Transcripts For CNBC Squawk Box 20150311

Rebounds there at least for the cac in france and dax in germany. Germany right now the dax is up 1. 5 . The cac is up by one and three quarters percent and we keep watching that Greece Market because of what it tells us about negotiations right now. In asia overnight you saw that the nikkei closed higher. Didnt follower as it tends to do from time to time. It closed up one third of a percent. The shanghai was up slightly. Well be talking about the broader markets including currencies and commodities in a molt. But stock has a look at the big stories driving todays trading. Lets start in europe. Ecb president mario draghi set to speak at a conference in frank frankfurt. Back here in the states theres plenty of speculation about what the fed will do or say at its next meeting. That twoday gathering is set to begin next tuesday but today the markets will also focus on the treasuries 21 billion auction of notes. And also worth watching today after the closing bell stress test. The fed is going to release capital analysis information on the nations biggest banks. A lot of focus on currencies. The euro is down about 12 against the dollar. Just this year. Many times we have talked about how clear at 135 or 140 it was. I dont know whether you put the trade on and stay this long without covering but it was if you wanted to make a lot of money and its a commodity and leverage and Everything Else thats all you needed to do. 106, every day. Didnt need to do anything else. Every day. Right. A lot of people are now saying its time to cover but not everyone. Opinions are coming in on how to play the situation. Jeffrey argues investors should not short the dollar right now. He says the currency is showing few signs that its ready for a correction. Stay with the trade. Stay with the short euro at least for now. Many are in a significant way long dollar but this time the consensus is right and their positioning could hurt portfolio. Check out the major currencies were looking at right now. I have a lot of thoughts swirling in my head to explain whats happening right now. Some might be causing this others are just a consequence. 314,000 or Something Like that. Last time i had pie. Right. So over 300,000. Theyre going to take out patient probably but now what we talked about yesterday. Do these guys have does yellen have the nerve if the dollar gets stronger. Market keeps selling off. Dollar gets stronger. Hurts the multinationals. If you look at what happens then you dont believe the unemployment rate. No im looking at the broader picture. The biggest bank in the world. Of course he does. Maybe the fact that theres not inflation anywhere. Wages dont want to go up at all. Small businesses now are racheting up their forecast for inflation in the next couple of years when they havent for the past ten years. Its finally Getting Better. Believe it when you see it. Either you have to believe 5. 5 or say a lot of it is part time. Do you believe it . No i never believed it. Yellen said they dont believe the headline either. It seems like a 2 economy and everyone is talking it up to three. But it wouldnt surprise me if the markets did go up. Data is Getting Better there and some people are talking about europe having a year we had in 2013 because itsz wide open. We have people that spell it spigot. I think so too. Lets talk about Energy Prices right now. The government is going to be releasing Oil Inventory data at 10 30 eastern this morning. Late yesterday they reported the first weekly drop in crude supplies in two months. Check out oil prices this morning. Theyre up 30 cents but youre looking at wti well below 50 barrel. Brent at 5756. As for gold the commodity is on a 7 day losing streak. Prices this morning around three month lows down another 2. 50 to 1,157. 70. Also on our market watch this morning, yields the ten year take a look at that. Its at 214. There was a lot of conversation we had the first day this week where we were saying the ten year had its biggest five week run in like 20 years. It was up more than 30 . So the focus reapproximate mains there as people try to gain what the fed is going to do and when its going to do it. That will lead into significant issue with the housing markets and were going to talk to the Property Brothers later this morning. So youre talking about a 30 rise in the price or yields. In yields. 33 or 35 . Something hike that. I thought it was i can remember thinking were off to the races. Remember a couple of times we had good employment reports. They think yields will come back down. In terms of yields its been lower lows and lower highs. So theres the rise there. Thats in terms of yield. It comes down and down i dont know. Its still on a declining pattern which makes no sense as we get closer and closer. I still hear people say to beckys point were going to get to 1. 5. I know. How many what is it right now . Zero. And this place is negative. That seems i want someone i want to take out a mortgage and have someone pay me for having the mortgage. Wouldnt that be good . Heres some money and heres some extra money because you did it for me. Its been probably the hardest trade over the last wouldnt you say 12 to 18 months to figure out. So many people called it wrong. Rates are going to rise. Theyre going to keep falling and go down. Then they start rising. Been pretty bad on oil over the last six months too. Thats for sure. Lets find out how the strong dollar is playing out in europe. Phil joins us from volkswagen headquaters in germany. Hey there, phil. Hey, scott. It is a topic of conversation here. Have you seen how strong the dollar is relative to the euro . Ive heard people talk about it while were here. Look at the dollar its up 20 relative to the euro in the last year and from the perspective of the people here in germany when they look at the euro its sinking to a 12 year low down under 107. Is it possible we could see the euro down at parody with the dollar . How far will it fall . Theres some discussion that perhaps we see the euro go down to. 85 relative to the dollar. We spent yesterday at the audi headquaters in the southern part of germany. Most of the audis that are sold in the United States in fact all of them, they are shipped from germany over to the United States but when you look at the auto Energy Overall in terms of the number of european built models sold in the United States its only about 5 of the market. Yes there are some models that will certainly benefit more than others because of the relationship right now wean the dollar and the euro but overall the currency ill impact is limited. Theyre not built in the United States. Theyre shipped from here. That overtime could alter, especially when you have the plan coming online in mexico next year. Jeep renegade is one vehicle we talked about getting quite a boost. Remember the folks at Fiat Chrysler theyre building that in italy with lower costs, european costs and then selling it at a premium in the United States. When you look at whether its fiat, chrysler keep in mind that the impact for the euro dollar and that trade right now is fairly limited. Trying to figure out my three favorite cities in europe right now. So you must notice it over there. You want to come on vacation dont you, joe . Have you bought anything over there . What are you eating over there . We have not gone on a shopping spree. Huh . Me no. Never. Weve had a little beer. Theres no doubt about that. Currywurst. But its interesting listening to the people. You hear people talking about how weak the euro is right now relative to the dollar. However when we talked with audi executives yesterday and we asked about the impact theyre pragmatic about it. They said we havent seen in a long time. Do we expect it to last . No. Thats what you hear from a number of the Business Executives over here. I dont know why. Why would they think it was going to last. We vnlt started raising rates yet. Maybe its because they have no bonds to buy over there and its not going to work. I dont know phil the world is upside down. Its crazy. Its nuts. Its insane. Anyway, thank you. We will be back in touch. Does volkswagen own portia. Yes they do. I just walked by one. Ill take a picture and send it to you. Would you do that . Okay. Thank you. I want a selfie though. I dont just want the car. You bet. You standing at the car. The chaos in the currency market playing out in the broader markets. Joining us now is the managing director for bk Asset Management and Steven Friedman head of investment strategy. Do either of you disappear that you should not short the dollar at this point. No, i would stay with the trade. I agree acknowledging the potential. Where would you put a stop . So you know everybody is talking about parody party and ultimately its perfect for the euro. You have qe continuing. You have troubles with greece and you have essentially the fed definitely raising rates sometime this year. All these three factors should push us closer but i think at 105 when you look at the longterm charts theres a lot there and its going to stall. I think 110. The whole idea is going to be out the window. Is there something to be worried about in the velocity of the move . People expected it to go the way it has but not this quickly, right . Its who is this somebody says that gets bad and slowly and quickly . The reason you have the velocity of the move is everything is aligned at this point. You have the starting of the qe very delayed. Heres the question though next week when you have the fed meeting do you think it gets worse or better at that point . Is there a chance that the fed could do nothing and that makes people back away from that a little bit . The interesting thing in all of this when you look at this is to look at the japanese analog. When you have qe its like quantum finance. Every rule we think about is broken. When you look at what happened in japan theres a serious danger here that we could be one and done. Everybody thinks it will be a continuous move upward. You have been talking about this early this morning. It doesnt feel like a 3 economy or like were jump starting. It could be a situation where we could be in this for a long time. You know that i know what you were saying. You never know what i am saying. No. We were saying what is the euro doing at 140 . Especially looking at our economy versus the european economy. All the problems with trying to put this Everything Else. What was it doing at 140 . Why was it at 140 and how did it stay there . Are people able to oil its the same deal. Its opec. Theres a lot of reasons why oil had no reason being at 120 or where ever it was. How did the euro stay at 140 for so long . It didnt make sense. How did it stay up there . It sealed like such an obvious short. Theres some reasons positive for the euro which could help stabilize things which is the current accounts situation. Europe runs a surplus and we earn a deficit. For that reason also because were far away from purchasing power parody right now. The dollar has become expensive. Markets are probably looksing so the market is going to start focussing on the fact that the euro zone is recovering. So did the problems of the euro zone result from the whole idea of having the euro or from china slowing and that filtered in or russia or oil . What caused or is it what we always thought . The structural problems with the way they do business over there in terms of a welfare state, sort of a model that always gets too top heavy. Structural labor problems. What is it . Whats europes problem that caused it to come down where it was now. It was the design flaw in the union. Really . So the cause did not respond to it. In the absence of other mechanisms that allowed for a more synchronized fiscal policy. You never met a welfare state you didnt like. Its the fact that the euro is a currency without a country. Germans should be doing is paying greeks debt and theyre not and its much more expensive not to do that. For 30 years our gdp has grown 40 or 50 faster. I think its moving toward the idea of making euro much more efficient. Just think about all the friction. They dont need to do the Structural Reforms . I agree with you. In a Perfect World they should have a global european. Not exactly. I totally agree with you. They need reforms but the euro itself is a good idea and hopefully going to be a longterm solution. You asked me why the euro was 140, Asian Central banks were making bids all the time. Now Asian Central banks why. They were chasing the trade. They thought it was a good idea and now theyre stuck at 150 on their reserves. Theyre not very happy. We just watched it by the way. I dont know if you werent watching or paying attention to the charts we fell below 106. We broke 106 this morning. I think that at 105 here well stall a little bit. You know im not an equity strategist. You guys were talking about this earlier, whenever you look at when qe starts the equity markets tend to really do very well and i definitely think the European Equity markets are going to outperform u. S. Markets this year. In that sense you have an interesting trade here because to think about it in very simple terms its much cheaper to buy european stocks now. You have a lot more bang for your buck. Same story with japanese stock . Yes, but its much more delayed. Nikkei already had a big rally because qe started last year. Here youre starting it this year. So would either of you say, i mean were looking at like a chart of the euro and the bottom should be at par . Can it go to 80 . It can. Its a political as well as an economic unit. If we get complete political chaos, if greece spins out and they start attacking italy and italian debt its a completely different story. Id be surprised. I think you need a surprise shot. Yeah. No that wont work. I need to just vacation there a lot. Make money. Cnbc europe . We do. We have a squawk box over there. I could see him on worldwide exchange. A square peg in a round hole. Youre right. I like it here. I like places that are exceptional but thats just me. Of course. Of course. Im just strange that way. Anyway, thank you. Lets talk about stocks to watch this morning. First up medical equipment maker posting better than expected earnings and revenue. The full year outlook is in line with consensus. Verafone with earnings that topped estimates. But guidance is a little light. Check out gnc. Its Health Products are in full compliance with all regulatory requirements. A recent Third Party Test and that stock was up on that news. Coming up well get a little political. Hilary clinton speaking out about her state department he email scandal. Reaction from washington next. But first if youre just waking up this morning action check out the futures, up about 76 points after 330 points yesterday. 300 almost on friday. Squawk box will be right back. Financial noise financial noise financial noise financial noise 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. Hilary clinton on the hot seat. Cnbcs chief washington correspondent, take a shot of that. John did you do that . Did you write your own intro. I did not. Did you change your name . Is your name john hardwood . Are you going into a different business . Are you branching out a little bit. Oh my goodness. Are we going down that road this morning. I didnt have any plans to. I didnt change the teleprompter. Did you change it . You need to find a producer. And commend them. Thats much better. Okay. There it is. Hey, john. This is my take on this we have known and loved hilary mrs. Clinton, secretary clinton for over 20 years now. Isnt it sort of 50 50 in this country. You have your opinion sort of formed about her and nothing that happened yesterday will really change it one way or another i dont think. The republicans saw what they thought they would see looking down and then the democrats said you know what she did what she needed to do. She answered the question its amazing to me that people can see Different Things. I think youre exactly right, joe. She came out and explain idea she kept the private email account. It was because it was more convenient to carry one device rather than two but she also said in going over the records to turnover to the state department that she deleted half the emails now when people hear deleted half of 60,000 emails whats their reaction going to be . Well if youre a democrat and we saw in our poll this week that 86 of democrats are ready to vote for her. Youll say okay fine. I get it. I believe you. But if youre a republican where her numbers were terrible where she has been a focal point of controversy as is suggestioned for better than 20 years. Theyre going to say wait you deleted 30,000 emails, whats in those emails he said this wont be over until we have a thorough forensic examination. She has no intention of turning over hr server. This is a perfect clinton controversy. Its not going to be settled but she thinks to think she can draw a line and move on. Well see if she can sustain that. The clintons have been able to do that. Well it depends on how you define drawing the line we got a massive impeachment drama. The most popular democrat. But they tried to draw a line early in the Clinton Administration on the issue of white water and what happened was she wasnt able to. Got a special prosecutor. They didnt go after her over white water but the other thing came up so they hardly protected themselves. I dont think theres anything id like to see some emails where she is yelling at bill or slapping him around or something or. Heres the crazy thing about that. Whats the worst that could be in there. Something about benghazi . This is politics. Sure thats what the republican investigators think but you mention youd like to see some back and forth between hilary and bill and she said yesterday the stuff i deleted included private communication between myself and my husband but bill clinton said through a spokesman the other day that hes only sent two emails in his entire life. Both when he was president and none since hes been president. But lets play the sound bite thats the core Hilary Clinton response to the charges. Looking back it would have probably been smarter to have used two devices but i have confidence that anything that could be in anyway connected to work is in the possession of the state department. So this is a matter of belief. Do you believe her or do you not believe her . We know how people lineup on that. Well, its interesting. Is anybody talking about with what she told our friend kara swisher . She has an iphone. She has an ipad. A mini ipad. For somebody that said she used one device because of convenience it doesnt exactly square with what she told kara. Youre right. Everybody immediately went to that point from karas interview. The question is when did she start doing that . Not all those devices existed when she started to secretary of state or were in popular use so the question is when that happened. But yes theres many more questions that could have been answered had she been willing to stay around longer but she one and she has had a particular conception of what she had to expose or what she didnt and she is drawing a line. Theres a famous moment from the press conference in the white house in 1994 when the white water scandal blew up. She said i always believed in policy but i have to acknowledge ive been rezoned. She has been resistant to some of that and doesnt have a tremendous amount of questions she gets from People Like Us and republicans. The server i dont know does it have a hard drive . Could you destroy the hard drive. I would do that . What i read from Technology Experts was if the harddrive is not destroyed a forensic examination of it probably would turn up the 30,000 emails that she deleted but she made clear yesterday she doesnt intend to turn it over. What do you think joe. Do you believe her or not believe her . And when i say belief what i mean is she said we scrubbed the emails. She said first of all there was only one email on her entire server to a Foreign Government official and it was to someone in the u. K. She said that hundreds of people she communicated with were on their official government email accounts and therefore that 90 of what she turned over to the state department the state Department Already had it in its possession by virtue of the fact that it was on a state. Gov email. Although john im probably more inclined to believe her on this but it still raises the question if you want this to go away why not turnover the server to the third party and let one neutral party go through it. Right. So that you can clear this and get this behind you. Well thats the question and her answer to that not spoken exactly but its clear is no im going to put this behind me by answering the questions that i want to answer and then moving on and you guys cannot accept it if you dont want to but too bad. So i didnt have to answer. Yeah i want to hear your answer. Do you know what my answer is i dont recall. I dont recall whether i she said that what she did, she and her people through word searches through word searches of anybody conceivably who might have sent her official email and all sorts of redundant searches, they took anything that could have been construed as work turned those over and Everything Else she got rid of. So then you believe her . You know what you dont recall either. Lets just both say we dont recall. Isnt that what everyone uses . I dont think they can get you on that its not even like pleading the fifth. Its just like i dont recall. I think youre right, joe. Its very difficult to come to a conclusion like that if youre not partisan on the other side. Very good. Which we arent. Either one of us. Thanks, john. You bet. When we come back this morning, blurred lines and the Music Industry today. A jury finds that farrell and robin thicke copied a marvin gaye song. And the numbers show that more people are taking to the skies. Why not everyone is happy about that. Well get to that next. 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. Hello. I am here to offer sophisticated investing strategies. My technology can help you choose the right portfolio. Monitor it. And automatically rebalance it. All without charging advisory fees, account service fees or commissions. That may be hard to compute. But im a computer. So trust me. It computes. Say hello at intelligent. Schwab. Com welcome back everybody. Were in chairs this morning and there have been plenty of things that caught our attention. One of the things i noticed you probably heard about this last night too which is blurred lines which is the song that farrell and robin thicke were so popular with, they lost last night. The jury said that they copied that song from marvin gaye. The song got to give it up. What youre listening to right now is blurred lines. Lets play marvin gayes song too. Got to give it up if you can hear for yourself. This is what the jury decided was enough of a copyright infringement. They actually awarded 7. 4 million. Lets go back to the other one now. No its just the beat is all thats similar. Yeah. I think thats what they actually claimed. That is what they claimed. In the past it had to be a melody or something else. I dont see it. I can kind of hear back and forth but let me tell you about another case that period happened recently this year sam smith winning a big award check out this song. This is sam smith. This is stay with me. This is what struck me. I would automatically hear tom petty. Go to go a little further ahead in this. Again this is sam smith who was the big winner at the grammys this year. This isnt the part. You have to go further ahead. Wont back down is the chorus. Because i know wont back down from barnyard. Here. Only three notes. No, its longer. Were going to run out of notes. That one i would start singing. Theyre the same notes. It picks up the other half. You have to keep listening. That one i would go into the tom petty song when i was hearing it accidentally. But it was raise a lot of questions about the mixing and the blending. Sal smith said he never heard tom pettys song but he granted him 12. 5 of the royalties that came out of it. Yeah. Were not in the chairs. We are in chairs but just not those chairs. Its a shame because you really cant spend 20 minutes ripping on my shoes. I can on your jacket which you refer to take off. But anyway i just read some of these lyrics. Does it really upset you . Yeah. Were going to have our 20 Year Anniversary on squawk box and we never wore jackets. We had all the doorways widened out at headquaters for you. Weve done that. Weve accommodated you there. Appreciate that. Okay. Good. Baby mine. Read these words. Do you not cry if you hear dry your eyes . And tim burton going to make a live action dumbo. This is after ringling brothers decided to send their electrical fanlt elephants there. Theyve had a lot of success with live cinderella and alice and wonderland is huge. Theres going to be cgi involved and theres going to be elephants and im wondering whether you can treat electrical fanlt electrical fanlts electrical fanltfants on a movie set. Theyre getting rid of them. This scene where she is tied up in there. People call heededed me dumbo as a kid. I saw this in the theater when i was 3 and cried so much we had to leave the theater. Im sure because he missed his mommy a lot but he shows everybody in the end. I looked at the songs last week. The one with the train. My son used to watch that over and over again. Im excited tim burton signing on with disney to direct a live action. Had i known we were going to talk about dumbo and stuff like that i would have come in earlier. Do you have any childhood memories of things people did like that . No bullying . Youre fine . Thats true . Yeah other people said i looked like a taxi cab coming at them with the doors open. Youre kidding . You do not have especially large ears. But you know who does . Sully. Is this all a set up . No. He doesnt care. He loves them. He does. Get me feeling bad for you. Im fine. They tucked in. Theyre good now. Its just the tupe people make fun of me now for. Coming up, the euro dropping to another 12 year low this morning and the Global Markets are taking note. Seriously . Well talk about the ripple effects 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. The euro hitting another 12 year low against the dollar this morning. Its below 106 at 1. 056. Mark grant joins us right now. Does this come as a surprise to you . No becky. As you know when the dollar euro relationship is about 1. 25 i said we were going to pairdy and here we are and the only surprise is were getting there with great velocity. Its very fast. A lot of speed. Mark i know another thing you have been telling us for quite a while is you think that Interest Rates will come back down again as the money eventually figures up to come back into american treasuries. This morning we have been looking at things and we have seen a very big pick up in the yield on the ten year just over the last several months but if you want to take a look this morning the latest that we saw on this was around 2. 2 . Where do you think yields are headed and when . Let me tell you what happened becky. Its quite interesting. Were some what below the yields at the beginning of this year. Were certainly substantially below the yields at the beginning of last year but whats happened has been an institutional trade thats taken place. Treasuries went down to about a 1. 64 yield. Its backed up recently but the back up is technical. What happened is the big institutions and you can see this in the futures market drove treasuries down and then what they did was they front ran the ecb so they got out of pressure ris and bought all the sovereign debt all over europe and when they came in and started driving rates in the negative territory theyre making very nice profits and eventually that money comes back to treasuries and drives down yield again in the second leg. Thats my opinion. When you say eventually whats the timing you would put on that . Two or three months. The velocity of the markets recently as you just pointed without the dollar which by the way is going to have a significant negative impact on corporate earnings in the United States, were seeing velocities pick up and it depends on how quickly they start buying bonds and driving everything into negative territory and i should also say to you becky that the negative yields are something we have never seen before and this truly is the real thing. What is it going to be when its all said and done . Around 1. 5 . Thats only off by he just told us three when he was on two weeks ago. Were supposed to get 3. We deserved 3. We earned it no . That may be true joe. You can have whatever you want. I have been coming on cnbc for more than 20 years and if you want 3, thats what we should have. Why is it 5. 5 unemployment with 1. 5 gdp then . Well the unemployment number as you know joe, is not something that i believe in at all. The bureau of labor statistics keep saying how many people left the work force. 98 million people. Its ridiculous. Its absolutely accurate down to the 12th decimal point. I like steve a lot but he and i disagree on this. Okay. All right. Thanks. Thank you, joe. Whats coming up scott . Well joe, coming up the financials. Did you know that theyre in focus ahead of the stress test today . I know now they are. Do you see how i can read the prompter while i look right at you . Welcome become. The s p is Financial Sector up nearly 300 since the lows of 2009. Gerhard cassidy covers the banks this morning. Good to see. You. Thank you. Everybody is obviously waiting for the stress test results. These are the real ones right. Last week was fine. These are the ones that matter the most right . I totally agree with you. This is the week we find out the banks how much capital they can give back to their had shareholders. Who is the pressure on most . I think one of the stories is goldman sachs, the one theres concern about, because their total capital ratio was a little too close. Because they just squeaked by last week . Thats true. Even though they just squeaked by we do expect the capital ratio. If you look at the test it came back at the end of the period which means they do have the ability to grow the capital through higher earnings. Its fun yu say goldman sachs. I hear people talking about citi. They already pay a paltry dividend. They want to raise it. Its under pressure as is the Management Team is that fair to say . Absolutely. Pressure looking at the ratios but youre right, in terms of who needs to pass it the most i would agree with you, citigroup has put the money in the people behind the people buying process this year. It should enable them to pass it. Let me ask you a question wharngs if citi fails it . There will be changes for citigroup. At the top. Probably at the top or but level as weapon. Beck yand joe and i have been talking all morning about rates in the movement over the last five weeks or so. Theyve come down slightly. But they did have the biggest fiveweek run in like 20 years. 30 in a tenyear yield. People are thinking maybe it is going to be a Good Environment for the banks. Is it . I think its Getting Better. You guys put your thumb on it. Its all about the steepness in the yield curve and the potential that janet yellen is going to raise rates. Were looking closely at whether thiel remove the word were the patience. With the actuality of raising rates in june or possibly september. Bank of america . Yeah bank of america is another big name of course thats been under a lot of stress with the past year or two. With the settlement similar to citigroup and jpmorgan. Theyre in fairly good shape. I think youll find all of the banks that come out of the stress test are in very good shape. We think theyll all pass. Theyre going to buy back more stock. The banks are being positioned very well especially in rates go higher. If you had to choose one or the other, woo wow buy a big Financial Institution or a Regional Bank . Id go with the big Financial Institution because theyre more attractively priced. Theyll benefit more. Citigroup or jpmorgan will get a better benefit. Even with the regulatory overhang and all of that stuff that doesnt ever want to end . You have a very good point. It never seems to want to end. We do seat light at the end of the tunnel when it comes to regulatory overhang. We think youll see more final decisions on rules and regulations by the end of this engineer. Gerhard thank you so much. Thank you. Still to come this morning, an original Julian Robinson tiger cub. On the oil and the fed. Squawk box will be right back. Building aircraft, the likes of which the world has never seen. This is what we do. Thats the value of performance. Northrop grumman. [ 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. 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. Stocks bouncing back from yesterdays selloff but fear of the fed may keep markets on edge until next weeks meeting. Well tell you why the strong dollar might delay rate hikes. Plus is it time to save your money on an overseas vacation . One of Julian Robertsons original tiger cub us. And a big shift in the transportation sector. Why shifters are leaving the rails and putting their goods on trucks as the second hour of squawk box begins right now. Announcer live from the most powerful city in the world, new york. This is squawk box. Welcome back to squawk box, everybody. This is cnbc. First in business worldwide. Im becky quick along with andrew ross sorkin. You do see a bounceback after steep declines from yesterday. The dow was down by more than 300 points. This morning it looks that the dow is up by 75 points. S p up by 8 and nasdaq up by 16. Take a look at the euro it is now, drum roll below 106. 105. 71. This is the lowest level compared to the dollar in 12 years. The last time these two currencies were at parity was in late 2002. People knew this was the direction we were potentially headed. Tut but this is the speed, the velocity where youre seeing a decline, up to a penny a day has caught people off guard. Cybersecurity threat. 80 fail to meet payment card Data Security standards. Thats according to a new report by verizon. The report said most had a tendency to wait until the clients checks were approaching before approaching hardware upgrades. President mario draghi is set to speak in frankfurt. And the dollar a 20 plus move since weighing on markets. Not just currency markets. Heres a closer look at the effects of a big dollar move. The our own domenic chu to go through the earnings season to get a taste of what it the future will be mike for multinational. A taste is putting it mildly. How Many Companies did we see . We just saw tons them come out and make reference specifically to the headwinds coming from the strong dollar. Theres a reason why. We were talking about the repetitivity. Becky brought it up earlier. If you look at the dollar index 20 move over the course of the past year. Just in february weve been up eight months in a row on the dollar index and that hasnt happened since bretton woods. Were going for nine months in a row if we can get that in march. So, if we take a look at the overall picture for the big moves, 20 gain in the dollar index year after year going all the way back to 1980 it only happened five times. The group took a look and said these are all the times weve seen a 20 gain year over year. Only five times its ever happened. So the universe is limited. We dont see this kind of thing happen very often. Interestingly enough when we do it may not be all that bad a story. Heres the reason why. We took a look at the stock market with regard to the dollar index on average when i say average, i mean the median. Because theres only five observations. We took the middle of that particular set of observations and said the s p 500 in each of those five instances according to this is actually up 15 12 months after those dollar gains happen so maybe not such a bad thing for the stock market. Best performing sectors materials up 22 . Median gains here. Its positive four out of five times. The worst performing sector energy, thats playing out as well. Down about 5 on average. Again, median its possible 40 of the time. The one sector i want to health interestingly enough is consumer staples. The gains are more modest up 6 . Over those five times thats the only sector thats up 100 of the time. Becky, we all know history is no good. It doesnt predict the future. But still, some traders are looking at past patterns to see if they reemerge. Becky, back to you. Our next guest is one of Julian Robertsons tiger cubs. He created the macro investment group. Things like betting on the collapse of the british 30u7bd. The collapse of japanese Interest Rates and the fallout after the onset of the gulf persian war. We have the president of Argonaut Capital management. David, its great to see you. Becky, great to be here. Thank you. Its perfect to have you here this morning. You saw the collapse of currencies in the past. Things like the british pound. Things like the iesh pound. But are you surprised with the speed at which were watching the euro decline . These things tend to get real momentum as they get going. And the dollar has got a lot of reasons to go upright now. And the euro has a lot of reasons to go down. I think what were seeing is response to fridays payroll report its in markets. We know quantitative easing began in europe next week. The thing were looking forward to is the fed meeting next week. Is that the issue that could dictate the direction . Yeah, i think its important to recognize that these currency cycles tend tour fairly long in nature. The idea that the dollar can keep moving i think is quite legitimate. And the fed, as everybody knows, is very likely to change their language next week. And is trying to prepare the markets for that. You would be in the camp of people saying even though weve seen a massive move tonight try shorting the dollar right now . I wouldnt try that. I would stick with the trend and allow it to persist. The dollar hasnt gotten itself to an expensive level at this juncture. Its still reasonably inexpensive if you compare where its been in the past. I think the markets overreacting right now to fears of rising dollar. I think there are problems with earnings growth. Because estimates are actually negative right . Year after year for q1 and q2 . Yeah. I think you have a problem with negative earnings. Its gotten to that point. Single digit im not sure. Is it a combination or the components. And the multinational and the dollar negative note . I think so for q1 and q2. Its tough to go up. Multiples shouldnt be expanding either. Multiples are at a fairly generous level at this point. And the idea that they should expand in a rising environment i think is wrong. Sometimes, they have and the economy was the reason for the rising rates, right . No question. But this is an environment where the underlying economy is doing okay. Its not doing great. Weve got reasonable forward momentum. Its enough to get the fed, you know, out of the starting gate. But its tough to expect multiple expansion in that kind of environment. Although it is a little looking through the hourglass, alice in wonderland you Start Talking a strong dollar because of an economy versus other places. Incredible low oil prices and yet we look at that as negatives for the market. This reminds a lot of 1995 and 1986 when we had a dollar decline in marketplaces. The market did okay. Until 1987. Until late 1987. Let me say it better than i did before. Single digits are probably right thank you i dont necessarily know if theyre negative, but they are it down they are down lower a decline in the year over year profits, growth. Expectations for earnings is growth. Q1 and q2. Let me say that better. Let me ask you something that just occurred to me. You know how it would help if some of the peripheral countries could devalue their currency, right . Sure. And thats been a big problem with the euro 105, does that effectively hold the value there . Will they be able to do better now and does this actually help the euro Stay Together because its so cheap now . What they need is internal devaluation. So its internal . So overall because they have their competitor. Theyre still with germany. Exactly. So they need to devalue it. Like the marc or Something Like that. Its going to help them negativeness in terms of the international. Is that more important than international . Its pretty important to them. If you think about the structure span of germany. That will be a Silver Lining. But there is a Silver Lining for obvious reasons. Its gaining competitiveness for euro. Its going to impact the United States but mother relatively close to the economy. Would you be more bullish looking at the u. S. Stock right now . I would be yes. I think you need to look at whats going on with the monetary easing going on in europe. Theres a lot of liquidity being pumped into the economy at this juncture. The economy looks like its doing a little better. They have a lower starting valuation point than the United States has so yes, i would be more bullish. This looks like a good time for a 10 correction in the u. S. Markets, according to you . I think thats probably excessive. But i think we are correcting right now. But as i said i think its difficult to get excited about an environment where you dont get multiple expansion and you havent gotten subsequent earnings with. Down for the year now . Weve kind of seen this playbook before. Midoctober, stocks sold off extremely hard. Everybody was worried that that was going to be the precursor to something even bigger in the market. Bullard makes one comment about maybe the fed should have the flexibility not to raise rates right now. Yeah. The thing reverses and we hit new highs again. The nasdaq hits 5,000. Thats overreaction, the question i asked you before whether this is another buying opportunity thats too hard to see because when fear comes in the market it blinds to you the real opportunity that exists in many cases . The fed is very sensitive to the level. Market we know that from the comments theyve made. The fed put i think is very much in place. But i dont think its going to get them off of their pack of tightening this year. You said you like european stocks within that do you have to be selective, which countries . I think germany looks good. The economy is doing pretty well over there. And you have a lot of companies that are sensitive to the currency and the german dax index. This thing has moved up a fair amount recently. Its not like youre buying the lows. But you also like japan. I do. And that is a pretty good move as well . Japans a good move. Japans a chief market but record earnings over there right now which people dont realize, the structural changes are starting to filter through on that economy. Were going to get wage increases which is going to help consumer spending. The productive side of the economy has picked up. Exports are doing quite nicely. Theres a lot to like about japan. We just had mark grant on in the last half hour. He talked about how he sees all of this happening he sees within two to three months u. S. Treasury is becoming a much more atraskt place. And he thinks the yield is going to go back down. And hes going to put a time frame on it. Youre nodding your head like you dont think thats an outlandish idea . I think the long end is going to stay supportive. But the front end is going to back up. I can envision an environment where the yield code simply flattens as the draw of lower yields from europe puts dollar 3resh on u. S. Yields. But i dont think its a bullish environment for fixed income if you think the fed son the move. When we were introing you, we talked about one of your big policies is oilrelated. Yeah. So whats your big call oilrelated right now . Well i think its a tough call to make right now. In any companies, debt junk loans, prices going up staying low for a period of time . I think theyre staying low . For how long . I think its staying low. I dont think we realize the forward, right now. We have a very steep curve in the oil market right now. Pricing in subsequent increases in prices over the next year. And i think thats highly unrealistic. And prince said never again 100. I tend to list ton him. They really would like it to go back up wouldnt they . They want to squeeze the share price. They do. Theyre willing to have prices lower for a period of time. Markets really up. Yeah, squeeze them out of business. Theyre nice people. David, thank you for coming in. Its really a pleasure having you here. Sure, happy to be here. How much is in your fund now . Still not talking about it. Cant even tell us an approximate size. You dont have to tell us what your return was. The returns are good. If its 10 million were not that impressed. Its more than that. Its more than that. Less than what putin has . Less than what putin has. David, thank you. Up next ripple effects from cheap fuel prices as trucking becomes a more affordsable way to transfer goods. And will the fed delay hikes . Well ask an expert rebecca anderson. And Tristan Walker wants to build a Procter Gamble for africanamericans. Joining us on set coming up. 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. Lets give you a quick check of the futures right now following yesterdays 300point selloff on the dow. Right now, a little bit of a bounce. The dow with an implied open plus 72. 5. S p 500 up 7. 5. And the nasdaq looks like it will open higher as well. Nearly 25 million containers are moved around north america by ocean liners railroads or trucks. But for the rails which had been the bigger driver could pose the biggest threat. Morgan brennan joins us now from kansas city. Morgan grgs morning. Good morning, becky, well, if youre going to invest in transport stocks theres one term you need to know and thats intermodal. What are we talking about . Well, is this an intermodal container, basically used to move goods, just anybody anything on a walmart shelf. Real quick, its freight that is moved across the country using multiple mode of transport, trucks rail many cases ocean liners. What makes it special, its using done container. This is the Fastest Growing business within freight transportation and the rails in particular have benefitted from this. Theyve been pulling market share from trucks that used to move these types of goods exclusively over the road. Now, weve seen this because you can move more by train. And when fuel prices are high its much cheaper to implement a combination. But that said, on the heels of crude, diesel prices have come off. Theyre about a dollar less per gallon than they were six months ago. And Donald Bratton of Avondale Partners notes that this is making the cost of trucking over long distances more attractive once again. However, this is really a point of debate the head of intermodal kansas city central said not so much. The rail move by a bull in comparison to a truck move regardless of what the fuel prices. Reporter even though this is really what handlists are watching right now, to see whether these lower fuel prices are going to encourage more of these types of containers to move by truck and therefore, take market share away from the railroads which in many ways can be the biggest threat to the railroads from Falling Crude prices even more so than any potential decline you can see in crude by rail volume. This is really the area to look at when it comes to transports intermodal. Back to you. Hey, morgan i guess when the Trucking Industry decides to pass the savings on to the shipping customers or whether they will boost their own profits . Has there been any sign that theyve been rolling back prices yet . Reporter so when it comes to different modes of transportation, rails, truck, they implement fuel surcharges. When fuel comes up you will eventually see all the companies will tell you those savings do eventually make their way out to consumers. That being said when you see diesel prices come off as dramatically as they have in the last six months. The trucking bills come off faster than the railroad bills. At least in the short term. Thanks a lot. Coming up markets look to rebound. At least at the open. After yesterdays selloff. Rebecca patterson will join us to talk the strong dollar. And combliximplications for the fed and their portfolio. Theres an elephant movie coming. I do remember Something Like an elephant. Shes six months away. Politically, its going to get tough. Protection sentiment will rise. The latest update. Plus well tell you why crystal meth is legal in ireland today. You had heard me right. What yes. Announcer time now for todays aflac trivia question. What company was among the original 12 dow components in 1996 and is still there today . The answer when cnbc squawk box continues. Ahhhhhh. Liberate your spine. Ahhhahhhhhh. Aflac and reach, toes blossoming. Not that great at yoga. Yeah, but when i slipped a disk he paid my claim before i knew it. Ahh so he had your back . Yep. In just one day, we approve and pay. One day pay, only from aflac. [duck snoring] over 20 million kids everyday in our country lack access to healthy food. For the first time American Kids are slated to live a shorter life span than their parents. Its a problem that we can turn around and change. Revolution foods is a company we started to provide access to healthy affordable, kidinspired chefcrafted food. We looked at what are the aspects of food that will help set up kids for success . Making sure foods are made with high Quality Ingredients and prepared fresh everyday. Our collaboration with citi has helped us really accelerate the expansion of our business in terms of how many communities we can serve. Working with citi has also helped to fuel our innovation process and the speed at which we can bring new products into the grocery stores. We are employing 1,000 people across 27 urban areas and today, serve over 1 million meals a week. Until every kid has built those lifelong eating habits, well keep working. Ok, if youre up there, i could use some help. Smart sarah. Seeking guidance. Just like with your investments. That sets you apart. It does . It does. Youre type e. And seeking another perspective is what type e s do. Oh, and your next handhold. Is there. You dont have to go it alone. E trade gives you the support and guidance to make informed decisions. Are you type e . Announcer now the answer to todays aflac trivia question. What company was among the original 12 dow components in 1896 and is still there today . The answer general electric. Business School Rankings by the u. S. And news and world report are out. Stan stanford, beat out harvard and the university of pennsylvania to take the top spot. And those three schools had had previously tide for the best mba program. But, youd have to live out there in pale low alto instead of cambridge. Roughing it. Or philly. Or chicago. Or once again, cambridge. For m. I. T. Rounding out the top five university of chicago andm. I. T. A bizarre thing has ruled out methamphetamine for one day resultinging in the drugs banned by the law becoming legal. The government is preparing emergency legislation to correct that problem. But it wont go into effect until thursday at the earliest. That is bizarre. When we come back this morning, how worried should you be about the strengthening dollar . Could it delay the feds rate hike . Steve liesman will join us to talk it. As we head to the break look at the futures. Theyre look better today. Not as high had as yesterday. But of course after the dow gave up 300 points yesterday. S p futures up over 6 points nasdaq up by 14. Stick around, squawk box will be right back. 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 s60 sedan. From volvo. This month, get these exceptional offers on a new volvo. Visit your volvo showroom for details. [ radio chatter ] [ male announcer ] andrew. Rita. Sandy. Meet chris jackie joe. Minor damage or major disaster, when you need us most, were there. State farm. Were a force of nature, too. Slow ride take it easy welcome back to squawk box, everybody. Among the top stories, googles cfo is retiring saying he wants to go backpacking and spend more time with his family. The Company Plans to name a replacement within the next six months. Rumors on the next generation of iphones. Apple is planning on adding sensors to detect how hard a user is pressing on the screen according to a report in the wall street journal. They want to know if youre beating up on your phone maybe . The device will be able to distinguish between a light tap and a deep press which seems like a great way to further confuse my typing. Lets go to a check on the markets. The u. S. Equity futures are looking like a little bounceback from yesterdays selloff. You got to add this up dow futures up 63 points. Dow lost 130 had points yesterday. S p up by 6, nasdaq up close to 14. And airlines with the number of passengers set to hit the highest level in seven years. Planes have been flying at about 80 of capacity last year through november. Airline, added 30 capacity per day. The trade Group Airlines for america cites the highest Consumer Sentiment in more than a decade. And affordability of air travel for reasons for the studys surge. Am i wrong . No im with you on that. Definitely not. The currency chaos causing some main in the equity markets around the globe but could an Even Stronger dollar force the fed to put off a rate hike . Lets get more on that from our senior economics reporter steve liesman. Steve. It gets interesting. A meeting that many thought would be kind of an easy call would begin to lay the groundwork for the first rate hike in nine years by removing the word patience to describe how long they would wait to raise rights. Clashing stronger with the strong dollar and Oil Prices Moving the fed further from the 2 inflation target. Here is the Core Management crisis. From below 2 in early 2013 and many economists say its headed lower. Jpmorgan on the core. Saying, quote, we look for oil and dollar moves, to shave about 0. 4 points off of core inflation rates in 25th. Heres where it complicates fed policy because it is in effect a tightening of policy. A it lowers inflation. If inflation rates go down it remains unchanged but the yield goes up. Its also what matters to the economy. The fed has said quote, theyll look for transitory factors but jpmorgan argues its not going to become clear in june whats transitory. And the fed, otherwise cutting, even the strength of the dollar more and causing more of a drag on growth. Does the fed care about that steve . They care a lot about that. They care about hitting both mandates. In effect, the truck is not that the dollar will move inflation lower. Usually, they look through that. The problem is the starting point here say point thats pretty substantially below the 2 target. So the question is do they really want to risk moving further from their target in this case . Plus, as i said the dollar is already doing the work of the fed as it. Telling the seniors 35 basis points seems pretty good yield to live on if inflation is negative . You can tell them that joe. Its hard to sell. Its true though. I know. But youre right, its hard to sell. But it is if inflation is negative and the rate you get more money on a fiscally adjusted basis. But i would not run for this had office on the real inflation youre making money what was the savings rate for years . It was zero negative. No when you put it in a savings bank . Oh 4 5 . The good old days joe. Yeah. We just went through all of this and realized i had like 4. Pa . I was just checking my kids savings account. 0. 16 or. 016. You know those aaa tax rates i had had at 13 . Floating rate should i have no. You should have fixed that. You should have fixed that. Thats why we have you here. Zero minus one is right. It does raise a question what jack lew does at this point. Right. Nobody neither the central bank or the treasury wants this. It worst them. Jack lew has been out there in the previous sector advocating what it has followed leading to the strength of the dollar. But i believe were getting to a point where the effect on manufacturer, the effect on the economy, that the strong dollar is going to become a domestic political issue and theres going to be pressure on the treasury secretary to Say Something. What do you make of the way the market has been reacting since friday . I think theres a lot of uncertainty. I think the fed needs to talk here. I think theres some possibility that they keep the word patience in next week. I think theres some possibility. Theyre definitely taking it out. Theyre definitely taking it out. But i dont think thats definite, though. Your gut gdp for the year is likely to come in where . 2 1 2ish. We have a change in our cnbc update of 1 1 2 to 3. 1. I think it feels like a mid to low 2s economy. Mid to low . No we have had a bumpup. Remember, we were below 2. Half a point to 0. 7 Percentage Points higher. Lets bring in rebecca patterson, ceo of bessemer trust. Of the its basically the carnegies, right . No henry phipps. I wish there were keep doing what youre doing. Youll get there. Maybe change what im doing . All right, all right. So listen like trusting your kids, theyll get there, right . Yeah. I referenceded you earlier. I dont think maybe its happened yet. In terms of ill summarize for everyone. It was about six months ago, you said i worry about the strong dollar becoming a political problem and causing, as we look at possibility then trade deals, causing protectionism sentiment to come back a little bit. Maybe we havent seen that yet. But the problems of the strong dollar are already here and now in terms of earnings. And thank you very much for remembering that. I think that were seeing some early signs that its becoming political with the trade deals being negotiated right now. Youre starting to see both sides of the aisle pushing for currency manipulation bills in order to give the president fast track authority. So its starting to creep up. The one im watching i agree with you, steve, if euro gets to parity, then maybe we get a more political focus around the euro. Keep an eye on china. Very soft. China has aloud its currency to weaken very modestly. They may be thinking we got to do have to do something not to devalue the rememby, but the politics could get more mess where. Especially if you have what i call devaluation creation. If china goes, japan, singapore. We have a bigger isk on the u. S. Economy and a greater risk it becomes political and ugly. That to me could be the straw that breaks the camels back. In the goldilocks environment, a ben franklin close. Positives and negatives. Theres a couple negatives but i can give 12 positives. The economy is Getting Better. The consumer the oil, all of these things. The one thing, you highlight this strong dollar its moving too quick. It unsettles people. Speed is huge. Steve, you touched on that too. If these currency moves come gradually, companies can adjust their hedging policies they can manage through it. When it comes very abruptly its harder for companies adjust their hedges and protect their earnings. I think speed is more important than the level for sure. I agree with you. Im watching china to risk. My job is to watch what can be wrong, as long as the currency doesnt keep moving a big a day or so i think the base case this is okay. The fed will go slowly in part because of the dollar. U. S. Costs will remain low. Oil is a major tailwind weve been talking about that in a while. Job growth is great. Unemployment rates coming down. So i think the u. S. Economy is in okay shape. But as you get closer to fed tightening. The first hike in six years, the of course the market is going to be nervous. Volatility is normal especially with valuations getting more. Do you remember i had a deja vu maybe five or six years ago, the word was we were devaluing the dollar. Right. And everybody was angry. We were devaluing and people said its okay. Now, were making the same argument. And or done for domestic purposes. Not done to gain the advantage. Well jack lew is make the Treasury Department is making that argument. That they dont want to see, the policies that are being enacted by those countries, as being done specifically to weaken the currency. But that is a ridiculous argument. You cant get to the question of intent. If you do it and it has that effect, its like we didnt mean to start a currency war versus we did mean to start a currency war. So then we have to take a step back and say is the only way for the world to get healthy on the back of a stronger dollar . No you could have structural reform in places like spain and italy. Right. And a lot of other stuff could happen, rebecca, right . We could have political consensus in america. We could pass laws. Yeah. Theres that and the idea that the only way to get stronger son the back but we also have to weigh this becky, which is are we better off taking it on the chin with the dollar in exchange for a stronger europe . Because what is the cost of the u. S. If europe remains youre basically saying we need to be like germany and suck it up and take the hit so that everybody else prospers . I think thats what im saying. Thats tough to say. Are we better off doing it that way . I think youre better off as a politician trying to sell this whole inflation rate and run. Joes going to do that. Hes going to go out there and convince the seniors and people retired why its so much better. That could be another one next year. We talk about political issues for 2016. I think all the savers in america, that could be a real issue. The german boon yesterday, tenyear german bond at 23 basis points german bonds are now negative. I heard 30 of european debt is now at a negative interest rate. I think thats right. This is a new world. That will be a factor that keeps us on u. S. Yield which is is great for people but for savers, where do you go . You dont want people to take risks to get a yield. At what point does it pay four to take the money out of a bank and keep it in a locker . What negative yield . Someone could steal it. What is the cost of security . People think its around negative 4 . I dont know. I still want the mortgage where i get paid. Its going to happen. Denmark. Denmark. Denmark, negative insurance rate. We should all buy houses. It sounds like a good deal. It is nice. Anyway coming up for now. Anyway cold and dry for now. Coming up Silicon Valley entrepreneur Tristan Walker will join us. Hes taking on the market for a personal care product. But first, a look at the stocks to watch ahead. Including a big beast for a chipmaker, stick around. Every day, our teams collaborate around the world to actively uncover, discuss and debate investment opportunities. Which leads to better decisions for our clients. Its a uniquely collaborative approach you wont find anywhere else. Put our global active management expertise to work for you. Mfs. There is no expertise without collaboration. Hey mom, you want to live by the lake, right . Yeah. Theres here. Did you just share a listing with me . Look at this one. Its got a great view of the lake. Its really nice mom. Your dad wouldve loved this place. Youre not just looking for a house. Youre looking for a place for your life to happen. Zillow some stocks to watch. And that may be things to see in trading for the day. Sunoco logistics announcing a 13. 5 Million Units from partnership plans to use the net proceeds to pay out funding borrowing. And sandisk is added to the goldman sachs, emc, outperforming, coming from wells fargo which means the stock could be range bound without any catalyst return. And express. And gnc says its Health Products are in full compliance with regulatory compliance. The company said the findings of a recent Third Party Testing, obviously, nats reaction to something because we dont just come out and say, hey, you dont bring that up unless theres been some question. And there had has been some question, i guess. Yeah. I lot of those supplements are not obviously, they dont go through the fda. Yeah there were questions brought up about particular substances that are were pulled at gnc and walmart. And this is the rest of things they sell. When we come back this morning, an entrepreneur who saw a gap for minorities. Tristan walker said he wants to build a gap for Procter Gamble. A Record Number of millionaires have moved to the United States. We have a new report about people are hitting the milliondollar mark and where they are investing now. 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. Why the coat see, now youre in trouble. Tristan looks good i look good. You look stupid. I think he looks good. Thank you. Some of the biggest names in technology have the least diverse workforces. Our next guests is one of the few africanamerican entrepreneurs in Silicon Valley. He left behind a startup to create a consumer company. Tristan walker is ceo and founder of Walker Company. Welcome. Good to have you here. Glad to be here. I was reading about the first brand under your Walker Company brand. Its bevel. A razor. Why . Bevel is the first designed specifically for people with coarse curly hair like me. 30 of men and women have it. Pretty significant problem. Whats different with the razor . Its a full intense system. A razor say singleedge safety razor. It cuts the hair level with the skin rather than beneath. If you have curly hair whats the razor going to do . Go into the skin. That combined with the shaving cream andbalm. You dont think they have another access . I didnt know about Silicon Valley until i was 24. Before i moved out to go to stanford for business school. The number one business school. Yes. As we just read the piece. Did you see that . Yes. You have big time investors. Ben horowitz. Ron johnson. Absolutely. The apple and jcpenney. Whats he up to . He started a brand hadnew company. Im looking forward to it. Mark schuster. Hes been incredible supportive of the vision. Whats great about the investors, all of them have had the same problems. Tristan, you said you didnt know about Silicon Valley until you were 24 and went out there. But you very quickly figured out thousand work your way through . Absolutely. Most people think if you didnt grow up with this understanding you cant possibly break in . I think its a matter of hustle. Ive been fortunate and blessed to have the Stanford Community about me. And to educate me about Silicon Valley. Its all up to me to hustle through and figure it out. I didnt have any network or contacts throughout. I figured it out. Why dont you tell our folks how exactly this works with bevel. Its a Subscription Service . Yep. 59. 99. A starter kit. What do you get . Correct, this the starter kit, it comes with the razor, shave cream, restoring balm. You get 20 blades. This is the 30day starter kit. You get 20 days. Something that a lot of folks wouldnt expect. So this kit is 59. 95. Right now, this is a 30day starter kit. We also have a 90day starter kit which goes for 89. 95. And then we replenish at 29. 95 a month for customers. Folks love it. Its a razor. And the money is made with the blades and theyre expensive. Right. If you have one of these i dont know what this thing is its got like a ball its got a motor. Its like seriously. Its like i think its planned obsolescence. They bring out a new one every year. I dont know how many blades. The first blade will pick up your skin. The second blade will cut beneath. Is that true . And theres like 20 of them. Yeah. The cost of making single blades is close to nothing, right. For us we dont want to make money on the blades. Thats an archaic method of selling in the business. Its about selling the problem with the entire system. Will you ever go brick and mortar . Absolutely. Ron johnson has a lot of that stuff. We feel the only way to build a brand as significant with legacy like Procter Gamble is were starting online but youll see the approach. You have to choose carefully. And pick a partner . Absolutely. Care very much in the brand, tone of voice, what were about. Were deliberate in that regard as well. What type will we see . Jcpenney . Certainly mass retail. Definitely going to be snag we push this year. Specialty, even our own. How do we reimagine not only the barber Shop Experience but the barber shop retail as well. How many customers do you have now . A good enough number. One thing ill tell you just in the past month, we drew 30 . Over the past year we grew 30s . Still looking for funding . We raised 9 million to date. We care very much about the profitability. But we care about this. So will will be next in terms of a product . So what the company is all about developing brands around problems for people with color. The razor is the first problem we wanted to solve. We think of problems like vitamin d deficiency. And the prevalence of mischarge in the community. How profound an issue it is. There are a lot of things we can do. We just are now on fullon execution mode. Issue of diversity on corporate boards in Silicon Valley. I know this is one you care deeply about. Absolutely. Especially for my board. Right now, its a board of just two of us. Were actually on the prowl looking for an independent director. One thing thats important for me is finding a really diverse independent lead right . For us were serving a very Diverse Consumer base. It would make sense not only for the team but the board. Is it a point for Market Solutions to ease some of these solutions . Absolutely. I got an email just the other day from a gentleman in the army, he got to shave every day. He said ramp bumps have been as big a part of me as my uniform. You can make money, employee people. Its about building something that people can be proud to support. We mentioned youre Silicon Valley. Your social media experience. You were at foursquare. I was employed at foursquare it was a fantastic time. Good luck. Tristan walker. When we come back this morning, more on this weeks big market moves. Well ask mark acota and doug ramsey if theyre preparing reports for a prediction. Stick around. Squawk will be right back. Gear up for great. Tigers, both of you. Tigers . Dont be modest. I see how youve been investing. Setting long term goals. Diversifying. Dip you got our attention. We did . Of course. Youre type e well, i have been researching retirement strategies. Well thats what type e s do. Welcome home. Taking control of your retirement . E trade gives you the tools and resources to get it right. Are you type e . 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. Looking to shake off that 333 point drubbing that allinventory data and the euro at 12year lows also fears about the feds next move might keep investers on the sidelines. A full plate of Market Wisdom is just ahead as we count you down to the opening bell. Plus the host of the hit renovation show Property Brothers are coming up. I will call soon to celebrate. Congrats. Thank you. Is there any reason to fear the home renovation wave thats flooding the airwaves. Could it be a sign of remodeling bubble . Stick around to find out. And who wants to be a millionaire . The details from a new report showing the number of millionaires is growing by leaps and bounds. Were set to show you the money. The final hour of squawk box begins right now. Announcer live from the most powerful city in the world, new york. This is squawk box. I dont know why thats just going up and back. A big topic of conversation. Welcome back to squawk box. First in business worldwide. Im joe kernin along with becky quick. And really fancily dressed man named scott walker in for andrew wearing a jacket in for andrew this morning. You got the thin andrew tie, too. Not that thin. Thats pretty thin. Look at this. I dont have those really cool leprechauns on my tie. Thats kicking the can down the road. That was free. That was a free tie. Theyre all free. Were less than 90 minutes away from the opening bell on wall street. The futures right now are up up 75 earlier. Should be an interesting session, i would think, after friday. The rebound on monday. And then yesterdays drubbing. Lets look at whats happening in europe. There was a thing where we werent feeling connected. Given currencies and everything and qe is really is. Where Interest Rates are over there, where inflation is were one Big Happy Family in the world well, not so happy. But definitely whats happening there is affecting us here. You can see, i dont remember anything other than the handle i dont either. If it gets under nine points. Seven would be different. Well there have been concerns. Yesterday, michelle was here. We were talking about somehow of the individual members were suggesting that maybe the greeks should step out of the euro. Well see as these negotiations continue. Among our top stories today as joe was leading up to this the euro continuing its steady decline. Check this out. Because it getting uglier every day. If you want to take a look at the currency. 106. 5. We dw see a 105 handle earlier. Well be watching that closely throughout the day because that seems to be dictateing all the other market. Mortgage applications dropping in the latest week. The decline comes as rateses jumped. And in the Fund Financial rates are focused. The fed will release results. Capital analysis on the nations biggest banks. I have a couple of free tshirts back on my desk you might like. Do you really . Yeah. I dont know something that ive not heard before. Ill consider them. Im bring them in tomorrow. I really thought those were leprechauns on there. Why would you Say Something bad about leprechauns . Do you have got a problem with leprechauns . Not all, i love st. Patricks day. You wear green, not orange. Maybe ill wear my green sports coat on the show. Its not a good idea to pretend you have a green jacket. I dont think. They got them on sale. And i would wear it. Youre not superstitious . Not superstitious tradition . Yeah, tradition. Okay. The markets are hitting the reset button when it comes to gains for the year but how does yesterdays big selloff stack against the other big pulloffs the market suffered. Dom chu joins us. Hi i know none of us would want to wear the green jackets out of respect for those guys in augusta. The pullback that were seeing about 3 right now, its not yet a pullback the size that weve seen over the course of the past year. I just want to walk you through the five times that weve seen a pullback of this market before we begin rally towards record highs. The first one happened back in april. Down about 4 . If you move through the summer here late july through early august you see another 4 drop. Two 4 drops. All of a sudden in the fall a bigger 7 move. So 4, 4, 7, here are a couple of 5s, right . Then december 5 drop for the s p 500. 4, 4, 7, 5, 5, 25 drop divided by five times. That mean the average drop in the s p 500 over the past 12 months has been 5 . Well, were right around 3 right now. Youd have to get down to the 2011 2010 level before this is a 5 pullback. The average of what weve seen over the course of the past year. Its important to note here the sectors that have led to the line since the alltime highs, energy telecoms. And as Interest Rates tick up you see those go down. Joe an interesting move overall. This is not yet one of those panic modes just a regular rue people pullback that weve seen happen five times in the past year. Joe. Back to you. Some day i counted the 9. 9 pullback in the s p. It was so that 7 is a closing basis. Youre right. I just hear from the closing prices. But im saying thats 10. Youre going to at all it 10 so its more like a 5. 5 6 pullback on average still not a bad deal right . No. I dont want 2008 again. That should last a while. It got wrapped up in bear markets all in one. 2011 april to october of 2011 we saw almost 20 pullback in the market and we rallied back. The president has been there, especial has been there especially the past three or four years we have seen a 17 , 18 correction. Doug ramsey chief Investment Officer of loophole investment fund. He said investors should buckle up for a 25 to 30 correction which could be coming. Also with us mark ohada. Hes not as bearish but could see a pullback in buybacks and opportunities in the housing market. Do you doug, ill start with you, if based in funnels or basics . Its fundamentals. Its where the measured indicators are today. And market option although ive got to say, i mean the most recent high just six days ago. It was pretty broad. The dow and the s p and the nasdaq and were all at new highs six trading days ago. And so you know its pretty gutsy to call a top just six days after its happened. I also think, maybe im just conditioned like everyone else to buy the dips. I think that bear Market Forecast is for something starting later in the year maybe pushed off to 2016. That 25 , 30 , thats an average cyclical bear market since postworld war ii. I guess since youre saying it will move up before that happens, so it will be 25 from where we end up. How much higher would be reasonable in your view that we would go . In other words, if were go only going to lose 15 from here its really not 30 . Will it move up 10 before it happens . I dont think probably quite that much. I mean what were looking for say narrower push to highs. Where, you know maybe its just the dow and s p 500 left standing at the end. Where the small caps continue to underperform. By the way, with yesterdays carnage, the small caps the russell 2000 is right where it was one year ago a week. Another composite, the nyse composite is actually down from where it was last july. Weve actually positioned the begun positioning for this last summer. I mean we cut equity exposure. We moved around a little bit. But we had been running about 65 for a long period of time in our tactical funds. And weve got the latitude to shift between 35 . So were 55 now. I do think well get that opportunity later in the year to get back toy a very defensive position. Mark, we havent talk toud in a while. S p 115 on the euro even higher as we spoke. Bonds were probably about the same. Whats new with you looking at all these different markets . Well volatility certainly is new, joe, weve seen a lot of that. That was the call this year. It seems to be hardwired into the system. Were in this post vocal world in this etf world. With a stress test causing people to do Different Things with their treasury baskets. And that volatility were seeing is showing up in a big way this year. And for us we think thats a really great thing for active management. I mean we are in this qe period where everything just melts up and up and up. And it makes you feel more and more and more uncomfortable as that keeps happening. We get these periods where markets get very choppy. And then suddenly theres a lot to do. Im actually really really excited about the markets right now. Theres just tons to do all of a sudden whereas before youre just not feeling great about all the debt youre putting on. Its like youre squeezing more blood out of the turnip all along. Youre excited youre not excited about necessarily getting long with new positions . No. How do you do it . Joe, theres places to get long. Theres credit right . We have negative rates in europe. We have certainly a situation where the u. S. Yields look very very attractive. The dollar looks attractive. We think that spread impression is going to be Something Like a two or threeyear sort of trade manage that continues to benefit the u. S. Markets. I wouldnt be surprised to see if you would see yields here for six months. I think thats a very positive place to be. I said that we liked weve got a big sort of bet going on in the oil space. Its a little different in the oil space. Weve got a lot of highquality credit that we really like. We put their portfolio in that space. Where were not that sensitive with what happens with the commodity. But were going to make probably 12 , 15 20 with that portfolio. But we also like the building products. Youve got a lot of this cost coming out of the system and thats really beneficial for some of those companies. So theres just a lot to do all of a sudden. And its not really coming markets per se. And i agree with the point around the bay, though that was the call this year that the stock market would be challenged. We werent going to see this big zoomup in stock market. And we were going to see this bumpy, choppy market. I wouldnt be surprised if we see this choppy market in a stock market for quite a bit. Why would people stop buying back stock . Thats another thing you said with the buybacks that would help a little cash thats missing . Yeah 70 of Free Cash Flow has been going to buybacks. Financial engineering has its limits. Theres a certain point where it really stops working. And cap x has to really be the engine that creates the longterm profitability for companies. And were hoping that pivot happens sometime this year. We still see about 700 billion in buybacks this year which is an amazing number. When you think about all the changes and the number of stocks there isnt really over 5,000. Only have 3,000 stocks the markets really are a strange place when you think about how much buybacks have disordered things. But we would hope at some point, right, you see a pivot and turn to cap backs. We sort of see that happening in spaces. And that really will be a great longterm profitability for companies. And thats really where were see it going. M a is another thing that you see going this year. M a makes a lot of sense because in a deflationary environment like we have right now, youve got to do something to get Pricing Power back. M a probably another way that companies do that. All right. Doug, i mean you dont care about do you care about talking about individual names . Or we sort of know where you stand on this . You can almost do this with index funds or something. Well we do our focus on the equities long equities is industry groups. Its a quantitative approach and valuations. From a level change. Were very heavy in both health care and technology. Weve owned the managed Health Care Stocks for six years. I mean theyve been a multi100 home loan and theyre still attractive. Mark thinks theyre fairly valued now, right, mark . Yeah, weve got this Supreme Court challenge going on. Were kind of on the sidelines for some of the hospitals. We do like medical devices, though. We think they could see some real benefit from a republican congress. Especially if we get a ruling thats favorable as far as the plaintiffs are concerned here, that could be interesting to see how that sort of pivots within the congress. And repealing the medical device impacts would be positive for those companies. Were kind of on the sidelines with hospitals right now. Okay. I dont disagree with the fairly valued but its in a market thats very valued overall. Thats true. Okay guys. Thanks. We still have an anchor named doug ramsey i thought he was coming back. Do you remember him . Before my time . Do you . Hey do you remember doug ramsey . No. Okay. So old. Sorry. Okay. When we come back this morning, who wants to be a millionaire . How about 10 million people. Thats the number of millionaires that the United States just reached. Were going to take a look at that growth right after this. Still to come this morning, the Property Brothers join us to talk housing. And more on yesterdays selloff on what investors can expect today. Jim cramer will join from us the new york stock exchange. Stick around, squawk box will be right back. 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 everybody. This is squawk box. Weve been watching the futures this morning after big declines yesterday youre going to see some bounceback. Even the gains we saw earlier, the dow futures up by 54 points to but that in context, you have to remember the dow was down by 300 points yesterday. S p futures up higher by 6 points nasdaq up by 13 points. Again, these are modest advances after the big declines we saw yesterday. A new report yesterday showing that since the market bottomed in 2009 a Record Number of millionaires have been minted in america. Cnbcs editor robert frank is sheer. Take us inside the numbers. Good morning. Good morning. The rich are getting richer and more americans also getting rich. A new study showed that the u. S. Added nearly a half million new millionaires in 2014. Adding 12. 1 million with specter groups which describes millionaires with a million or more investable assets. Were well above that 2007 level of 9. 2 million. Multimillionaires also growing there. 1. 3 million households worth 5 million or more. In the u. S. 142,000 households worth 25 million more. Wealth at all levels growing. Generally, millionaires are bullishes on the markets. Half putting money in the stock markets over the next 12 months. 23 plan to invest in fixed income. More than half putting their money in cash or savings. Only 39 are investing overseas. With europe now theyre favorite region after years of favoring china and brazil. Among the millionaires biggest worries, Interest Rates, tax ratings and Overall Economic policies. Andrew is not here i guess ill try to answer it or ask a few questions. I mean what can be done to try to stop is there a legislation that we should be considering . Is there can we get congress can the president take some executive action to try to i mean look wealth is more tied than ever to the stock market. So theres no way to slow the growth of these millionaires. Ask the feds to raise rates. Right. This could be a slowdown this year. Whats interesting if you look around the think tanks i mean this has to be stopped. All this wealth creation. And possibility. But if you look at house wolds worth 100,000, 500,000, all of those categories have growth. What is it that we have to look down at these people 500 . I dont know. Im marveling that hes keeping a straight face. Yeah. Channeling. Rebecca was already on. At the christmas party, its like, hes chasing her around im like leave her alone. Shes one of our people. You told me i think she likes me. Its a good thing, weve been married for 12 years. Oh, my. And they were summaried. Oh boy. The fast food chain coming up in the big apple that has everybody cooking. Theyre opening their first restaurant this summer. Its hard to believe fast food chain does not have a fast food front in new york. Well tell you which one it is. Then it the Property Brothers talk about their show success and whether or not were in a remodeling bubble. Squawk box will be right back. At mfs, we believe in the power of active management. Every day, our teams collaborate around the world to actively uncover, discuss and debate investment opportunities. Which leads to better decisions for our clients. Its a uniquely collaborative approach you wont find anywhere else. Put our global active management expertise to work for you. Mfs. There is no expertise without collaboration. Introducing preferred rewards from bank of america the new banking rewards program that rewards our customers, every day. Youll get things like rewards bonuses on credit cards. Extra interest on a savings account. Preferred pricing on merrill edge online trades and more. Across your banking and investing get used to getting more. Thats the power of more rewarding connections. Thats preferred rewards from bank of america. Fast food chain chickfila will open its first new york city restaurant this summer. The chain generates about 5 billion in annual sales at more than 1800 restaurants. Theres a chickfila stand at nyu but they dont have a fullservice menu. So where can you get a golden fried breast chicken sandwich and waffle fries . The location will be at 6th avenue and west 37th street. We could almost walk from here. Its not far. Youve had it right . I have its okay. Its fried, isnt it . It tastes pretty good right . Cannot care pollo loco is what i wish we had. Grill them right there. I guess its okay. Closed on sundays, chickfila. Theyve got they have antiquated antiquated notions about things dont you think . Look at you youre nervous. Im not the one talking about it. A few stocks to watch on the move this morning, General Mills raising to 44 cents a share. Verifone cites a negative impact from a stronger dollar. Sandisk and goldman sachs, including valuation. Still to come jonathan and drew scott aimed to help home ooirns bind a fixerupper and make it a nest of their own. We ask them if the rising rates will hurt the housing market. Right now, a look at u. S. Equity futures. Dow futures up by 55. S p up by 6. 5. Nasdaq up by 14. 5. Squawk box will be right back. Welcome back to squawk. Lets take a look at stocks in the news. Brown show sees it below forecast because of disputes at the port. Vera bradley, and the handbag maker said Business Trends remain quote, difficult. And express earnings beat forecast and giving an upbeat outlook for the future year due to promotions. Hgtv is one of the hottest networks on television. Getting its highest rating ever in 2014. Property brothers getting 6. 3 million viewers. What does this mean for buy and selling your home. Lets ask the stars of Property Brothers drew and jonathan scott. Thank you for being here. Its actually the tight jeans that jonathan wears when hes doing renovations. Killer right there. Who was the sexiest guy . Both of you . They consider this one guy. My hair his butt. Your hair his butt. Can we see . If you want. Lets do it at the end. Right, exactly. We could use a crowd. Up two years in a row, sexiest jeans in a row. He declined thats why they gave it to us. Next year you can have it back. You guys like kidding around and yanking peoples chains because i know for a fact one of that was. Yeah he was. Guys i know youve seen really tough times since the housing bubble burst. But you think things are starting to turn and pick up right now . Yeah theres volatility in the market. We say to people anytime say good time to get involved in real estate as long as you educate yourself. 2013, we saw a lot more appreciation than last year. 2. 5 increase than last year. Its time for people to continue improving their credit. Continue lifting up properties that they can fix up and put equity into it instead of buying something that somebody else has fixed up. I always guy into my city is not going the way other cities are going every city you have different markets. As jonathan said the main thing is education. Work with professionals that can help you see where the best investment is for you. Is it gets tougher to find good deals as we watch prices appreciate . Its tough, there are investors just like us looking for property. We see a lot of bidding wars. People have tried to price their house low to create a frenzy. Housing that were dealing with clients they go 200,000 over list price. 200,000 . Weve had that just in toronto filming. And now were here for the next five months. Where are you going . We work all over. Were mainly from white plains up to connecticut. Okay. Vegas you sort of made your mark there. That was like a trouble spot. Wasnt it the worst place in the country . Yeah that was the original move down. I looked at the market across the country. Florida, arizona, nevada were the hardest hit. But that also meant there was the most opportunity there. When we first moved into vegas, we were picking up properties they were destroyed. People had torn them apart. About 30 grand a piece. Especially the low to midpriced homes, the midpriced have come up a lot. Theres not a lot of activity but quite a bit. Why are you here though . Were here one, because we have a large audience for hgtv. And because we heard you need your kitchen done. Can you get over . In new york youre getting 2,000 feet yeah for 5 million. Thats not the case. We got a home for 495,000 thats obviously outside of manhattan but theres potential in different areas. We just me and my friend just finished redoing an entire huge house. It was my wifes family house that she grew up in. Now, are you guys are you guys handy . I mean is that how . I dont know are you handy, drew . Watch this summer. Youll see how handy i am. He is the contractor. Lets see, i had my wife an architect, two Construction Companies and an interior designer. Did i remodel . Can i take credit for being handy . You were the general. The funny thing is im a contractor and designer by trade. I went to school for that. But back in the day, drew used to get in there when we first started our business mid90s, he would do everything siding. In about 1996 he broke a nail he was done. Im not picking up anything after that. Actually this season of Property Brothers its a little different, you see me get hands on a lot more. Obviously, we do up to nine privates at a time. In a year jonathan does 60 renovations, 60. Handy is sexy for some reason. No no thats handsy. Seriously. I never understood. But it is. You can work around so i am screwed. Hes been trying to catch up for ages now. You and i will keep the suit on and the tie. The funny thing is we say to people, if youre looking to fix up a home and you really want to have your dream home the fastest way to get to your dream home is to marry a contractor ladies. Is the kitchen still the number one thing that people are remodelling . I think the number one thing that people love the kitchen its the hot spot for the family. Most of us spend time there together. Its the sexy spot of the house. Well, it can be. It can be. There are a lot of houses that we toured around with renovations those kitchens are not sexy. Its also the most expensive room in the house. Its the room that people hang off the kitchen now. Thats the 50 shades room. Wow, it can be. I like to have that open concept. You do have that tv room or family room just off. If youre entertaining you can have that open flow from the kitchen. And specialty rooms as well are becoming popular. People dont want to spend a fortune taking kids to movies. Theyre building inhouse rec rooms, Dance Studios yoga rooms. Jonathan put a commercialgrade water slide in a house. Why not. Not everyone should do i dont think but it was definitely its not just you guys combine a little bit were connected by the brain. I got most of it when we were separated. And the brawn as well. Yeah. The hipster we just had a guy who brought razors in. There is something that allows it to stay that length too, right . Im just trying to brush up i havent heard. Its actually a genetic problem. Theyre testing to create more Property Brothers to make more successful shows. Im going to watch this show. You guys are crazy. On the show we take the job seriously. We want to help our clients get into their dream homes, but we dont take ourselves too seriously. You guys do really great work. Some people hear the success of this show. The success of other shows. Everybody is remodeling on tv it seems, whether restaurant shows, what have you, a size of the bubble the top in the remodeling market you guys must hear that . Yeah. And honestly i dont think so. Everything slowed down after the collapse in the economy, but when Consumer Confidence came back people started spending again. This whole home renovation trend has really only picked up in the last 15, 20 years. It will continue. People want a beautiful home. You guys havent seen necessarily normal. People flock to you. They want you to do it. Some of the people have not seen our shows. Were actually out in different communities. We have Real Estate Agents working with us try to find people that we can work with that just dont like renovations. We do see if theyre regular families, they have regular budgets. Thats why you see true emotion on our shows. Guys that are on tv that want people to know that theyve really made it they have an elevator in their house. Oh yeah. Now, i do not. Have you ever put do you happen to have an elevator in your house . He has he has an elevator in his house. Scott has a single story home. He put an elevator in for no reason. The producer told me to go there with you. This is now . People that have really made you know what, were going outside. Is that the first time viewers have heard about this . I dont though do you think i talk about it on the halftime show . Youre getting an elevator. The gluts. He was on peoples sexiest before he got the elevator. You got to take it up. I didnt put it in the house. I didnt put it in the house. You bought a house that bought an elevator. Ill say, yes, we have worked with houses with elevators before. Its a great thing. Ive seen people who want to put it in the house where it doesnt make any sense. Did you ever get in the elevator and so you can tell your friends im kaling you from the elevator. When cell phones came out, i had that big brick phone. It was my girlfriends dad. Id actually stand on the corner pretend to make a call so people could see me. You dont squeeze into a dumbwaiter, do you . Is there a way to get down to the indoor pool without the elevator . You can you wish there wassen inground pool. You do allow your Service Staff to use the elevator. The Weight Capacity can you guys stay. Andrew is coming back tomorrow. Please come back. Im feeling tension from both sides here. I may sneak out. Guys we want to thank you so much for coming in. Im going to give you a ride in the elevator. Can i come over later . Silence. Exactly. Honestly, i love the show. Thanks so much for coming in. We appreciate it. Coming up. Were going to have to hit the reset button on our relationship. Coming up weve hit the reset button on can i no, youre good. On games for the year after tumbling more than 300 points on the dow. Find out if there are more Turbulent Times ahead. Be sure to join us tomorrow on squawk box, when greg hayes, the new ceo of United Technologies appears on squawk box with us. And harold hamm is back to talk about the Constellation Energy brands. To discuss that success. Thats tomorrow beginning at 6 00 a. M. Eastern, squawk box. With the stock brothers andrew and turning two worlds into one takes love. Helping protect that world takes state farm. 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. You know what they say about payback, right, you do right . Yeah, i do. Payback is a bitch. Its better served cold. We can do this later. Welcome back to squawk box, come on, elevator, boy. Oh. Welcome back to i really am going to take you outside and mess you up. Welcome back. Futures go ahead, youre doing great. The futures right now are up. Let me see, theyre up 55 points. I guess you should have not bought the house. Yeah right. Its not your fault. I havent even prepared for this. I cant do it if i dont have my tie and coat . Really . Do you think ive prepared for it . Todd coleman is a senior oh he is senior v. P. Of ambercino brothers. Rick santelli is here as well. Rick do you think were going to rebound today . Rick do you think well rebound today or have more weakness by the end of the session . You know i think we are going to rebound a little bit today. But i think the fascination with equities, of course is driven by how to trade the equities at a time where Central Banks are going in different directions. We have the weakening of the euro at somewhat historic levels. But whats really fascinating is that were still basically at just about where we settled last year on rates. It doesnt fit. Joe, the treasury market hasnt traded exactly correct since the january 22nd ecb meeting. Its stubbornly sluggish with regard to dropping its rates and find buyers when you get days like yesterday where youre down by 300 at one point. Up need to pay attention. There could be many illogical incongruent bumps that got us here in the market place. 1. 5 we heard for the gdp number from mark grant. Where do you think consentence sis is right now . And how do you do 1. 5 with 5. 5 unemployment . I dont know how you do 1. 5 and continue that and thats enough to get the fed to nudge rates. I think were probably more in a 2 to 2. 5 range. Ecks with a selloff like yesterday is probably not too much of a price, joe. But what is a surprise the lack of volatility in the market which is an intended consequence of our fed policy but what is an unintended policy how to get it back up on the market thats supposed to alert people theres a change happening and it isnt coming. Are you at 2 above or 1. 5 senior more realistic . Which is more realistic . Easily 1. 5. I do think the Third Quarter weakness isnt going to what about for the year . For the year i think were roughly between oh, i dont know 2 2. 25 like the oped that has m. I. T. Prepare a program to write it and make it look terrific. But, yeah i dont think well see much. The other thing, blue yield 00 minus 19 basis points. Options didnt go very well in russian. And we see that the treasuries arent acting quite right. But what this tells me its pretty much i think the markets are trying to exert their different personalities, under the thumb of many repressive scenarios. And i think its really going to get complicated to trade. But i still think at the end of the day, equity are probably going to give up ground. I dont think its like the epilogue for equities. I hate saying tina. But its partially true, i do think we focus on one responsible for europe outside of what theyre preaching. And i think thats an exodus of money out of europe. We saw it in greece. We saw it in russia. And not enough people are talking about it in europe. I think i saw somebody rate the panfication of europe. Its not my quote. I dont know who said it. But the outlook in europe in general to give mr. Pickity even more fodder to brag about how socialism works so great and he goes into an area of country that that we dont have positive gdp until we celebrate our 70th birthdays. Rick thanks todd see you guys later. I wonder if the dollars had its run . At least that would take pressure off of yeah but if youre still looking at the Central Banks calling the shots. Maybe we dont rise as quickly. That may be the call. I think thats what ends up happening. So you can do this i wanted you too, but we cant i wonder why. Is there music . As youre muzack. Still to come let scott read this in come on. Thank you, joseph. Talk to greco. Man. It was a bag morning yesterday for jim cramer celebrating ten year of mad money. We catch up with him after the break. 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 get down to the new york stock exchange. You rang the bell. Was that on your bucket list . Its pretty exciting. The great team i got yes, yes. Bucket list. What happens up there, you look at the vast panoply of the greatness of cap allism. Youre up at top for the day. Youve got tone joy it. Quite a lineup down there. Who is that tall handsome man next to you, jim, on your right. Thats mark hoffman, hes our boss. Yes. Youthful. Im trying to find my nephew cliff mason who appeared. Comes out every five ten years. Never seen him before. I knew all about him. That was cool. I saw him at our breakfast, holy cow, ive got to tell my sister hes here. I saw him at thanksgiving four five years ago, tough to find. Head writer. Hes good. He is. Head writer and only writer since the beginning of the show. The dollars moved fast and that has some people saying its disorderly and thats why we had those, you know separated by monday but we had two tough sessions. Have we done enough to just wake people up or is this we ask this a lot, dont we . We never know if its going to turn into anything. I thought this morning looks very important. What happens were not going to see a change in the dollar until we see a peek in dollar until we see europe Getting Better. When i saw the stock market up it heartens me if we see a sign things are Getting Better in europe the pain will in. Yesterday we had dick fisher saying we needed to tighten immediately. Im hoping stanley fischer, who remembers the asian contagion, recognizes we could have a major run on brazil mexico turkey south africa. If we tighten right now. I think that was what yesterday was about and i feel better today. Jim you want to talk about the eagles at all or no . No. I saw your tweet. I thought id check. Why do you hurt me scott . I dont know. Youre number one fan, i want your reaction more than anybody elses. Im a fan. Theres a master plan here. I know its not just to get guys off the operating room who have had their knees redone. Its just not about knee surgery here. I have to believe that. Does this translate to villanova, too, or not worry. Ill take villanova in a bracket. I think it may have an easy path who has the easy path. Today starts in earnest. Big east tonight. Im picking big ten rutgers no. Sorry. Im starting on you. Thank you, guys. Starts tonight, though the tournament . Some of it. Not the big the other ones begin. Coming up now the time to take a contrarian view of the markets . Countdown to the opening bell is next. E financial noise financial noise financial noise financial noise at mfs, we believe in the power of active management. Every day, our teams collaborate around the world to actively uncover, discuss and debate investment opportunities. Which leads to better decisions for our clients. Its a uniquely collaborative approach you wont find anywhere else. Put our global active management expertise to work for you. Mfs. There is no expertise without collaboration. Can it make a dentist appointment when my teeth are ready . Can it tell the doctor how long you have to wear this thing . Can it tell the Flight Attendant to please not wake me this time . The answer is yes, it can. So, the question your customers are really asking is can your business deliver . For those who are keeping score, the euro dropping 12 against the dollar so far this year. Many hedge funds and big Institutional Investors are long the greenback. But Jeffrey Gundlach says this time the consensus is right and a contrarian position could hurt the portfolio. Investors should not short the dollar. We heard that from other guests today as well too. Futures, set for the trading day here after yesterdays big slide, we will have an implied open higher not as strong as earlier in the morning but looks like a positive start in trading. Thank you for being here. A pleasure. Pleasure. 105 really. Viewers of your show werent watching this. 105 on the euro. Join us tomorrow. Squawk on the street is coming up next. Everybody get up yep, good wednesday morning welcome to squawk on the street. Im Carl Quintanilla with Jim Cramer David Faber at the new york stock exchange. After the second worst day for stocks premarket steady. The euro is the story. As you heard joe saying falling to 1. 05. We have not hit parity since 2002. Vinner tos at 1030. The