Transcripts For CNBC Squawk Box 20150217

Offs. Kentucky tennessee, virginia maryland crippled by a winter storm. Federal offices in washington d. C. Will be closed today as they brace for snow. Airports in North Carolina and tennessee look to be the hardest hit and well have a live report from the Weather Channel in about 20 minutes, scott. Heres the big stories were watching today. Two economic reports of note. 8 30 a. M. Eastern time the new york fed releases its february survey of manufacturers and then at 10 00, a read on housing from the National Association of home builders. Theyll attend negotiations in the west coast. Drawn out talks between Dock Workers Union and their employers have come to a assault and as a result sports are clogged with cargo. Facing the deadline among the filings we have already seen city group, aig and Delta Airlines while exiting positions in bed bath and beyond. Among green lights new positions, time warner and east side technologies. They took a stake in American Realty Capital Properties in the Fourth Quarter while exiting its holdings and city group, halliburton and facebook. And running through their moves now. First stocks to watch. The offshore drilling giant ceo is stepping down and slashing its dividend as it deals with Falling Crude prices. Heres the activist story i was telling you about. They want the Mattress Company ceo ousted. Are you familiar with them . Whoever they are, theyre citing worries about the missed forecast. The activist investor also wants a seat. Do you know how much they manage . I do not know the answer to this question. Also i wonder what you think, they plan to sell 4 million of google shares. The ones that expired last month. So they have been selling over the years. They will now be down about 10 or 11 of the company in total. However they will still control them by 52 . Whats that worth . Millions of dollars but as you start widelling it down with your power widel down . If you dont like it as a shareholder walk away and sell. Thats the deal. Creek stocks breaking down yesterday. They basically never started. There was a short 40 minute discussion. Both sides expressed disappointment about the other side and that was it. They have until friday to apply for a current extension. Thats crucial because if it happens the country could lose the support of the European Central bank which would mean capital controls et cetera. Now we wait and watch to see if either side blinks. We built a wall graphic to show you the way the two sides see the world. On the left hand side is what the greek finance minister says. He says europe is a house of cards you let greece go at the bottom everything is going to start to fall theyll start pricing in exits for all of those countries. On the right hand side is the view from berlin. There are 19 of us climbing up this mountain all connected by a prone what do we do about the very weak person at the bottom . Do we all keep struggling to bring them along . Do we let that one person bring us down or do we cut them off . Whats going to determine who turns out to be right . Its going to be the markets are we seeing italian or spanish yields rise today . Not by much. Right now it looks like more leverage on the german euro zone side but well have to see over the coming days if we start to see any fear within the markets starward hotels and resorts replacing its ceo leaving the company. Adam aaron is ceo on interim basis basis. If you look at the stock, maybe can we get a five year chart . If you look at a five year chart it went 40 to 80. Stall for the last year. Clearly for the last year. As its piers. Marriott had a pretty good run in that time period. So you know im unclear exactly what is going on behind the scenes. It doesnt look good when you have to bring in the interim because that doesnt mean you didnt have somebody ready to go or it was a surprise. Thats obvious. So this is the surprise. The gentlemen that runs it i think thats how you pronounce it he was at third point before he started it. Thats who we were just talking about. Right. And theyre sealy. Tempur thats the new bed . You can jump on one side. You cant do with that with that kind of bed. Theres people that swear by it. Theres people that watch this show from bed in the morning. Thats true. Back to the business at hand. Thank you. No worries. I started it. Lets check the markets this morning and take a look at where futures are setting up. There you go with the snp and dow. The nasdaq is where the focus probably is going to be today you can see it at plus three but were back at nasdaq 5,000 watch. The nasdaq had its tenth highest close ever so people are focused on whats happening within technology and the nasdaq. Take a look at whats going on in europe as michelle said continue to watch the situation in the talks with greece. They dont like that frightened. Not at this point. I saw the euro this morning was up. It moved lower yesterday but up today. Well get a check on oil. But theyre both up while the nikkei is a fractional loser. Oil always in focus today. You know that. Crude above 53. A gain of twothirds of a percent. Its been there a week or so. Thats where it sits right now. 204 is where were going to call that. The dollar we were just talking about how the euro was up this morning verses the dollar. Thats where it sits now. Why do you think the euro is moving higher . Is it eventually something is going to happen . Or is it so much leaning against it its a bounce back . The euro im not sure. Overall markets theres the perception that either a theyre going to get a deal done or b if they dont get a deal done its not going to matter that much. Is it going to be volatile . Yes. But manageable . Also yes. Not the end of the world. In greece leaves youre supposed to have a stronger euro because you have the weakest component leaving now. True. At which point do you get past the volatility . I dont know. Thats bigger brains than me. Lets take a look at gold real quick. What is gold doing this morning . Gold at a slight loss this morning. Stocks continuing their bullish run with the dow pushing above 18,000. With us is yen, ceo and founder of fifth Street Management with 6 billion under management. Made it here three blocks away in the snow this morning. Kathie is the managing editor. Good morning to you both. Good morning. Lets just start where michelle was on athens and what it means to the markets. I thought we would wake up and things would be more out of sorts than they seem to be at the moment. Do you want to take that . I think theres a lot of hope in the markets. I think while its true that it wont be the end of the world if greece leaves the euro. This can be a lot of volatility. Its important for the market to realize and i think policy makers realize theres too many consequences to allow this to go easily. So you see the performance of the euro today and yields this morning and the mixed messages out of europe that they still have two weeks to get something done. So theres the two sided issue. You either get there or you dont and it doesnt matter. You think we get there. I do. I think they can force greeces hand. They basically, you know cut them off from the Emergency Liquidity Program and push them into action. I think you have to appreciate the consequences in terms of the return rising inflation and debt default conte i dont know that everyone is worried about it would be foolish to drag this out. U. S. Equity market versus been on this tear. Ive been waiting for the pull back. I thought it would come as a function of greece by the way and its not happened. Seven years, i dont think so. History says we probably cant. One of your guest earlier was saying things could go down 30 sometime in the next 18 months what causes that who knows. Its not it apparently. Its different this time. During the qe instead of leveraging the greek debt infinitely, how could france be trading. 4 and treasuries where they are. It make nos senses no sense. At the same time the qe theyre doing with negative Interest Rates is causing an anomaly in the market but greece i think was left out of the leverage. It was. So i think its less of a katzcatastrophe this time. So you dont agree . I think its a liquidity drichb Market Driven market. Were seeing it in small companies. Does it drive both europe and the United States . Its european qe. Not u. S. Qe anymore. They drove the u. S. Market dramatically. Right. Correct me if im wrong, it sounds to me say you not necessarily the United States. Not only europe but japan is printing 10 times faster than we have ever printed. You have japan massive qe and that has to be driven somewhere. For the viewer listening to you, what should they be doing with their money . Were shorting Energy Exposures because what i found is the high yield market hasnt been reflected in energy. People are these quotes are silly in terms of if energy stays down here 50 60 65. I think the high yield market 25 and i know you know this market andrew they can get equities at bargain. They have to wait until the crisis passes. I dont think now is the time to buy. You can probably pick it up around 112 50 or so. So it pays to wait i think and see how it plays out. Why arent you buying longterm debt or the u. S. Tenure . Well if youre you have to be buying it. Why wouldnt you get ahead of it . Because what were doing is well one of our companies is going to issue fixed rate debt. Thats what you want to do. Borrow. Not really a borrower. What you want to do is issuing debt is to borrow money. Its going to cause inflation. Interest rate versus to go up. Its been down too long. What about floating rate. You said its hard to figure out. Those are your words. Valuations are better in europe. Thats not that difficult to figure out. Is it just the risks are too high . Well the currency is manipulated. Any time you have massively quiddity and youre including here everything is not necessarily market traded. Should the ten year be where the ten year is . But with the massive qe in the world is it driving an unnatural interest rate. Of course but it is everywhere. Yes. I like floating rates because youre hedged against Interest Rates going up but capturing a descent yield spread. Thank you for coming in this morning in the snow. Our pleasure. Is it a snow day by the way . For kids . Yeah i know we dont do that on this show. Work. Theres other networks. Starting two hours late. No i didnt know if the schools were being closed today. In the city. I want want to encourage people to go to other networks but people find out about these things in the morning. I dont have these answers. Im trying to find out. Thanks guys. Still to come this morning a live report from North Carolina where residents are getting slammed by a winter storm and lot of news on apple including a revamp of its stores and get this, a possible apple car. An icar. And later deeper into the situation in europe and ask what the risk of a grexit means for the Global Markets. Big holiday today so a lot of schools are closed because this whole week theyre out. School vacation out. They want to put that on the record. Our district is closed. There you have it. Heres a look back at this day in history. Anything . No. You . No. Aflac what are you guys looking for . Claims legend has it these hills are full of em. It can take months for an Insurance Claim to surface. Claimin takes patience. Aflac paid my claim in one day. They got some newfangled kinda one day payin machine . Hehehehe yea, i got aflac at work. Aflac. In just one day, we approve and pay. One day pay, only from aflac. Aflac. The road. It can bring out the worst in people. But the mclass scans for danger. Corrects for lane drifting. And if necessary, it will even brake all by itself. It is a luxury suv engineered to get you there and back safely. For tomorrow is another fight. The 2015 mclass. See your authorized dealer for exceptional offers through mercedesbenz financial services. Check out this picture from boston this morning. Its a tweet from jim cantore at the Weather Channel. Hes saying snow in fenway is higher than the right town wall. They have been breaking weather this winter. More white stuff effected this week. Lots of School Delays for those schools in session today in the northeast. Did you see cantore with the thunder snow. I have so much family in the boston area. I want to point out, the tourism board on their website has changed to say just go to florida. But this morning the south dealing with rough Winter Weather today. Jen is here with that story. Shes in charlotte this morning in North Carolina. Good morning to you. I tell you what boston has bore the brunt of this winter. For awhile it was nothing but the storms. Now all of a sudden were getting the storms in the east. Really in the southeast here it was a wake up call that we get ice in the south and this is one of the tree branches nearby here. In charlotte, North Carolina this for us is a travel impactful storm. Its effecting the roads big time. Everything is pretty much iced over here and of course theres been lots of cancellations at the airport as well the story is some tree branchs are carrying much more ice than this. Its across portions of northeast tennessee and georgia. Certainly parts of South Carolina as well into virginia. So much ice on power lines or tree branches. Were waiting on the precip to move out. But at least the first half of today, dealing with the precip from the latest winter storm and then the big story is the arctic blast that is coming in all the way from the south and even in florida by the way well be getting a cool down. So well be getting this cold air, a lot of places seeing the record coldest of the season. Record low temperatures will be set all the way into the deep south. Youll hear in charlotte we are completely iced over right now with temperatures in the 20s, we are going to be in the Single Digits barely above zero i was thursday morning. 4 degrees is the low temperature. Thats the next story were literally iced over right now. I want to show you what it looks like. This is not just the case in charlotte. This is happening in raleigh and parts of atlanta. We have a sheet of ice on roads. This is your drive way. This is your front steps and what we need is help from the weather and maybe salt but the weather will help in the south through the afternoon as the precip moves out and as warmer temperatures build in well get above freezing today in the south but the cold coming is a big story. Were going to get power restored before the arctic blast. Going down into the Single Digits this week. The winter never ends and now for the southeast were joining in on that as well. Back to you in the studio. Its going to be a tough, tough week. Could an alabamaed car be in the cards . Theyre working on an electric car. It could be driverless as well. In other apple news the company is in the process of revamping its stores. By the way, two things amazing story in the new yorker. Hands down a great read and two do you think they should be making cars . I dont see why not. Why not . You invest in one company and now theyre in a completely arguably unrelated business. Im not saying they shouldnt. As a customer if they can do it i imagine they would do it well. Im just wondering. They were one of the First Companies to push the idea. When you first bought apple you thought you were buying a Computer Company and then they were going to be a phone company and you realized thats because they were becoming the same thing and they saw that so far in advance. Youre cool with it. Im intrigued by it. I dont know what the boundaries are supposed to be anymore behind these highly innovated technology companies. Google pushed the envelope. For better or worse, people have criticized them. The car business has been littered. But needed so much reinvention reinvention. People say tv needs reinvention. Its a great business and its kind of always been a great business. The car business is a hugely capital intensive business when the economy turns down you have real issues. It is just a totally different type of thing than when youre selling 2 and 300 phones. Theyre going to come up with their own vehicle or partner with somebody . Unclear at the moment what theyre doing. Are they trying to be a tesla or create a drive train and other things they sell to a tesla or gm. Or provide the software that makes cars so much more of what they are today compared to the horsepower. I could be down with an apple car. Smart car. Partner with somebody but its their their software. If its them just putting their software into the car im totally down. My question is are they manufacturing cars . When theyre hiring people. That seems farfetched. When theyre hiring people that have adrive train, is that a signal but when they have manufactured hardware in the past think about how beautiful and elegant it is. Wouldnt we love to see that brought to a car. Im like andrew. A little skeptical that they would its so capital intensive. Look at tesla. Constantly having to pour so much money back in. Is tesla down this morning . Theyve been down for the past week. On people not buying cars because theyre on vacation. Can we get a tesla chart up on the screen in i dont know the answer. You have tesla up marginally about a percent over the weekend. I cant imagine theyre going to come up with a ground up vehicle. See thats the thing. They invented something we didnt know we needed which is a little thing that put all of our music in all of one place. How great was that. They created a market that didnt exist. They rethought that whole thing from the bottom up with phones too. Could they do that with cars . I hope so. It would be great. That would be great. Well see. In the meantime why Lance Armstrong is forced to pay 10 million to a sports Insurance Company. Well tell you about that story. Plus markets, greek talks breaking down. Why arent stocks selling off more sf that debate as we return. But first take a look at last weeks s p 500 winners and losers. Theres nothing more romantic than a spontaneous moment. So why pause to take a pill . 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For a free 30tablet trial go to cialis. Com 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. Good morning. Welcome back to squawk box this morning. Joe and becky are off. Michelle and scott are spending the day with us on this snowy tuesday morning. Among the stories were talking about today Lance Armstrong wanted to pay 10 million in a perjury battle. Heres what happened. The money is owed to sea promotions. Thats a dallas sports Insurance Company that paid him bonuses for winning the tour de france. Stocks collapsing. Is greece exit from the euro zone inevitable. Its good to have you here. Thank you. Okay we have a little bit of a delay. The market response this morning has been anything but. Does the market think its a deal or even if there isnt a deal it wont be that painful for the markets overall . I think ultimately the belief is theres going to be an agreement between greece and germany. Theyre still a little far apart. Both in terms of the frame work and negotiations as well as the final outcome. Substance, large divergences but ultimately we are moving toward a deal that may not happen this week. It may come closer to the 28th of february but i think a deal is more likely than not. Thats what the Market Reaction is telling us this morning. It could get ready ugly between now and then correct . Are we going to get to the point where we see greece implemented capital controls . I think the worst Case Scenario is theres no agreement on extension of the current bailout. Thats clearly the greek governments aspiration but at the time they exit the bailout theres also no agreement on a pathway forward to a new program. Now in that scenario greece will run into funding challenges probably around mid march. Theres likely to be more deposit. The ecb will be put in a difficult situation regarding its support to the banking system. In that world theres the risk of capital controls but i dont think its going to get that bad. Were likely to see some form of agreement emerge toward the back end of this week and early next. Whats the probability that youre wrong and if you are wrong and they end up leaving, how bad is it in terms of the Market Impact . So we have an 80 probability that ultimately theres going to be a deal. In terms of the grexit risk we place that at around 20 more driven by germanys extent. Theyre clearly playing greece aggressively for a set of domestic reasons. You saw on sunday her party got completely trashed in that context. So very very constrained domestically. If we do end up with grexit the reaction will be the risk of spill over will be more contained. Theres institutions created through 2010 and 2012 designed to deal with the crisis. European stability mechanism is one. You had a large amount of refunds. If you look at spain, Fastest Growing economy many 2015. Estimated to grow at 2. 5 this year and most importantly you have the ecb gearing up to do sovereign qe in marchand countries that would otherwise be vulnerable, france and italy are the ones im thinking about. They will be protecting in the context where theyre intervening in the secondary market. I think the risk of grexit is small. 20 . 20 there abouts but spill over is nowhere near as pervasive as in the 2010 context. I dont know if we had the wall graphic we build earlier. Were showing two views of the world. Europe is a house of cards they let greece go everything is going to tumble the germans see 19 mountain climbers going up the mountain all connected, what do they do with the weakest player at the bottom. Do they let them drag them down or that individual two. Depending on who is right, which side has the most leverage. Who is right . Is europe a house of cards or are they all climbing up the mountain and greece is just a weak player . The true is probably somewhere in the middle. I think he believes he has leverage and thats italy. If you let greece go you demonstrate a path way for exit. This is no longer a single currency. Its a fixed Exchange Rate regime and the market will bet on those sovereigns they receive to be weak. On some level i think there are elements of truth but i think germanys view is also legitimate. This is not 2010. But the southern part is dislocated. You can see how markets are pricing risks versus greece clearly making a distinction and i ultimately think were trending toward a deal and the deal is going to look more like what germany wants than what greece wants and thats because greece is heading into bankruptcy in the middle of march. There arent private buyers and absent official creditors theyre supporting the sovereign and will run into a difficult situation and this government in greece doesnt have a man date to take the country out of the euro. Thats not their platform. It is to renegotiate a new deal with europe. Slightly slow down the pace of austerity and roll back the structural reforms. I dont think the government wants to take greece in that direction. Thank you for joining us this morning from london. Thank you. Well watch the situation play out with greece. Good to see you. Meantime the faa unveiling new drone rules and they could mean a green light for thousands of business drones but a possible trouble spot for amazon and its delivery plans. Safety rules would mean operators of small drones would need to stay within sight and not fly them higher than 500 feet. Makes it tough to deliver pizza. Dont you think some day were going to look back and say remember when they wanted to prohibit drones. Is it going to be in our lifetime . Maybe well be looking down from the heavens at drones. I dont know. I dont want to see them. You dont . No. Why . Would you feel that way about planes . I hardly see planes. Planes are so high. All right. You could have a silent drone. They wouldnt necessarily be loud. Theyre like plastic helicopters. Like toy helicopters is what were talking about here. Essentially. Theyre basically Remote Control toys. Toy helicopters and think about them just flying all around and hitting things and falling town on top of you. Maybe they wouldnt hit things. Maybe they would be controlled. Presumably if they ever let them fly they credible than that. Heres the catch. Right now theyre great in that theyre like a bird so if they were to run into something or fall out of the sky, not a problem but to be a commercial for commercial use they would have to carry heavy things in which case. A can of paint falling on somebody would be problematic. Killer. Done. Thats the end of the story farce im concerned. Up next time to play name that stock. This dow component hasnt traded at these lofty levels since it debuted. Harry s. Trueman was in the white house. Humphrey bogart won best actor and the price of a stamp was 3 cents. The year 1952. Well give you the answer when we come back. 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. I love my shows, but i cant just sit around all day. Thats why i have xfinity. Their cloud based dvr lets me take everything i recorded, anywhere i go. Which is perfect for me, [whispering] because i have responsibilities. I mean thats really interesting, then how do you explain these photos . [people gasping] objection your honor. Sustained. With the x1 dvr library you could take anywhere, xfinity is perfect for people on the go. We asked you to name that mystery stock trading at all time highs dating back to 1952. And that mystery stock is boeing. Talk about a high flyer. The Aerospace Giant soared over the past 50 years. Theyre the top contributor to the dow. So far up about 15 year to date. Joining us to break down boeings performance is kent herbert. Welcome. Good morning. Thank you. I mean this one has been flying under the radar a bit hasnt it . I dont hear many people talking about it. Well it had a fairly disappointing 2014 after a great 13 but the company put out strong guidance for Free Cash Flow. Visibility is improving. Its a safety stock. A lot of concerns with fuel. So i think its time to take a fresh look like a stock at these levels. Are you surprised by the strength . A little bit, frankly. They reported very good results at the end of january. The stock was up big that day. It was up big the second day. 63 which was very unusual. You have 12 billion in cash from buy backs over the next two years. Youve got continued strong fundamentals. I think the backdrop is very favorable. Risks are what . Currency risks . You mention something in your note, this 777 order bridge. What is that. First boeing announced theyre launching the 777 x which is an upgrade to the 777 aircraft. In order to avoid cutting production rates on the 777 they need to sell about 50 or 60 of the planes for each year. It is a very profitable plane and contributor to cash. They have half in asia and europe as airlines of course and Leasing Companies pay for aircraft in dollars so as their local currencies continue to weaken thats a risk and then i think about the Defense Budget as well. But thats a risk also. Clearly i would say the 777 and currencies are what im watching the closest. Where are we reason to break even for the 787 . The issues or the dom nanlt issue over the last 12 months or so, maybe longer. Where are we on the road map to break even . So the Company Continues to make progress. Obviously South Carolina and the plant there. A big part of the story is that continues to improve. The company is talking about end of 15 for break even on a uni basis on this program. Myself and most investors believe either end of 15 or early 16 youll start to cross a point on this program. The Company Continues to move in that direction an whats important is people now its not a matter of if but when on this program and theres things moving in the right direction. How does oil factor in the equation . Airlines tend to be more profitable but are not passing it on to us the travellers. Theyll capitalize the fleet and spend more money. If oil were to stay depressed for an extended period of time you could see risk as airlines swap out with some of the older jets that are less fuel efficient. Thats on the margin. I dont see it as a significant risk to the backlog. Thanks. Interesting story. Certainly a stock that performed well for investors. Thank you so much. Have a great day. You too. Thanks. Its time for the squawk planner this morning. The n norkew york fed releasing its february survey. And also a few Companies Report Quarterly Results before the bell. Those include medtronic and the Westminster Kennel Club dog show is taking place in Madison Square garden. Are we headed over there to see dogs. Im supposed to two tonight. Are you . Yeah. Its a big american tradition. Do they crown the champ tonight . Im not sure. Im not that informed. Better get. I better right . Coming up it is fat tuesday and carnival celebrations are reaching feverish levels in new orleans. Well have a arrive report from the big easy coming up next. First check out the most clicked stories on cnbc. Com. Including crude oil. Can texas remain the best state for biz . And apple just hired a radio dj. Squawk box will be right back. Ameriprise asked people a simple question can you keep your lifestyle in retirement . I dont want to think about the alternative. I dont even know how to answer that. I mean, no one knows how long their money is going to last. I try not to worry but you worry. What happens when your paychecks stop . Because everyone has retirement questions. Ameriprise created the exclusive confident retirement approach. To get the real answers you need. Start building your confident retirement today. Kid hey dad, who was that man . Dad hes our broker. He helps looks after all our money. Kid do you pay him . Dad of course. Kid how much . Dad i dont know exactly. Kid what if youre not happy . Does he have to pay you back . Dad nope. Kid why not . Dad it doesnt work that way. Kid why not . Vo are you asking enough questions about the way your wealth is managed . Wealth management at Charles Schwab can it make a dentist appointment when my teeth are ready . Can it tell the doctor how long you have to wear this thing . Can it tell the Flight Attendant to please not wake me this time . The answer is yes, it can. So, the question your customers are really asking is can your business deliver . Welcome back to squawk box this morning. Media news fifty shades of grey grossing 90 million in the u. S. First week alone. Add to that 158 million its done abroad. Its doing pretty well. The universal parent part of this comcast family. In the black by a wide margin. Doing pretty well. Did you see it . I have not seen it yet. Have you . No. Neither have i. Wow. Were not good employees. I dont know. Did you read the book . No. I didnt read the book either. That only cost a dollar. What do you mean . Wasnt the big story about it was that it was a downloadable book. It was cheap on kindle. I dont know. You dont want to see a movie about this . You dont want to admit you saw it . Thats another good question. But i havent seen it for real. In other media news, the early numbers are in on the big saturday night live 40th anniversary show. About 23 Million People watched. That is nbcs best nonsuper bowl night in demos since the will grace finale in 2006. I watched it. I did too. As much as i could. I was cracking up at so many different things. So many good little it was like a classic saturday night live. Some things were super funny and some skits fell a little flat. It was true to form. Red carpet was interesting. It was fun seeing everybody again. It had been a long time. It was. How different they look. Jane curtain looks great. There are others who did not age well. But thats okay. Did you see chevy chase . I did. Okay. There you go. Whats going on . Its fat tuesday. That means a big party in new orleans. Thats where we find jay gray who is looking great. Jay . Good morning, michelle. Im glad ive weathered the years especially at mardi gras. Theres been some concern this year because of rain which weve seen throughout the last day or so. Temperatures that are in the 30s, windchills in the 20s. Not traditional mardi gras weather. But i can tell you because i am industrious and giving reportering with ive been checking things out. There are still people on bourbon street. Hard to tell whether theyre wrapping up last nights party or just getting an early start on the last day of mardi gras here. Beads and boas masks, costumes, and well, this. All in a place where just about anything goes during carnival season. This is the party capital. This is what im talking about right here. Raw nolo. Theres an undeniable rhythm to this city. Spilling out and into the streets. You do it now, you have fun. You got to enjoy life when the party starts and you start the party. Especially when that party is mardi gras. Its so much fun, all the people, the crowds. Everyone is real nice and friendly. Its a great time. A bash that is also big business. The latest Economic Impact study shows mardi gras brings more than a billion dollars to the big easy. With more than 95 of the citys 30,000 plus hotel rooms filled. Though between the parades and the parties, it doesnt seem like many are staying inside. Even with a forecast this year for a little rain. And temperatures a bit colder than normal. Weather has been proclaimed postponed until wednesday. And in the meantime, the party continues. Yeah. Continuing with two of the biggest parades a bit later this morning. And then tens of thousands expected to pour here into the French Quarter regardless of the weather. Rain or shine, cold or warm theyll be here celebrating the end of the carnival season. Did you have to show anything to get all those beads, gray . Those are a lot of beads around your neck. The big ones usually cost you something. This is a family show. And were not going to start the morning like that. Also, nobody wants to see whats under this ski jacket, really. Its early . An hour earlier in new orleans, i think. Thank you for waking up or never going to sleep. Thats what you do when you come to mardi gras. Thank you for that. When we come back this mornings top stories including collapsed greek talks and the nasdaq is 5,000 back in sight. Squawk box returns in just a moment on this very snowy morning here in new york city. So whats going on today . News alert message email calendar update most of us admit to being overwhelmed by information at work. Thats why ibm created verse. It uses powerful analytics to uncover hidden patterns in your email, calendars and social feeds. It continuously learns how you work. And helps you prioritize the people and projects you need to focus on. Theres a new way to work and its made with ibm. Im type e. I know what my money is doing. I rebalanced my portfolio on my phone. You know what else i can do on my phone . Place trades get free real time quotes and teleport myself to aruba. I wish. E financial noise financial noise financial noise financial noise i love my shows, but i cant just sit around all day. Thats why i have xfinity. Their cloud based dvr lets me take everything i recorded, anywhere i go. Which is perfect for me, [whispering] because i have responsibilities. I mean thats really interesting, then how do you explain these photos . [people gasping] objection your honor. Sustained. With the x1 dvr library you could take anywhere, xfinity is perfect for people on the go. Stocks in rally mode. Squawk market master jer mee siegel tells us what to expect. President obama sending labor secretary to broker peace at west ports. And the house that lego built. Introducing the double decker couch so everyone can watch tv together and be buddies. The toy maker increasing market share and unveiling new offerings here in new york. Well unveil the companys new franchises and movie tieins. This is emmitt. This is my boyfriend, batman. Im batman. Second hour of squawk box begins right now. Live from the beating heart of business, new york city, this is squawk box. Welcome back to squawk box right here on cnbc first in business worldwide. Im Andrew Ross Sorkin here with Michelle Michelle Michelle Carusocabrera and scott woffner. Greek talks breaking down yesterday. Leaders being told they have until friday to apply for an extension or else its going toex pyre. They could lose support of the banks. Greek banks are losing around 2 billion a week. Which says the banks could run out of collateral in about 14 weeks at that pace. Then the country could face a cash flow. Ports on the west coast reopening today after being shut down for six days out of the past ten. U. S. Labor secretary tom perez will attempt to mediate negotiations over that situation today. And a federal judge has temporarily blocked president obamas plan to protect millions from deportation deportation. Failed to comeply. Requesting an injunction while the legal debate is settled. All right. The ukraine peace deal negotiated last week on the verge of collapse this morning. Prorussian forces continued pounding ukraines Government Forces and kiev said it will not pull back heavy guns while the truce was being violated. The eu attempted to keep pressure on russia releasing a new list of sanctions. Angela merkel called that situation, quote, fragile. And we also have a bit of breaking news this morning. A shakeup at starwood hotel. The ceo has resigned. Company has named adam aron. The former ceo of norwegian cruise lines. Starwood will conduct a search for a new chief executive and will consider candidates they say both inside and outside the company. As michelle said in the last hour, when you announce an interim ceo without announcing a new permanent ceo, you know theres a problem. You were clearly doing something that surprises the markets or wasnt intended. Why did he resign . If its a performance issue and we looked at the Stock Performance relative to its peers, thats one thing. In which case youd see that the performance over time wasnt so great. Typically if youre going to cut him off at the knees right this minute without theres usually Something Else. Is there Something Else . Thats the question. Reaction coming in as you might expect. Jim cramer tweeting earlier he likes the change at the top. He thinks the company can prosper under vail resort exceo. Thats who adam aron is. Well hear from cramer later this morning on what his take is. Markets going to react all day to this news. I dont know if that chart was correct, by the way. It said unchanged. Free market. Yeah, but it looked like it was up. I dont know. So anyway its going to be a mover, clearly. My read. Yeah. Your turn. Stocks in rally mode. With climbing oil prices giving the Energy Sector a boost, in record territory. Heres a look at futures at this hour. Could be lower for the s p and dow. But not for the nasdaq. Nasdaqs been on fire and has an implied open up a point. Joining us now brian belski and jeremy siegel. Gentlemen, good morning. Professor, to you first. Because greece is so topical, are you getting worried about a deal not getting done and how that could upset your bullish forecast and some others . Well, you had a guest on earlier and i think he had it absolutely right. Its what ive been saying. Has no mandate to leave the euro. All the polls in greece said 31 they dont want to leave the euro. So hes playing a game of chicken and going as far as he can. But very clearly hell have to give in at the end. He wants a little bit he can take back to the greek population and merkel doesnt want to give very much because she doesnt want a renegotiation from portugal and spain. So theyre going to go on that line. But i do not see anything you know a collapse or a grexit. I do not believe thats going to happen. Well muddle through it. The ecb will kick the can down the road again. And finally theres be some kind of negotiation. Really no way out of it unless they want to leave the euro which the people dont, theres no way they cannot pay the very low Interest Rates that the ecb has given them on most of their government debt. Brian belski youre optimistic for the year. Youre looking 150 s p points from where we are right now. We are, scott. Good morning. I think the pain trade is clearly if the market goes higher. Its one of these things. Im running out of words to explain what this market is. Its a stealth bull market but its like Portfolio Managers are masochistic. They cant wait for it to roll over. Theyre looking for things to be negative. Fundamentals in america could not be stronger continues to sift higher. Volatility i think will be risen. Higher this year especially given whats going on around the world. Make the pain trade higher. Market is going to continue to sift higher this year. And thats why you want to own very consistent stable ie quality growers right here in the United States. You think the fed moves this year, brian . And how could that impact the way you view the market . We think it does. We think thats actually a positive thing given the fact the feds going to have to move because the economy is improving. I think whats happening with this unwind of Commodity Prices is just a final unwind of the prior trade. And the prior trade was anything but the u. S. Meaning emerging markets, europe commodities, credits, small cap. And i think that pain trade to finally feel on the downside is bringing people back to what really counts. That stock picking. Thats assets. Thats Balance Sheets. Thats earnings. If you look at all those Things Companies in america are the best position. Were going to have some volatility. But we think its a positive thang they do raise rates. Dont you think the strong dollar which is already having an impact on earnings is going to remain a significant story . And if one of your students sitting in class says make the case as to why the United States is where the values still lie, the best place where our money is and not a place like europe. How do you make that case . Well, youre certainly right. The high dollar is a challenge. I want to comment on what brian said. I am a little concerned that the fed is too anxious to raise. I just saw my good friend Loretta Mester this morning. The headline she thinks that june might be right. I personally think that that is too soon. You know one thing everyone talks about how very strong the employment reports are, the payroll reports. What theyre not talking about is how amazingly weak the gdp growth is in light of this strong employment. Weve just had terrible productivity growth. We are trying to explain it. That concerns me a little bit. I think it would be premature for the fed to say everythings fine. Lets tighten in june when the rest of the world is still going towards zero and even negative Interest Rates. Youre right, that will send the dollar even higher. Higher dollar is equivalent to tightening credit on demand. There are some economists that estimated the dollar increase is almost like 50 75 basis points. They dont have to add another increase on top of the dollar. I would very much prefer that looking at all the situation that we dont see an increase until the end of the summer given the data that were seeing right now. How messy does the market potentially get, though . If youre suggesting that you know if the fed does move this year in your view that would clearly be a mistake. What impact would that have on the stock market and its reaction to that . Well when i not necessarily this year but as early as june. And i want to see growth better. I dont want to see the dollar continuing to rise. Because there are some economists that estimated the dollar increase, that negative effect on exports offsets a lot of the good effect of Lower Oil Prices and gasoline prices. So you know we cant ignore the its great the dollar is going up. We buy cheaper stuff abroad. It shows the promise of the u. S. But that does have economic effects. My thought is the fed would be a mistake to raise in the near future. Nasdaq, were on 5,000 watch again. You at all worried that the nasdaq is just too high . No. Were not. I mean because if you take a look at where the fundamental strength is coming within the nasdaq and certainly technology stocks, its what we call the old bricks and mor tack tech. The apples intels those types of names that continue to sift higher. Not only due to Balance Sheet strength, but earnings consistency. Were not worried. I think again thats youre more of a whistle blower fear factor. If youre going to trade like that markets are probably going to add higher. Thanks so much professor, brian. Talk to you soon. Thank you. Coming up when we return stocks on the move this morning. Well tell you what to watch ahead of the opening bell. Then legos head of north america is here to talk about the companys latest franchise tieins. At the bottom of the hour weve got George Pataki on a possible run for the presidency. Then the ceo of snapon weighing in. What does it mean to have an unlimited Mileage Warranty on a certified preowned mercedesbenz . What does it mean to drive as far as you want. For up to three years. And be covered . It means your odometer. Is there to record. The memories. During the mercedesbenz certified preowned sales event now through march 2nd, youll get complimentary i two months payments on us. Only at your authorized mercedesbenz dealer. Now with the xfinity tv go app, you can watch live tv anytime. Its never been easier with so Many Networks all in one place. Get live tv whenever you want. The xfinity tv go app. Now with live tv on the go. Enjoy over wifi or on Verizon Wireless 4g lte. Plus enjoy special savings when you purchase any new Verizon Wireless smartphone or tablet from comcast. Visit comcast. Com wireless to learn more. Lets take a look at some stocks on the watch this morning. Transocean ceo stepping down. The offshore drilling giant also slashing its dividend dealing with Falling Crude prices. And nordstrom underweight. And then theres macys at underweight. The largest investor wants the ceo ousted at tempur sealy. And then imax downgraded to hold from buy at canaccord. I think theyre doing just fine. At least in the sorkin household. Macys got my attention more than the other calls. I think thats interesting. Because everyone loves macys. With good reason right . Theyve done well. Lundgren is yeah. Its not so often you see an underweight on that. By the way, i dont think that was a i saw like two from the report. I think that was more of a call on just how much the stock valuation was than a performance issue. If you look at a couple years, it probably would be. Have you seen this video . Check out this close call on tape. A reporter for an nbc affiliate. There it is. The camera was rolling when all of a sudden on a snowy road an suv careened out of control, crashed into another vehicle and came barrelling straight toward the camera. Fortunately the vehicle stopped within mere inches of the camera. Also looks like nobody got injured. Right. I mean wow. That was so close. Wow. Look at that. I dont know if there was an actual photographer standing there or if it was just roll but the guy didnt or girl who was shooting it didnt flinch. It was probably a guy holding the camera which is typical. Youre trying to get video of driving in a car. The camera didnt move. Look how it goes out of control. I know. He was on sticks, were told. Really . Thats a tripod. Kudos to the photographer. I know. Makes my stomach go. Coming up the toy company that has passed hasbro and mattel in sales and posted ten years of rising sales in the u. S. Lego head of north america is here with some new offerings including a new movie tiein. Hey, girl. Is it crazy that your soccer trophy is talking to you right now . It kinda is. Its as crazy as you not rolling over your old 401k. Cue the horns. 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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. That is awesome. Sales of lego surpass hasbro and mattel as building sets have seen the largest and fastest growth among toy categories. Joining us now to talk about is the north american president of lego. Also with us is our own morgan brennan. Shes covering the new york toy fair which brings you here to snowy new york this morning. Good morning. Good morning. Well, thanks for joining us today. Thanks for having me. Lego. Double digit growth. 14 sales growth in the u. S. Last year according to npd group. This is a company thats been around since the 1930s. What a driving that growth . I mean were talking about a company that has surpassed mattel and hasbro in terms of sales looking at that data. Why now . Why is this happening now . Is it the licenses . Is it the fact you expanded to girls . Is it the lego movie . I think its all of the above. The success were seeing is not something weve seen recently. Weve had ten consecutive years of growth. We believe its because we stay really relentlessly focused on making sure that we talk to kids on their terms. We constantly check in with our users and make sure were relevant to them at all ages and stages. Whether its the movie side or whether its the core creativity. All of those places we try our best to spread our portfolio. We are very focused as one brand. I dont want to take scotts question, but we do have we were both wondering the same thing. The question we have as parents who buy this stuff, why so expensive . The margins feels like its got to be incredible. First and foremost lego is not expensive. You say theyre not expensive . Really the large boxes, you cant get for under 100 bucks. You dont love your children . Well i do but after like the tenth lego box comes in the house the question is how long do they play with it . Its really how long do we play with it. How do you determine the price . We determine the price, of course, from talking to our consumers and shoppers and understanding whats reasonable from their point of view. And then we truly believe that the value we bring in terms of longevity of the play the system of play. You dont buy a lego product and play with it for a period of six months or so. It grows with them. Therefore its a toy how do you feel about the company plaey . You effectively rent you pay a monthly fee. Weve done that. And they send you the lego. You put et together and then put it back in the box and send it back. Is that good or bad for your business . Its always good when kids get an opportunity to play with lego. Thats a starting point. We see a lot of kmply kagss with that model, but its not our business. I wont comment further on that. Back to your call why they price set where they price set. Where do you manufacture . Most of what we sell in north america, we manufacture in mexico. That should lower prices because manufacturing in mexico is cheaper than in connecticut. We focus on the value we bring to the consumer. How much you can charge in the market. Yeah. Also ive seen the huge licensing fees because theres a lot of products obviously, that are tied in with others. There are marketing fees. We have elaborate Customer Service where kids can call in if they have missing pieces. Theres a lot more to it than producing the toy. Is there another company you think of as a competitor. We use another company in our house. Theyre a German Company too. Were not german. I apologize. Who do you put on the list of who youre competing against . We are really focused on our stake holders. That is successful throughout the years. Were not watching our back. Were looking forward. There was never a you only make lego right . You make bricks. Thats the only thing youve ever made. And youre never going to buy another project. Youre never going to try to be a bigger toy company that has multiple brands. Thats not our intention. We have no plans to do so. What is this Lego Bionical . That costs 200. You can get that for 12. 99. Theres many you can get for 4. 99. Its what we call construction. You build action fill yurs. So its less building. And more role play. Its kind of a clone between construction and action figures. Earlier this year hasbro held talks with dreamworks animation. What did you think of that . You know probably the same as rest of you. That was strange and it didnt go far, right . You dont think the idea of a toy company hooking up with a Movie Company makes sense . It probably does. I mean im sure because i think hasbro is already pursuing a strategy of becoming more engrained in the content space as we all are in the toy industry. Because we know that content and story telling is do you have an app for lego in. Oh, yeah. Plenty of apps. Digital is definitely a focus of ours. How do you take this very analog form and make it work in the Digital World . So we have lego won the ecotoy of the year where we try to blend the physical world and Digital World. So kids build something in the physical world, they scan it with their iphone and then it builds into 3d on their app and they then play in the Digital World. So thats one dimension of it. Mine minecraft, you can make the physical world of your Digital World. Thats interesting. One of my colleagues is emailing me saying you should open recycling centers for a discount. You finish playing with it you bring it back somewhere and you can recycle and resell it. It would make sense if the notion of finishing playing with it is true. I know. But come on. In all honesty, my kids love legos, but my older boy whos 9 now is sort of done. Now my 6yearold is onto it. They now just but tastes change for kids as much as they do for anybody else. Taste changes, but the core product is exactly the same as it was 50 years ago. You might want to store in the attic for awhile, but the grand kids will play eventually. Were being wrapped now, but i have a bone to pick. I was one of those kids who loved. For me it was choice of pirates and robots. Why have you just now in the past years expanded to girls . Where were they when i was a kid . Well lego products have always been gender neutral. We always had girls playing from the day we started. In most recent years we were allowed to have a more meaningful for girls. Im just jealous. Last question. You suggest they last for a long time, do you advocate super gluing your legos together . No. That takes away the whole idea. The idea is you can keep building and rebuilding. So why would you do that . And theres a new movie coming out . Yes. Thank you for coming in. That was fun. Always. Appreciate it. Coming up, stogcks in rally mode. And president ial hopefuls testing the waters. Former new york governor George Pataki is considering a run. Hes here. Hell talk to us about it next. In my world, wall isnt a street. Return on investment isnt the only return im looking forward to. For some every dollar is earned with sweat, sacrifice, courage. Which is why usaa is honored to help our members with everything from investing for retirement to saving for college. Our commitment to current and former military members and their families is without equal. Start investing with as little as fifty dollars. Opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Now with the xfinity tv go app, you can watch live tv anytime. Its never been easier with so Many Networks all in one place. Get live tv whenever you want. The xfinity tv go app. Now with live tv on the go. Enjoy over wifi or on Verizon Wireless 4g lte. Plus enjoy special savings when you purchase any new Verizon Wireless smartphone or tablet from comcast. Visit comcast. Com wireless to learn more. Welcome back to squawk box. Among the stories front and center, gm says it received another 75 claims last week for ignition switch related compensation. That brings the total to more than 4400. Homeland security could shut down at the end of the month because of a budget fight. He says hell blame Senate Democrats if that happens. Shocker. And a rough vacation for twitter ceo dick costolo. He said day one skiing fractured collarbone. Ill do anything to avoid leisure. Ouch. Feel better. Heres a fact in case you didnt know, sex sells. Thats the lesson from the box office over the long valentines day weekend. Fifty shades of grey shattering expectations bringing in more than 90 million in its first four days in theaters. They were expecting the movie to bring in 60 million. It was the largest february weekend opening ever. And the biggest ever rrated seller on fandango. Also federal railroad and hazmat officials in rural West Virginia today trying to figure what caused a fiery train derailment. The csx train was carrying more than a hundred tankers of crude oil. It slammed into a house. A 300foot fire ball thick black smoke blanketing two small towns. App thousand people were evacuated. One tanker landed in the river causing concerns about contamination. One treated for smoke inhalation. No one else injured. Thats the good news in that. Amazing images. The s p at an alltime high. The nasdaq nearing levels not seen since the dotcom boom. Dom chu joins us with more. Good morning, scott. The one sector were going to want to focus on today is the technology sector. Not just because its theest biggest one in the s p 500 but because it had the biggest comeback in the last week. Its up about 2 . So maybe its not a lot to hang your hat on but the bulls are saying at least theres a little shortterm momentum to the upside. If you look at the s p 500 Technology Side of things you can see this particular sector over the past week was up almost 3 . The best gaining sector over a oneweek basis for the s p 500. Thats a good sign here for at least some investors. We saw a bit of that selling pressure. A lot of people taking money off the table at the end of last year in tech. Theyre maybe dipping their toes back in. If you look at the stocks that led higher for the entire sector, there are big nams here big moves here. Up 9 just over the past week here. Data up 10 . Micron up 10 . Then akamai on the activity side in terms of technology and making the internet go faster those shares up about 13 . But of course these names are big and their moves are large, but theres one Company Overall that drove things higher for the technology sector. Some investors are at least finding a renewed affection here with apple shares. They are up about 5 over this past week. Again, this is a big deal because apple is the Largest Company in the s p 500. It carries a lot of weight when these guys do well. Well see if the momentum can continue for apple. Really what it comes down to for these guys is whether or not apple can drive the market if urt. Thats going to be a real question. A market stock as some say. It helps drive the market itself. And then when the market goes up, that drives apple even higher too. It carries a lot of weight. This stock up 5 in one week did drive a good amount of the 500 tech sector. Lets talk politics for the moment. The list of potential president ial candidates is growing. Our next guest says he is exploring a bid. Former new york governor George Pataki joins us this morning. Good morning, andrew. Nice being with you. Youre up for this now . Im up for this. When did you decide . I havent decided im sure if im running because you cant because of the finance laws. But things are so bad around washington and the world that if you believe in your heart you have the ability to lead a complex government and not just manage it but change it and you sit it out, shame on you. Tell me how you think about this. Because i assume you look at the field, you see jeb bush there. You see Chris Christie there. You see the whole and you say to yourself i think i can dive into this thing. You know thats what i did the last time. I looked at the field. Im not doing it this time. I looked at the field the last time. And everybody was for mitt romney. I thought mitt would be a good president but not a particularly good candidate. Unfortunately i was right about that. I look now and i decided doesnt matter who runs. If you believe you have the ability to lead to change washington, to protect the american people, and to win an election and i know i can win other than just bright red states and you sit it out when things are so bad nationally and globally, shame on you. Can you raise the money to do it . Were going to raise enough to be competitive and get the message out. How much is that . I dont think ill leave that to the experts. You know one of the things i love about iowa new hampshire, South Carolina, theyre smaller states so a lot of the politics is retail. You sit down like this and people can ask you directly what they want to hear from you. And they can tell you their opinions. I think that is the best type of campaign. Andrew raises the issue how you would stand out in what is looking to be a fairly crowded field. I saw you on tv last night saying you think some folks in your own party havent handled the issues all that well in their own right. Is that you trying to stand out from the crowd or what . I dont think i have to do that. But i think it is absurd in the 21st century were talking about things like measles vaccines and evolution instead of things like going after isis before they can attack us here and reforming washington where its so controlled by the special interests. But i think what really allows me to stand out would be 140, 150 republican candidates out there running is i have the ideas to shrink and reform washington. I have done it. You know i ran a big state for 12 years. I can win an election beyond bright blue base bright red base in a bright blue state. I think those are things that are different. Everybody could say im going to do this or do that i can say ive done it. Thats very different. How do you i mean this goes to the question but how do you compare yourself to jeb bush . If you think hes sort of the front runner in all this at least from the money perspective at the moment, i think of him closer to being a centrist. I think of you as closer to being a centrist. Whats the distension . Part of it is im not just going to reduce the size of government in washington. I did that when i was governor. We have to reform it. Right now there are too many special interests making the decisions in washington. Ill just give you one example. There are over 400 former members of the house and senate who are registered lobbyists in washington. Half the senators who leave stay there and lobby after theyre done with their terms in office. I propose a reform. You serve one Congress House or senate, lifetime ban on ever being a lobbyist. We need to not just tinker around the edges. We need to fundamentally change washington. And on the issues i got you speechless there, im shocked. No no. Im not sure jeb bush is far away from you on those issues. I propose reducing the size of the federal government by 15 . I did it. I dont think anybody else has. I think we have to throw out the tax code and start with the Bowles Simpson reforms and getting rid of all the loopholes and credits and have three simple lower rates. I dont think anybody else is going to say that. When it comes to National Security i dont think theres anybody who will be as aggressive and understanding that if we just look the other way while things like isis behead christians we did that before. I was governor on september 11th. I saw the difference in thinking. We dont have to worry about it here they said. We do. Would you put boots on the ground . Yes, i would. I think right now we are at greater risk of being attacked in the United States than in any time since september 11th. And i think we have to attack them there before they attack us here. So you would reengage in a new war . Not in the same way. I think there are two false paradigms here. One is we have to have a massive army, spend a trillion dollars and create a democracy where one never exists. I wouldnt try to do that. The other is that we can simply look the other way, tinker around the edges and think isis is not going to come after us. Thats not going to work either. What i would do is have massive strikes, whatever quick strike force, boots on the ground is necessary to deny them training camps, planning recruiting centers, financial hubs. And then get out. For how long . I would think a very limited time. Get in get out and if you had to go back it sounds like something that will go on for years. I think the quick strikes will have to occur again and again. But are we going to just sit back . I mean what were doing now is not going to work. President carter goes on national tv and says his model for going after isis is yemen. Yemen does not control by did you say president carter . Did i hear that . President obama. President carter was much stronger globally than obama, forgive me. Do you worry at all there is going to be too many candidates running . Some people argued the last time around there were so many debates debates, so many candidates everybody just beat each other up that it actually made it harder for the party to win. I dont think so. I think the republicans had a good chance of winning after the nominating process was over. I think it came down to the campaign and during the course of the Campaign Obama ran a Better Campaign than mitt romney did. I think it would be better if there werent as many but i think its good for the party and the country that there are a lot of qualified people looking to run. Governor thank you for coming in. We look forward to watching as this all plays out. When do you make your official announcement . No time frame set for that. Good to see you. Coming up American Companies finding ways around the west coast port strike. Snapon staying busy despite the shipping difficulties. That ceo joins us next. And the nasdaq nearing 15year highs. Well tell you which tech stocks are leading that rally. 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. The 2015 cclass. See your authorized Mercedes Benz dealer for exceptional offers through mercedesbenz financial services. Doug, we have the results, but first, we have a very special guest. Come on out, flo [house band playing] you have anything to say to flo . Nah, ill just let the results do the talking. [crowd booing] well, he can do that. We show our progressive direct rate and the rates of our competitors even if progressive isnt the lowest. It looks like progressive is not the lowest ohhhh when we return well find out whether doug is the father. Wait, what . 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Tdd 18003452550 or visit schwab. Com trading. Tdd 18003452550 schwab trading services. Tdd 18003452550 your goto for trading knowhow. Tdd 18003452550 west coast port dispute heating up as all 29 ports shut down operations over the weekend. The nrf, thats the National Retail federation, say these ports account for roughly 12. 355 of u. S. Gdp. One company snapon is finding a way around. Theyre also trading at an alltime high. When it was first listed in 1978 more than 500 over the past 20 years. With us on set is the chairman and ceo of snapon. Good to have you here. Good to be here. Lets explain what you do. You manufacture and make products you sell to auto repair shops so they can fix cars. Is that right . We sell to technicians, actually, and to the shops. The port shutdown is it hurting you . I imagine its manufactured overseas or no . 80 of what we sell are made right here in america. Why . Well the reason is because we solve a variety of problems. So we have 65,000 skus. So we use a variety of products like complexity and flexibility. Those are inherent advantages if youre up close to the customer. So we tend to make in the markets where we sell. Right here in america. So the strike doesnt really affect us. It affects some for what we export and little bit we import. None of what youve told me tells me why you wouldnt be manufacturing in mexico or china other than the United States . Because part of the Value Creation we have is that our manufacturers and the people, the Design Engineers go right into the shops and figure what will solve their problems. We make hand tools. Guaranteed for life. For life . For life, the hand tools. Why is it we have a business at all . And the answer is thats the theory. The reason is because technology in automobiles keeps changing. Keeps changing constantly. We offer you hand tools that get you inside the new compartments. We also offer things like laptops for cars that will tell you what the car is saying and give you its heart beat. So you have to start employing all sorts of software engineers. Exactly. But the key value creating mechanism is the actual observation of what will release the work make the work easier in the garage. That works not only in automobiles. It works in other critical places. That business is a big business for us. What do you think about apple maybe designing a car . Have you heard about this . They can design a car. Tail actually, if anybody changing technology if the president said he was mandate inging everything a gallon tomorrow i would kiss him. Because it would mean new tools and laptops for cars. We would sell them. Youre like the people that want a complicated tax code. Cars keep changing. Look under the hood of your car in a 2014 car. Look under the hood of a 2004 car, youll see the difference. The number of engine codes have changed from 50 to 5,000. The deep depression as a result of the financial crisis good or bad for your business . It doesnt make any difference. Our business doesnt move with new car sales. It moves with the changing technology and aging of the vehicles. Cars are 11. 4 years old. That is good for our business. People arent buying new cars its better for your business. If you want to testimony to this, that particular business which is what youre focusing on. 37 of business grew in the Fourth Quarter. It has grown more than 6 , 18 of the last 19 quarters. So this is a business thats expanding. We like to say we have these vans, theyre limited by the driver. The drivers time and the drivers. Were expanding the productivity and are bringing out more products better than ever. For example, the laptops for cars, its a technology that is underrated. When you plug that laptop in in a garage you not only have to read a bmw, you have to read 30 badges and maybe 30 years of cars. We have that data. Well tell you what the car is saying. Well tell you how to put it through its paces. And well tell you how to fix it. For example, we have hundreds of millions of records in a data base that will tell you if you own a honda thats seven years old and has a check engine light, 92 of the time this is whats wrong. What is the average Life Expectancy of a car these days . Its going up. I drive through parts of america every day. Sometimes theres more driveway space taken up with old cars than the house is taking up really. Its gotten older every year. And whats happening is is the technology that is being put into these cars and new cars are moving into the independent garages as well. Are you primarily a u. S. Domestic company or wheres the biggest revenues come from . U. S. But we have this Automotive Repair business that works very well. Now were rolling the snapon brand out of the garage into aviation aerospace, oil and gas. That grew at 9. 4 the quarter before. 8. 4 the quarter before that. Still a small percent of revenues. Thats about a third of our revenue. Basic auto business youre talking about is 37 of our business. We sell to shop owners and managers which is another quarter of our business. Then if you think about building an emerging margt, one of the cool things about this is the repair wave hasnt started. Selling more new cars in china than ever before right . Pretty soon theyre going to have to start fixing them. Were there to take advantage. Were kind of happy. All right. Thanks for joining us. Okay. Thank you. Good seeing you. Be well. Coming up, some big movers on this tuesday morning. I almost said monday morning. Were going to have this list of stocks to watch before the opening bell. Plus new details of an nsa spy program. That story is next. Can it make a dentist appointment when my teeth are ready . Can it tell the doctor how long you have to wear this thing . Can it tell the Flight Attendant to please not wake me this time . The answer is yes, it can. So, the question your customers are really asking is can your business deliver . Now with the xfinity tv go app, you can watch live tv anytime. Its never been easier with so Many Networks all in one place. Get live tv whenever you want. The xfinity tv go app. Now with live tv on the go. Enjoy over wifi or on Verizon Wireless 4g lte. Plus enjoy special savings when you purchase any new Verizon Wireless smartphone or tablet from comcast. Visit comcast. Com wireless to learn more. Welcome back to squawk box this morning. A moscow based Security Company reportedly hiding spy software within hard drives made by Western Digital seagate, toshiba, and other manufacturers. Found infected computers in 30 countries. Among the targets, governments, militaries, Telecom Companies, banks, energy companies, and activists. Surprised . Not really. No. I wonder what seagate and these other companies knew if they knew anything at all. I guess as you say, what they would have to say about it . And what it does to sales. This goes back to the larger issue of future sales from u. S. Tech companies and how foreign buyers now are much more worried about doing business with both Telecom Companies and it sounds like har ware companies. And an unwillingness to buy them. Weve seen a dropoff because of the fallout from spying. And these new phones said they were going to encrypt everything. You heard there was an outcry here because they couldnt get into them. That was arguably one of the reasons they did that was not just to make it more secure. But also because there were countries like china that might not have actually been so happy to sell these things if they felt the u. S. Government could get inside them. Whole new world. There you have it. Lets look at stocks to watch this morning. Medtronic earnings beat. American express downgraded citing near term earnings visibility. Sutherbys downgraded from outperform. The price target remains 45. Lear corps hiking by 25 . Also raising its Share Repurchase program to a billion dollars. Coming up when we return, a squawk market master on a possible greek bailout deal. Mo hem med elerian joining us. As we head to a break, look at u. S. Equity features at this hour. It could all change as we get closer to the markets open. Back in a moment. Automotive innovation starts. Right here. With a control pad that can read your handwriting, a widescreen multimedia center, and a headup display for enhanced driver focus. All inside a redesigned cabin of unrivaled style and comfort. The 2015 cclass. At the very touchpoint of performance and innovation. See your authorized mercedesbenz dealer for exceptional offers through mercedesbenz financial services. Boy once upon a time, there was a nice house that lived with a family. One day, it started to rain. The house tried to keep out all the water, but water got inside and ruined everybodys everythings. The house thought she let the family down. They just didnt think it could happen. They told the house they would take better care of her. Always. Announcer protect what matters. Get flood insurance. Ameriprise asked people a simple question in retirement, will you have enough money to live life on your terms . I sure hope so. With healthcare costs, who knows. Umm. Everyone has retirement questions. So ameriprise created the exclusive confident retirement approach. Now you and your ameripise advisor. Can get the real answers you need. Start building your confident retirement today. Stall talks in europe. The next few days will be crucial for the future of the eurozone. Mohamed elerian joins us on this. Now may be a good time to get a deal. But with shipments stuck at sea, could your dream car be on hold . Speaking of cars is apple ready to jump into the carmaking industry . We discuss how the move could be a game changer 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 right here on cnbc first in business worldwide. Im Andrew Ross Sorkin with Michelle Carusocabrera and scott wapner. 15 years later we are on the kus of reaching nasdaq 5,000 yet again. We are going to discuss if this is the right time to get into tech. Before we get there, scott wapner has the headlines. Labor secretary will attend negotiations in the west coast ports dispute today. Drawn out talks between the Dock Workers Unions and their employees have come to a halt. Stocks in greece under pressure. Talks between the greek finance minister and his eurozone counterparts failing to reach a deal over athens debt crisis. And president obamas immigration policy halted bay federal judge at least for now. The judge is prohibiting the white house from running programs that would offer deportation protection and work permits to as many as 5 million undocumented immigrants. A few of the stocks on the move this morning, transocean ceo stepping down. The offshore drilling giant also slashing its dividend as it deals with Falling Crude prices. Starwood hotels ceofrits has resigned. He will be replaced interim by aron. Cutting its guidance this year. Citing weak u. S. Sales and the negative effects of a stronger dollar. We are less than 90 minutes away from e the opening bell on wall street. The dow would open lower by two points. The nasdaq higher by four points. Is there a big reaction in europe in not so much more. France higher by a third of a percent. Jernl germany slightly lower. Greek talks as i said breaking down yesterday from what i can tell they never got started. Here to talk about the fate of the eurozone and its impact on the Global Markets is mohamed elerian. He is allianz chairman. Good to see you again. Good morning, michelle. Im going to start backwards here. Scott spoke with david temper last year. He said if greece leaves the euro 300, 500 points maybe but ultimately manageable. Do you think a greek exit would be cataclysmic for the World Markets . No. But it would cause a lot of volatility and some losses in shortterm. The reason it wouldnt be a mass ivica its a fee is europe has done a lot to be able to navigate a grexit. There are certain things it cannot do. They cannot write legal contracts. So there will be shortterm chaos. The answer to that question is crucial because it goes to the heart of who has more leverage. The greek finance minister describes the sipgs as a house of cards. You let greece go Everything Else is going to start to fall. He says my leverage is italy. Italys Interest Rates will rise. The germans, however, say were 19 people climbing up a mountain. Were all connected bay rope. Weve got a weak player. Maybe we should let this person go. You sound like the germans have the leverage here. So i love that characterizization that you put up earlier today. If you think of the greek position as being over here call it a zero. If you think of the german position being here the climbers, call it a ten. Were at a six. Right . So were somewhere here. This is why these negotiations are proving so difficult. There is no decisive element one way or the other. Its somewhere in the middle. Probably more towards the climber characterization than the house of cards, but its not decisive in you have to make one side feel that strong. And thats why these negotiations are going to continue. So on the risk meter, i guess, knowing what we know about the situation in ukraine and this ceasefire already apparently not holding, is that a bigger risk right now to the Global Markets than greece . Theyre both big risks. And the biggest risk is this illusion of liquidity. People actually believe that they can, quote, rationally bubble ride until the turn. When the turn comes, they actually believe theyre going to reposition themselves. History tells us whether its a taper tantrum or whether it happens earlier this year there isnt as much liquidity as people like to think there is when theres a major change. So the major concern is you get a change in the paradigm. Then people discover there isnt enough liquidity. The current ceo of Deutsche Bank was on last week and when it comes to the market risks out there, lack of liquidity is a huge one. We heard this from larry fink. Weve heard this from explain to the viewer at home what does that mean . Does that mean a huge selloff . A credit crisis . Play that out. So it means a selloff. And then it means dysfunctional markets. Then and everybody is going to look to Central Banks hoping they will step in again. Look theres been a structural change, a functional change. The broker dealers have gotten smaller and will continue to get smaller. The end users have gotten bigger. So when the end users decide to reposition and they all have to go through the middle they find out that the middle isnt as robust and there isnt the risk willingness to take risk in that middle. What we have is a structural change in the capacity of the market to provide liquidity. And if its tested then you get not only price corrections, but you get market stress. Then everybody is going to look at Central Banks and were going to wonder whether Central Banks will be its going to be that big of a crisis that you need a central bank. When you talk about a correction, what kind of correction are we talking about . A 5 correction . 10 correction . A true correction is 10 plus. Where are you . So if and its a big if. Im not predicting. This is a risk scenario. But if theres a fundamental change in the on the parting paradigm, if people no longer believe were improving u. S. Economy, if all that changes, then youre looking at at least a 10 correction and at that point theres going to be a question of what holds. Look at the oil market. All you had to do in the oil market is change a simple paradigm which is that saudi arabia is a producer. The minute that paradigm change changed, you get a massive correction in the market. The biggest risk out there, i agree with those who have said it before. Is theres an illusion of liquidity. There isnt as much liquidity as people think there is. A lot of fears about the etf market in particular. So many retailer erer investors out there think they can sell them at any time. Theres a question as to whether or not that is going to be true when the moment comes where, you know, everybodys running for the exits at the same time. Theyll see a gap down in prices that they never expected. Am i being alarmist . Youre not. Theyll get it at a completely different price. Theyre going to have to pay a price for that liquidity. I think most people dont realize that thats the case. I mean weve had enough episodes in the last two years to Pay Attention to this issue. The big hope ask that the Central Banks will continue to be the markets best friends. But there is a limit at some stage at which the reposition becomes too big for the markets, for the Central Banks to be able to accommodate it. You want to weigh in on this premise or question that Larry Summers puts forth as to whether europe is in danger of becoming the new japan . So i do think europe is in danger of becoming the new japan because europe has yet to deal with this fundamental issues which is revamped growth engines, a better composition of demand and lifting the overhang. In addition, architecture is incomplete. So the risk is there. I think the biggest theme remains divergence. The fact the u. S. Is getting better. The fact that the fed will be hiking rates in the middle of this year. Meanwhile, the rest of the world is struggling. Weve already had 16 rate cuts this year. So this divergence in Economic Performance and Monetary Policy is the biggest theme. It has served the macro hedge funds well. I think it will continue to do so. But what would that do then to the Global Economy . Europe becoming the new japan would theoretically have much more dramatically negative impacts to the world than just japan being japan. You follow . Correct. But dont forget the u. S. Is getting stronger. But could it i know. But could you i hate the decoupling thing, but is it still relevant in a period of time where japan is so underperforming and is in a long period of underperformance that it has a drag negatively on the world including the u. S. . So you have four sets of countries. You have those improving, the u. S. You have those slumping japan, the eurozone. You have those stabilizing, china. Then you have the wild cards. Russia. Somehow all this has to be reconciled through one market the Foreign Exchange market. The question youre asking is can the Foreign Exchange market act as the main shock absorber for this multispeed, multipolicy world. This world of divergence is going to put tremendous stress on the exchange market. Its an open question as to whether these large movements reconcile or break things. Well it is the area with the most liquidity and heretofore has the consensus on that. I think the dollar gets stronger. I think that the road were on and this is my major hypothesis its a road for awhile and then its going to tip. The probability of it tipping in a worst equilibrium or better equilibrium is even. Which means investors should stay liquid. They should go up in quality in terms of bond exposure. They should increase the beta and alpha exposures. They should pay close attention to the Foreign Exchange markets. That means a lower return in a lot of respects, right . On a Higher Quality bond . I think thats the reality. That this world can no longer produce a source of returns that weve enjoyed in the last few years. Youre not talking about the new new normal now, mohamed, come on. No. The road were on ultimately is going to end. Then were going to tip one way or the other. And theres not enough evidence for me to tell you with conviction its going to be a or b. And that in itself has important investment implications. Good to see you. Thanks for coming on. Early for him. Not really early for him. Are you i know youre always emailing. Youre still awake at these crazy hours even though youre not doing your pimco thing, right . Yeah. I enjoy my early morning. If you work on the west coast in the securities markets, you get up early. But you leave the office early. Your life is a tradeoff. Nice to see you, mohamed. Coming up with a footprint of about 6 million merchants first data is responsible for about 45 of all credit and debit transactions. The companys ceo joins us next to discuss security. And later the effects of a port slowdown on autos. Plus have you missed the tech rally or is there time to get in . And then it is jim cramer from the New York Stock Exchange as we get ready for the opening bell. Squawk box coming right back. I love my shows, but i cant just sit around all day. Thats why i have xfinity. Their cloud based dvr lets me take everything i recorded, anywhere i go. Which is perfect for me, [whispering] because i have responsibilities. I mean thats really interesting, then how do you explain these photos . [people gasping] objection your honor. Sustained. With the x1 dvr library you could take anywhere, xfinity is perfect for people on the go. Welcome back ta squawk box. Take a look at the futures right now. No deal yet in greece. Ceasefire apparently breaking down in ukraine. And that is the market picture. Not so bad on this tuesday morning. The s p and the dow with an implied open slightly negative. Nasdaq implied slightly positive. Remember its the nasdaq and as ive said before, were on this nasdaq 5,000 watch once again. Levels we havent seen in an awfully long time. Since the year 2000. But there we are. Were only like 150 or so points away. Took us about 15 years to get there. That feels very japanlike. Lets talk data. The Worlds Largest Payment Company is getting ready for a transaction revolution coming later this year. Thats when the more secure Chip Card Technology will go into effect in this country. Also looking to expand in places like india where our guest just came back from. The man behind the transaction turnaround at first data is frank bisignano. Before we get into the earnings story because its a good one after what was a long period of red, lets just talk about sort of security for a moment. I think people thats front of mind. How far i know were all going to get these new chips in our card. Ive already gotten one. How long is that going to take to roll out and how much more secure does it actually make us . Well first way to think about it is were going to issue 100 million this year. We issued 25 million last year. I think also in october youll see evm rules change. And merchants will be liable for fraud. Were bringing technology in there to the point of sale to encrypt. We have a world class product which will encrypt it. I think between the chip and encryption at point of sale which already exists there will be much higher security. Much higher security. And how much do you worry about not just the security at point of sale but the back end security . All day long. All day long. Every day. And i like to tell people weve been working on security a long time. It was called information security. It was called cyber security. You know before that it was data security. But i think whats important to recognize is even on friday government coming together with business. Everybody collaborating. It has to start with that collaboration. But i like to say we like to protect the perimeter, surveil the interior. I think its very important. Whats your nightmare scenario. What do you worry about waking up one morning looking at your blackberry or whatever looking, what is that headline for you . I think about a lot of nightmare scenarios, but obviously hacking into the money systems. You know i worry about tremendously. Ive worried about that my whole career. Thats why surveilling the perimeter and interior thinking of people inside and what they can do along with people on the outside what they can do. I think the retail customer their nightmare is they wake up log into their bank account, it says zero. The probability of that happening is what . The probability of that happening to an individual is real. The probability of that happening systemically i think our Financial Institutions are very very committed to not having that happen. And defending it and have tons of defense against it. To your point, we now have these reports of the Biggest Bank Heist in history. Right . These hackers busting into these global banks and stealing a billion dollars. Is that number small to where it could possibly go . Well i think a billion dollars is big no matter how you look at it. Where i grew up in brooklyn thats a large number. Where i grew up as well its a big number. But still, my point is are we going to see larger and larger and larger frauds like this . I think youll see defense get bigger and bigger and bigger. I think, you know i remember in the bank when i was dl i there, i used to talk about how many times a bank branch got robbed. Versus how many times a perimeter tries to get penetrated. So its crime. Its crime. Its going on. But, you know all the institutions have built up tremendous defense and continue to do it. But it sounds like were on this ultimate its going to be a continuous arms race. It reminds me of the police complaining about l. A. Gangs and we need more. It is an arms race. Thats it. Forever. Yes. And its been that. Its been that. If youve sat inside institutions and youve overseen these disciplines for a long time you recognize going back to 1990s early 90s people working on the defense of information and data. It just happens to be where the money is. You worked with apple on this issue. How much safer is apple pay than using a card. I think its very very secure. Much safer . Would you prefer people use apple pay than a credit card . Id prefer them to secure their data at all times. You know, i actually but straight up. Im just wondering. If i had a card or this device if i wanted to be more secure what do i do . Depending on your card use the device. And how many years away are we that i wont have any cards in my pocket . I think a long time. Because, you know i think about trends in technology ive watched it for a long time. Think about Bank Branches were in 1990 people were talking about less of them. Youre going to have cards in your pocket, but youll transact differently. Getting closer to ipo . 2015 . This is the year . Were trying to build a great company. I think were going to be very very smart about how we do this. Weve invested a lot. Youve seen us make 200 million more this year. You saw our top line growth. How many quarters in the green before the market will accept an ipo . How about that . I think its about revenue growth. I think its about revenue. I think, you know growing ebita, look. We plan growing. You look at Free Cash Flow for us. Much better story. We had a company at 24 billion in debt. Weve got 20 now. Were a 5. 4 to 1 debt equity ratio. Were at 2 to 1 today. I think were working on the transformation. We didnt get to talk to you about banking. I love banking. You do . I partner with banks all day. But you must not miss the big bank world and the world of regulation and everything right now . Hes dealing with it on the card side. Yeah. I feel like were an extension of Financial Institutions. So, you know we have as much compliance oversight as any financial institution. Come on back. We have a lot to talk to you about. Thanks. Pleasure. Thank you. Coming up is apple ready to jump into the car business . Phil lebeau is going to join us with new details on that buzz story. And when it comes to the Silver Screen whos the richest movie moguls . The net worth of some of these guys will shock you. The numbers after the break. Squawk box will be right back. When the moments spontaneous, why pause to take a pill . Or stop to find a bathroom . Cialis for daily use is approved to treat both erectile dysfunction and the urinary symptoms of bph, like needing to go frequently, day or night. 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Request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing. Call us or your advisor. T. Rowe price. Invest with confidence. When it comes to making a mint from the movies few hit the big time. But acting talent and the right funding, some get very rich. Ultrahigh net worth wealth x has released its list of the american film industrys richest individuals. Here are a few who top the list. Steven spielberg. His estimated net worth only 3. 3 billion. Famous movies include e. T. And jaws. Also one of the cofounders of dreamworks studios. Arnon milchan worth 5. 2 billion. Most famous movie probably pretty woman. And then theres george lucas whose estimated net worth is 5. 4 billion. How could the other guy be worth more than lucas . After star wars, youd think. I apologize. Its a valid and legitimate, interesting question. Lucas tops the hollywood rich list. He sold his company to disney for 4 billion in 2012. Maybe he should have sold it i thought he was lower. I thought we just said the other guy had more money than the other guy. Oh 5. 2 compared to 5. 4. Got it. See you didnt let him finish. That was my problem. Just saying. Its great. I think its fantastic. Would you like to finish the reader . No. Go for it. You can see more names of hollywoods richest movie moguls on cnbc. Com. Youre kind of a hollywood content creator. You going to get up there . Not like that. Lets talk about other media news. A huge audience tuning in for the saturday night live 40th anniversary bash. It was seen by more than 23 million viewers. The 3. 5 hour special featured more than 80 guest stars. Nielsen reporting that the red carpet special was viewed by 11 Million People. Coming up how can ships hurt cars . A look at the west coast port slowdown. Why you may be out of luck when it comes to fixing your ride. Take a look at equity futures at this hour. Youre looking at the dow like it would open up off about 21 points. Back in a moment. Financial noise financial noise financial noise opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Welcome back to squawk box this morning. Lets look at stocks in the news. Investment firm calling for the ouster of tempur sealys ceo. Saying the company has been mismanaged and shareholder value has been destroyed. Also medtronic reporting quarterly profit beating estimates by four cents thanks in part to new product launches. And zillow shares, theyre rising. The real estate website operator saying they should close a deal as early as today. Also Goodyear Tire shares theyre gaining. 59 Cents Per Share beating estimates by a penny. Federal railroad and hazmat officials are in rural West Virginia today trying to figure out what caused a train derailment. The csx train was carrying more than 100 tankers of crude oil. Slammed into a house. Several cars exploded. A 300foot fire ball you can see there, thick black smoke blanketing two small towns. A thousand people were evacuated. One tanker landed in the river causing concerns about contamination. All right. A west coast port labor dispute has hundreds of businesses stuck in limbo unable to deliver for their customers. The situation is getting so bad. Its getting bad enough for president obama to send in the labor secretary to try to break the log jam. It stretches from seattle to san diego from Food Producers to auto makers. They are all taking a hit. Secretary perez will be in San Francisco to meet with both parties today. One import thats feeling crippling effects of this labor dispute more than most auto parts. They hold the number two spot of imports in terms of volume. Joining us now is the ceo of the motor and Equipment Manufacturing suppliers. Its good to have you on. Good to be here. How bad is it getting . Its getting very bad. And the reason its of concern is its not just impacting the Motor Vehicle suppliers or the automakers themselves. Its the fact it has a direct impact on the u. S. Economy. The automotive suppliers are the largest single Manufacturing Sector in the United States with over 750,000 direct employees and an extended employment impact of over 3. 5 million. So whats happening is a very serious and significant. And is already costing our industry billions of dollars. Its not nearly a new issue. Its one that continues to linger. And its having a Significant Impact on the economy. Thats our main concern. What kind of time delays are we really talking about here . Well the delays are now going into the weeks. You have freighters that used to be offloaded in 24 hours. Its now taking up to two weeks. You have truckers waiting in line three to four days before picking up just one container. And its not purely an issue of imports because our industry Motor Vehicle suppliers, actually export over 60 billion a year to pacific countries. And so its not going either way. So its having a Significant Impact on the industry. And if its not resolved soon that impact is going to be felt very acutely at the consumer level. Amazing that some of these shipments that left asia in october havent arrived. What about shipping by other means . Air freight, the cost may be higher but is it an option . It is an option. And many are doing that. But youre right. It is very expensive. Redirecting these shipments to other ports is likewise the same thing. Those increased costs are simply going to flow down to the consumer in time. Its a shortterm gap measure, but it cannot be relied upon for an indefinite period of time. Its already costing billions of dollars. If, in fact the west coast ports were to shut down it would cost the American Economy 2 billion a day. And even when it would become resolved, it would take months for it to get back to normal. So were urging the parties to stay at the negotiating table. Were glad the administration is involved with it. And we believe they have to do everything they can to make a difference. You mentioned it would be soon that the consumer would start to see the impact. How soon . And play that out. They would see what or feel what . Well, first of all, theyre finding that the availability of makes and models is going to begin to diminish. While its true the automakers and the suppliers in anticipation of what were experiencing today began to add inventories. Those inventory levels are beginning to decline. And so with the additional cost and as this continues to linger i think its only a matter of time, shortterm. I couldnt specifically tell you how many months it would take. But its going to impact the u. S. Economy. You cant have issues of this significance and magnitude which is driving up costs and driving down profits for everyone along the supply chain. Again, its one that dramatically impacts the u. S. Economy. And the brinksmanship thats going on right now is playing russian roulette with the u. S. Economy. Its got to be resolved quickly. Appreciate your time this morning. Thanks so much. Thank you. This is the water cooler story of the day. Got us i think the most controversial here on the set. Apple could be entering the car market. The news comes amid concerns that the companys stock prices too inflated now trading at an alltime high. Phil lebeau joins us with what hes hearing. Wow, phil, this would be exciting at minimum. It would be exciting. On many levels, michelle. But lets keep in mind that apples entry into the auto arena has happened for a number of years. What weve been able to confirm is that apple has been ramping up its work in this area. With project titan. There are several hundred workers at apple, researchers, developers who are working at a number of areas as apple is trying to expand its footprint. Remember, a little over a year ago apple introduced car play. At the time it was introduced as a way for a number of manufacturers to sell to their customers and apple also selling a way for you to take your apple universe, if you will your own apple universe bring it into your car. There you see an example of how it works. It has not had wide spret adoption yet. Part of that is its still being rolled out with a number of manufacturers. The other question that has come up over the last several days is would apple want to manufacture a car . A lot of this talk is stemmed from the fact that people have looked at the google car and theyve said look google could eventually make a car. Couldnt apple eventually make a car . Couple of things to keep in mind. Google has made a prototype. They are not an auto manufacturer. They have come out and said we dont want to manufacture cars. The people that ive talked with who are familiar with project titan, the work being done at apple have said theyre at least going to make some prototypes for research and development purposes. You have to do that. You have to go to a company like that in europe and say this is what we want so that we can test out what we want to do with our expanded footprint in the Auto Industry. Guys, if i had to take my guess right now as to what ultimately happens with autos and apple in the future, look for them to want your time behind the wheel. Not necessarily for you to be in an apple car, but they want you to have your apple universe in the car. That commute time apple time. Thats the way you might want to look at this in the future. Nonetheless, a lot of people are talking and saying wouldnt it be cool if we had an icar similar to an iphone . There is no doubt the Auto Industry is one of the areas with tim cook and the folks at apple are looking at for the future. On your point, if theyve ordered prototypes in its not necessarily that they plan on building cars. Its that they want something inhouse where they can experiment with their software et cetera, and their platform. Absolutely. And they may get into some hardware. Theres no doubt thats a possibility there. But if you have a prototype there or several prototypes michelle, it allows you to expand the opportunities and really to try new things. And thats really at the heart of what theyre doing here as they expand their auto footprint. Cool. Thanks, phil. You bet. Okay. Sticking with the apple theme, a story in the wall street journal details several features that had to be cut from apples watch. Among them a system that was supposed to track your stress levels by measuring the conductivity of your skin and ekg heart rate monitoring. The programs were reportedly cut because they didnt perform consistently on some people especially those with hairy arms or dry skin. The results also varied based on how tight people wore the watch. Those features could be included in the later releases of the apple watch. Thank you very much michelle. There you go. Im thinking am i dying . I dont know. The jawbone theres a new jawbone. But i assume it would have the same issues. Theyre trying to do the same thing. The next fitbit is supposedly going to measure my heart rate all the time. You dont have skin issues with that . We discussed that last week. I dont get a rash from my fitbit. The rash stories . Yes, yes. Coming up next were going to talk tech. The nasdaq almost back to the 5,000 mark it hit back in march of 2000. Can we get there again and should you be a buyer . Were going to talk about it as we head to a break. Heres whats trending on twitter right now. Squawk box returns in just a moment. First impressions are important. Youve got to make every second count. Banking designed for the way you live your life. So you can welcome your family home. For the first time. Chase. So you can. [ male announcer ] your love for trading never stops. So open an account with schwab. And when a market move affects, say a Cloud Computing stock youre holding, we can help you decide what to do. With tools that help you see how market activity is affecting your positions. So when the time comes to decide whether to scale in or scale out. You can make your move wherever you are. And start working on your next big idea. The s p 500 hitting an alltime high but the nasdaq nearing a record of hitting 5,000 again. Have people missed the rally in tech or can they still get in . Paul meeks joins us. Have we missed the boat . Im a contrarian and i think that depending on what companies have announced the most recent quarter, we did have a couple Tech Companies that even though the tide typically lifts all boats, theyve actually sagged post results. Theres a couple contrarian opportunities that i like because theyve actually had some near term weakness. And how much room do they have to go . I think both of these stocks over the next year or so are going to rise at least 20 . So microsoft, make the case. Well, the interesting thing about microsoft is nadella has been the ceo has been the ceo for a year now. I do think well see some sort of acceleration later this year with the release of windows 10. And in the meantime what he has done which i think is very savvy is really positioned the company to be more of a player in cloud competing. It seems to be working. Sandisk . You like them a lot. Sandisk is interesting. Both sandisk and micron play in flash. The interesting thing about nanflash which is typically a command over time is that demand in that space is healthy. One of the reasons for that is its tougher to manufacture some of these chips. And what happens is that limits supply which makes a nice supply demand balance. Can we talk broader for a second . I look at nasdaq when it was at 5,000 the last time. I was here at cnbc when that happened. Then watching for years, dead money at the nasdaq. Right . If you bought the qqqs nothing. Then a year two years ago, that markets finally started to turn and make a real comeback. What finally happened do you think . Was it qe . Was it simply apple . What was finally you know we can ask the same question about japan that finally moved after 15 20 years. What was it that made the nasdaq turn . I think the biggest part of the equation has been qe. Not just the United States but abroad. And the tech sector which dominates the nasdaq is particularly high beta. So it has a particular boost when the world goes to riskier assets. Also i do think within the tech sock tor there are four or five new themes Cloud Computing being just one that has become very fast growing, long runway with these themes lifting the sector as well. Where are you on apple at this point . Yeah i like apple. I think the iphone 6 ramp continues. Im particularly excited about what i see in china. Two quarters ago year over year chinese revenues grew 1 . Last quarter 70 . So i think this ramp will continue for a few more quarters. I think the stock gets to 150. If apple pay is successful. If the car is some day successful. If the apple watch is successful. I think theyre all essentially free call options on the name. By the way, before we goat to other stocks the car thing. Does that scare you . Do you love that . How do you feel . Im mixed on that. Its a huge market which brings a lot of unit volume. I know whatever apple does in the car its going to be a cool product. The problem with that is that industry typically brings much lower margins than where the company is now. Real quick, delta and warner. Those were two on your list. Delta is very interesting. The estimate was about four bucks per share. Now its going to be five. And borg warner is to increase fuel efficiency and the other one over time not just in the states but worldwide to lower carbon emissions. Okay. Paul, weve got to leave it there. We appreciate your perspectives this morning. A quick reminder for everybody out there. Go online to cnbc pro on cnbc. Com to track the managers picks in realtime and get analysis. When we come back jim cramer joins us from downtown new york city. Find out what hes watching on this shortened trading week. Check out the futures right now as well. We watch the situation is greece. We watch the situation in ukraine. And thats what we watch right now. The s p, the dow implied to open negative. Nasdaq turning as well. All slightly to the downside at least at this hour. Squawk box right back after this. Theres confidence. Then theres trusting your vehicle maintenance to ford service confidence. Our expertise, technology, and high quality parts mean your peace of mind. Now you can get the works, a multipoint inspection with a Synthetic Blend Oil change tire rotation, Brake Inspection and more. 29. 95 or less. E financial noise financial noise financial noise financial noise ameriprise asked people a simple question can you keep your lifestyle in retirement . I dont want to think about the alternative. I dont even know how to answer that. I mean, no one knows how long their money is going to last. I try not to worry but you worry. What happens when your paychecks stop . Because everyone has retirement questions. Ameriprise created the exclusive confident retirement approach. To get the real answers you need. Start building your confident retirement today. Welcome back. Shakeup at starwood hotels. Ceo Fritz Van Paaschen has resigned. The board member adam aron has been hired former ceo of norwegian cruise lines, nbas 76ers. Starwood would conduct a sent for a new executive and search inside and outside. Jim cramer joining us now. Hope you enjoyed the long weekend. You have opinions it the move. Saw your tweet this morning. It appears you like it. Adam a good friend. He leaves the sixers to run this. Hes not a i think, at soft interim ceo, a very hard one im think fritz wasnt moving fast enough for the boreard. I think the board sees the opportunity of no new hotels coming in that they can rival windham, move faster and i also think that fritz kind of you know, did what he had to do changed into a hotellike model. I think he fought it for a long time. I think aron terrific at vail and dratgreat as he runs starwood to the next level. Whats more on the radar as a concern, i guess, Unfinished Business as it relates to greece, ceasefire breaking down in ukraine. Nasdaq closing in on 5000 again . Different nasdaq obviously, without all of the Service Providers that dominated the top 25 at this time. Look, i think a lot of people are misinterpreting greece ukraine. Ukraines going to be a sloppy truce, thats the way things are with truces. Greece i doesnt know people felt there would be a deal. My pointing greece feels like what happened in the United States when we were doing debt deals. You dont solve it until after the deadline and thats whats going to happen. Thats why the european markets are strong. What do you think, jim if they what if they leave . Say there is a grexit. So what . Tired of talking about it. 11 Million People versus 700. Thats not what the market is pricing in now . Our market doesnt care. If you i looked at the 200 charts this weekend, 200 domestic companies, every time they got hit off of greece it was a buy. It will be the same here. I mean i think that the problem is its a great, juicy news story. But in the end, its an opportunity to buy. I dont want to get too far offtrack. Walmart reports thursday and so does nordstrom. Eog is going to report wednesday, growth oil, those are what im looking at. I think greece sends the stocks down and then people buy them. Nordstrom, this call this morning on nordstrom and macys downgraded. I guess its on valuation. But still you dont often see it . No and nordstroms hit a 52week high. Its a welltimed call in terms of nordstroms 7 its moved a tremendous amount. 75, 76 represents great value going into the quart. People feel macys is played out. Every time you bet against terry lund again you tend to be wrong. I want to see something bigger from macys. The macys doesnt have an off the rack thing. Come on big deal. Give me a better reason. Apple car . Phil correctly pointed out how far away it is. Piper puts out five years before it. If you want to sell tesla, sell because of earnings, dont sell because of apple. There you have it. Have a great one. See jim and the gang in a few. Dangerous Winter Weather slamming states from south to the northeast. Video you have to see to believe when squawk look at your screen right now yikes well show it again on the other side of the break. In my world, wall isnt a street. Return on investment isnt the only return im looking forward to. For some every dollar is earned with sweat, sacrifice, courage. Which is why usaa is honored to help our members with everything from investing for retirement to saving for college. Our commitment to current and former military members and their families is without equal. Start investing with as little as fifty dollars. Why do we do it . Why do we spend every waking moment, thinking about people . Why are we so committed to keeping you connected . Why combine performance with a conscience . Why innovate for a future without accidents . Why do any of it . Why do all of it . Because if it matters to you its everything to us. The xc60 crossover. From volvo. Lease the wellequipped volvo xc60 today. Visit your local volvo showroom for details. Can it make a dentist appointment when my teeth are ready . Can it tell the doctor how long you have to wear this thing . Can it tell the Flight Attendant to please not wake me this time . The answer is yes, it can. So, the question your customers are really asking is can your business deliver . Oh yes, yes, yes we got it baby we got it oh again again thats a twofer, baby yes thats a man who likes his job. That was the Weather Channels jim cantore over the weekend in plymouth massachusetts. Celebrating thunder snow. Thunder snow. Sometimes cramer can get excited about a stock. Fed. Ill put the they know nothing up there with cantore thunder snow. Uhhuh. Okay. Lets also tell you about a messy morning commute in the new york area today. Snow still coming down in midtown expected to end by noon. Kentucky, tennessee, virginia maryland crippled by icy winter storm. 18 Million People under winter storm warnings. Federal offices in d. C. Closed as the area braces for 8 inches of snow. Airlines canceled more than 1200 flights today. Airports in North Carolina tennessee, look to be the hardest hit. Looking for a warmup, dont get too excited. Parts of all of 50 states with a little help from elevation forecast to be below freezing tomorrow and thursday morning. 31 days until spring. Not going to show the car video . We have to show the car video. Can we get that in the control room . The photographer doesnt budge. One of the most that we know of. He or she may have high tailed it out. Oh then it stops inches before the camera. Weve been pretty lucky thus far, id say, this winter. Hasnt been that bad in terms of snow. Not nearly like boston. Brutal in boston. Even down south now getting hammered. We havent had it that bad. This is nothing. A few inches. Got some School Delays today. You they doubt it in the city. If youre a kid, thats all youre playing for today. We had a good time. Great time. Thanks for having us. Youre saying hopefully joe and becky will be back. Better be. Hopefully if they make it through the weather. Join us tomorrow. See if becky and joe are back. Squawk on the street begins right now. Good tuesday morning. Hope you had a great, long weekend. Welcome to squawk on the street. Im carl quintanilla. Jim cramer david faber. We got no deal between the greeks and eu over the weekend. Cracks in the ukraine ceasefire as well this morning. Oils a story. The iea warning of some supply risk in the mideast. Brent did crack 62. Tenyear. The road map with greece worried about brea