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Both down by 0. 75 . Chinas february exports dropped by more than 35 in u. S. Dollar terms. Imports there fell by nearly 14 . Of course, were watching Oil Prices Today too. Crude was up by 5. 5 yesterday. Its up 45 from februarys low. Right now its down by 1 , but wti still sitting above 37. 50. Scott . All right. Speaking of oil, the Goldman Sachs Commodities Team out with a new report today. That title, the three rs. The goldman team suggests those factors have driven a prema chur surge in Commodity Prices that is not sustainable. The firm is maintaining its bearish view on gold. It keeps its nearterm copper price target of 4500. As for iron ore, goldman predicts a rally will likely prove temporary, so its maintaining its end of year target of 35. And on oil, goldmans nearterm view is for a trendless market with substantial volatility between 40 per barrel and 20 a barrel. That firm has a bullish end of year view on energy, saying oil will likely rebalance this year and create a deaf it market by year end, but goldman cautions a socalled green shoot of a deficit alone is not sustainable for a market. Were going to talk with commodities King Dennis Gartman at the top of next hour. I wonder what all that means in light of equity markets. Once again, fair is foul and foul is fair. Is oil going up good or bad for the stock market . Do we want commodities to bounce . Do we worry about inflation . Probably want some stability. But they said probably stale volatile. I think since friday, since that great job number we had, markets struggled to close higher on friday, but they did. Yesterday struggled to close higher. The nasdaq did. Im starting to feel like now that were its the first time weve had 100 likelihood. Oh, no, we could double Interest Rates at some point this year. We could go up another quarter point to half a percent. But these traders, theyre like, oh, no, the fed might act. The pausing cycle on the tightening phase that weve been in, this horrific tightening phase. But you have to put it in context with the ecb. Its relative to the rest of the world. Unfortunately, weve imported their lousy Economic System in europe, which is causing negative rates. They may never grow again. For a myriad of reasons. Suddenly now we cant because the dollar gets stronger. We cant do what we need to do. They didnt take our ideas of individual freedom and initiative and free markets and private sectors. Unfortunately, that didnt export as well. The other part of the market story to your point about the f. A. N. G. Stocks not doing anything, the reason they havent gone up is because money has been coming out like an atm going into other areas. The industrials and transports and all sorts of different commodity spaces. Thats one of the reasons, along with Short Covering, that its really, you know, ripped to the upside. Since january 20th, energy is up 17 . Im sure the f. A. N. G. Stocks are flat if not lower. Does the n stand for netflix . Because it should. Half of the loss in cable has gone to netflix. Yet, theres no barrier to entry for someone else to come and do what netflix does. Is it over . Not programming. Is that going to double again . Its not that expensive. The market cap is not that big right now. Its not like a disney or our comcast or something. Yet, people look at it as the biggest disruptor. Were going to have a guest coming up in about 30 minutes or so to talk about that very topic. Some of those guys think netflix is a second coming. I think one of the folks well have on the set will raise issues we talked about. No barrier to entry. 40 billion. It was going to take over the world. Really . What happens to the market if you cant get any traction in the f. A. N. G. Stocks and the whole commodity boom of the last few weeks or so was all Short Covering. Then that evaporates. No f. A. N. G. Youve got the commodity thing. People start selling and taking profits. If we actually are in a tightening cycle, the one area that would benefit from that is the financials. Weve been waiting and waiting for financials to actually tick up. If theyre counting on fuller house to double their market cap without the olsen twins twins. Stocks to watch today, Urban Outfitters is set to open at its highest level in nearly five months after the retailer posted better than expected samestore sales. The companys free people brand bolstered those results. Jm smucker announcing mark smucker has been named the firms new ceo. Probably not they probably didnt go outside to find him, i think. Not a lot of smuckers. Thats not a common name. Most people would change that. Anyway, starting may 1st, mark smucker is going to take over. Hes the ceos nephew. Interesting. Its a family company. I love smucker too. Did smucker buy a Peanut Butter company . What investment banker ca eer c with that . They presented that. Looked like a genius. Eureka. Shake shack posted its biggest intraday plunge in month. Results beat estimates, butt Company Offered a soft Sales Outlook for the year. I think they have their own smuckers Peanut Butter. They do . As long as they make it. Its like doritos and pepsi. Mayo and tuna fish. Yum. According to the huffington post, larry page and tim cook attended a secret meeting where the discussion was trying to prevent donald trump from getting the republican nomination. It was hosted on a private island off the coast of georgia where mitch mcconnell, karl rove, and House Speaker paul ryan also attended. Theyre not out whats that Richard Brant . Its a bridge that gets there. Its the greatest vacation spot in the world. Theyre on a secretive private island, no admittance to normal people. No, its sea island. A nice island to go to. Its not really private. Lots of people live there. Youre right. We should probably not call it private. I go there. Its not that exclusive. Voters in four states go to the polls today to pick their president ial candidates. John harwood joins us now with more. Reporter morning, becky. Today is michigan, mississippi, idaho, hawaii. Hawaii, of course, will come in way late. Were grinding our way toward the selection of these two nomine nominees. I want to step back for a minute, look at our nbc News Survey Monkey tracking polls nationally to get the state of the race. First on the democratic side, you can see Hillary Clinton has widened her lead over Bernie Sanders 5538. Indicates shes pulling away from him. This is influencing decisions like Mike Bloombergs announcement yesterday that hes not running. His path was only there if Bernie Sanders was the democratic nominee. He said he would only help donald trump or ted cruz, and he didnt want to do that. He criticized donald trump sharply. Now look at the republican race. This is why hes concerned about trump. Donald trump has got a significant lead, not as overwhe overwhelming. Hes not at a majority. That is reflected in the polls in michigan. When you have a National Race and then you go to a big diverse state, theyre going to look pretty similar. The 39 20 is similar to what we see in michigan. The antitrump forces are still hoping that they can deny him the majority of 1237 delegates he needs to get nominated on the first ballot. They havent given up yet. But thats going to depend on what happens next week in florida with marco rubio, assuming he stays in the race. There was a cnn report you saw yesterday that he was considering getting out. His aide strongly denied it. But hes behind donald trump in florida. And in ohio, john kasich is behind donald trump as well, although hes trying to use that last week to make up ground. If kasich and rubio can grab those delegates, its winner take all at that stage on march 15th. They might be able to deny him. If they cant, this thing will be over next week. Interesting piece in the journal. Journal has been playing the establishment, been wearing that hat for a whale with trump. I still like reading everything. It is realistic. They point out that 35 , 40 is not a majority. I understand that. That is true. But lets say you just saw that National Poll again. If you continue to win 39 every time theres a caucus or primary, if youre at 39, your delegates are going to add up to a majority, right . Some of them are winner take all. Youre going to get those. Youre going to get a higher percentage, even at 39, youre still going to get more delegates. If trump was to stay at 39, hed go above 12 whatever it is. 1237. I dont understand the path to blocking that. I dont know. Tons of people have done the math. The question is when you look at the delegates in the bank already for the nontrump people, can they bank enough Going Forward to have over 50 against him. If you had proportional selection and you won 39 all the way through, youre not going to have a majority by definition. Really . Yes. What about the winner take all states . You didnt let me finish. Thats what i was saying. When we flip over on march 15th to winner take all, then the equation suddenly changes. Thats why ohio and florida are so important. As we go forward, you know, some of these are winner take all entirely by state. Some of them are winner take all by congressional districts, so you have different formulas. If donald trump can keep winning states in that new phase, yes, hes not going to be able to be stopped. Real quickly, the idea of what happens to delegates that are pledged to a candidate that drops out, how does that add up . Are there any polls that suggest what would happen if rubio actually dropped out of florida . I think if rubio dropped out of florida that, would assure donald trump wins that state. Hes been leading substantially. Marco, the polling indicates, has been coming up, but i dont think theres anyone else who could win that state. In terms of what happens beyond the first ballot, you know, delegates become free agents, and at that point, if you have a sustained deadlock at the convention, then you have the ability of some of those establishment forces, party leaders, Business Leaders in the state to try to put pressure on. But i wouldnt bank i wouldnt bet a lot of money on the prospect for the nomination being snatched from donald trump at the convention. I just think that becomes very risky when you start offending the rank and file who have delivered primary victories to this candidate, and youre going to go to a convention. The ultimate sort of definition of the party machinations and youre going to take it away. I think Donald Trumps been warning about that. His allies have been warning about that. I think they would have a lot of ability to resist that. John, how bad do you think hillary hurt herself big picture with the comments about being against fracking . States like ohio and pennsylvania. Well, look, thats a significant industry. The thing she said, shes trying to thread the needle. She does this on everything. Bernie sanders said he was outright against fracking. She did not say she was outright against fracking. What she said was, well, i want this, this, and this condition met before fracking can take place. That would diminish some of the fracking. I think what would happen in a general election is she would start emphasizing how to make fracking safer. You know, you take the other side of the bet that the point. I think when you have states like ohio where an industry has contributed significantly to the economic well being, theres going to be a cost to your opposition. You get some support from environmentalists and sort of core democratic voters, but you alienate some other people. You know, you make your calculation and take your chances. Were really late again, john, but cramer picked North Carolina all the way. In the ncaa . If you had to pick one, just pick one right now that wins everything because its impossible. But who do you think . Im going with xavier. Are you kidding me . Do this with me. Do this. Can you see me . Do this. I love you. Im going thursday night. I love you for saying that. Wheres the game . Big east tournament at msg against either creighton or seton hall, both of which they have split this year. The truth is, joe, ive got no idea whos the best team in college basketball. I dont either. Kansas is good. I watched kansas play. Perry ellis. That guy. Fashion, game. Its weird his name is perry ellis. You know who else is good . Indiana. Anyway, thank you, john harwood. Well see you soon. Sorry, drew. Drews been sitting here. You were interested, right . You like politics. I like it all. March madness. Its fun. It is march too. Its march now. I forgot that. Is it 2016 . Fiveday winning streak for the dow and s p. It could be in jeopardy. I think its because, oh, my god, they might go up another quarter at some point before eternity. Futures points to a lower opening. Joining us now is rich steinberg, president and chief Investment Officer of steinberg global asset management, and drew mattis, deputy chief u. S. Economist at ubs. Drew, now were at 100 for a raise at some point, even though we thought it was going to be four. That sort of went off the table to maybe people thought zero. Now getting back to maybe another quarter point bit end of the year. Is that threatening . It shouldnt be threatening to anyone. They need to get it up. In our view, it has been and continues to be a couple rate hikes will help things. Certainly not going to hurt things. Truer words were never spoken. Maybe, just maybe, if rates were a little more normal, people would act more normal. Rich, we should not be basing the stock market on whether its a quarter point or half a point, should we . Maybe corporate profits go up some day. We got 4. 9 unemployment. Arent things good . Shouldnt this be enough to put some support on the market so we can get it up a little bit higher . I think as long as we understand the trajectory of that increase, i agree. The ten year is only at 1. 8. Even if we get back to 2. 25, 2, thats equal to the yield on the s p. I think it would give us a background to stop a lot of the crazy volatility thats occurring because traders in the short run have hijacked this market. Youre seeing moves in crude or in equity prices, other commodities that could be the move of a year happening in a day or two. So i think this cheat money, low Interest Rate environment is not healthy, and until we get a baton handoff from the shortterm volatility traders back to longterm investors, the fed has to start to move. But theyre going to do it very gingerly for sure because theyll use the data dependent excuse for the rest of the year. We only see one bump. One more. Drew, i cant remember your later you know, youre always fairly sure. Did you think it was a mistake to keep going up with rates or inflation is not at a point where we need to i mean, we might as well just stay on hold as long as inflation doesnt come back . Arent there signs inflation is not as quiet as we thought . Look, if you look at the narrative, get rid of the narrative everyone has out there about rates going up. Just look at what the fed should be looking at. The Unemployment Rate is at 4. 9. Inflation measures are at or above where the fed thought they would be at the end of this year. If they hold true to what their old forecasts were and say, hey, if we were going to hit these forecasts, we should have four rate hikes, then they should hike rates at the march meeting. Theyre not going to, but they should. And theyre not going to because of the dollar . Who know what is they think anymore. Ive given up trying to figure out why janet yellen does anything. But it seems pretty clear to me theyre afraid they would upset markets because no one is anticipating it. So if they should and they dont, arent there negative consequences . Or there are never any negative consequences. If i was a fed official and the Balance Sheet was at 4 trillion and the Unemployment Rate was below 5 and dropping and inflation was approaching where i thought it should be and rising, i would think i would raise rates at that point. But youre up able to. I dont get to make that call. All right. Rich, what about just Revenue Growth in this country. Negative Interest Rates in europe. How is just the backdrop of Business Activity . Car sales seem to be slowing. Were still in the best place around, right, in this country . Were the cleanest shirt in the dirty laundry. As we look over the rest of the year, were going to go through fits and starts in the economy, and were going to go through fits and starts in the market. Earnings are coming down, and the only way were going to start to get Revenue Growth is if we get some solidify kags by consumers that things are going to be better down the road than they are now. Oil prices have come back up, but consumers werent spending that savings before. For a while, they were on restaurants, but the last data i saw from some surveys showed that Savings Rates were going back up. I think as we go into the election and the election circus that were watching, its hard for businesses to start to plan until we know who the final people are going into the november elections. I think were going to go through this trend of volatility, and you can use your cash to pickle your points on names that you like. All right. Whos going to win florida . What are your friends telling you . You got any republican friends . Yes, with my republican friends, including myself, everybody is so scared about trump, but they dont know what to do. Every day im getting a phone call from surveyists saying if you dont vote for trump, who are you going to vote for . The amount of fire power thats trying to get rubio higher doesnt seem like its holding traction here. You negotiation a lot of moderate republicans are really scared about trump. All right. Rich, thank you. Drew manus, you dont live in florida. Coming up, new data just released paints a gloomy picture for Small Business. Thats bad news for job creation. Those details coming up next. And can you explain why you recommend synthetic over cedar . Super food . Is that a real thing . Its a great school, but is it the right one for her . Is this really any better than the one you got last year . If we consolidate suppliers, whats the savings there . So should we go with the 467 horsepower . Or is a 423 enough . Good question. You ask a lot of good questions. I think we should move you into our new fund. Sure. Ok. But are you asking enough about how your wealth is managed . Wealth management at charles schwab. Small Business Optimism hit a twoyear low in february according to the National Federation of independent businesses monthly outlook. Optimism hit 92. 9. Thats down one point from januarys read and below the 42year average of 98. Out of ten index components, six fell and four were flat. Plans for spending and hiring weakened as well as growth in real sales volumes. Sales trends have fallen over the past few months. Expectations for future Business Conditions remain negative. Another point of note here, owners are continuing to report higher wages but arent raising prices. In fact, more firms reduced prices than raised. Government and the economy often give main street reason to pause. This months report had the Political Climate continuing to be the second most frequently cited reason for the reluctance to expand. Optimism has continued to climb. As we said, this is the worst read that weve gotten in two years. I guess that leads to our expectations of what kind of hiring Small Businesses would do. Yeah, absolutely. Theyre not really looking to hire and expand right now. As we said, the economy and political concerns are really giving them reason for pause right now. I think theyre kind of in a waitandsee mode to see who the nominees will be on each side. When it came down to a race of donald trump and Hillary Clinton, donald trump did come in first place with about 60 of the vote for the Small Business crowd. All right. Thank you. Coming up this morning, buzz stories including details on a poor inspection report from a theranos lab. Plus, the hidden value of bromances. Why your bros may be the best cure for a stressful situation and a long life, scott. Can you move over there and let us you want a bromance . I mean, can we sit together . They didnt tell me that was in the Job Description this morning. Scott looks nervous. As we head to break, heres a look at yesterdays s p 500 winners and losers. Vo know you have a dedicated advisor and team who understand where you come from. We didnt really have anything, you know. But, we made do. Vo know you can craft an Investment Plan as strong as your values. Al, how you doing. Hey, mr. Hamilton. Vo know that together you can establish a meaningful legacy. With the guidance and support of your dedicated pnc Wealth Management team. Time now for the executive edge. A report in the wall street journal says chesapeake energys suit against Aubrey Mcclendon was on the verge of being settled when he died. The suit is separate from the federal indictment on charges he conspired to rig bids on oil and gas leases. Mcclendon died in that fiery car crash last wednesday. What kind of car was it . Suv. Looked like an suv, yeah. Hit like the embankment. The corner of the embankment. We dont know yet about the speed. I think it was a fairly high rate of speed. Was it 100 miles an hour . That we dont know. All this, of course, happens not only with this story and the indictment the day before, but a lot of folks talking about the comeback that aubrey was trying to wage. Its on the front page of the journal. He even had a conversation through email with steven weiss, on our show, at noon looking for investment, looking to start a lease bank for new opportunities. So he was trying to stage a comeback right until the end. A federal inspection report found that a theranos laboratory in california ran a blood test on 81 patients despite erratic results from Quality Control checks. The report has not been released, but it reportedly cites theranos for deficient practices in five categories, including hematology. Also, the inspectors said those problems posed immediate jeopardy to Patient Health and safety. Inspectors also found the lab had been conducting tests with expired materials and the labs Quality Control manager was unqualified. Beautiful. Thats it . Yeah, thats all. False positives or false negatives . Id rather have the false positive. Thats no fun because a lot of times you do something about it. You go in and remove something that doesnt need to be. Sure beats the heck out of a false negative. Just in general, you want these things i mean, its important. Quality control. Its stunning, really, when you think about whats happened to this company over the last 12 months or so. From the cover of fortune magazine. Were still waiting. The Cleveland Clinic is going to be running tests and trials, inspections like this. Theyre doing due diligence. He gives them as much support as he can with that. Finally, bromances may help mitigate the effects of stress. Thats according to a researcher at stanford. Research was on rats and found that companionship between male rats immediately following a stressful situation led to less aggressive and more cooperative behavior. They cuddle and sleep together. They hang out. They, you know le they, you know lets say we were leo, out there with one horse, would we both get in to keep warm . Oh, youre thinking of cutting the horse open . Talking about spooning. There can be physical contact. I dont have a problem with that. I dont know. Are you okay with that . Im good with whatever. You just dont know what the hell to say. Youre a guest on the show. Sorkin, i dont know where hed be right now. He may be in the fetal position. Anyway, when you are substituting on the show, youve got to just be ready for this type of stuff. Where are you on this . Theres no sister i think its true. You would think after any stressful period if you have someone you can lean on, whether its femalefemale, femalemale, malemale, you just need that. If someone cuts out that sound bite. But what is the name for a female bromance. Is it bff or something . Yeah, bff would work. Bromance sounds better. It just works. We assume some women for some reason, and i dont want to get into gender problems, but we assume women have close friends. Men are thought of as you need to be more, you know, not show that side. Im fine with it. I thought we were going to do like that sort of awkward icahn ackman hug. Yeah, im worried about the Christie Jerry Jones deal. Remember the one you had with rich bernstein on the set . I was there that day. Did we hug . Ill tweet you a picture. Okay. Coming up, netflix keeps its view i dont even remember what it said. Oh, yeah, keeps its viewer numbers a closely guarded secret. We asked nielsen to crunch the numbers on the new season of house of cards. Theyre going to share their data with us next. Youre an at t Small Business expert . Sure am. My staff could use your help staying in touch with customers. At t can help you stay connected. Am i seeing double . No maam. Our at t buy one get one free makes it easier for your staff to send appointment reminders to your customers. And share promotions on social media . You know it now im seeing dollar signs. You should probably get your eyes checked. Good one babe. Optometry humor. Right now get up to 650 in credits to help you switch to at t. We believe in the power of active management. Management, by debating our research to find the best investments. By looking at global and local insights to benefit from different points of view. And by consistently breaking apart risk to focus on longterm value. We actively manage with expertise and conviction. So you can invest with more certainty. Mfs. Thats the power of active management. No, youre not yogonna watch it tch it we cant let you download on the goooooo youll just have to miss it yeah, youll just have to miss it we cant let you download. Uh, no thanks. I have x1 from xfinity so. Dont fall for directv. Xfinity lets you download your shows from anywhere. I used to like that song. Welcome back. Time for the squawk planner. No Economic Data of note today, but on the earnings calendar, we will hear from look at this. We were just talking about this. Chevron is holding an Analyst Meeting today. Well be looking for comments about the companys dividend and Capital Spending levels. And a day whoa, no way. Ihops National Pancake day. What . Restaurants are giving away a free short stack to each diner and asking for donations to charity. That is todays squawk planner. Theyre still around. Before my kids were born, at the hospital where they were born, there was one. Right there . Engel wood . Ive been to that one. They had never been. We said, you know what and we drove to one. Youre not going to just be seated immediately. No, if you go on a saturday or sunday, its a long time. Did you imagine the line on National Pancake day . Im telling you, on the back of the one sheet, just bring it. I dont even have to pick and choose. Chocolate chip pancakes, blueberry pancakes. Do you not do this . I do. Okay. Every now and then. Do you think about it like i do . Just out of the blue, it just comes to you. Not quite as intensely as you obviously do. Are you okay . Theres like a tear forming in your eye talking about this. This becomes more and more important. Thats what i was going to say. The bromance . Maybe we should go there for breakfast together. Lets do that. Over pancakes and sausage. This is your read. Im gathering myself so i can read it. Its getting awkward. Getting . Where have you been the last 40 minutes . The last 20 years. Well, the new season of house of cards premiered to rave reviews, but investors werent feeling the love. Shares of the streaming giant falling 6 on mond. We told you about true optic, a company that measures streaming numbers. We asked them to crunch the numbers for the latest season of house of cards, which was just released on friday. Joining us with the results is the ceo and cofounder. Good to have you here. Great to be back. Never mind the side show thats going on over here. Maintained a lot of composure. Getting it back. So what are the results . What did you find . The overall story is that house of cards is probably one of the most hyped shows in television over the last three years, but the audience size really isnt there in terms of considering it a hit. What we saw was over the first 48 hours globally, we saw about a Million People stream at least one episode of house of cards. The average household looked at about 3. 2 episodes. If you compare that to, say, game of thrones, in the first 72 hours, we saw 39 million households. What about the first go around of house of cards . Is it dropping year over year as dramatically . Were seeing it pretty flat over the last two years. Certain markets have gone up a little bit. Certain markets have gone down. Overall, its pretty flat. Whats interesting, although house of cards is the most hyped show that you think of for netflix, its not actually even one of the netflixs top five most streamed shows. Overall, in q4 for 2015, it wasnt even top 200. Why is that . Is that because its got an audience of elites who are watching this and people who have talked about it . Why does it get so overhyped . I think its an amazing show. Its personally one of my favorite shows. So i think it gets hyped because its amazing. But in terms of the audience, what they actually want, its not the content people seem to resonate the most to. So obviously theres big hits like the walking dead, game of thrones that do amazingly well both on Linear Television and streaming, but what were seeing is what people demand over the top in streaming is very different than what you see. I just wonder if in some respects because of what house of cards is about, and there have been a million debates on tv and the political talk has been obsessive lately, whether people are just tired of that specific genre just for the time being. Are you saying it makes a larger statement about where netflix is and where its going in terms of growing subscribers and things like that . Yeah, i think if you look overall over the last two quarters at the demand for global streaming of content and you see that netflix has five of the top hundred most in demand shows for streaming, it shows theyre doing a great job of producing content, but its still not enough. Netflix is still very, very reliant on licensing other peoples content in order to drive subscriptions. They quite frankly just dont have enough great content to be able to drive new subscribers as well as maintain audience. Not to mention competition. I need to ask, so breaking bad probably the greatest. Homeland, great. House of cards is up there with those . Its not even in the same stratosphere. Just in terms of what you like. Im looking for something. Did you like sons of anarchy . Its not something ive personally watched. What about the wire . People say i have to watch that from day one. Whats next for me . Thats what i want to know. Should i do house of cards . Heres what we can say. One of the things that we announced last week was a Global Partnership with mind sharing group to create microgenregraphs. That lets us look at any particular market, what is the content most likely watched together. So when we look at house of cards, were able to see shows that you might not really think like quantico was the most linked to people that also streamed house of cards. What about narcos . I think its pretty good. It depends on the type of content. The thing thats amazing about the over the top eco system, which is very different from what occurred on linear, is the audience has ondemand choices to anything they want. You can watch shows that just aired last night. You can watch shows that are 25 years old. So it gives people more choice. So the data in being able to measure that is more critical than ever. Everything turned out really well at the end. Everybody paired off. Thomas got to be butler. Carson gets to stay. Spoiler alert. Oh, thats right. Exactly. Thats right. Nice job. Thanks. Thanks so much. See you soon. When we return, well talk about the dow transports. Theyve surged in the last month, up 11 . Well talk to a transportation analyst about the winners and losers in the sector right after this. Jake reese, day to feel alive jake reese, day to feel alive jake reese, day to feel alive welcome back, everybody. The dow jones transportation index has surged more than 10 . Chris, whats happening . This is a huge turnaround for what we were watching at the beginning of the year. We have seen a nice bounce here for the group. I think its driven by data thats been at least bad if not a little bit better than the Fourth Quarter. Fourth quarter was pretty troubling as we saw in not only industrial and commodity end markets start to slip. January saw a bit of a balance and february sort of continued that. I think were taking a little bit of the Recession Risk off the table. Six weeks ago we talked to analysts who were convinced that it was an industrial recession that was very likely headed over into a fullblown recession for the u. S. How much of that is off the table at this point . It is hard to put it the market seems to be telling us that they dont think it is happening. I dont think it is fair. It is hard to put a percentage on it. When we looked at the Fourth Quarter it was the industrials of the commodities but we also saw some of the consumer facing data. We look at Railroad Cars as an indicating. We were expecting the industrial weakness and commodity weakness because it made sense given what was going on in the world but the consumer side should have been okay. As we moved in january we saw a niceup tick in that data by 4 from december. We kind of retraced a lot of the deterioration in the Fourth Quarter. It is amazing. Thats the chart we just showed. The transportation average or of once again asserted itself as really a good leading indicator for other things. It really does work. The hard thing for us to understand was when oil was going down, the kneejerk reaction is it is going to be keeper to move things around. I think it is going to be good. But then you realize a lot of that oil is moved by the rail so thats going to hurt that. I think there was the specter that the reason oil was down was because of demand, not supply. Then we worry about the economy, right . Thats why you sell transports if oil goes down because you are worried about a recession . I think there is some concern about the demand driving the price down certainly. I think we probably miscalculated the halo effect around the Energy Markets in the u. S. It touches a lot of things around the industrial complex. That drove a bigger decline in volume than maybe we saw. Fuel prices come down. Thats great for their cost side but they give a lot of that back, at least Transportation Companies give a lot of that back in terms of lost revenue through surcharges. Is it domestic . Do we need to worry about the strong dollar with transports . Not really. Right . Youre betting on the United States with the transportation to some extent. Shipping show yeah. There is some of that but i think also our exports do deteriorate. Some multinational Industrial Companies probably pull back a little bit when they have weakness from fx. There probably is some effect to that. It is largely in more of a domestic place. Just over a week ago Warren Buffett was with us talking about Burlington Northern santa fe. He thinks Burlington Northern will have a worse year than they had last year. He said part of that is just because of the demand they are seeing. Because things are picking up, were not talking about a massive increase. I think that thats right. When we are looking at our estimates, generally speaking we look for flat to down for a lot of our Transportation Companies this year. So the operating leverage wont be as negative as it was last year but the volumes are still going to be down. Thats why i sort of characterized as a little bit less bad when we think about whats happened in january and february. As it stands right now we are looking for very moderate in some cases down estimates for the entire group including railroads. Nice bounce. Does it turn back down or does it keep going . I think data so far has been supportive of keeping it there. If you start to take a little bit of Recession Risk off the table, they priced that in at the end of last year. They were wrong. So theyre not always right. We got to go, chris. Coming up, voters in michigan, mississippi, idaho and hawaii go to the polls today. Well get a check on the delegate count and get predictions from democrat harold ford and republican david fromm. Can a business have a mind . A subconscious. A knack for predicting the future. Reflexes faster than the speed of thought. Can a business have a spirit . Can a business have a soul . Can a business be. Alive . Hey kevin. Hey, fancy seeing you here. Uh, i live right over there actually. Youve been to my place. No, i wasnt. Oh look, you dropped something. Its your resume with a 20 dollar bill taped to it. Thats weird. You want to work for ge too. Hahaha, what . Well were always looking for developers who are up for big world changing challenges like making planes, trains and hospitals run better. Why dont you check your new watch and tell me what time i should be there. Oh, i dont hire people. Im a developer. Im gonna need monday off. Again, not my call. A fiveday win streak on the line. Weak data from china overnight. Goldman sachs warning about the big commodity rebound and optimism on main hits a new twoyear low. Bloomberg says no to a possible president ial bid. Plus, its primary day in idaho, mississippi, hawaii and michigan. Well talk decision 2016 with political insiders harold ford and david fromm. And the sports world buzzing this morning. Tennis star Maria Sharapova fails a drug test, nike suspending their ties with the superstar. That and a big hole in one for a squawk favorite. The second hour of squawk box begins right now. Live from new york where where business never sleeps, this is squawk box. Welcome back to squawk box here on cnbc, first in business worldwide. Im joe kernan along with becky quick and scott wapner. Futures right now are indicated to be down not triple digits anymore. Earlier that was the case. Now down 92 points on the dow. The s p down about 12. The nasdaq which was weak yesterday down another 30. This would snap a fiveday winning streak but not from the nasdaq which was down yesterday with weakness in the f. A. N. G. Stocks, facebook, apple, netflix and google. You see what Noah Blackstein sent it . It is the b. A. R. F. Rallies. Could take that a few ways. Market warf the rbarf. 10year note. I thought it was was coming down a little bit today. It was up 1. 9 oh, a look at energy first. There is the 10year note. 1. 85 this morning. Oil had been on a good run, down fractionally today. Among stories making headlines this morning, Global Markets are under pressure due to new figures from china. The country saw a february exports drop more than 25 from a year earlier. Thats the biggest drop since may of 2009. Nike suspending ties with tennis star Maria Sharapova after she revealed that she had failed a drug test at the Australian Open. Sharapova had been taking a substance for ten years that was recently banned. Small Business Confidence dropped last month. The Natural Federation of independent business saw its monthly sentiment. Index drop in february. The dow and s p both up over 9 since the lows which were hit earlier this month. Dom chu joins us with a look at the biggest winners. Good morning, joe. Just to talk a little bit about the f in barf, to put it in context for you, take a look at the chart here. If you look at whats happened with the s p 500 since maybe march of last year over the course of this past year weve seen a drop from the record highs of around 15 and then of course like you said, that big rally that weve seen in just the past couple of weeks ago. As for whats really been driving this particular rally, becky mentioned it earlier. It has been a lot of these commodity heavy stocks. Energy stocks in the s p 500, since the february 11th low, up 14 as a sector overall. Very strong gain there. Financials up 13 . A real concern for a lot of participants out there that the bank stocks werent participating. Material stocks on the commodity side up 12 as well. As for stock gainers, this peeks to your point. Who have been the biggest gainers in the s p 500 . Chesapeake energy since those lows has nearly tripped, up 193 . Freeport mcmoran, theres the n in your bart. Up 101 . A doubling there. Murphy Oil Corporation up 67 . The one thing that these three stocks have in common, becky, they are all three among some of the most highly shorted stocks in the s p 500. The question becomes whether or not a Short Covering rally can sustain a longer term upswing for the bulls. These guys here, yes, theyre up big. But remember, they were down huge going in to that february low. Back over to you guys. Dom, thank you so much. The Goldman Sachs Commodities Team is out with a new report today. It suggests that reflation, reassignment and releveraging have driven a premature surge in Commodity Prices thats not sustainable over the long term. Firm maintains its bearish view on gold. Gold surged in 2016 up almost 20 in year and covering around 13month highs. On oil, goldmans nearterm view is between 40 a barrel and 20 a barrel. The firm has a bullish end of year view on energy saying oil will likely rebalance this year and create a deficit market by year end. Crude surging more than 40 since the recent bottom that it hit back on february 11th. It was just around 26 then. Joining us now to talk commodities and market moves, dennis gartman, founder, editor the a publisher of the gartman letter. Also james liu, a Global Market strategist. Dennis, weve seen a huge resurgence in the commodities prices. You think this continues . I think it depends upon which commodity one is talking about. I think in the Energy Market i think it is going to be very difficult to push wti crude much above the current levels. 37, i wrote earlier this year that i thought 37 would be a moderate point at which everybody shall be happy, producer shall be happy. Youve got oneyear forward crude at 45 or so. Fraccers will be imminently pleased to be able to produce. Theyll be forced to put hedges into place. A lot of old wells that had been capped will come back on stream. There will be plenty of overhead resistance at these levels so i think it will be difficult to get crude to rally. Grains, you might see a rally. Cotton is probably going to be under pressure but gold i think wants to continue to move dramatically higher as long as there are expansionary programs in place by the monetary authorities around the world. I dont see that changing in he time soon. So crude is probably going to stop. Grains could get stronger. Gold i think will get stronger still. James, lets talk about the broader market. This is a situation where two camps, one camp thinks we are on the verge of a recession, one camp thinks all of these concerns have been heavily overplayed. Where do you come down . We come down on the side that we dont think there will be recession in the next 12 months. There are clear recessions in some parts of the economy. In energy, in materials more specifically. But because we dont see that recession over the next 12 months it means that the highyield spread represents attractive opportunity and we still like the more cyclical beta driven stocks in the stock market. The dilemma is really this. Usually when youre late in the cycle, as we are, valuations are usually very, very expensive. You certainly saw this in the dotcom bubble. Valuations are quite cleheap rit now for the stock market. Unless you think you can predict the timing of a recession, you can fall back on whether the think the stock market is weak. Earnings is the big stumbling point for the market. We talked about this all last year with the Energy Sector and low Commodity Prices and the strong dollar. But it doesnt seem to be bottoming as quickly as we had hoped. For the rest of this year you are looking at maybe 120 for earnings. Looking 12 months out, maybe 124 in earnings. If those numbers stabilize, for example if the dollar actually depreciates over the next 12 months, that would help support valuation even further. If you are now looking at the fed funds now predicting a rate hike, the dollar can strengthen from here out. The dollar column is probably the trick yes, sir column this year. Fed fund futures are showing maybe two rate hikes. Where a few weeks ago they were showing zero. Remember we came into the year expecting four rate hikes from the fed. I think expectations are a bit mixed right now. On top of that, it is a question of whether emerging markets and other global economies can stabilize. If they do show a little more stability for example with the fiscal stimulus news out of china, then that would actually help the dollar depreciate as well. Does the foundation to the market feel better to you . High yield has improved. The rally in the transports. The rally in commodities. Is it justified i guess the move that weve had and is it sustainable in any way . I do think that the market was probably oversold in midfebruary. A lot of it is entirely due to sentiment. Sentiment sunk way too far and way too fast in the wrong direction. Ha is it swung back the other way . Not entirely. Were still below average on sentiment measures but we could get higher on valuations. But it is a question of how much higher especially since earnings are coming down. I think it is easy to get back to par from where we are. 2 , 3 . Thats basically noise for the market. Probably capped at 5 total hurricane return for the s p. Dennis, have you been surprised how quickly oil has bounced back . I cant believe im talking 37 as a bounceback. I have to admit i am somewhat surprised by the swiftness with which crude oil has bounced back. But i thought 37, again, would be a reasonable point at which everybody would be happy. But the fact that we made it back almost 10, 12 off the low is by anybodys estimation a swift rally. I doubt that it will hold. Well see. What about the move in copper and iron ore which a lot of people are focusing on i know a lot of attention is on oil. Obviously. And it should be. But as really important bounces for both of those two groups. It is interesting. Nobody nobody until the past two weeks has written about whats gone on in the iron or ebusiness. I remember writing about it several months ago that it looked to me like iron ore prices had gotten to a ridiculously low level. And were due for a rally. I am somewhat surprised how swiftly its come back. But im even more surprised by how swiftly everybody has put it on their radar screen. Iron ore is a very important commodity. We need to pay more attention to whats going on. That, plus nickel, plus tin, plus copper, all of those things tell me that the economy of the world might be doing a bit better than most of us had thought only a short while ago. Didnt nennis, james, thank both. Women return. The race for the white house. After months of speculation, former new york city mayor Michael Bloomberg confirming he is not running. Plus foreign diplomats sounding off about a potential president trump. And later, erin andrews winning a 55 million lawsuit. Well take a closer look at sports stories that are making headlines both on and off the field. Squawk box will be right back. I am the future. I provide for my family. I will use my education to help my community. I will inspire our next generation of leaders. I am a college student, but i am only 1 . Only 1 of College Students are american indian. Donate now, and help our numbers grow. Welcome back to squawk box. Lets check out the futures which are improving. At least they were last time i looked 60 on the dow. Nine on the s p. The nasdaq which was weak yesterday down 23. It is the day when voters in hawaii, which if i was a voter in hawaii, i dont know if id go. Why bother because it is so beautiful . Had. Yeah. Exactly. Ive got some other stuff to do. Idaho. Michigan i must just stay at the voting place no, it is a nice place. Former new york city mayor Michael Bloomberg has made it official i am, too. I want some headlines. Neither one of us are running for the white house. We said in independent statements. You wouldnt have affected it on either side. He had 6 and hes 74 years old. It was never going to more than john kasich. Thats right. But hillary was never it was really never a question. I think he was holding out waiting to see if there was an indictment. There still might be. Youre worth 37 billion. Why do you need this . Go to bermuda. Here to set the table for todays heated contest, harold ford who i wish you would run former u. S. Congressman at least for mayor managing director at morgan stanley. David fromm, former economic speech writer for george w. Bush and Senior Editor of the atlantic. David, i can get you to talk about hillary and bernie or i can get maryland to talk about trump and cruz and rubio. If i let harold talk about hillary, well just get a sales pitch. I dont know what im going to get from you, david. Is it a little weird that the republican establishment is much more focused on making sure trump isnt elected than hillary . The republican establishment is not focusing on making sure trump isnt elected. The republican establishment is focused on its own internal civil war. There are twothirds of republicans who dont want donald trump. If they could Work Together there wouldnt be a donald trump candidacy. Those internal its those internal rivalries that are strengthening donald trump because effectively hes a lot of peoples second choice if only by default. Can i ask you this, david . W who would it be harder to get on board . Harding to get trumps people on yord with an establishment candidate or would it be harder for the establishment to get onboard with trump if he is the candidate . Look, i dont think that term establishment helps us very much. Whatever you want to call it. Because there isnt one. You know what im saying. But semantics are important because it indicates sort of the inle intellectual problem. We have a class crisis within the republican parties. Republicans who have gone to college, who are married who go to church regularly and who have participated in the recovery since 2010 are going one way. Theyre splitting, if theyre more religious they go with cruz, if theyre less religious they go with rubio. Twothirds of the party who havent completed coverage, who vn who havent participated in the recovery, theyre lining up behind donald trump. Story of republican politics since romneys defeat has been the attempt by the more affluent republicans once again to impose a path on their party and this time they have met for the first time with this massive revolt and resistance from their rank and file who say, hey, you are offering us more tax cuts for the wealthiest, more entitlement cuts, more wars abroad and more immigration. We want less immigration, fewer wars, protection of entitlements and were not too interested in your tax cuts. The problem with using the word republican is because there are a lot of democrats who are actually looking at trump as maybe the answer, too. I think there is a rebellion against governance, against competence, against at least what we define as competence in politics. But if you look at trumps support, trump enjoys support from up and down the income ladder and up and down the education ladder. There may be a preponderance of people perhaps without a great education and without high income, but that is a case also on the democratic side. Think every 15, 20 years we see these kind of shakeups. I would argue every four years you see an insurgent candidate, an outsider. Happened eight years ago with barack obama. This time around is particularly in the Republican Party and far less with the democratic party, the outsiders have come in and taken over. Both cruz and trump would be considered outsiders. Many republicans have said they might be more comfortable with ted cruz. Lindsey graham say when you compare to trump. When you add their two votes up, thats 85 of the republican vote dominated by outside candidates who those considered insurgents any other year. President ial politics, every race is about choices. The chose between likely Hillary Clinton or increasingly looks like donald trump. It will be interesting to see where republicans fall down as well as democrats. I think it will be a dynamic race. It will be polarizing on a certain level but i think demographics would favor the democrats in that race. At the end of the day the message and whomever is able to speak to middle class anxieties, middle class worries and aspirations, as it is in every president ial race i think has the best chance of winning. David, is trump doomed to fail if the other twothirds you just talked about find him just unpalatable . On the contrary. As the other twothirds find each other more palatable than they find him, donald trump will slip up the middle. We just had a report yesterday that Marco Rubio Super pacs have to date spend 44 million. Jeb bushs super pac spent Something Like not all of the money they raised has been spent. But say in excess of 100 million. Throw in what kasich and cruz have raised youre reaching over 200 million that have spent by the candidates who have held elected office. Donald trump has spent hardly anything. This money has not bought anything because of this massive rejection of their message. I dont think it makes sense to group ted cruz with donald trump as a pair of insurgents. Ted cruzs function in the Republican Party is like that of Bernie Sanders in the democratic party. Theyre both senators, they have both been elected to office. Theyre both career politicians. And they both, though they have extreme views, they are normal actors within the political system. Donald trump is truly different. We have not seen Something Like this four years ago. We did not see Something Like this 20 years ago. We havent seen anything like this in a long, long time. I think people need to Pay Attention to what a challenge it is not to the party, but to the whole american political system. I get what you said about cruz to some extent. I dop thint think there is a p a live a year ago that would have said ted cruz would be the default candidate for the establishment republicans. I said it in writing. I wrote an article in the atlantic. David is a very smart guy and was alone in that regard. Again, i just differ with him. I said rand paul would grow up and ted cruz would inherit his support and he would emerge as one of th establishment lane. Certainly what you call a ult, mainstream, whatever. With one term in the senate. Republicans have complained about a oneterm senator i think before being elected, ate years ago. Look, politics is like any other business in the sense that disruption finds its way into the conversation and finds its way into peoples consideration. Theres no doubt theres frustration across the country with politics as we know it. I think that explains a little bit of bernies rise, though he has been a career politics and him running against Hillary Clinton. Shes viewed as the establishment in my party and donald trump is perceived as being completely outside of the mainstream in the Republican Party. How long will bernie stay in . If he loses today badly, loses next week badly, i hope he considers whats best for the party. Im a democrat. That first term moniker for the president became less of an issue as he became more effective. They firstterm senators can be effective but it dependents on where theyre leading. Thats the rub. Where he took us effectively. You know who else called cruz very early . Welsh. He did. Thanks, david frum. Let me know the next time you go to vegas and well talk. Thanks, harold. Mr. Mayor. Coming up, one of the most anticipated video games of the year is out. But there have been problems. Details off the break. And later, Dicks Sporting Good ready to report. That stock up 25 since the beginning of the year. Reaction to the numbers in a bit. Squawk about be right back. By debating our research to find the best investments. By looking at global and local insights to benefit from different points of view. And by consistently breaking apart risk to focus on longterm value. We actively manage with expertise and conviction. So you can invest with more certainty. Mfs. Thats the power of active management. Among the stories front and center today, lift is moving into the fast lane in its competition against rival Ride Sharing Service uber. Lyft has seen a 500 increase in ridership in new york city since last may. The programming dispute between at t and spanish vanl univision continue. Univision has gone dark for customers of at ts uverse service. Are those bongos . Dont you love a person who knows how to do that . It is been goes. Thats a skill. At t is now telling customers they can get univision if they switch to provider satellite tv provider directv which is also owned by at t. Auditing firm kpmg has struck a deal about ibm to use big blues Watson Technology to help with audits. Kpmg says it will help them analyze data more frequently as well as offer new services. A slight glitch in one of the new video games. Gamers across several platforms reported connection problems. The division requires an Internet Connection at all times. All servers are now up and running. The division is now available for playstation 4, xbox 1 and pc. I dont see any zombies. Smallpox virus that they put on stop, stop, stop. Its not a zombie situation. For new viewers or young viewers, that was Peoples Court and youre judge wapner. Why are like what is that music . Do they ever play it on your show . Never. Its exclusive here. Good. Okay. Fed speak yesterday. Highlighting differences at the central bank over the outlook for inflation and the economy. Steve leisman is there actually, hes here and he joins us right now with more. I am here, becky. Thank you. The outlook for inflation is dividing key members of the fed and creating uncertainty over how many times the fed will hike rates this year. The recent rise in the Consumer Price index is now above 2 . At least on a headline basis. Yesterday the fed vice chair said in washington, we may well at present be seeing the first stirrings of an increase in the inflation rate. Janet yellen says it is just a data point and is focused on other factors influencing inflation. There are a variety of reasons to think that inflation could stabilize, could move up over time if oil prices stop falling, if the dollar doesnt rise further, if what were seeing in the labor market starts to translate through in to higher inflation than one would expect to see it moving up to our goal. On the other hand, though, is some troubling signs that Inflation Expectations have actually slipped downwards. Fishers clearly less comfortable with this 37 basis point points funds rate. Brandon more concerned about global interests and worries that the u. S. Cant remain immune from the downdraft in prices blowing around the world prp the key test is thursday, ecb set to step forward with what we think will be more stimulus. Well look at the effect on the dollar. If another round of the stronger dollar could influence prices. I thought we were already ahead of the feds targets. I saw some last week that if we continue at this pace within two months well be at where the fed thought wed be for all of 2016. Thats true. The question becomes fisher says, thats where we are. He doesnt want to see the fed fall behind the curve and he says it is because ultimately that means the fed has to hike more in later months. Doesnt want to have that adrupt change in rates, wants to keep going gradually. Thats been the sort of argument all along. Right . The fed didnt janet yellen she made that same argument months ago. Right. Braenard is saying ive got an oil problem, a dollar problem, Global Deflation essentially, and it is wrong to think that the u. S. Numbers are really hitting a turning point. Shes on the dove scale, where is she . You know, its funny, we have a number now. You know we do this cnbc hawk dove index. Shes certainly down in the 3s where 1 being the perfect dove. She hasnt been on this show i dont think yet, has she . No. Yesterday it was on another show. One of the other shows on cnbc. Thats disturbing to me. I wouldnt care if it was another network. But the idea it was another show. Thats irritating. More internally competitive. Im sure she would love to come on. It was a matter of scheduling, joe. Im sure her first preference was to come on squawk box. You just saying that . No. Yes, he is. Any big surprises from draghi . That plays right into the dollar. I worry that Market Expectations have gotten ahead of him like what happened last time. Remember out there he promised this whole thing. The germans kind of limited his ability to deliver. He does not do the same job the fed does though the fed has given us too many clues. But going into a meeting you kind of know i can tell you stories being at jackson hole and talking about yoeuropean central bankers. American central bankers are much more focus on how the market could help or hurt them in delivering a monetary policy. The europeans are like, oh, darn the market theyre just not cooperating. Theyre not quite as good. Draghis changed that. He overdelivered a couple of times so i think you could be setting up for a little disappointment scott, this thursday. If they did not offer as much quantitative easing or lower negative rates, however you call that, if they didnt do that, how would the u. S. Stock market react . Because it would almost mean that we would have more room for the fed to raise rates. You would think it would be a good thing now youre hitting the nub of the issue. This issue of divergence. How far account fed go given the ecb going the other way. I think youre right, becky, if draghi underdelivers it gives the fed some scope. If draghi overdelivers or meets some expectations it will be harder for the fed to raise rates with all of the world going the other way. That 1. 8 or 1. 9 10year just looks so rich relative to the rest of the world even though we all know that it is a very low rate relatively. Having maybe learned his lesson after the last time that he may come back maybe the risk is top outside this time and he surprises the market with something we didnt expect. Just dont have the guidance we have when we talk about the federal reserve. Even though you get angry there is so much talk going on, the reverse is you end up being surprised more often. Coming up, the sports world is buzzing this morning from Maria Sharapova to the Golden State Warriors. Well get you the headlines and talk about the business of sports media next and continuing along that line, Dicks Sporting Goods, the earnings are out. Well run through the numbers and talk Consumer Sentiment with squawk box comes back. Welcome back to squawk box. Big sports stories making headlines. We start with russian tennis star Maria Sharapova. She failed a drawing test at the Australian Open due to a substance she was taking for health issues. She is the seventh athlete in a month to test for ot substance which she used to treat diabetes and low magnesium. The drug has been linked to increased athletic performance and endurance. Leading longtime sponsor nike has suspended ties with her during the investigation. That company saying, theyre saddened and surprised. Turning to law and order, a jury found a Nashville Hotel liable for a nude video of sports anchor erin andrews that went viral. Andrews has been awarded 55 million in damages to be paid by the hotel and the man who shot that video. The Golden State Warriors breaking an nba record for consecutive home wins. The Orlando Magic fell to the warriors 119113 last night. Even more amazing, it was the 45th straight win at home dating back to january of 2015. Which is better than the previous record set by the Chicago Bulls in the 9596 season. Ch eck this out. Ch cell phone video captured the reaction when ricky fowler earned 1 million at a hole in one event. He earned the 1 million for the els for autism foundation. You take that Million Dollars and that never happens it never happens with amateurs. Right . Unless you are the kid teeing off for the first time at tigers course. Normally, for those tournaments, norm lir the insurance insurance is not that expensive. But you put someone like ricky fowler there, im told and im i was supposed to be there, couldnt get off work really to go down. 1. 8 million raised for ernie. Ernie has a son thats affected. This is a place where autistic adults can live and learn to function in society. It is really a good cause. Unbelievable facility down in florida that marvin and ernie have built. But that was amazing. I hear that that happened. You know who you get to play along with . Rory was there. Rickie was there. Adam scott was there. Fresh off his win. Luke donald. I think jack was there. Ernies friends. They do it every year. It is great. Here to break down the latest news on the sports Business Beat but takes us inside the new digital frontier, george pine, founder and ceo of bruin sports capital. Good to see you. Good to be here. Start with the sharapova thing. I want your opinion on a couple of different levels. You used to run img sports. Img represents her. What do you do if youre representing Maria Sharapova today knowing that nike, now porsche, taghauer have suspended their partnerships . I think you do exact pli wly they did. Is to get ahead of it. She took ownership for it. She admitted she made a mistake. Shell abide by the rules. I think they handled it perfectly. She recover from this . I think she recovers from it. It is a substance that wasnt banned until the beginning of the year. Whether she knew or she said she didnt know. But i think she recovers. The question is, do we know for sure she hasnt been taking it for the last ten years because of the performance and stamina enhancing qualities of it . Is that why she was taking it all along . Do we know whether there was a medical need . How i look at it, nascar we used to have to enforce rules. To me i dont think you can speculate why someone did something. She failed a test. The substants wce was newly ban. But she was taking it for ten years. I would immediately be on her side. Saying wait a minute, she had a medical need for ten years. But she didnt say that. We dont know. We dont know. There is a rule, she broke it, and there is a process to address it. Who you many performance enhancing drugs are there that you into ed to test for . Ive never heard of this thing. Its not a steroid. No. Its not. How many are there . As long as theres competitors there are going to be people to work the edges. People have to enforce the rules. Somebody breaks the rule, there has to be a process to deal with it. I think she got ahead of it, admitted she was wrong and the industry will deal with it. Sponsors arent interpreting why she did it. She broke a rule. They have an approach, they are taking the approach. But good for her for standing up and saying, okay. For owning it. She didnt blame somebody. She said i broke a rule, i was wrong, and i want to tell but it. Kept her sense of humor, too. Did she see what she said . She said i was going to be retiring, if im retiring im not going to have this carpet in some tacky hotel in florida. The sponsors stay with her. In the long run shes the fivetime grand slam clinton and as long as she handles herself correctly. People have won more obviously. But the highest paid female because of the global endorsements. We talk about the possibility that some people thought she was going to retire. Peyton manning just did retire. He was the highest paid male athlete i think from an endorsement standpoint or certainly in the nfl history. Peyton, according to forbes, earned 400 million on and off the field. He think that was a little bit light as well. Obviously a great player. Fivetime mvp, two super bowls. Really a guy, as john elway said yesterday, changed the game. They have this hurryup offense. When he went to the line it was to try to fool defense. Peyton actually went to the line, took his time and outsmarted people. I think peyton will be successful in business. Think youll likely see him in the front office or broadcasting. He comes from a great family and is a good human being. Talk about what youre doing these days. Bruins sports capital. What kind of investments are you finding attractive just in the current marketplace . We actually raised two funds in the last 13 months. One for more mature businesses, bruin. Another one called courtside ventures. Weve actually made Ten Investments in 13 months. Six of those investments have been in the digital space. Obviously with the way data and audio visual content is ng chaing the distribution, there are enormous opportunities. We see four or five digital concepts every week. So to me, digital is a big part of the future. In bruin we invested in a Digital Engagement company. Were trying to understand the opportunities as Media Consumption and data change. How does the current economic and also stock market environment just play into sort of the prices that youre seeing out and the environment you are investing in . Are we at a peak . Have we rolled over . At bruin we have wealthy families. Have a longterm view. I think what people find attractive about us is our investor base. We came up through the industry. When i was a kid we hung signs, we sold tickets, sponsorships, we bought sponsorships, sold media rights. For somebody that wants to be affiliated with longterm capital and people that operate businesses, our discussions are more about growth and building and less on price. You mentioned digital. Where are we going to ultimately end up with the major sports leagues trying to do deals with the facebooks of the world and others . Which the nfl may very well do itself. I always say, what was fox network before it had the nfl . It was quite different after the nfl. Some day theres going to be a digital pioneer like Rupert Murdoch who is going to plunk down some money for some rights. When that is, i dont know. Is it going to be the traditional media guys or is it going to be a google i think it will be a google or someone like that thats going to be the fox news corp. Of the future. You think rights fees in any way come down . Theres been criticism some of the fees espn had paid and maybe as people are assessing where that business is right now, wondering whether fees will come down. Its been a question ive been asked for 25 years and so far they havent come down. Doesnt mean it wont happen in the future as the channels of distribution change. What i can tell you is that sports rights will be very valuable over the long run. Sure they will. Bruin, from the brown, brown bears . Thats what bruins from . Thats right. Brown university. Its not the boston bruins. At first i thought it was the boston bruins. They changed the name of the school but when i was there it was the bruins. Were sticking with the bruins. What did you play . I was an offensive lineman. Captain of the team. All right. Thank you. Thanks, guys. When we return weve got stocks to watch. Also, check out the futures right now. Looks like things have improved slightly. Dow futures still down by 50 points but we were down by 125 earlier this morning. S p futures down by seven, nasdaq down by 18. Can a business have a mind . A subconscious. A knack for predicting the future. Reflexes faster than the speed of thought. Can a business have a spirit . Can a business have a soul . Can a business be. Alive . Breaking news on united airlines. David faber joins us with more. David . Thanks, becky. United Airlines Ready for a proxy fight this morning. Par capital and altimeter, two owners of the stock are going to nominate six new directors for uniteds board setting up conceivably a battle between the company and one of its largest shareholders at 7. 1 . The two stock holders saying theyve been disappointed with bad decisions over the last several years and they referred to yesterday in which united appointed three new directors as a lastditch effort adding three people to its now 15person board, a cynical attempt to preserve power by what they call an entrenched board of directors. Amongst the six candidates for the board that are being put up by par and altimeter, Gordon Bethune. A cnbc contributor, 74 years old. He ishas a key demand for this group. A nonnegotiable demand that he be made chairman of the board as part of this nomination process and proxy process thats going to be under way here and potentially a fight. Again, six new nominees for the board. It is a minority legislate. It is a 15person board now. It had been 12 as of yesterday. But they also want mr. Bethune to be chairman of that board. To first, david. People remember continental how great it was. I think there is some disappointment that the combined companies dont deliver what continental used to. In all fairness, oscar nunoz is just coming back, hes been out with a heart transplant. This is one heck of a welcome back. It really is. Quite a potential welcome back for mr. Nunoz, going back to work next week after his heart transplant. Mr. Bethune will join us later this morning. Love gordon. I thought very differently about worst to first. Coming up, crude prices hit a threemonth high but Goldman Sachs is warning the pain is far from over as they wait for the next big drop. Well get a crude reality check next. Plus Vehicle Leasing hitting record highs meaning more used cars on the market. How is this going to hit prices for new vehicles . Former General Motors vice chairman bob lutz will join us to discuss that. Much more straight ahead, stick with us. Well be right back after this quick break. By debating our research to find the best investments. By looking at global and local insights to benefit from different points of view. And by consistently breaking apart risk to focus on longterm value. We actively manage with expertise and conviction. So you can invest with more certainty. Mfs. Thats the power of active management. Came courtesy of james and patricia thompson. This tv . Margaret and tom lee. The championship game ball . That was sebastian diaz. Good guy. And all i had to do was ask for their money and pretend i was investing it. Their life savings is now my lifestyle. Female announcer dont let someone else live the life youre saving for. Find out if youre dealing with a registered investment professional at investor. Gov. Its a great first step toward protecting your money. Before you invest, investor. Gov. Happening now stocks swinging wildly as the bulls fight to extend a fiveday winning streak. Bird is the word. Shares of twitter jumping nearly 35 in just the last three weeks. New this morning, voters in four states head to the polls for president ial primaries. This all happens as Michael Bloomberg says that he will not be running for president. The final hour of squawk box begins right now. Welcome back to squawk box here on cnbc, first in business worldwide. Im becky quick along with joe kernan and scott wapner. Andrew is on assignment today. Less than 90 minutes away from the opening bell on wall street. Futures have been down this morning by twice this much. Right now dow futures down by 60 points. This comes after five days of in a row of gains for both the dow and s p 500. S p futures right now down by nine points. Nasdaq off by 21. Also look at whats happening with the treasury market today. Yields had been climbing. Yesterday they were up big. This morning the yield on the 10year sitting at 1. 85 . European stocks are under pressure. Miners are khalleading the decl. Thats better than it was. They were all down more than 1 earlier. So thats helped the improvement in our markets i would say as well because they have sharply cut their losses and italy and spain are up. Back in the u. S. , Small Business confidence declining in the last month. Among the reasons, concern about sales growth. Also profits hurting Capital Spending and hiring plans. In the race for the white house, four states to watch today. Its caucus day in hawaii. While idaho, michigan, mississippi will all hold primaries today. Obviously michigan is really important, see how trump holds up and with inroads being made by case being. To some extent people are wondering and cruz. And as we have been reporting, neither i nor Michael Bloomberg will be running youre no the returning either, are you . I think we all ought to get equal time. Youre not running for president . No. He did have people begging limb to run. I dont care if it is 6 6 is more than a lot of sitting governors. Were all here in new york. We know he was mayor here. We know that. Nobody else cares in the rest of the country. Nobody knows. Nobody cares. Whos the mayor of los angeles . Garcetti. Good. Good. I know one other. Cincinnati i know because i went to school with his uncle. Then rahm. But it is not going to happen. Im not running either. Just to put it to rest forever. Im not running this time around. Thats when i do this to you. Folks, now you know. David faber just broke a story for us. Former Continental Airlines boss Gordon Bethune to be nominated for united airliness entrenched board. David tells us one of the demands is that gordon be named as chairman. Thats nonnegotiable. Anybody who knows gordon knows what he did with continental before. Probably pretty impressed with it. But this is all happening as the newly appointed oscar nunoz is just back next week after a heart transplant. He didnt get a chance to really start anything. He had been on the board for a long time before that. Right. A rail guy. Railro railroad. Is that gil garcettis son . I think it is. Im not 100 sure. Someone talk in your ear . No. Just the guy right up in here. Thats strong. Strong. Gordon bethune joins david at 10 15 eastern time. Who is the mayor of montclair . Other stocks on the move this morning, shake shack poised to post its biggest intraday plunge in months. Its Sales Outlook for the year was soft. Shares of Urban Outfitters getting a boost, posting better than expected samestore sales boosted by its free people brand. Thor industries posting earnings and revenues that top estimates. Lower gas prices have helped boost the rvmakers bottom line. Revenue at Dicks Sporting Goods falling short of stilts. They cited unseasonably warm weather. Retailers, i dont really blame any of them specific. Theyre all down. Theyve all had mixed results. Why though . I thought consumer was better . Theres more places to shop. Weather, too. Im worried about this next segment. The s p 500 on a fiveday winning streak. This is going to be like the thriller in manila. Katy stockton, chief Technical Strategist at btig, and sean darby, global strategist at jeffries. Youre not that weve had a nice bounce but you think that the down trend is probably going to reassert itself . Thats right. He doesnt think that. Hes over here rolling his eyes. Youre technical, hes more fundamental. Right. Different places. But it is a counter trend rally at this point. We do have those lower highs, lower lows. Really weve seen a change in the character of the market year to date. Last year wasnt great either. We saw a lot of negative divergences. That means less participation on the up side, we saw lots of momentum that was very real and yet it wasnt until january that we saw a lot of breakdowns. Indeed those breakdowns are very difficult to recover from. While weve seen a very nice relief rally, the market now faces a whole lot of resistance or overhead supply to get through. There was an upturn in the s p that went up into a period of years. Which momentum indicator was breached . Right. So if you just solely looked at the curvature of the 200 Day Moving Average which is a great longterm trend ruling device, you can see that rolls over. It doesnt apply just to the s p 500 but beyond that. We already have downturns overseas, for example. I think we need to respect that, have a shorter turn time frame on those long positions and be somewhat noncommittal especially when overbought conditions give way to a loss of shortterm momentum. You see certain problematic markets might be basing . Thats right. The Commodity Markets have stabilized a bit this year. It is still very much also a countertrend move. Of course we did see Wti Crude Oil gets above its 50Day Moving Average. Is this a countertrend move . It is. It could prove to be something more than that later on but still it is very early stages. It looks somewhat similar to last october or even a year ago now. Id say we have to view it as countertrend but something thats somewhat tradable. We looked for that breakout of the 50day as an allclear signal to take counterpositions. Energy stocks certainly have been anticipating some stable days. Sean, do you just want to go bearish right now . Im slightly different. I think people were positioned for a very, very bearish outcome particularly for deflation. I think people were positioned here for a deep recession. What were beginning to see is that even in the Capital Markets things were opening up again. We have one of the best weeks for flows into highyield bonds. Weve also seen some of the Economic Data turn out to be a lot better. People got overly pessimistic. I think so. Thats whats expected through fund flows. 200 billion of money coming out over the last 24 months out of the u. S. Again, it was very few sectors or stocks keeping the market up. I think were going to get a Pretty Healthy rotation over the next couple of months as beam revisit some of these earlier assumptions which have actually proved to be nonfounded. You could both end up being right obviously with fundamentals and technicals. Because it is nice to get some weakness to add to longterm positions. Isnt it . Right . But you dont view these improvements as countertrend rallies at this point . You think there is more to it . I do. I think some of the moves in inflation are very important. Weve had some market moves, fiveyear swaps were pricing out as in some deflation environments as we saw in markets like germany and japan. I feel just a small change in Inflation Expectations you could have a big, big switch into equities. I think markets are not really necessarily positioned for that. Your eyes just glaze over listening to that . I hope hes right. Is its totally different though. Its like mars and venus. Does btig have fundamental analysis . We do. How does that square with what your view i tend to focus more shortterm to mediumterm. So oftentimes we often manage our positions using the charts. I think thats the way to use the charts is to really understand what is my risk, what is my potential reward based on the levels. You deal with this every day, dont you, wapner, this kind of stuff . Yes, i do. Neither one is always right or wrong, either. You need an ececlectic approach. It is great to combine both into formulating your view on where you think the market is going. We had a technician on yesterday who said this move is just too much, too fast, the technicals are lining up, that it is going to the market is going to roll over. There is no doubt it is positive shortterm momentum but it really hasnt done much more than that. We havent seen any massive brokeou breakouts. The s p 500 is hardly clear of resistance. We saw 2000 and 2035. I think in fixed income markets like germany and japan to be thinking about buying bonds on negative yields, and if you have any small changing inflation some of the stocks in the u. S. With five to tenyear history with very high return on investor capital, decent dividend, will get picked up rather rapidly. It all depends on where the fixed income markets are in the next few weeks. I think well get that big switchover into a much more nicer inflation environment. You are a uk guy . I am indeed, yes. What is a marquess married to i have no idea. Youre obviously not from those side of tracks. Im from the wrong side. Is its not a mark i thought you would know. Thanks, sean. Do you watch Downton Abbey . I did a few seasons. It is a great export for england which we dont have very many. It is better than shepherds pie or something. Or fish and chips. Love fish and chips though. Kind of a foodie. Pancakes. Anyway. Thank you. Coming up, renters on the rise. A new study you distract me every time. Im interested. People in the buburbs like they once did. Former gm vice chairman bob lutz joins us when we come being ba. At ally bank, no branches equals great rates. Its a fact. Kind of like bill splitting equals nitpicking. But i only had a salad. It was a buffalo chicken salad. Salad. Ls welcome back to squa box, everyone. U. S. Equities are still under pressure this morning after a big up swing in the markets. Dow futures right now down by 67 points. Thats half of the losses that we had seen earlier in the day. S p still down by ten points, the nasdaq still down by 25. To this mornings upgrades and downgrades, boston beer downgraded to underperform from outperform. Clsa sees growing pressure. Auto nation downgraded to sell from neutral from Goldman Sachs. The price target increased to r from 47. Prices drop. Then that makes the next lease more expensive because the company now has to take into effect the actual recent experience of the depreciation as opposed to what they guessed. So overleasing, its just a shortterm thing. It makes you feel good. You sell cars this month and next month. But two or three years later you pay for it. I dont quite understand the comment about lowering new vehicle prices. It may tend to no. It will certainly overleasing will certainly depress used car prices. If used car prices are sufficiently depressed, the used car market is strong, and that also benefits the new car market. So the risk ive seen is for the companies loss of residual value in their vehicles. How account Car Companies actually control the leasing . My expectation was that theres an offer for a lease and any dealer can pick up and decide to offer that to any customer. Is there a way that you can well, you can because you can set the company can pretty much set the lease rates. If you set the lease rates at a reasonable level that actually reflects the amount of the car that youre going to have to cover over the next two years, then if thats right, then your lease rate will come out at about 15 or 20 . However, if you issue a really low rate, like no money down, 99 a month and everything, youll see a sudden expansion of leasing with really bad effects. It seems like it would be selfcorrecting if like when you turn it back in, you said the lease rates will get too high the next time around. Seems like it would be selfcorrecting. And number two, the other point to make, if it is bad for the Car Companies, isnt it good for consumers . Shouldnt i want to lease then if it turns out bad for the Car Companies, seems like youre getting a deal they didnt price it right. Well, sure. Low prices are always good for the customers shortterm. Okay. Ill keep leasing then. Until the Car Companies are in real trouble. Bad for them, good for me. Let me put it this way. On a bmw, mercedes, audi and all of the socalled premium brands, these sort of mediumincome whitecollar americans who all buy mercedesbenzes, audis and bmws, they dont buy them. These people couldnt afford to buy a 50,000 or 60,000 car. But a 400 a month lease on a threeyear lease, that they can afford. Thats to your point. Certainly leasing has made cant say the ownership, but its made the use of Premium Automobiles pretty much available to everybody. Bob, this is what weve heard similarly from mike jackson of auto nation who said that he thinks a lot of the deals that have been offered to just kind of juice sales have made him question the strength of auto sales lately and he worries about the profitability of them. Would you echo those concerns . Well, for some reason, i like michael jackson, and for some reason he and i always come up with the same theories at the same time. I think hes absolutely right. Anybody who is overheavy as i say, it is no different from futures in any other commodity. Basically when you set the lease rate, you are making a bet on what those used cars will be worth in two years time. And if you get it wrong, you can really have to take a massive writeoff. Bob, always great to see you. Thanks for coming in this morning. Sure. Coming up, Maria Sharapova fails a drug test and two of her largest sponsor suspend ties with the tennis superstar. How much is it going to cost her and when is she going to be back, if at all . We needed 30 new hires for our call center. Im spending too much time hiring and not enough time in my kitchen. announcer need to hire fast . Go to ziprecruiter. Com and post your job to over 100 of the webs leading job boards with a single click. Then simply select the best candidates from one easy to review list. You put up one post and the next day you have all these candidates. Makes my job a lot easier. announcer over 400,000 businesses have already used ziprecruiter. And now you can use ziprecruiter for free. Go to ziprecruiter. Com offer2 [bassist] two late nights in blew an amp. But good nights. Sure,musics why we do this,but its still our business. We spend days booking gigs, then weve gotta put in the miles to get there. But its not without its perks. Like seeing our album sales go through the roof enough to finally start paying megs little brother i mean,our new tour managerwith real,actual money. We run on quickbooks. Thats how we own it. Nike and taghauer have suspended ties with Maria Sharapova after she admitted to failing a drug test at the aussie open. She says shes been taking a drug called meldonium for the past ten years. It apparently enhanced performance. She was taking it for diabetes and magnesium. It was just banned january 1st. She hopes to get another chance to continue her career. The 28yearold could face a yearlong ban and thats significant because there are some that thought this might be a retirement announcement. 28 sounds obviously very young but tennis, man, you got to be you see people at 17 and 18 years old when they win their first one. Youve just going to to be in such incredible shape to play at that level. Maria sharapova is the worlds highest paid female athlete because of endorsements. Forbes estimates she made 30 million. Not much of that was on the court. I think 6 million or 7 million on the court which leaves 24 million for sponsorships. In addition to nike and tag heuer, avon, and porsche. Wti. Is it too late to jump on the comeback . Inside the numbers after this break. First, a look at u. S. Equity futures. Now down seven for the dow and 11 on the s p. 26 on the nasdaq. For your retirement, you want to celebrate the little things, because theyre big to you. And that is why you invest. The best returns arent just measured in dollars. Td ameritrade®. Welcome back to squawk box, everybody. Leers whats making headlines this morning. Activist investment firms Altimeter Capital management and par capital will nominate six directors to the board of united conned nent continental. They include the former head of Continental Airlines, Gordon Bethune. Hell be on squawk on the street at 10 15 a. M. Eastern. Former American Airlines boss bob crandall will join us in 20 minutes. In other airline news, both jetblue and southwest report an increase in passenger traffic for february but they also are talking about capacity that grew even faster. Jetblue says both it and its competitors have add the capacity and that profits are under more pressure as a result. The Justice Department has asked a judge to reconsider his decision in an encryption dispute involving apples iphone. The judge had refused to compel apple to unlock that phone. In a new york state drug case. Apple of course is involved in a higher profile case involving the iphone in the San Bernardino shootings. In other news this morning, lyfts ridership is increased 500 in new york city since last may. Lyfts pool of drivers has multiplied by four times and that weekly riders multiply by six times. Lyft recently cut fares in 33 cities, including new york. And check this out. The yelp for peeple act is finally here. The maker says it provides a reference check for the people around us by showing reviews god, almighty reviews of neighbors, coworkers, even dates. Generated a lot of buzz and criticism when the idea was originally revealed back in october. Ive actually seen one of our guests that was on today talking about this fractured political situation were in. Giving credence to what ive been saying, this is all because of twitter. All the ills of the world imagine rating your coworkers . All the ills of the world are because of the social media stuff. It really is. It is just a cesspool. People say whatever they want. It is like online graffiti. And it gives you a license to say whatever you want. Im getting my house in order. Someones coming and were hopefully youre prepared. The end of days im with that guy. Whatever his name was . Harold camping or whatever . Might be from climate change. Speaking of climate change. Chevron is hopeding its anim ho meeting this morning. Good morning. Chevrons annual Analyst Meeting kicking off right now as we speak. The number two u. S. Energy company will discuss Capital Spending, production cash flow of course what ceo john watson called the number one financial priority, the dividend. Entering lease ahead of the event, chevy cutting its price targets for the year. 2016 spending cuts spending of it 25 billion to 28 billion does seem to stay the same, but chevron affirming Production Growth through 2020 even at moderate prices even with less investment. In january it forecast 2016 output to be flat up 4 . That looks like it is staying the same for this year. Watson saying this should help improve cash flow significantly, and that chevron plans to limit debt increases beyond 2016. All of this as he again reiterates the commitment to that nearly 5 dividend that chevron pays out. Also in focus, the 54 billion gas export facility in australia. The Company Announced last night it is producing liquefied natural gas there and that is expected to start shipping next week. Analysts say that should generate solid cash flow this year and again something that could bolster the difficult vend. On a programming note, ceo and chairman john watson will be on the closing bell later today so stay tuned. Big Energy Companies like transamerica and darko all up 40 since januarys low. Good morning. Amazing gains really. So many stocks in that space are up 50 . Right down, 40 , 30 , 20 on some well known stocks. Have they come down too fast and is it sustainable . I think when you see these type of rebounds to put things in perspective from their highs. I think these stocks are still somewhere between 60 to 70 off the highs they hit a couple years ago. These moves do not portend necessarily the end of a run. You heard from Goldman Sachs out today pretty much telling clients, look, dont believe the hype. The whole commodity spectrum has come too far, too fast and it is not sustainable in any way. Do you agree . I generally think there will be opportunities within any cycle recovery. For example, you look at a company like neighbors. Neighbors is basically flat on the year with some of the stocks in its respective Industry Peer Group may be up 15 , 20 . You can always go through and find some opportunities even in a broadrebound sector like this. You had another note out yesterday. Whether it was leaked or however it was made public, it was from a Consulting Group called pira which is thought of to be a pretty good prognosticator on the energy space saying that 50 oil was where we were going and it was because we were going to eventually see maybe sooner than later some of the supply cuts that have been rumored from opec for the last many weeks. Whats your thought on that forecast . I think there have been potentially two pivot points that could mark a cycle turn here. The first one did occur back on february 16th when effectively the saudis did agree to a production freeze. Granted, a production freeze is not a production cut, but it does mark a significant change coming out of the saudis since the cycle downturn occurred. Second pivot point has occurred during the past month. There have been a number of companies that have indicated theyre going to cut their spending by 50 to 80 this year and theyre using now a 30 strip price. Thats in stark contrast to a year ago when they were still talking about Production Growth and maintaining spending and still looking at a 50plus oil price. I think when you look at cap x cuts, they are the definitive lead indicator to production rollovers and thats where we need to see a siebel recovery. Are we done talking about majors and dividend cuts . Conocophillips sort of surprised a lot of people. I think conventional wisdom is that chevron and exon, theres absolutely no chance in the world that they would cut their dividends. Your thought . From the majors oil standpoint, thats not my specific area of purview but i would just say that for many of these companies, dividends are very important. You have seen reduction in Capital Spending. I think that reduction in Capital Spending gives them enough ammunition to athlete maintain their dividends where they are. Kurt, thanks so much. When we return the little bluebird may be on the mend. What is the initial beating post earnings an investor overreaction . Well break it down in under 140 characters. As we head to break, the etf that tracks the social sector is up close to 12 since early february. Squawks box will be right back. At mfs investment management, we believe in the power of active management. By debating our research to find the best investments. By looking at global and local insights to benefit from different points of view. And by consistently breaking apart risk to focus on longterm value. We actively manage with expertise and conviction. So you can invest with more certainty. Mfs. Thats the power of active management. News breaking just a few moments ago that the planned sun edison deal with vivent solar after vivent accused sun edison as failing to consummate a deal. The planned deal woosas a big pt of concern for appaloosa. Mr. Tepper told me, this is probably a very good thing for taraform. One has to wonder whats next. Mr. Tepper had criticized their Corporate Governance as it relates to the deal. The deal was valued at more than 2 billion when it was made last summer but sun edisons financial position has weakened. Sunedison this morning up more than 32 on news that this deal is not going to happen. This is as simple as oil prices . These things are not theyre not competitive. Are they . Was that 362 that i just saw there on that chart . Pull the chart back up. The stocks gotten obviously hammered. All the way down to 2. 2 is with a 35 gain this morning. Today. Just on this news. David tepper obviously a very Interested Party in how this will play out. He was critical from the getgo. He sent those scathing letters to the board of terraform in the past questioning some Corporate Governance moves. But his comments to me a short time ago, this is probably very good. He did not want those assets to go to terraform, that it was just a departure from that companys business, that these were rooftop assets. Twitter rebounding after a rough Fourth Quarter. I did that for you. Shares of the social networking site are up nearly 35 in the last three weeks. Jon fortt, youre walking. If youre reporting, you are walking. For you, im sitting down right now. I said he doesnt need that chair. Its all i can do to just sit still. I have just said twitter is causing the end of the world. But at least the stock is acting a little bit better. But i use it, i do. Im guilty. I look at it thousands of times a day because of the news feed. Right. So i guess its got to have inherent value but its just hard to monetize it. Does it have 14 billion of value . Does it have 20 billion of value . I think thats part of the question. It is a whole cohort of growth tech stocks that have been doing much better over the past few weeks. Linkedin had that big fall after earnings, down near 100. Its up 15 to 20 off its lows. Look at groupon. Groupon is almost doubled from its lows. Some of these stocks arent great performers in terms of how their business is doing. That makes me wonder how much of this is because investors at least some investors are feeling a bit more comfortable with risk now perhaps with oil off of its lows. Their maybe it will hold better in some stocks than others. You think people going out of f. A. N. G. Into these beatenup teches . I dont know. Everything but facebook is down i think double digits here today. Amazon was down near 500. Now its up i think around near 560. Some of that has come back into some of those stocks as well. To me, it feels like still a time to separate the Different Cases for these stocks. You look at a stock like workday, founded by two of the guys that came from peoplesoft. They set out to build a nextgeneration Enterprise Software company for the long term. So when you look at that companys prospects, i think you have to separate it from a company like groupon which has been through pivot after pivot. To me it is a head scratcher that both of them are rebounding because it says maybe investors arent distinguishing between these different kinds of stocks. Is twitter buyable . I dont think it is buyable. They havent shown proof they can grow their cub scrisubscrib that they can meaningfully engage users. Facebook and snapchat are showing better growth. Twitter is clearly trying a lot of new things, a lot of new advertising. But i think until they actually show they can really engage users and grow their users base it is not even about being able to monetize it and make money. It is able to have an actual value to more and more people so that they grow subscribe i understand news people use it. But i dont understand the man on the street, why you would use it. The oscars, 400,000 tweets over Leonardo Dicaprios win, but on the average basis, the Younger Generation is using snapchat for hours a day. Facebook is seening considerable usage not only on their core news feed but also on video. Instagram is really addictive for people around the world and twitter just has not captured that yet. And you are not convinced its going to. Theyre trying a lot of new things. I think for the rest of this year twitter will release a lot of new features and capabilities but i like these other platforms. I think jsnapchat is a great longterm bet. What do i use that for . To send messages to people . Is it like Anthony Weiners dream . I have a 16yearold daughter who uses it every day. Im on ifnd a i use it a bit. She said dad, its not for you. I thought that was an interesting comment. You are a he not cool. The interface is a little bit strange. It is not intuitive. It is not as easy to use as other platforms. But the sub25 generation, the 15 to 25 yearolds, that is their facebook. That is their instagram. That is how they communicate in every single thing. When you tell me thats their facebook that doesnt help either. We got to end it. Thank you both. Coming up, it is the news of the morning. Activists pushing for big changes at united. Veteran Airline Executive bob crandall joins us next. Welcome back everyone. Altimeter Capital Management and par capital are nominating six board of directors including industry veteran Gordon Bethune, former head of Continental Airlines. Joining us is robert crandall, the former president and chairman of American Airlines. Bob, this news, first of all, does it come as a surprise . [ laughter ] hi, becky. No. As a surprise . Sure. I did not expect it. Not entirely ununexpected. Because of uniteds performance or Gordon Bethune. Not because of gordon. Hes a capable Airline Executive. Putting him on the board makes a lot of sense. I think the activity itself is a consequence of uniteds its been an unsteady situation for a long time. They never have got the right sense the merger with continental and the consequences, as you know, people now expect airlines to do way better than they used to expect them to do and the consequence of that is i think we got activists who said, look, lets see if we can get pros in there. Maybe they can help united do better. Yeah, bob. Not only shareholders who expect better performance but probably customers as well. What went wrong with the United Continental merger . Why did things take such a long time and still really not jump. Oh, who knows . You have to be inside to really know the answer to that. Obviously these are very complex undertaking. If the planning isnt done right, if the execution doesnt follow the plan the results arent good. That seems to have been the case here. Just exactly why thats the case, i dont know. Im not sure anybody else does. Bob, there is an article either yesterday or the day before. I dont know who had an ax to grind. It was about your old company american. They have returned some of the anti the poison relations between unions and management again. Ceo doug parker has done a good job. He was saying i think he was trying to listen and address concerns. Did you read the article . Do you know whats going on there . I did read that article, joe. I must confess, i am buffaloed. I think doug has done a carefulle job of trying to listen to the pilots and in this case is article focused on pilot dissatisfaction. Hes done a capable job of trying to listen. As you well know, management cant simply yield every time a particular union makes an assertion or says they would like to have a particular thing. The focus of the article seemed to be, at least in part, on the performance of the company, that is the performance metrics. It is true. The performance metrics havent been as good as they could be. I know as well that doug is working hard on the issue. I assume the pilots know it as well. It just seems to me it would be better if a group had a concern about the company trying to talk privately to management rather than turn it into a media circus. You want to keep them happy. Like the guys on the field. You have the coaches and those guys. You want the pilots flight attendants are always in a bad mood anyway, right . I hope you fly soon. So i dont get a coke. The pilots im not getting peanuts anymore anyway. The pilots are important. Am i wrong . Listen, joe, airlines are big, big complicated Public Service organizations. Everybody that works for them has to do their job well. If they are going to provide the right kind of service to the public. Thats managements job to try and make it work. I know doug is trying to make it work. Im sure the board at united, if the new guys get installed and particularly if gordon is there they will work hard at it, too. Thanks for joining us today. Good to talk to you guys. Hope we see you soon. Stay with us on cnbc. Gordon bethune will be on squawk on the street. Lets get to the new york stock exchange. Jim cramer joins us now. Did you get a blood transfusion . Youre vertical. I dont know. Put it this way. I come to play. I come to play. Cold or flu. Laryngitis. I went to the doctor. Just classic larn jiets. I get it a couple times a year. Talk too much. Talk to you guys, talk to the show, talk to womad money. Ill be fine. Given you do mad money every night nd its just you, im surprised youre not always hoarse. Thats why i cancelled by radio show. I was doing 15,000 words a day. I cant do more than 12. You have to have all the tweets, too. Mostly thank you. Im taking that. Thats the best way to do it. Man, do you see any of the negative tweets about nancy reagan . Did you look . Your kidding youre kidding me. Oh, my god. Thats the end of days coming. Anything in the market catch your eye . We have to be careful. A lot of the dollar stocks and 2 stocks are going higher. Thats frothy. I want them to come down. I want mineral stocks to come down and the Consumer Product stocks to go higher. Im waiting to hear what faber says about united. We need transports to go better. That makes me happy. Thanks, jim bo. Im glad its just the voice. Just laryngitis. Coming up, candidates for the stock of the day. Todays stock of the day. Well have todays stock du jour after we come back. Frank abagnale. Convicted felon and con man. That was a long time ago. You know, they made a movie about it. You were shown to be quite skilled at fraud. Times change. Now i help catch the bad guys. Me too. I help banks detect fraud by applying cognitive analytics to public financial records and social media. So if somebody said, catch me if you can. . We can. Lets do a sequel. It could be a buddy movie. I would like to have a buddy. Watch shake shack shares getting who does that . Shake shack shares, shake shack shares, shake shack shares. Be careful. I was going to get that. Its getting hit on weak outlook but there is a stock down 9 . Scott, thanks. Watch scott later today. Have fun on the show. That does it for us. Now its time for squawk on the street. Good tuesday morning, welcome to squawk on the street. We are at the new york stock exchange. After five days up stocks looking to give some back at the open as we juggle information from retailers. Europe lower despite german production up nicely, first time in three months. Oil squeeze continues now up nearly 30 from lows this year. Api inventories are tonight. We begin with will the rallily in

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