theyre trying now to bring in more variety. But then that slows up the operations and the delivery system. So theyve had brand confusion. But if you look back in the last ten years, and youre the first to cover this angle. Theyve had five ceos. How could that be . You had jim skinner ceo for most of that period but they had some tragedies. They had two ceos who died backtoback in 2014 and 2015. Neither one of them were expected to be the ceo. They replaced another guy. A guy doing pretty well but stumbled for exactly the same period of time that we see don thompson stumbling. Don thompson wasnt supposed to be the ceo either even succeeding jim skinner. They had two other candidates. One some alleged misconduct issues and the other was frustrated with the succession process. So they really havent had their the plan they had in mind roll out. But at least theyve had bench strength. And when we look at legendary ceos and usually we can find like they did this. We can come up with three decisions that they made either to buy or sell something or whatever. But when you think about how many things happen every day and some of them are so minor, but they probably make a couple hundred decisions, maybe even more every day. And i think the sum total of those things gets overlooked. It can be from the top down. That can totally transform a company. Absolutely. When michael dell says were the only ones out to provide the entire integrated line of i. T. That nobody else can provide from the cloud to you know right down to your own devices, thats something where he has made a distinctive difference. Howard shultz was talking about going back to the core of who they were. And even though some of it may be overstated as they had to move forward, howard still was able to change the reframing of how we thought about starbucks. Is right now theyve got this guy. He is a fantastic choice. Probably better than the choices they had. He is somebody who successfully not only turned around europe. But when he was in the uk in 2006 they were underperforming there. He saw we frank blake. How about frank blake . Frank blake is a fantastic example to. I think thinking easterbrook, he brought in frank blake was charismatic in ways. Mcdonalds, we hear hour china has surpassed the u. S. To become the number one economy. Every late night economy says thanks to mcdonalds, u. S. Is still the largest people. Weve got to get past that image. Talk about who they can be as a healthy you know, ingenuity did this well. Repositioning the choices of healthy choices, good for you as well as fun to eat in the whole pepsico brand portfolio. A single individual can make a difference. This gi easterbrook had lots of great ideas as the brand manager. He had them on the outside. I like the fact he left the company and came back. He can make a big difference now that the guy with the ideas who was a proven implementer can do those implementations. Well put a little stake it in at this point in time and see what happens with mcdonalds with the results and with the share price. Jeff thanks. Appreciate having you on today. See you later. Okay. Coming up when we return taylor swifts latest business move. Youve got to find out what the pop star just trademarked. And then coming up at 7 30 eastern time former white house chief of staff bill daley going to be talking about russia immigration, president s budget. Squawk box returns in just 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. 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The artist formerly known as prince should have trademarked that so she couldnt steal it for 1989. Cause we never go out of style. And could show you incredible things. And nice to meet you, where you been. What . That is ridiculous. God bless her for her business efforts, but this is too much. Its worth a try. Its not enforceable. Right . People have been saying that for years. If we made a shopping back threaded. You should do threaded. Just be you. Lets take a look at the markets today. Well trademark all of these phrases we fall back on. We should trademark shopping bags and terminals and apps. I think if there was something really specific about one of her songs, i could understand it. Like if she starts doing players going to hate. Is that trademarked now . Thats part of that song. Oh it is . Haters going to hate. Sorry. My taylor swift is not up to date. Go ahead. Oh coming up a former Obama Administration insider on the president s budget and that nowabandoned plan to tax College Savings accounts. Bill daley. Thats a familiar name. Is he from chicago . He will join us next. Look how happy we looked in those pictures. Welcome back to squawk box why would we be . Among the stories were watching this morning, well tell you about them. There have now been more than a hundred new cases of ebola a week since last june. The number of new cases totaled 99 in the weekend of january 25th. The w. H. O. Says the response to ebola has shifted from slowing transmission to ending the epidemic and that is good news thorpg. Also Fidelity Investments saying the average balance hitting a record high of more than 91,000. That means thousands became newly minuted millionaires on paper. The stock to watch this morning is alibaba. Falling short of estimates suggesting the chinese ecommerce giants growth slowed. You dont want to miss their executive vase chairman on squawk on the street. Theres joe tsai. E imagine he will be talking to mr. Faber. Okay. And the pentagon has selected the next air force one. Boeing 7478. The 7478. Its like an updated 747 will serve as the president s next official plane. There are currently two models in use as president ial aircraft. Both boeing 767 200b planes entered service in 1990. Bad news for president obama. The new planes oh. Its not really for him then. Wont be delivered until two years after he leaves office. So hillary or jeb will get to sit on that plane . No. They then get to be tested for up to five years. So maybe you got to really think out. Yeah. Its unclear. That could be more of a ryan situation or i dont know who could be seven years, anything could happen. Anything could happen in two years let alone seven years. Elisabeth warren. Dont even try to think about it. We are talking a range of political topics this morning. Everything from cuba to immigration to 52 t9 tax plans. Joining us is bill daley. Former white house chief of staff to president obama and hes former commerce secretary under bill clinton. Its great to see you today. Thanks. Could you put on your Congress Secretary hat for a moment. They always say the treasury is a good thing. Strong dollar has not been a great thing for international businessings. First of all i think as youve seen in e the market there are some companies doing quite well because of the stronger dollar. And then those that have difficulty. The same you could say about the energy market. The prices of oil are down and it helps a lot of companies. It helps the consumer. But other companies are hurt dramatically. I think were in a period of uncertainty and its going to continue. And the volatility is going to continue. And were in a very different world right now. And there are lots of winners as you see every morning. And then theres the companies that because of the strong dollar are really getting hit. The list of companies that we saw yesterday included the likes of Procter Gamble cocacola has had issues with this pepsi. You look at caterpillar. You can go right down the line of all these multinationals. And last week in davos there was definitely the idea fwher a race to the bottom when it comes to currency devaluations at this point point. Is it that cohesiveness for a number of years is now gone. Of Central Banks. And thats causing a ripple effect. Then you have like switzerland taking their action. And i dont know if you call it a race to the bottom but it is a little ironic to say that the strong dollar is bad. Where many of us have believed longterm its a good thing. You know how i feel about you. Youre like a dying breed. I thought you were going to say dinosaur. You are in todays Democratic Party. And i think youre a private sector democrat. We get you on here to say things and you shouldnt worry about it anymore. You fit in at that administration about as well as i fit in at davos. Thats a terrible statement. No, look. I think the president brought me in in 11 to help. And he said what have i done and you said what have i done. No no. Its not a blanket denial. Let me read you something. I missed it for our show. It was so beautiful later because seinfeld has done everything at one point or another. The journal yesterday said the president costanza. When george tried to do the opposite of everything he did. He started getting girls and a job. And every decision was the opposite of what he would normally do. And things worked out. Now theyre saying thats what the president should do. Instead of raising the rate on tax capital, cut it. Instead of raising incentives to go on disability reduce the incentives to go on disability. Instead of raising regulatory costs on business, reduce regulatory costs. Whatever instincts you have mr. President , do the opposite. This happened with the 529. Look at the last six years. The oil boom though . Just look at what the hes taking credit for that too. Sometimes you could say that what he hasnt done. Look at what he announced the other day on exploration along the atlantic coast. He shutting down anwar. He was going to announce that in 09 because of the bp oil spill. He had announced it. But well see whether a lot of republicans, how they respond to that and how aggressive theyre going to be. Late to the party on oil probably. Well you could make the argument part of the fracking explosion, a lot of people were arguing with the president years ago to stop this explosion of fracking. And do things at the national level. He didnt to that. And he was pushed by a lot of environmentalists to take action. And he didnt. That would have had a serious impact. One other thing i would say about the 529. I made the point to harwood that the president for people that get an advantage if theyre already paying taxes and they get a break on the taxes theyre paying to save for a college education, hes not as interested in that as people that arent paying any taxes and you can actually redistribute to those people. Obamacare is redistribution, is it not . The rise of food stamps disability and everything. He seems more interested in giving people fish than giving them a fishing rod and them learning how to fish. Right . Look. You can make that same argument about the deductions we all get who do quite well. That thats redistribution to the wealthy. Which lots of people today has happened over the last number of years. And but i think if you look at the overall go back to 09 also. People were recommending crazy things for the president to do. He didnt do them. Some people are still mad at him the left of the Democratic Party. But youre more for Elizabeth Warren than for me. Thats frightening. The pull of what Elisabeth Warren is doing over what president obama will do over the next two years and the way you see the election playing out and to the extent you think hillary has to move more left or how does it play itself out . Youve had a resurgence of liberal. Liberal is such a word that people run from. But i think theres a lot of jealousy on the far left that the popularity that the tea party and the power the tea party had in the republican party, they want to replicate that. I think theres no doubt if there isnt a primary in the Democratic Party which i dont expect a strong one right now, you would push hillry. Wheres the power base . The power base is it really in the center . It is more in the center than i would say center left. But theres a big difference between center left and left. The problem, the president won in 08 on center left. There is a perception and i think you could argue against it to be frank with you if you really look at it. He would say its left. Absolutely. But the American People moved center left. We split between center right and center left. The right and the left are big changes. Center left, center right, theres not that much difference. Weve had people say whichever candidate can get closer to the center is the one whos going to win this election. Others say you have to run far right or far left. If Ronald Reagan and the republicans always look to him, Ronald Reagan today would be a center maybe center right. What would bill clinton be . Right where he was and hes so far to the right of where we are. I dont know if thats true joe. Perceptionwise economically if you look at it no doubt about it. Because take nafta and a budget. He had a tax increase in 93 that people like Newt Gingrich said the world is going to end, there would be no jobs created. We had a pretty good period. I think he wanted to create jobs in the private sector not the Public Sector. I do not think theres a strong incentive to do that. Look at the numbers right now. The Public Sector is down across america for jobs. I want to ask you the federal government is mostly military. One other question quick. Rand paul and ted cruz have now proposed this on the fed transparency issue. This is the Federal Reserve Transparency Act which they are pushing. Now there are some democrats apparently who are on board with this idea as well. Do you think this has any chance of passing as many. I think anything thats a little crazy could pass right now. But i think its frightening to think that politicians should be directing the fed what to do. I think thats a some people would say i think maybe indirectly. But here youre going have actual selected officials in congress saying they should i havent read the bill but theres been a move afoot to get more say about it. Were you a hillary person . Are you one now . In 08 i was for at the time senator obama. Helped him. Okay. How about now . Well i think ive kept a Good Relationship with president clinton and with the secretary. And i think shes a strong candidate. I think shell be a great president. You think shell win . I think its a tough race but i think shell win. I do. You got to have a horse to beat a horse. And right now shes way ahead of anyone else. But it will be a close, tough election for whoever is in. Thank you. Bill great to see you in person. Coming up when we return alibaba shares falling sharply after Quarterly Results earlier this hour. Well speak to an analyst about what happened. Plus more big tech earnings today. Well tell you what to look for when amazon and google report. Squawk box returns in just a moment. 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. Alibaba reporting Third Quarter results. Falling short of estimates suggesting the chinese ecommerce giants growth slowed. Good morning, gill. Good morning. Okay gill tell me the key metrics here that might be below your expectations. Well the metrics were actually above my expectations. 49 growth 40 Revenue Growth is tremendous. 34 ebida growth these are great results. They exceeded expectations on earnings. I think the disappointment today has to do with the aftereffects of singles day. The growth of singles day was in the 50s and i think some people extrapolated that that should be the growth for the entire quarter when in fact a lot of the shopping is now converging around singles day which is why the growth wasnt quite as high for the rest of the quarter. So its that simple . And that wouldnt be a reason to sell the stock down although its had quite a run. Its down about six or seven dollars. I think the other issue is theres been a discussion the last couple of days around chinese regulators criticizing alibaba for merchandise on the platform. They reacted strongly on the Conference Call to this. It is disconcerting that the Chinese Government is the one thats telling alibaba that it has merchandise that may not be authentic on its website. That rattled some investors yesterday and has effects today as well. I didnt have a chance to look at the gross margin or the margin numbers. Are those holding up . Because people say thats impossible to say where they are forever. Holding up a lot better than i expected. Theyre 58 ebita margin. Thats only down two Percentage Points from last year. Up seven Percentage Points sequentially. In spite of the fact alibaba has been very inquisitive over the past months trying to bolster its mobile properties and starting to buy some properties in emerging markets. And in spite of of all these, its much higher than any comparable company. Okay great. All right. Gill, we appreciate it. Thank you. So you think buy it here or buy on weakness . Absolutely. Okay. 30 times next years earnings, i think its very attractive here. Okay. Call my broker. No, im just kidding. Thanks, gill. Make sure to tune into squawk on the street at 9 00 a. M. For a first on cnbc interview with alibabas executive vice chairman joe tsai. Awesome guy. Big tech earnings on deck later today. Were going to be hearing from amazon and google. Both set to report after the closing bell. Here to tell whaus to watch in those reports is collin gillis. Hes a senior tech analyst. Hes here with us on set. Good morning. Good morning. Great to be here. I assume the currency issue is going to be big for these guys. Absolutely. Weve got the vengeful markets that do not like the results. Currency is going to be impacted for the Current Quarter as well as the guidance. Its not a factor for google. They dont give guidance. But youre seeing 300 to 400 bips of negative. Amazon is about 38 international. Google is 55 . How much are you waiting to see how much google is spending their money. Everyone is upset on how much money theyre spending on rnd. These two companies, you dont always bucket them together but theyre on a collision course on a lot of metrics. Trying to monetize that with the kindle for amazon. It means for those viewers who are they took googles popular android operating system, made a copy of it put a skin on top of it and called it their own. When you buy a kindle, youre running googles operating system. We just heard this morning they want to get into email for companies. They want to have a full array of product offerings. So the key issue were going to see out of amazon is profitability. Do we get profitability this quarter . And do we get a decent profit . Do you need profit . Do you care . I do care. Yeah. Some people dont care at all. Then clearly more recently a lot of people do care. So i just upgraded amazon. Ive long before more on the sidelines. Turn positive this quarter because of the profitability issue. Also because i think the digital delivery of goods is going to allow them to expand their margins. Then all of a sudden the ratios dont look so unreasonable. What suddenly becomes profitable . In the shortterm its the resolution of cachet. I expect to really drop down sharply in the september quarter. It was a margin around four points. Dropped down to less than one point. And so books, their original business is decently profitable for them. And that whole dustup with the authors going out against amazon, that had a negative impact on them. Thats been resolved. You think the fences will be mended as quickly as the deal comes . Of course not. There will be a curve to that. But there will be some bounceback. Real quick because we did hear from facebook great earnings. In terms of Advertising Market share, what do you think were going to see visavis google. Amazon not in the advertising business yet i know of. Amazon with all the information on your credit cards, purchase habits home address, they show advertisements on our kindle. For google. The key thing is click pricing. And the pricing has been down because of mobile ads. Theres a chance you may see that actually start to turn after ten quarters of negative decline in click pricing. It will be close to zero, close to flat. If you had a dollar to invest in amazon or google youd invest in which . It depends on your time horizon. Google is a safer bet. Amazon 145 billion market cap, theres still a lot of upside there. That could easily be a 300 billionplus company. Thank you have been joining us this morning. Appreciate it. When we come back this morning, we have a list of stocks to watch. And later an app to alert your doctor if you start suffering from depression or anxiety. Well talk privacy concerns and other applications. Stick around. Squawk box will be right back. Stamps. Com is the best. I dont have to leave my desk and get up and go to the post office anymore. [ male announcer ] with stamps. Com you can print real u. S. Postage for all your letters and packages. I have exactly the amount of postage i need, the instant i need it. Can you print only stamps . No. First class. Priority mail. Certified. International. And the mail man picks it up. I dont leave the shop anymore. [ male announcer ] get a 4 week trial plus 100 in extras including postage and a digital scale. Go to stamps. Com tv and never go to the post office again. Lets look at some stocks to watch this morning. Coach earnings topping analyst estimates. Among the catalysts, rising demand for its handbags in china. Hersheys revenue falling short. Bakery snacks hurting chocolate sales. The Company Also Announced its buying meats snack maker crave jerky. Crave jerky. Hold on. Whats it again . Hersheys. Had hersheys are buying crave . Yeah. Why . I love crave. Its the best stuff ever. I was just emailing with is it beef jerky. They have beef jerky. Its turkey jerky. Its the greatest i just heard it out of the we go crazy in my house. You dont usually listen, but what about this jerky is good . Its more tender. Its softer. Jerkys not supposed to be soft and tender. But the seasoning is better. I cant say enough good things. I feel like the spokesman for crave jerky today. You dont think hershey is going to cover it in chocolate. No. Thats fantastic. Anyway, so interesting to me. Youre taking a good thing and ruining it. Good for them. Youre excited. I am. Ive been eating this stuff i thought i discovered this stuff like a year ago. I like this new side of you. You like jerky. When we come back well have much more on the man who will run fast food giant mcdonalds and what the retirement of don thompson means for the golden arches. 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If you have any sudden decrease or loss in hearing or vision or any symptoms of an allergic reaction stop taking cialis and get medical help right away. Why pause the moment . Ask your doctor about cialis for daily use. For a free 30tablet trial go to cialis. Com grimace at mcdonalds after a tumultuous years for don thompson. The Company Naming a new ceo. Well look at what Steve Easterbrook brings to the table. Hologics talks healthy results. Steve mcmillen will be here with us on set. Plus wings, chips, pizza, and beer. Well tell you how much your Super Bowl Party is going to cost this year as the final hour of squawk box begins right now. Live from the most powerful city in the world, new york, this is squawk box. Welcome back to squawk box here on cnbc first in business worldwide. Im becky quick along with joe concernen kernen and andrew ross sorkin. So far this morning it looks like we are trading with some green arrows on the way. Dow futures indicated up about 45 points. S p up by close to 2 points. Nasdaq down 3 points. This comes after days where the dow dropped hundreds of points. Things have not always stayed as they start the morning. They havent stayed there by the end of the day, but well see where we get close tore the opening bell this morning. Also if you check out europe at this hour it looks like there are some modest declines. Ftse down. 6 . The greek markets actually trading higher this morning. Up by 2. 65 right now. Heres whats making headlines at this hour. Were now 30 minutes away from the read on the employment picture. First time jobless claims falling slightly. Also eu Foreign Ministers are meeting today. Theyre expected to ask for a few round of sanctions against russia. And president obama wants to bust through spending limits in both domestic and spending programs. This would negate the effects of the sequester. Few stocks on the move this morning. Dow chemicals said value expanded in most estimates. Alibaba revenues falling short of estimates suggesting the ecommerce giants growth slowed. Dont miss alibabas executive vice chairman on squawk on the street at 9 00 eastern. Blackstones results topped wall street. Setting full year records for several of its metrics. Okay. Lets talk about mcdonalds this morning. Mcdonltds ceo don thompson will be leaving effective march 1st amid slowing sales and currency. Really for the past couple of months. Richard clayton for Ctw Investment Group joins us now. They advise 5 Million Union pension fund holders. And also collectively the Union Pension funds on a little over 2 million shares. Also joining us this morning is joe cahill of cranes Chicago Business. Good morning to both of you. Im going to start with you, richard, to ask you this question. Which is to suggest that you have said it wasnt the problem of the ceo but you think theres a larger problem that runs deeper on the board of this company that may be the underlying problem that this company has had over the past year and a half. Thats exactly right. This board is really dominated by a number of directors who have been there for more than 20 years. Some up over 30 years. And who are overwhelmingly from the Chicago Business community. And i personally love chicago as a city. But mcdonalds is a Global Corporation and mcdonalds more than that is a corporation thats part of a system with other significant stake holders including especially the franchisees. And we think the absence on the board of directors of a greater diversity of backgrounds including a background in the franchise business we think that thats really a strategic weakness for mcdonalds. And we think that the companys difficulty in responding to its change competitive environment is particularly the difficulty its had attracting millennials. Reflects the lack on the board. Richard, we will say we spoke with someone else earlier this morning Jeff Sonnenfeld who said the board moved and gave them credit for acting before someone from the outside did. I think, again, what theyve done is replaced mr. Thompson. Theyve also appointed one new director to the board. A google executive. But what we think we need to see is rather than just changes at the management level, we need to say changes at the board level to bring in new directors who can help the new Management Team coming in adopt a new strategy thats going to work for shareholders. We think the boards responses have been unduly defensive and too focused on engineering than really thinking how the restaurants operate in a way which will enable them to emulate some of the best aspects of new competitors. And a better and more stable relationship with franchisees. Steve easterbrook, do you think he changes the game for them . Hes a longtime mcdonalds executive. He has been credited with turning around their english operations. And lately hes been the chief office in digital and changing their advertising. But its too early to tell if thos efforts are going to bear fruit. But what is your sense . The reasons i ask is you have been banging that drum about don thompson getting being responsible for this. The question is is the problem run deeper or is it really just to swap out the guy at the top and the whole game changes . Well they clearly need a new strategy. And thompson was pushing one. And the fact he is out i think suggests the lack of confidence in the possibility of that strategy going to work. You think the direction is going to change now . Do i think the direction will change . I dont know. Easterbrook has not spoken yet in any detail. And, you know he was part and parcel of the existing strategy. So it would be reversal for him if he changed course. Richard, would you prefer to see a complete outsider come in . There would be some advantages in a complete outsider just as mr. Cahill is suggesting they wouldnt have a commitment to the existing strategy which i think clearly isnt working. But at the same time i think there could be value in having somebody whos already a part of the system knows the company, knows people within the company and understands in a more detailed way than anyone from the outside could what really needs to happen here. Richard, given that you represent pension funds, are you a purporter of higher minimum wages . Part of that is we dont pay particularly lower wage workers enough and companies arent looking to engage their entire workforces in a way which would enhance productivity and produce the kind of investment we need. You think the investment will do better if they pay more theres no question in our mind the investments will do better over the long run when we have wages more in line. And you have no worry that profits come down in the shortterm or even the longterm . Thats not what happens when you raise the minimum wage. Profits go up. Their customers have more money. So were not concerned about that as a Public Policy issue. We think that companies actually have an opportunity to improve their performance by engaging their entire workforces and by managing capital your benchmark with mcdonalds against a shake shack which is going public. What kind of wages is shake shack paying relative to mcdonalds . My understanding is its over 12 an hour where they start. Im not sure where they cap wages for hourly employees. But i think it may get up into the range of a little under 15 an hour. Joe, back to you real quick. In terms of the changes well see out of mcdonalds over the next three to six months walk us telethe permutations you can speculate. The current plan is to whittle down the menu. It got really bloated with a lot of items that didnt sell very well. And to start rolling out this custommade Burger Program theyre going to be offering which by the way seems more complicated to me. The second you start letting people i dont understand that. Well, thats a big question. Mcdonalds tried to do custommade burgers over a decade ago and it botched up the Restaurant Operations and it was pretty much a disaster. And they stepped back from it. Now i think they believe that the technologies, you know the digital ordering kiosks will help make it more efficient. But thats an open question. And theyre moving pretty slowly on it. Theyre only expecting to have this in 2000 of the 14,000 u. S. Restaurants this year. And i think that may be one of the reasons why the board acted is that theres a growing perception that thompson was moving too slowly. Right. Okay joe, richard, thank you. We will continue to watch this story and see how things play out. Appreciate your time this morning. Thank you. Folks, bill gross is out with his latest janus outlook. Gross says he believes the slow unwinding of 0 interest rating here in the United States will support domestic and global stocks. As for fixed income investments, gross says that bonds despite their ridiculous yields will not easily be threatened with a new bear market. He says the hay day for stocks is over and the bond market wont be threatened despite these crazy yields weve been watching. Okay. We will see whether the market takes heed. Got out of all bonds. So now he now hes in. And the markets not going to 5,000. He didnt say that. Was that his last it was 5,000. I think it was 5,000. No specifics. Dow going to 5,000. Not the s p. The s p is close to 5,000. Why would he talk about stocks bill . Remember when he was at pimco they started an equity fund. Yeah that did well. When youre looking at that one guy is trying to be a politician and the other guy no. And mohamed never and he should have known. Bearish for about 8,000 points. Well get you some happy pills in a second. Coming up, hologics has seen its stock hit new highs. The companys ceo joins us next. Then at 8 30 you dont want to miss this. Jobless claims data. And then an app that connects your behavior to your health. Plus jane welles will be here to talk about how much your Super Bowl Party will actually cost you. Were back in just a moment. Introducing. A pm pain reliever that dares to work all the way until. The am. New aleve pm the only one to combine a safe sleep aid plus the 12 hour strength of aleve. 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. Hologic reported. Also listed its guidance for the full year. The stock closed shy of a 52week high. Joining us the ceo of hologic. Youve be there 14 months. Nobodys counting but i said how is the stock up . Is that this mornings trade too . I think that was as of yesterday. As i dont have yesterday, okay. I think you added a few decimal points. Well take it. People who dont know its a cool name. Is it a star trek hologram, what is it . It goes bax to scans and some of that from your previous world. But started that way and then moved into the momography spade. And then our breakthrough product is the 3d momography. Thats been turbo charging the business today. Does it need to get better or is it state of the art . Its truly one of those times you have a breakthrough product that the radiologists see. Its also saving the system money. How much have you penetrated so far . Were only about 15 penetrated in the u. S. Which means were in the early stages of the adoption cycle. So were describing the growth really as a freight train. Its building. We had great Clinical Data that came out last year. Positive reimbursement came in. So that will be building you know, really over the coming years. Every hospital doesnt replace their equipment. How much does it cost . Generally a unit is about 300ishthousand dollars. But that will also last seven to ten years. Let me ask you this. The 3d versions of it. I have something they call as dense breast material, they try to get me in every six months. Would i have to do that with the is . The 3d is better for detecting cancers or anything. Like 40 of women have this. Yes. And thats becoming much more common for just people understanding the difference between dense breast tissue and regular. Do i still have to go every six months if its a 3d mammography . Im going to let your doctor talk on that. I think were bringing much greater clarity. Again, i dont want to diagnose on the air but i think with the greater clarity you probably shouldnt need but that seems pretty frequent. Andrew and i are going to stay away from that completely as a matter of fact. I dont know how to do that. Not really my thing. She forces us into the adulthood. It does give you much greater clarity and will detect things far earlier than the 2ds did historically. What is the medical device tax now . Were waiting to see where that plays out. Theres a lot of frankly bipartisan support on you know the hill to repeal it. I know you guys have been talking about it for years. We think it was probably one of the bad parts of the Affordable Care act. These guys in d. C. Could not i mean what if they really did get paid by the, you know instead of by the hour by by what gets done . Its unbelievable. This is not done and probably not going to get done. We think in the new congress it will probably were hopeful it will get repealed. But were focusing on running the business and will see where it plays out. What do you attribute the moderation of Health Care Costs to in recent years . You know i think a lot of us think the economic factors and the marketplace was already putting pressure on things. As you looked at it as hospitals were consolidating Getting Better buying power, what you started to see was a moderation of Health Care Costs. Combined with consumers getting more involved as their copays and Everything Else were coming in. And for those of us who believe in Market Forces think there was a lot of that already happening. And you could already start to see the cost moderating before the Affordable Care act kicked in. Was that an extra piece of it . Maybe. You know, at the end of the day, we keep looking at you know if youre coming out with great technologies that are bringing you know better value to patients. So in our case we got additional reimbursement for the 3d mammography because were reducing the number of false positives which reduces the number of biopsies and takes cost out of the system. I think a lot of medical Device Companies have been looking at products that actually do take cost out of the system. I think that whole rnd pair dime changed six, seven years ago. False positive and false negative, its like which do you choose . I know. Theyre both so bad. And thats the brilliant part. We had a huge study published in the journal of American Medical Association last year showing particularly in our 3d case 41 increase in the detection of cancers. Nice. So therefore you feel much more confident youre catching things. Youre catching them early so you can operate and not have to go to radiation and chemo. And also up to a 20 reduction in false positives. You say 15 that you now saturated the market with. When do we see a big uptick . 15 is still not covered 85 of women out there. Youre clearly seeing it. Our latest results, i think what youll see is probably within the next couple of years that will at least hit 50 . And in every major city every state, you know, there are now systems. And were seeing a clear acceleration. So most women can find a hospital within their jurisdiction to go to at this point. Do you have any anecdotal evidence at your old company, are people are deductibles too high in certain cases to do some of the procedures in other parts of medical device with with the deductibles have gone up. I think it forces people to be more rational. And at the end of the day people are choosing the procedures that matter. I think we all saw in the 2008 time frame we saw the firstever you know i think at the end of the day the way we keep thinking about health care is theres going to be more money spent but youre going to have to fight for your share like by any other consumer good there you say where people are going to choose the most relevant you dont blow a bunch of money like used to. It seems like medicare is not the way to do it because theres thatst thats where all the fraud is. Certainly as consumers get more and more involved in their Decision Making we think thats going to help us all. Okay. Thank you. I think its 40. 6234 as the stock is up since you took over. I thought you were going to say since he started talking on the show. Its a team effort. Oh god. Dont you love that . Its all the ceo. Thats the first thing they teach you in Media Training isnt it . I dont do Media Training. I would not have guessed that after this interview. All right. Thank you. Great. Thank you. Coming up in just a moment when we come back an app that monitors your Mental Health. Meet the ceo of ginger. Io. They turn your phone into a virtual diary that tracks your behavioral patterns. And Marshawn Lynch at it again in phoenix. Two days a the media guested what he had to say. Details after the break. [girl] can it tell the doctor how long i have to wear this thing . [man] can it tell the Flight Attendant to please not wake me this time . The answer is yes, it can. So, the question your customers are really asking is can your business deliver . Opinions. Theres no shortage in this world. Who do you trust . Whose analysis is accurate . How do you make sense of it all . A simple unbiased stock score consolidated from the opinions of independent analysts. Is that too much to ask . Nope. Equity summary score powered by starmine, will help you execute your ideas with speed and conviction. And its only on fidelity. Com. Open an account and find more of the expertise you need to be a better investor. Welcome back to squawk box. Never before have five little words created such a media circus. Seattle seahawks running back Marshawn Lynch once again showed up for a league mandated event. Much of the same as the day before except he updated his phrase of the day to you know why im here. Thats a slight revision to tuesdays answer of im just here so i dont get fined. Despite having hundreds of media members crowded around him, he uttered his sentence of the day 14 times. There you have it. You know what . Clever guy. Hes clever. The media and you love this story. Gets more attention. The media does help the super bowl. And the more the super bowl does, the more the guys get paid. I can connect some dots to where you should show up and say a couple of things. We have to do that sometimes. Guess when he will talk . After they win. If they win. All right. Theres one company that can get the running back to talk and thats skit ls. Posting a News Conference with Marshawn Lynch on their website and he answered questions. Like hed rather stay on earth than live on any other planet. Me too. He prefers watching cat videos over dog videos. And he thinks reporters deserve skittles. Pure marketing genius. The conference has more than 3 million hits. Although this makes me think he wont talk unless you pay him. I aint going to say anything unless you pay me . You wouldnt. You sit here and talk without getting paid . Oh yeah. In fact watch this. Not on the meter right now, but when we return jobless claims data. Plus what investors should take away from yesterdays market move. And the fed announcement. Lets look at u. S. Equity futures. Theyre giving back a lot of gains. Dow futures still up but only 14 points. S p down 1. 5 and nasdaq down 7. Stick around. Squawk box will be right back. Financial noise financial noise financial noise i bring the gift of the name your price tool to help you find a price that fits your budget. Uhoh. The name your price tool. Shes not to be trusted. Kill her. Flo it will save you money the name your price tool isnt witchcraft and i didnt turn your daughter into a rooster. She just looks like that. Burn the witch the name your price tool a dangerously progressive idea. We are just a few second away from jobless claims. Weve been waiting for that number as weve been watching the futures this morning and seeing the futures give back some of the gains we saw earlier this morning. Dow futures still up but only by about 20 points now. S p futures down by just over a point. And the nasdaq down by just over 7 points. Rick santelli is standing by in chicago. Rick, take it away. All right. Survey says big drop on initial jobless claims. 265,000. Oh my goodness. Were 45,000. Thats a huge drop. Unbelievable to me. What . 43,000. Big, big drop. 308,000 down to 265,000. That might be one of the cycle lows. It underscores theres been a lot of different data going Different Directions of late. Yesterdays statement, of course, becky and joe and gang that was a big interpretations loomed rather large with respect to how to kind of decipher the the viewing of International Issues we highlight. And traders down here definitely traded before they researched our thought. Whether thats good o for bad well have to see. But bringing that up to many down here is obviously looking to the smoke of whats going on in economies that are certainly not cooking in grease thats for sure. We still have pending home sales. And we need to digest some of these new levels and Interest Rates. The flattening yield curve. What does it all mean . I think at this point it means well continue to see low Interest Rates. Well have to wait and see on that as well for tomorrows close. Important on the priority scale. If youre monitoring present behavior based on past behavior. Trying to predict future behavior. Thats what technicals is all about. I didnt think traders did themselves proud yesterday at all. More hawkish than expected them to sell the market off some 200 points. Number one, a better economy is something that we should want at this point. And two, they should want the fed to follow through on a quarter point increase in june. To see them do that hoping that the fed would Say Something dovish yesterday, they bid up stocks if were staying at zero . Are they that knee jerk the ill . Its pathetic. Yeah. I dont know joe. To me i didnt really think dovish or hawkish. I just thought that you know if their binoculars are moving around the financial horizon and they pause and put in the word international, that in and of itself didnt register dovish hawkish. Its now a variable theyre going to paint themselves into a corner on. My god is International Going to be in their next statement. Are they going to pull it out next statement. I think once again the micromanaging via words and statements is all fine and dandy. Some call it transparent. I call it muddy. Whatever it is though youre right. Theres a lot of debate. Three people you get six interpretations. Rick thank you. Well see you again tomorrow. In the meantime the dow dropping nearly 200 points despite the fed saying they will remain patient because everyone has a different interpretation. Weve been watching the moves on Interest Rates and oil prices dipping below 45. Joining us now to put it in perspective is lizann saunders. What was your interpretation of what the fed said yesterday . What does it mean . First of all, i dont know if the markets move yesterday had everything to do. Given the input of international developments, i think that gives them a little leeway to the extent they want to push rate hikes further out. And then you have the upgrading of the economy to stronger. So i think depending on which side of the spectrum you were on, you could find something light in the statement. What i think is going on is volatility for multiple reasons. Least not being about fed policy uncertainty. But whether were trying to perceive policy and wondering whether theres just too much focus on and perceived power of Central Banks. Because were now out of whack with other Central Banks . We have convergence in terms of central bank policy. With us now starting to well flatten out anyway no more qe. And the rest of the world is now following what the u. S. Has done. Theyre hoping for the same results, but i think theres still a question of the results that we have seen in the economy, how much of it is a function of qe. I know you talk about all the time about the counterfactual. Well never know had we better r been better off. I watch whats happening to u. S. Treasury rates. And clearly the markets are speaking. If you can get a bit of yield here its still better than negative yields in other places. It makes sense theyre looking at the market as an attractive place with bonds. Is it the same perspective they would look at u. S. Stocks also . Even though youre note getting all the growth you would hope. Youre seeing more interest outside of the u. S. I think thats mostly a value play right now. Because of where those markets stand . Yes. I think i dont think the u. S. Market is overly richly valued. But its at a level that suggests you needed earnings to do a bit more of the heavy lifting. Youre not going to get and i dont think that is a problem in perpetuity. Companies can be dynamic in their approach towards hedging. I dont think what were seeing now not across the board companies. You saw reports some were better than expected. But i think this quarter, maybe next quarter is where you really get the most significant. And then i think theres the adjustment process. That mean this is not a problem. But were talking about low Single Digits earnings growth. To have the market look quite as attractive as it has in the last several years. So what do you like . I think this will be the first year in awhile where global diversification makes a bit more sense. Its certainly what we do at wind haven and we support it at schwab. But as recently as late last year you had the classic comments that i was getting all the time. Why wouldnt we just index to the s p 500 . You know, you hear that and think here we go again. And sure enough since the end of december into the beginning part of this year i think its reminding investors that there are times when you want to be in noncorrelated assets and outside equities. Do you like european equities . Japanese equities . We gerbilly lygenerally like emerging markets. So when you look at russia and brazil on the production side versus india and china, two different stories just within the bricks. Then you can break that down further. Asia within emerging markets looks better. Europe is potentially interesting but i dont think youll have al play there for a sustainable period of time until you see the financials do better. I would watch the bank stocks. Thats really what i think is most broken in the system. If you want to get a sense of whether its qe or just finally animal spirits kicking in i think thats part of the European Market to watch. Were not really seeing that there yet. I think the rallyies are more short lived at this stage. Thank you for coming in. Great to see you. When we return on squawk box right here looking at and logging your life on your smartphone can help predict stress or even depression. But we have questions about who has access to that data and how they use it. Were going to introduce you to startup ginger. Io. Then jane welles tells you how much youre going to be paying for pizza and wings and beer and all that stuff we eat on super bowl sunday. Our football inflation gauge just ahead. Back in a moment. 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. Futures right now, last i looked after those claims we were up about 40. Now theyre up about 52 points on the dow. So 53 is the net and then up 2 on the s p. Nasdaq continues to trade lower. Is that baba . Probably. Lets talk about doctors now. They are going digital. Ginger ginger. Io tracks how depressed or anxious you are. The company measures how often you text for example. Your vocal tone and daily habits to check on your psychological health. But should users be alarmed their privacy is at stake . With us now is the cofounder and ceo of ginger. Io which recently added 20 million in its latest round of funding. Good morning. How does this work . Before we even get into it. Yeah so if i can just take a step back and talk about the problem. Theres about 50 Million People with Mental Health issues every year. A small fraction of them get support because you dont have enough doctors and therapists to help them. Is the other function they dont know theyre depressed . In some cases they do know but its massively underdiagnosed and supported. Allocating the resources, helping patients get support at the right time. If you do that you can actually make sure the patients and their families have a much better experience. But you can also drive Better Outcomes in cost savings in the health care system. And the way were approaching this problem is we think acknowledging the way its done can essentially come in and help strengthen that relationship. So explain how it works. So theres about 5 billion of these devices on the planet. Turns out they are an incredible tool to sort of understand a person. What were trying to do is ginger. Io is get your smartphone to recognize patterns in your behavior. So an example is when a person is at the psychiatrist one of the things they might look for is is this person isolating themselves changing the way they interact with others. Or are they going to school doing the things they usually do . Those are the sorts of behaviors you can train your smartphone to detect. The idea there you can then drive support. Instead of waiting for them to show up in the emergency room you can maybe have you see me going to school and work and doing all the things i normally do that would indicate im fine. What happens if i dont do all those things but im texting a lot . Is that bad, good . If you step back and see how most of these machines learn, a single behavior isnt a single rule youre using to make that prediction. Whats happening when you use this data and you try to predict whether a person is depressed is it usually are hundreds or thousands of features together in machine classifies. It makes sense to me. It makes sense the device could help monitor your behavior. But it strikes me this would fall into the same limitations that medications have. If somebody decides to stop taking their medications because they dont think they need it its too bad. If someone ziez not to go along with this its not going to track it. Yes and no. I think a lot of these technologies are significantly better than where things are today. Today you have tens of millions of people not getting support. Giving them support is an asset. Just real quick because we have to go does this indicate or send a message to a doctor saying youre depressed right now, you need help . And is that with your per manymission permission . Without . How does it go . Always with your permission. Our relationship is with the consumer first. Your doctor asks you to install the app and with your permission if youre okay with it, some of those notifications go through. How do you make money . Were free to patients. But under new legislation sthast passed, it manages the patients even when theyre not in the clinic. On both android and iphone . Yes. Thank you. Really interesting stuff. Obviously there are privacy issues, but i imagine youre working through that too. Absolutely. Coming up next cramers take or well talk mcdonalds and other Market Movers this morning. Did you know this sunday is the second biggest food day behind thanksgiving . Not surprisingly, probably. Food galore. But its going to cost you. Jane wells will join us on how much your Super Bowl Party will set you back. Know that chasing performance can mean lower returns and fewer choices in retirement. Know that proper allocation could help increase returns so you can enjoy that second home sooner. Know the right Financial Planning can help you save for college and retirement. Know where you stand with pnc total insight. A new investing and Banking Experience with personalized guidance and online tools. Visit a branch, call or go online today. Do y ou like to travel . Im all about free travel babe. Thats what i do. [ female announcer ] fortunately, theres an easier way, with creditcards. Com. Compare hundreds of cards from every major bank and find the one thats right for you. Creditcards. Com. Its simple. 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. Lets get down to the New York Stock Exchange where jim cramer joins us. I guess i ask you is it possible that the right person we talked about supply chain stuff and execution, things like that. But could you bring mcdonalds back to where millennials think its okay and cool . Is that possible . What eamon did at wendys, that was a trash franchise doing badly. He man comes in aided by nelson peltz. Catch a quick double. So these things can be fixed. Burger king really terrific. Yum. I know they stumbled in china. If they didnt that stock would be at 90. The fact is that mcdonalds is about a factory. Its about making product and getting it to the customer. Good tasting and not difficult. Clean the stores. I dont think the franchise is going to put more money towards this company as long as thompson was running it. Easterbrook, big turnaround in the uk. Very social media oriented. I think he can make this a better company. Not unlike when shultz came back to starbucks. Itll take 18 months. Thats how long it took shultssz before you see anything positive. But i think well see real positive momentum after that period. I hope youre right. I dont miss photo mats. Dropping that stuff off. I will care if something happens to mcdonalds. This is about cash flow. Its about franchisees buying in. Yesterday they said hey, enough is enough. Enough rabbits pulled out of the hat. Weve got to go back to basics. The cmo, easterbrook, says listen, weve got good burgers, thats what we do. Theyve got other things. You do not want to be edison in order to work at mcdonalds. You want to be henry ford. North america, very good. Get the straw wrappers off the floor, get the clean the bathrooms like howard did. Clean the darn bath rooms, the one when you get off of 69 in l. I. E. , clean that that is important, isnt it . We talked about airport bathrooms, man. Im going to start im not going in those anymore. Still love the mcmuffin, the fries, i dont need that stuff. I dont need no purple smoothies. Right. You do need some alternatives, like good salads. They were great with salads when they first came out. Now theyre not so good. Last couple of years, qualitys dropped. I go to wendys in short hills, monster, monster. What a roo do they did there. Youve got caffeine free cherry coke diet its a great right. I was there last night. Im not admitting that. Love that wendys. Theyve got that tv in there, sit down, burgers taste good monthly offering fantastic. Fries are fresh. Wendys is right. Mcdonalds, time to be right. Better get a free coke tonight. What about alibaba. You know what . Got to hit on all sill derns when selling when youre alibaba because Everybody Loves it. Get this 2017 earnings, facebook is cheaper than alibaba, that was not the case before i saw what i regard as a slowdown in the trajectory. The slowdown trajectory of sales in alibaba mimics slowdown of the growth of the whole country. Isnt that interesting . Which way are you leaning between seahawks and the patriots . Im an r. Sherman under score 25 guy. I have got to tell you, jonathan and bob put together a team if you can win with 17 yards rushing, you can beat that team. May be the First Quarter seahawks. Saw what they looked like against green bay, versus every quarter of the patriots. Compelling matchup. Nixon got one state, you know, lost one state, got 49. I feel very thank you, michael, Jpmorgan Andrew luck got one state. I dont care if the balls inflated deflated nixon did not need to do watergate and it doesnt matter about deflategate. They would have won anyway. With no Wide Receivers with no running backs, it doesnt matter. Didnt need to do it but taken down by the scandal, jim. All i can tell you who . Nixon . I need shermans elbow dont want him shorting stocks. He never moves love that. Its good for peyton. Its not good for brady. All right. All right. You know what . One more day to talk about this jim. Do it tomorrow. Pepsico could be the net winner. Like baltimore and green bay. Arent you glad that somehow the stars aligned to put these two teams in the super bowl. Fantastic. It is. Its a fantastic match. Im going to start watching at 12 00. I think nbc should do it every year with al and crisp i dont know whether we can do that. Thank you. Thank you. Next continue this conversation super bowl isnt the super bowl without wings, nachos and pizza. How much a party will cost you. Remember festivities begin noon, sunday nbc, tune in early, catch pregame fun and watch the game. Squawk box returns in a moment. Well football isnt football without wings beer chips and pizza at least. Millions will be watching and eating during the super bowl this sunday. How much will it cost you . Jane wells, always worried about shes cheap how much will it cost, jane . Reporter well joe, according to the National Retail federation, the average super bowl viewer on sunday is spending 89 on food and other supplies. Thats up 10 from a year ago. It is the biggest food day behind thanksgiving. Instead of eating turkey we eat chicken. Project ing projecting one and a quarter billion chicken wings consumed. About 1. 70 a pound. Down from the great wing crisis of 2013. Cheese prices down is very good for pizzas. 4 million pizzas consumed on sunday. And each pizza giant has a different strategy. Hey, hey, hey. Thats a terrible call pizza hut is promoting new product, flavored crust with an ad with rex ryan and tony romo. Dominos, the app that lets you track your order can work on your samsung tv while watching the game. Papa johns promoting value, 15 this weekend, youll get a free pizza after the super bowl. Making its debut, a fruit. Avocados from mexico teaming up with old el paso with an ad during the game. Some have warned of avocado shortage, prices are up slightly a year ago to 1. 12 each. For beer we will consume 325 gallons sunday one gallon for every american. And while bud is still the king of beers according to 24 7 wall street the Fastest Growing beer brand in america guys the most interesting beer in the world. I will be consuming all of this starting at about five minutes. My very favorite i think weve ever had, live from janes house this morning. Yes. This way i could sleep in like maybe another half hour before i had to do this. Wow. Everybody drinks a gallon. . Thats amazing. Most dont drink beer. Right. That means fat beer belly guys are drinking six gallons of beer, thats unbelievable. That includes children. I dont think 1yearolds are drinking a gallon of beer. We know some of the main how many calories are in the what is it . Do you have a bottle . Isnt it like 100 calories . You know what . Its interesting you should ask that pause they are saying that the average super bowl fan will consume just during the game 2,400 calories. Oh. Two slices of pizza, 600 calories. Five chicken wings, over 500 calories, thats without the ranch. Forget about fat tuesday. Its fat monday. Im drinking light beer. I have spinach and kale chips. Thank you. Eat up. Bring us some of that. Looks great. Join us tomorrow squawk on the street begins right now. Good morning, welcome to squawk on the street. Im david faber along with jim cramer, live from the New York Stock Exchange. Carl is off today. A look at futures, as we start our day here. You can see, we are poised it would look like, at least, for a higher open we shall see how we do during the course of the day. That has changed dramatically in recent sessions. Crude oil a key. Mr. Cramer tweeting yesterda