Conciliatory zone in the e. U. Meeting this week. Got good news in travel as well. Oils in the red. United airlines raising its fuel cost projections this morning. Well talk more about that. And the tenyear yield, a twoyear handle since january 8th. Oil lower as the iea offers a mixed outlook on the future. Shares of cocacola higher in the market after the company has expectations but is calling 2015 a transition year. Well tell what you that means. Cvs Health Higher than trade. And ceo said it was the right decision to stop selling tobacco products. First up futures rising in hopes for a greek debt agreement. A proposal for a sixmonth debt extension for greece as euro leaders get ready for the meeting tomorrow. Crudes down after the iae said there may be pressure. The greek meeting very interesting, jim. Remember i think were going to get a resolution which is a big stretchout. That is what weve seen period click with like the railroad that got in trouble in 1800. Weve seen stretchouts where you kind of reconfigure. Thats been from time in memoriam. Thats the way you get around this which makes it so youre still made whole. But you get an easier time. Okay . So thats kind of what i offer offer, by the way, by the russia. Lets make ukraine lets take a Eastern Ukraine buffer no nato. Im more for compromise. Yeah. Listen, the people i spoke to this morning who invest for a living thought it would be constructive to have that. Thats a good strategy. One of the things that happens when europe is not in our face and you could say china, the numbers, but when theyre not in our face we default to america. And you have a plate of earnings today where im trying to pick a single one that i dont like. Suddenly, you look at this. Like whats been happening in this period once again, brian said something really good briefly, since the greece thing started the markets up 75 . But when you take a step back from greece. You dont look at the futures, you look at cvs is and you say, maybe they again guide exactly perfect. Starwood hot, finally doing that Vacation Rental spinoff that were looking for. Aeropostale i thought aeropostale was dead. Yeah. Im just saying look at urban. It just changes the discussion. So all of those who are going to write in and say, all right, redo the terms on greece. Extend it for 10 volume 5, you dont have a problem with that . No i dont, because in the end, you know i think that you just dont want greece could be over it gets overblown, because its the one thats in trouble. But its a small country. 8 million. Yeah. Its funny, germany by the way, ultimately, its the definition but germany has been a big beneficiary of this, with the euro down the whole controversy. And germany keeps Getting Better and better. So i understand how hard it is for these countries they keep winning. Its pushing out. I know lets 60 can. But, boy, kick the can worked in america. Turned out to be a pretty good gig. Yeah, so far. There are going to be the naysayers who may be here 15 years from now saying the same thing. Youll be 75 years old. No, no, 73. All right. Hey, listen you starting to shave it down. My nephew he said i said i was actually 50 he said well youre 63 uncle jumbo. I said i cant say im 63. He said so much better to be a young looking 63 than an old looking 50. But i am catching up to that initial date. Yes, you are. Do i bump it to 70 . Listen 70 is the new 50 . You can still bench a multiple of 60. My father was working out at the gym until he was 89. Then he was doing strength workouts not stretch. As do you. On the broader markets, i know mr. Quintella had had something to offer but the tenyear is back to 2 . I mean it was just last week where, you know people were wondering is there a low, is there a bound . We were talking about negative yields in europe. But this is still so many negative yields but here we are right around 2 . I think this is good. Rates should go higher in banks over this. I like the funds that are not flight to safety. The flight to safety you have to remember in the greatest part of the great recession, holy cow, youre calling jpmorgan jpmorgan, not because of cyber. Hacking. I like the fact that ray was hired. 6 billion last week. Microsoft is working on 11 billion. What are they doing with that money . I was watching microsoft yesterday. Its been horrendous. Im saying whats the deep end . They have a lot more buy in their buyback . What do you think is the genesis of that . Thats part of it. I dont know. Obviously Companies Like that can borrow almost free money. If you dont think youre going to get a big repatriation holiday. They do have money in the states as well. We always talk about that. Obviously, much of is overseas for microsoft and apple. We talked about it for years, the basic mechanism of retiring your dividendpaying stock actually given how little interest youre paying and the fact that Interest Payments are tax deductible can actually make it work in your favor. I dont understand box the way the tax code works, it is such a win. At the same time i wonder whether, you say, listen its back to 47 and then to 41 maybe this is an opportunity. Ceos come on mad money and theyll say, yes. Like at clb. This is a stock that came in totally disappointing. Just a horrible number. Stock was at 88. And david denture said are you going to buy stock for the company . He goes this is like ten days ago. He said were going to be in there hand over fist. The stocks at 110. I think back to when buffett was asked whats the best investment i can possibly make . He said, get a 30year mortgage. This is sort of the corporate analogy of that . Youre so right. By the way, i wish people didnt have to put so much down. Im just saying you need to put a big deposit. And fico scores so high i know it feels like Mortgage Rates. Theres the Mortgage Rates for people doing really well. And then theres the other Mortgage Rate thats just out there. And thats been the key. The problem some would argue in the housing market, although frankly having stringent standards is something we want because we know it happened when those were completely abandoned and that was the result of a vast security market. Punishment of the euro is were not going down. Weve been talking low rates. By the way, it wasnt that many years ago that we were talking about Balance Sheet repair for so many corporations. I know. And they worry about these maturity cliffs that they were facing. And would they be able to refinance. Its not so many years ago pand here we are with so many healthy Balance Sheets. You never see spot secondary in order to improve a Balance Sheet. If i were freeport id do a spot Balance Sheet. Some of this euro companies would probably do well with a spot secondary. They cant raise the debt market. Yeah. Its equity. Speaking of companies with big Balance Sheets coke today posting Fourth Quarter results that did exceed estimates. Global case volume up 1 sarah eisen spoke with the cfo. She joins us on the floor with more. Reporter hey, carl there werent Great Expectations going into the quarter for coke it did manage to beat slightly on the the bottom line. On the top line hence, the stock reaction pretty positive. Did talk to the cfo, kathy waller she said there are nearterm factors working in cokes favor. Number one, the low gas savings at the pump because of those cheap oil prices are helping the business. She said it seems like it helped them in the Fourth Quarter. And they should continue to help more money in americans pockets going into this year. The other thing thats helping is pricing. In other words, yes, americans are drinking less soda but they are paying more it. Specifically, she said good pricing realization in u. S. And in europe. But when it comes to the warning on 2015, she continued to say, if this is going to be a year of transition. Her words, also weve heard that from ceo mutar kent that means theyre in the middle of this plan cutting savings, and layoffs continuing. And the macro environment. Carl talked about the strength of the dollar and how that will hurt about the strength of the profits in 2015. Great wrapup, sarah. The 4x picture is a little worse than two months ago. Well look theyre feeling the heat. I think that was this big battleship. I kind of liked what i saw. I like the fact that theyre no longer saying theyre the best. I see yelp raise, with the quarter with the conference call, they were saying were the best the best the best. What people dont hate is when you say youre the best. They love that coal coalcacola said were not there yet. And under the thompson regime its hey, listen were pretty good, dont worry about it. You see these activists comes after people who do great. I think you have to explain, yeah, were not doing that well but were going to turn it. And thats what i saw there. When we hear pepsico, theyre going to do a good job. A bigger ding to buffetts portfolio, ibm or coke . You know, the ibm people have a big meeting coming up in february. They can redeem themselves if theyre able to say 27 of the good part of the growth if they flip that and say, listen thats going to be 54 by the end of two years, otherwise, yeah, its going to be a bad ding. Coke has made buffett a fortune. Recently, no. By recently but jim stewart came on and he said something, he just said listen this is like the bump. Its not part of the preaching. If we had monty montgomery, if we had the guys from whole foods on right now. If we had had the guys from chipotle on what they would say, listen is this a dying thing. Its part of the food chain. But at the same time, people still drink it. If youre mr. Buffett and you own the stock, youre talking about a stock that is 40 in 1998. Thats not so high im glad you point that out, thats not so high. If you bought more in 09, you did well. I dont that you did. Dumping dividends, no doubt. But you are talking about a stock from 95 to 98 went straight up. No. Its basically none nothing since 98 well its done a lot but if you just held it no you stand right. Just the dividend thats not good. When we come back evidence of a pretty good Holiday Season for a lot of retailers. Well filling you. Also a lot of buzz surrounding the Sports Illustrated swimsuit issue. Hanna davis, the model is going to join us live. The dow going for three down days hasnt done that in a month. But if the month ended today, it would be the best one in a year. General motors harry wilson who helped restructure gm as part of the governments Auto Industry task force is now seeking a spot on the board of directors of the company. The gm saying its received a notice from wilson indicating he would nominate himself as a candidate for the board at its 2015 meeting. Gm says wilson is acting with the backing of kyle bassett eamon, hg aurora. And welterconnicks. Those shareholders represent 1. 2 . Shares looking up here. Wilsons kind of become a board member for hire, if you will. Lobe has used him for a while when he was on yahoo . On the sothebys board. Again a loeb action there. Wilson ran for Public Office in the state of new york. He is known as a restructuring guy. My friend carl bassett has made no secret of the fact that he wants to see gm use much of its cash for a buyback, as much as 8 trillion in the near term. I will Say Something is interesting as a quick background on this. Wilson apparently approached the company on february 3rd. And said i want to talk to you. They said okay lets talk. He wouldnt tell them who is in his group. In other words he indicated he might have an interest being on the board but they didnt know who he represented until 11 57 last night when he told them. Why did he do that . Im not sure. He has one of these what were calling a golden leash, is what the bankers are calling it. Hes going to get a fee. A percentage of the groups profit from their investment in gm. From the time i believe of his nomination. I think thats correct, but i want to read the filing. Like the malkovich deal . Yeah. Paid by the company. Paid by them out of their profits. Some criticize that in a broad sense saying he should be representing all shareholders. But the fact is all shareholders will benefit if the stock goes up. 2. 1 , total. 2. 1 . Well look its a democracy, right . They want to put him up, but they dont have to take him. Mary barra is pretty perceptive in the times. I think mary barra was at the time a bad hand. She investigated everybody and tried to figure out who was behind the ignition key. In the meantime she has the right portfolio, done remarkably well, and she cant catch a break. Gas prices are going to give a lift to some of the higher profit cars. Thats true. But i think her product lineup was refreshed even before gasoline. Well is she doing better or worse than mark fields well mark cant you know alan was there before. But i just think that there say lot of cash there. That was a very nice dividend. A lot of cash they did increase the dividend by 20 . The quarterly dividend. Its now 36 cents a share. Theyre talking about that saying we are returning money, the shareholders for that. Disappointed they didnt have a dividend boost earlier. A dividend boost, more than ford. People are unhappy, they want more. Thats fine. I like the feet to the fire hence, cocacola. This wouldnt surprise me its finally going right. These fee arrangements i dont like them. I dont like them. I dont like it when theres sort of a success fee for directors. Right. And thats not what nelson peltz has done. Elliott had it but they got rid of it. Id like to be on the same page as the common. You can say thats true but i like to be a fiduciary. Greece up for the first day in four as the markets are doing better with that. Still to come, back in a second. [announcer ] what if one stalk of broccoli could protect you from cancer . What if one push up could prevent Heart Disease . [man grunts] one wishful thinking, right . But there is one step you can take to help prevent another serious disease pneumococcal pneumonia. One dose of the prevnar 13® vaccine can help protect you. From pneumococcal pneumonia, an illness that can cause coughing, chest pain difficulty breathing and may even put you in the hospital. Prevnar 13 ® is used in adults 50 and older to help prevent infections from 13 strains of the bacteria that cause pneumococcal pneumonia. You should not receive prevnar 13 ® if youve had a severe allergic reaction to the vaccine or its ingredients if you have a weakened immune system, you may have a lower response to the vaccine. Common side effects were pain, redness, or swelling at the injection site. Limited arm movement, fatigue, head ache muscle or joint pain less appetite, chills, or rash. Even if youve already been vaccinated with another pneumonia vaccine, prevnar 13® may help provide additional protection. Get this one done. Ask your healthcare professional about prevnar 13® today. Being a keen observer of the world has gotten you far but what if you could see more of what you wanted to know . With fidelitys new active trader pro investing platform, the information thats important to you is all in one place, so finding more insight is easier. Its your idea powered by active trader pro. Another way fidelity gives you a more powerful investing experience. Call our specialists today to get up and running. All right. Back here on tuesday. What do we got, six minutes before the opening bell. Qualcomm yesterday, on the mad dash. Today, we get the settlement. 175 million fine. Were you . I kept thinking fi ging fiat saved 2 billion. They had a problem, they lost a customer but this had been a major overhang. Thats a slap on the wrist because they have so much cash. And they have an enormous amount of business in china. Its not just the 975 million theresal Licensing Agreements that are going to make it easier for Chinese Companies and presumably hurt their market, is that true . The margins should not be as good. People see this im not recommending it. I think skyworks is better. Corgo is better. I think there are a lot of other semis. But this has always been a growth town favorite. Right. Now, heres a growth hound favorite that is becoming an unfavorite. Starworth, a lot of people thought when are they going to adopt a model, spinoff vacations or marriott line . Okay. Well, they have. And this is what happens when you do what the angry shareholders want. And this stock is not done going higher. He seemed to be like giving special dividends. He thought that was enough. Just hectoring, hectoring, hectoring. You do this he responds and he gets rewarded. I think this is a better story. You do . Yeah. Marriott, hes taking it from there, thats a good playbook. And windham, by the way has been great. Steve holmes has been a remarkable ceo. Welcome back. This is a good thing. Weve got a lot more to watch. Of course the opening bell right after this on squawk on the street. On the street. Live from the Financial Capital of the world on this tuesday. The opening bell in just about 60 seconds. A lot going on headlines out of greece making it sound like theyre backtracking a little bit. The credit tours saying this thing may work out. Athens having a very good day. And what happens if there is move in ukraine. I know they all say lastditch lastditch. What happens . I know the answer is that you capture a rally that will capture a lot of people by surprise. Were dealing with that idea that, yeah strong growth is bad in our country. The hangover from the idea that bad strong growth means high rate hikes. No. Opening bell about 20 seconds early. Thats okay. Well get a look at the s p on the top of your screen. Down here at the big board, atf provider and adviser shares. And at the nasdaq mts systems a supplier of test systems and Position Sensors celebrating its 35th listing anniversary. Wow, thats a long bell. They got to make it probably until yeah. So much retail news jim, that we have not gotten to gap holding, aeropostale. Home depot hiring 80,000 employees. For their black friday. Their third Holiday Season is the spring. Shoutout to frank blake who was just the greatest in tellers of knowing what gardeners wanted. A great ceo. What do you make of all of this gap, everybody raising their holiday forecasts . I think it was good. Banana republic had a good number. Urban. Saw a good number for the flagship urban. I looked at what the chopper was saying, National Retail federation. And sales were very lackluster. Thanksgiving week sales they thought slid from the federation, 50. 4 billion to 50. 9 billion. Im officially retiring that period, black friday and thursday as the period we should be looking at because it was a false tale. One after another in retail really with the exception of tiffany just had eye a great Holiday Season. Aeropostale, theyre back. Losing less money at least. Yeah i was looking for 18 to 23 cents. Theyre going to lose 1 to 6 cents. But theres a pulse and i think that matters. Urban outfitters, geez is it going to be a great growth stock again . I dont know. L. B. Macys didnt get too excited about that. I thought that was wrong. L. B. The investors, radio shack is not good. But that was foreign, it doesnt benefit, deckers wasnt that good. But if the stuff wasnt more expensive, and its inexpensive, i think all the big national discounters. What i want to watch here is dillards. I think dillards had a great holiday. Why . They just have the right merchandise. The buyers. You have seen the stock . I think we talked about it. Its been amazing. Its been a high performer, yeah. Heavy texas presence. Makes you wonder if texas can hold up. I keep looking at numbers for texas expecting bad. It has not hit yet. We all know that the layoffs are just kind of beginning now. Theres a delayed reaction to all of this. So far, texas has not been a real problem. David mentioned the tenyear back at 2 for the first time in a month. We talked about the banks rallying on that move, now Deutsche Bank up to citi with a buy. I think corvat is doing a great job. And there was a cue that came out, saying youve got to update your queue. I think its done a good job. We should mention by the way, the latest reports are there may be criminal charges as a result of the currency manipulation scandal, if you will. Theres been a lot of commodity and currency manipulation that really did impact a lot of what we saw. Not just the u. S. Banks included there as well. Well. We do go through the series of scandals whether it will be live or currency or mortgages. You do tend to wonder a bit, in terms of having confidence that broadly speaking these management teams are capable of keeping it all on the up and up. There was a lot that was rigged in that respect, right . There was a lot that was rigged. I think bankers are never going to get the trust again. But obviously, if you bash the banks in washington, its pretty good for your ratings. It is. Its a terrible thing to realize that maybe commodities were rigged oil might have been rigged and gas was rigged. You start to think, okay what wasnt rigged. When youre in that club. When youre absolutely in that club of traders that speak. I remember in the 1990s, when we saw traders manipulating payne whiffle got nailed. Theres tapes guys. At this point, they appear to be looking at their messages and things as a result of the trading on the platforms that some of the banks traded. How could they be so stupid . Over and over again they got nailed. Because theres a level of entitlement at that part of the business where i think they feel that the governments a bunch of idiots. I remember when well i dont really remember im like old enough, i was at harvard law. And top ten people went in to be prosecutors. Like they were trying to get the southern district. I remember giuliani rejected me a couple of bs. Guys rigging the markets do you understand that those guys pay for free and how hard it is to defeat an enemy who doesnt play for money . Holy cow. I mean, that guy is the most dangerous guy on earth. Hes not nothing to lose. He like plays for free and you want to take him on. Hes not motivated by money . Holy cow, thats a dangerous point. Really good point, jim. Nasdaqs doing pretty well. Apples back up of 120. Story in usa today starting next week you can use apple pay on jetblue to buy food and drinks. I say geez you have a pillow. You sleep miserable in this plane. You forgot how much people spirit air on tonight where they charge you for walking down the gang plank and charge you for saying hello. A lot of things they charge you for. You needed that because they dont take cash. Jetblue doesnt take cash. And dealing with those credit card its in aisle always a pain. Apparently this is the First Airline to do this. You can upgrade using apple pay. Eventually when the watch comes out, youll be able to use your watch. Im a big believer in this stuff. I would love the wand. Here david, heres some money. Id like that too. By the way, theres a way to do that also and its called taking out that giant wallet of yours and just giving me money. No this is so much more efficient. It is actually its like a rubiks cube. A costanza wallet. And Sports Illustrated im worried, its 10 45 this morning, were talking to hannah davis. No money in your wallet and you see her on the street . What are you going to do how are you going to buy her a drink . I dont know. Does he like the mature men . She likedoes she like the 60s i dont know. What is the product i bought . I saw it and bought it. Downloaded a video game. Smoking game. Finally, jim, lets revisit coke 3. 3 is pretty impressive on. Going back to the editor in chief who covered cocacola, all kind of reminding me jim, the stock has done nothing. You know this is a welcome respite from doing nothing. Some arguing pricing for this quarter. Trying to get people off of that metric. Well yeah people just dont they just dont drink it like they used to. You go to my cardiologist, is not to be too personal on this personal day. I dont think he even wants you as a patient if you drink diet drinks. Theyre so toxic. The new generation has said theres a lot of chemicals in that stuff. I know you probably think its just water. Im not a soft drink drinker. Your doctor like the activist. To know you can stay alive my dr. Ben lewis, like when you go to him, youre incredible a conscious of everything youve done in your life. Its like i had an egg. An egg in a german study, eggs are okay. Olive oil. Now that youre 60, were going to talk about doctors, is that whats going happen here . I see a doctor away. Theres a new study and your Blood Pressure is okay at 88. Theres a new study every day. Eggs are good for you. But hes all about the wearable. If you get the holy grail and your Blood Pressure spikes and youre on and he gets the call he lectures the heck out of you about why youre not taking more avapro. A triple digit gain on the dow. Hey, bob. Financials lead energy lags. S p futures. Trading before the open. 7 00 a. M. , all of a sudden boom futures move up 10 points. There were reports out the e. U. Commission might offer a sixmonth extension on the current Bailout Program there were reports in the greek newspapers overnight. The greeks will be presenting a plan for a bridge program. Call it an extension, a bridge program, tweak it whatever you want. The idea here is were moving towards some kind of potential deal for the next sick months coming ahead of that meeting tomorrow with the finance. And thats whats moving thing. Greece is nicely higher. Take a look at europe italy and spain on the upside too, almost 2 in spain. Meantime, bond yields are moving up. You mentioned the tenyear over 2 . Weve been up i think this is the fourth day in a row. And yields good news for the banks. You mentioned citigroup moving as well, deutsch bank upgraded to the buy. Citigroup bottomed several weeks ago, it bottomed after the Earnings Seasons for the major banks. A fairly routine occurrence. Teen retailers, i think everybody was surprised by aeropostale and Urban Outfitters reporting sales better than expected. Now the whole group, including American Eagle and abercrombie will do better. Guidance still a loss and better than expected for aeropostale. Just remember theyve had losses, quarter for quarter, for a long time. Any deceleration for the losses good news. Starwood had interesting comments. Good news revenue, terrific up 7 . Wyndham had a beat. They raised a dividend. Their red card was 8. 6 . Of course, this is the key metrics. You can see them up nicely. However, if youre a consumer and looking for a cheap hotel room in 2015 forget about it. Did you see what starwood said about hotel rates. The u. S. Economy looks set to continue its growth and in the u. S. Hotel business look for rising rates for some time to come. Dont look for any cheap hotel rooms anytime soon from them. Dean foods has a problem. Its not just their guidance. Its milk. This is the biggest seller of milk in the united states. They came out and talked about the record high commodity prices. They have been raising prices last year. And buried in their comment is the concern because of the high prices they may be see something competition out there. But the retailers that they sell too may in fact be going out there and talking about private labeled milk deals that would reduce their share, essentially. Now, they have not given any numbers about this. All they have said theyre only providing guidance for the current quarter. Theyre not providing fullyear guidance anymore. That was sort of the red flag out there concerning people about increased competition with them. Right now, the dow up 92 points. Guys back to you. Bob, thank you. Keeping an eye on the tenyear back above 2. Rick is he cme. Hi, rick. Its been creeping and traders have been well aware of the strange behavior and trade of late. But it isnt just the notion as bob pointed out four days of higher yields. It isnt just the notion that we didnt have a good employment report because that was friday. Where do we settle earlier in the week, under 170. So there is more going on here. And traders of cognizant of it. Look at the year to date and basically up 2 to 1. A year to date were seeing closer to 217. Keep this in mind whether last year or this year the bond markets were never in the red. Last year they opened up at 3 03. Straight down. Never in the red, this year 217. Never in the red. This is very significant movement. You see it on the year to date chart. And the twoyear creeping higher than 98 but not nearly as much. If you look at the difference that separates them 10 versus bund spread. Theyve been looking at that a ten bases point bonus. The bunds creeping higher. They have a weight on them to extend it and trying to handicap that. If you look at the yield we can also garner information. Look at a year to date of 10s minus 2s. 2 is anticipated in a large way with upyields. So there you see a notion of stevening in with the feds job report. If you take that twoyear out, you look at 5s, 10s and 30s, you get a different picture. If you look at the currencies today its a dollar yen day but its getting closer on that 120 level. Always psychologically significant. All the congestion is below there. Look at a year to date it jumps out to you. Carl back to you. Rick santelli in chicago. Thanks. When we come back the ceo of Reynolds American the home of camels cigarettes. Later, shes on the cover of Sports Illustrated swimsuit issue. Well talk with hannah davis right here at the big board with the dow down 82 points. Take a look at the markets here this morning. Dows up some 90 points. S p subpoena 10 as were once again positive for the year jim, as the back and forth continue. Again focus on the united states, and focusing on apple, a fulltime high. A very date barometer. Actually now at an alltime high. Sally sims is one of the providers on squawk on the street bringing in, jim, yes. Oh. That is a beautiful cake. Your own jersey. Yeah. Number 60. I love the network and i love fighting with you guys and the team that we have and the evening team. Im thrilled to be here. Everybody that we talk to. Happy, happy birthday. Thank you guys. I looked at to see who number 60 was, Chuck Bednarik the man who remember, the guy from the 1960s yeah actually cut giffords career relatively short. Talked endlessly about bednarik. Happy to be here. Happy to be with you guys. Happy to be alive. Happy to have a couple of great kids. Amen baby. When you get to be your age, thats all you can really be thankful about. Yep, yep. Im happy, yes. Ill say it. And its going to be a big year. Thats right. The dows up 94. Dont go away. Know that chasing performance can mean lower returns and fewer choices in retirement. Know that proper allocation could help increase returns so you can enjoy that second home sooner. Know the right Financial Planning can help you save for college and retirement. Know where you stand with pnc total insight. A new investing and Banking Experience with personalized guidance and online tools. Visit a branch, call or go online today. Time for cramer and trading. I like a fine merlot. The ceo for cvs, that stock is a buy. Piper this morning comes out and says, dont take the profits yet starbucks, it goes higher. I thought that was interesting. Man that stock has a good run. Thats harold schultz. Both of those are intriguing torr to me. Pharma concept cvs up 5. 5. They gave up tobacco which i think say great thing. You mentioned starwood earlier. And wyndham, people are using that as a sign that maybe the strong dollar is not hurting International Travel to the states as people thought. Bob iger happy birthday, bob iger, said the same thing with disney theme parks. And visa said be careful with travel. So far visa has not borne out being the top. Tiffany on the flip side of that. Its been on the border. I take disney and the numbers very very strong. I think its good. Spirit air. Save. Lets hear if thats a cheap way to go. Its been a fantastic stock. Applebees richard pops more about general health. And its a data point, the earnings are data point versus the approvals. I think the best approvals since 2008. Oil, this call that oil needs to go to 20 before its said and done . I dont get the sequel to that. Were already seeing there can be a bottom put in the low 40s. Today, occidental is the most leader to oil in the majors. It fits that pattern you that wont want to be much lower. The discussions and negotiations continue between royal dutch and the unions over this labor contract dispute going into its ninth day. Is it not amazing that we have labor contract disputes west. No one cares. The old east would be like i want to sell the stocks. No one seems to care. They dont care until they do. Suddenly well be discussing it. Thats absolutely right. Its like the longterm rates in italy. Suddenly, its like boom. But, yes, guys thank you for the birthday wishes. Quite exciting. Its always a good day. Your birthday is i think, one of the most fun to celebrate out of all the birthdays. You obviously get a kick out of it as we do. This is a big one. I do get a kick out of it. I wish my late mom or dad were here. My dad would have called me right after the show. He would have said they really like you. Pop, theyre my friends. We do like you. Well see you tonight on mad money 6 00 p. M. Eastern. Goldmans equity strategist david coston sees more upside to stocks. Plus the model hannah davis gracing the cover of this years Sports Illustrated swimsuit edition. Shell be here post9 00. You just got a big bump in miles. So this is a great opportunity for an upgrade. Sound good . Great. Because youre not you youre a whole airline. And its not a ticket youre upgrading its your entire operations, from domestic to international. Which means you need help from a whole team of advisors. From workforce strategies to Tech Solutions and a thousand other things. So you call pwc. The right people to get the extraordinary done. [ male announcer ] your love for trading never stops. So if you get a trade idea about, say organic food stocks schwab can help. With a trading specialist just a tap away. Whats on your mind lisa . Id like to talk about a trade idea. Lets hear it. [ male announcer ] see how schwab can help light a way forward. So you can make your move wherever you are. And start working on your next big idea. Good tuesday morning. Welcome back to squawk on the street. Im carl quintella with sara eisen, david faber here at the new york stock exchange. Simon hobbs more from him. Hell be speaking to the ceo of wyndham worldwide. Make sure you stay tuned for that. Dows off the high as we opened with a quick tripledigit gain. A lot of alltime highs regarding the consumer apple, starbucks, as well as hasbro as well. And coke look at that stock. The leading dow component this morning, up almost 4 . Yep, sharply higher. Investors expectations were quite low. And the company did manage to beat on the top and both tom line. We did speak with the ceo of coke, well have more of that including the impact of the prices. She said coke spending. Lets get to the road map, Goldman Sachs chief david kostin. And the ceo of Reynolds American will be joining us for an exclusive interview find out about the massive deal with lora lie and how theyre affecting the ecigarettes. Hey, rick. Hey, bob. This is a lot like income spending numbers. Two Different Directions consumer read on invent up half a 10 what were looking for. Sales down four 10s. This is a bit larger. Once again, how much of last quarter of 2014 was inventory issues that gave us some strong gdps that gave away one moderate gdp, of course. This is a december number. All of this will refigure in. In a few minutes were going to get december jolts and well come back for that. At this point, it changed a bit below 2 . But of course weve opened the door to 2 . Its just a question about where it settles at this point. Carl back to you. S p currently 2054 on those. Not far from goldmans target of 2400. Joining us, the chief strategist Goldman Sachs. Good sototo see you. Its interesting opportunities from rotation from inside the market but within the market rising with the growth, 2100 at the end of this year. Your private forecast included some period of chop right, where we might take a dip down. Is that still valid . Well we had a kwags where there was a hiatus where companies are not buying back stock. A couple weeks before earnings season. And were now just through earning, season. That is open a positive tailwind from the trading perspective. Thats seen as the number one source of demand for shares is corporate buybacks by a pretty wide margin. So thats a key technical or key anomaly perspective to think about. Right. Now, weve got some very Big Companies raising a lot of money in the bond market. Rates are extraordinary low, historically speaking. That is the one area from violation perspective that would suggest that the market could trade higher. All the other metrics. Enter prized to the metric of choice in the private equity world. Theyve been reluctant to make changes with the oil prices. The ratio suggest what is the market is a pretty high valuation level. And some interesting dynamics inside of the market have been the rotation for growth. And Growth Stocks have done pretty well in the first part of this year. And the history would suggest that is likely to fade. And you want to be more valueoriented. And the way to think about that the way i think about that is when the Economic Data is mixed, growth becomes a scarcer commodity. And people look for growth. But the Growth Stocks do. Is this less than 1,000 value. We did some other metrics. When the Economic Data gets better is when you want to own value. And at this juncture were now seeing a very strong employment report on friday which suggests some of the data points might be moving in a stronger direction. The Goldman Sachs view is that the u. S. Economy will grow at a 3 rate this year. That would be more consistent with value oriented stocks doing better. So david, what actually works now were going to talk about cvs in a minute. Theyve beaten out the consumer pharmaceutical level on the top line. Where do you go into this environment . You can go into a variety of different sectors are we think about value, we look at aig, we look at General Motors delta airlines, as an example of companies in the sectors which are value. As we define value as looking at low ebda. And the Goldman Sachs covering those spots. Later than the upside that i have in the forecast a low Growth Market which is 2100 at the end of this coming year. And that would represent or will represent in the forecast almost 16 times forward multiple at the end of the 2015. So thats a reasonable healthy valuation. Well, what about those people who will look at what were many of their favorite stocks that are being pretty quite hard by the Foreign Exchange move as they come through . Because that would seem to many people to be about twin hour ravens. Do i believe its a great franchise, do i sit in there waiting for this to turn around . What would you say to people facing that dilemma at the moment . If youre looking at that situation for this year owning stocks with a Revenue Source that is primarily domestic is a pretty critical component. And the reason for that the u. S. Economy growing much more rapidly than there are in both europe and japan as examples. And in the fourth year, the Company Selling into the end markets your volumes are greater. Of course on a translation perspective, exporting and transferring earnings would make it better to sell u. S. Companies selling domestically. Thats an issue. You talk about franchises. You could suddenly have companies with global franchises many a third of u. S. Corporate sales overseas but twothirds are domestic. So when you think about a portfolio, tilt more towards u. S. Companies that are generating sources domestic lick Revenue Sources, a. And b, think about this juncture, given the economic date is likely to get better. That involvement is better than the growth. David, given what weve seen in the last few sessions really out of the bond market treasuries, tenyear heading back perhaps above 2 . Does this mean this is the end of the utilities that have outperformed all last year . Its so much more sensitive in view of the Interest Rates moving modestly higher is what is forecast. But that would suggest theres more interesting opportunities probably in those sectors. Consumer staples, expenses . Im thinking about it because of cocacola. Youre not seeing the kind of growth but certainly theyre defensive. Well you can find more defensive stocks in different areas. It doesnt have to be unique to you know Consumer Staples certainly defensive. And it would be more interested in my sper detective tiff than value technology. David, its good seeing you. All right. David kostin. Breaking news here. Hi carl well the white house has just put out a statement from the president confirming the death of the young humanitarian aid worker kayla mueller. She was just 25 years old captured back in 2013 in syria. Isis, the group in syria, put out a notice last week said that they had killed her. Now, the president confirming that she has died. Saying ging kayla represents what is best for america and the values we have strived for around the world. Isil as the white house calls the group, isil is a hateful abhorrent group and in contrast to the people like kayla. Thank you so much. Heartbreaking news. Lets switch gears now. Weve got new data coming out on jobs just moments ago, Rick Santelli in chicago with more on that rick. Jolts, jobbings and labor turnover. This series started around the turn of the century, around 2000. And this is the best level since june of 02. 4. 28. And if you look its virtually unchanged. Separations, 4. 9, virtually unchanged. If you looks at growths, 2. 7 million, thats the one people like to Pay Attention to if you have enough courage to pit, most likely you have knowledge to get another job. We want to Pay Attention. Overall, not a bad number whats surprising theres very little notice of the figured income markets. Rates really havent moved much on it. Remember, last friday with a better than expected number it helped to put more selling to what was already a light selling market. Back to you. Thank you very much rick. For that breaking data. Lets get the first reaction from the dablabor department. Joining us here is labor secretary thomas perez. Good morning to you. You must be happy to see that earnings number go above 5 million. What is driving it . Does that give you a good sense of Economic Confidence from employers that theyre opening new jobs . Absolutely. This is another indicator on the confident economy. 5 million job openings thats the second high nest history of the series. You look at the number of people who are voluntarily leaving their job. You dont leave your job unless you have confidence you can get a better job. Thats 2. 7 million in the depths of recession it was Something Like 1. 5 Million People because folks were far more scared to leave. In depths of the recession there were almost seven job seekers for every job. Now were down to 1. 7. No everythings moving in the right direction. You layer this on top of jobs numbers on top of gas prices on top of auto sales, and that all equals a confident economy where the fundamentals are very, very strong. Zbl the one question i have with all of these strong market data why arent we seeing stronger growth . If more people are quitting their job, why arent we seeing higher pay going along with that . I know were starting to see it but not where it needs to be. Well actually thats an interesting question. If you look at the jobs created in last eight years. 8. 5 . Less than 10 have been lowwage jobs. You contrast that eye were the beginning of the recovery where the vast majority of jobs created as virtually every recovery in the recession lowerwage jobs. So actually over the last two years, weve not only seen increases in the rate of job growth, but were also seeing qualitative increases in the types of jobs. And that is yet another sign of an economy thats moving in the right direction. Mr. Secretary, were very focused on the semiannual testimony from the head of the Federal Reserve janet yellen is about to give in a couple of weeks. In that testimony, presumably, on the basis of this data shes likely to be fairly upbeat and therefore hawkish on the prospects of Interest Rates rises over the next few months. I dont know if youre able to comment on what the Federal Reserve does but if they do start hiking rates what do your models show will happen to employment . Well, again, you took the wording out of my mouth. I leave fed policy to the fed. And what were doing here is our level best to make sure that we continue the momentum what we see in todays numbers in last months numbers. And frankly, in last years numbers. Everythings moving in the right direction. What we have to make sure we do and the Unfinished Business of this recovery is to make sure that we have shared prosperity. We want the rising tide to lift elbows. We want to make sure that the longterm unemployed, the rate is coming down but we still have work to do there. So thats what were focused on is making sure we continue to create good jobs. You adequately do you think youre adequately focusing on the supply side of the economy . Because oftentimes certainly, if luke at when the president last spoke in the state of the union, it really was more wealth transfers from the rich as you might put it to the middle class. Trying to compensate for the fact theyre not doing so well in the middle economy rather than enabling them through the supply sites to do bet and become more wealthy in the market. Well actually middle class economics, the linchpin of sustaining the middle class is making sure folks have the skills to compete. The president s proposal to make Community College free is a recognition of the fact that just as high school was made free in the beginning of the 20th century, in the beginning of the 21st century, we need to make sure that people have that opportunity to upskill so they can indeed get the middle class jobs of today and tomorrow. Mr. Secretary, no doubt, things are as you said going in the right direction. One area of concern is certainly those states where energy has been a big part of the job creation. What are you seeing or expecting giving that fall on the price of gasoline. And the potential result of lack or cutting of jobs by many of these companies . Well we certainly monitor that situation very very closely in states like north dakota louisiana and elsewhere. At the same time its important to know that you know the average consumer is getting an effective raise somewhere between 600 and 900 depending on what study you look at. Thats had money in their pocket. And what drives gdp growth in large measure is spending. And when people have more money in their pockets because the price of gas is cheaper, they spend it. And that spurs growth in other industries. So were looking at the totality of circumstances. And i know for the folks that i talked to they welcome the notion that theyre paying 2 or 2. 15 for a gallon of gas. And theyre paying 3 and 4 a year ago. Finally, mr. Secretary, the study out today about manufacturing auto matice inging automation and the notion that robots can go from 10 to 25 automation in the near 2025. Highpaying jobs. Is that why were not seeing some of this wage pressure develop . Well, again, at the depth of the recession we had roughly seven job seekers for every job opening now were down to 1. 7. Theres still slack in the economy. And as the labor markets continue to tighten, were going to see more upward pressure on wages. Thats one of the best things we can do to help move wages forward. We also need to make sure that we train people for those advanced manufacturing jobs of today and tomorrow. The 20,000person bethlehem steel plant which was 20 minutes from where i grew up in buffalo, new york those arent the types of jobs that are being created today. Its smaller numbers. But higher skill level is required. And we need to make sure we scale those jobs up so we can indeed help ensure a middle class existence for everybody. Thank you, mr. Secretary, for joining us on those breaking jobs numbers openings. Again, highest labor since 2002. That is labor secretary of the united states, thomas perez. Ic whiching the smoking hakt. E inging habit. Well find out with that stock today. The dow is up. Ted. Visit legalzoom today for the legal help you need to start and run your business. Legalzoom. Legal help is here. Shares of cvs climbing, cvas health climbing. Before it ditched Tobacco Sales reporting revenues of 37 billion in the quarter. Thats 1 billion more than the street expected. Meredith adler is the food and retail analyst of barclays capital. Good morning. Good morning. How important is this topline beat . 1 billion extra, up 13 on last year, in telling us whats working now for cvs . I think we already knew that they had a decent selling season. I think they did say that the impact, the negative impact from eliminating tobacco was less than theyd expected. And theyre getting a very good response. So you know i think in general, people believe that they are outperforming in just about every area. Were you disappointed by the margins . No. We were expecting exactly what we saw. You know you add specialty is going very quick lip and specialty is all margin. So thats you know its just what you have to factor in when you forecast a company. So what do you say to people about the stock, is it Worth Holding . Yes absolutely. And what ive been saying to people is that they are transforming themselves into a health care company. And theres tremendous opportunity for them to provide value in the health care system. Not Many Companies can redefine their market. Even as they gain share in their core markets and i see cvs doing that. They have a wide variety of capability, and access. The elimination of tobacco had widespread benefit to them. Gains we just showed 48 over the last year. My question really to revert back to what happens to it now. Given that so much of the change management is presumably factored in that stage. I think people will continue to recognize the benefits of the combined model. And, you know maybe they benefited towards the end of the year because of a strictly domestic company. Right. And theres a pullback as people start to feel more comfortable or the companies with currency issues get cheaper, the stocks get cheaper. But from a longterm perspective, we really like the stock. And where does cvs fit the grid behalf you cover . My coverage is actually very broad. Okay. Like the s p 500 or something . Not quite that broad, but yes, broad. What is your top pick within the related Companies Win that space is cvs top . How does it compare to the others . I would say it doesnt have as much upside as other stocks do. Our top pick for this year was sprout. Right. Because we do the whole thing with food companies. And next year . Im sorry, thats or 15. Good to see you meredith thank you for your time. My pressure. Sara. Coming up on the show. The cover of the Sports Illustrated swimsuit issue bringing plenty of controversy. Is it too risque . The model here is heres. Announcer the cnbc realtime snapshot is sponsored by enter agentive brokers. Interactive brokers. The professionals gateway to the worlds markets. Some breaking news on apple they have sold 875 million swiss franc deal bond. Tenyear yielding 28 basis points. Another 20year bond 75 basis points. It comes a week after they did another 6 billion. Stocks an an alltime high just right below it. Talk about free money for a long time. Those yields are incredible. Not negative. I know people say you would buy it because perhaps the currency would appreciate. 281. Not bad. Straight ahead on the show an interview with wyndham worldwide, find out what the ceo sees for the company and the industry for the months ahead. Well be right back. In my world, wall isnt a street. Return on investment isnt the only return im looking forward to. For some every dollar is earned with sweat, sacrifice, courage. Which is why usaa is honored to help our members with everything from investing for retirement to saving for college. Our commitment to current and former military members and their families is without equal. Start investing with as little as fifty dollars. Know that chasing performance can mean lower returns and fewer choices in retirement. Know that proper allocation could help increase returns so you can enjoy that second home sooner. Know the right Financial Planning can help you save for college and retirement. Know where you stand with pnc total insight. A new investing and Banking Experience with personalized guidance and online tools. Visit a branch, call or go online today. Im sue herera. Heres i cnbc news update. General motors said a former member of the u. S. Task force who restructured the company back 2008 wants to join the board. Harry wilson wants to company to commit to a buyback program. Home depot is hiring 80,000 workers for the spring selling company. Its the companys busiest season. And walt disney and sony have agreed to share spiderman on the big screen. Marvel will coproduce the next solo spiderman movie financed by sony. And what could affluent americans want on a credit card . Turns out pretty much what everybody else wants. Cash back. On a survey free money was the number one perk. Thats the cnbc update. Back to you, guys. Meanwhile, theres an element of relief for investors worried about how the strong dollar will impact larger companies. One of the first to report wyndham worldwide beat it by 7 . And Free Cash Flow this year to 800 million. Joining me now Stephen Holmes the yeahman and ceo of wyndham worldwide. Good morning. Good morning. Youve taken the core projection for next year down albeit well within what people would have expected. How badly are you affected by the strong dollar . Not terribly affected. For 1 and the earnings share we raised it 2015. Theres an impact for all businesses. From our standpoint we want our managers focused on running the business and not focused on what currency is doing. You look at that Free Cash Flow, i know its a guy who likes to attend cash to share holers, 800 billion this year. What is it the National Campaign for all the brands do you have many brands . Is it the scheme or that the cash is really good . Its all good. Back when the economy wasnt so good. So really weve got a phenomenal collection of businesses. They have incredible resilience. All the things you named in dynamic pricing. All of those things contribute to the performance of the business but at the end of the day, every day, our managers have to get up and perform on how to include global business. The last sector of the market to recover is the group area. Theres a whole point you see a lot of chinese buying hotels. You say, well thats a sign you might be at the top of something. You recently bought dolce which is 5700 properties. They are for groups. Properties for big conference facilities for groups. Why buy now . Isnt that a cycle . Well, not for us. Were not buying the hard asset. Were buying the brand. And sometimes, the best time to buy a brand is in the bottom. Im not even saying were turning. I see you at the top of the cycle. I dont know that we are. Were seeing great momentums, were not seeing a slowdown. Were still feeling good. If you talk to most theres good momentum in the industry. For a long time you were one of the stars, performers on the stock market on the s p. Its not that youve underperformed on the major road but your stock hasnt done as much as id imagine youd like. Youre shortly through the sell Price Performance if you would. And where you think you should be . Well, the performance has been fantastic. You said we were one of the best performing stocks for a couple years because we started at such a low base. Were still not where we should be thats why were still a big buyer of our own stock. I think its a little more complicated in some companies. So it takes people a little more work to understand our business. But at the end of the day, the value is really the result of the incredible resiliency of these businesses. Four divisions. Three businesses four divisions. Youre the only ceo to answer this question stock 86 67 69 what should it be . You think i should answer that question . Where it should be. Higher. I never give an estimate of where the stock should be. I will tell you at these prices were a buyer of our own stock. Do you think it should be substantially higher . Of course it should be substantially higher. When, thats for the market to know. Wee produce the e. The rest of the p. E. Comes from that. I dont control that. I can only tell you what we can control. Ill tell you where were headed with the businesses, what the cash flow is going to look like dividend. How much of that 100 million is Free Cash Flow when you return this year . Well this year we gave back about 650 million in shares. We purchased another 200 million in dividends. We probably gave about 800 million back. With acquisitions closer to 1 billion that we spent in total. 800 million Free Cash Flowing. Were not looking to be more highly rated so well take on more debt as we produce more eeb ba. Do you think with the shareholders for the 60 of the gain, do you go oh why cant we achieve what they chiefed . We did it for four years before they achieved it. Weve gone through cycles. No, i think theyre doing great. I think most of the companies in our industry are doing well. Its been a good run for the hotel industry. Im not calling the run over yet because weve seen a lot of growth. Stephen holmes ceo of wyndham worldwide. Sara, back to you. Were going to continue on the earnings beat simon. One company that is actually being squeezed by a stronger dollar cocacola reporting earnings. Actually rising after a slight beat in sales and profits volumes which everybody looks for in terms of coke sales. Up 1 for soda and up 2 for noncarbonated drinks. Pricing is a big story. So for the first time in a few years, coke is actually raising prices and that is helping with weaker sales. The cfo kathy waller telling me earlier that good prizing realization is being seen in the u. S. And in europe. So theyre selling fewer cokes but theyre able to charge more for them. Also, the cheap gas prices is something that the cfo is telling me quote, will help business and will factor into the big results. The big picture, its still a challenging outlook for cocacola. Thats why management including the ceo and qfo muktar kent are calling this an action to boot product boost productivity. And refranchising some of its bottlers and the strong dollar. This is a company thats hugely affected by what happens internationally. Waller said it could continue to be challenging. Also said a bigger hit expected down on sales because of the stronger dollar. Coke makes most of its money outside of the u. S. The upside is investors werent upbeat in the quarter. So they managed to get higher prices for the coke sales and increased volume that did come in in line with expectation. Any comment from her at all on what is going to be continued expectation about their significant positions in both monster as to what their intent may be . I asked her if they were doing bigger stakes of course she couldnt comment but said always looking to grow. Coke is taking Big Investments stakes in them. I do want to mention venezuela, it has been a moving target when it comes to those prices on venezuela. Even today, a new Exchange Rate regime is being announce napdd, and that is hurting companies, p g. And lots who operate there. Up next the ceo of reynolds company. Will the ftc approve the deal. Thats what Everyone Wants to know. And the her take on the importance of ecigarettes. And another special guest. Hey, im hannah davis. Ill be on squawk on the street on cnbc next. Were legalzoom, and over the last 10 years, weve helped millions of people protect their families and run their businesses. We have the right people onhand to answer your questions backed by a trusted network of attorneys. So visit us today for legal help you can count on. Legalzoom. Legal help is here. Jacks heart attack didnt come with a warning. Today, his doctor has him on a bayer aspirin regimen to help reduce the risk of another one. If youve had a heart attack be sure to talk to your doctor before your begin an aspirin regimen. At ally bank no branches equals great rates. Its a fact. Kind of like shopping hungry equals overshopping. Stocks had a nice gain right out of the gate. Then split roughly in half with the dow up 51 right now. Health care is one of the best performer in the s p. Don chu is back at the s p. Good morning. Stocks utilities, Technology Telecom and staples all trying to get a piece of the action. But were seeing strength across a wider array of healthcare related groups. So far the best performing stocks in the businesses, pfizer and edwards and humana. Very big gains in the health care sector. Back to you. Thanks speaking of earnings movers Reynolds American out with earnings coming in line with what analysts are looking for. Investors also watching the announced merger. Remaining confident that that 25 billion transaction will close in the first half of the year. Joining us now for an exclusive interview to discuss, susan cameron, the ceo of reynolds. Live from winstonsalem. Good morning susan. Good morning, sara. Talk to me about results. How much of is being driven by pricing, higher pricing on these cigarettes because overall, theyre still in decline in terms of volume and sales, correct . Sure, sara. Reynolds american had a fantastic Fourth Quarter and a very strong year. As you said we met consensus, we grew our earnings 7. 2 and we saw strong market share growth on all of our key focus brands. Certainly, cigarette volumes are declining as they have been for decade, we saw a 2 volume decline in the Fourth Quarter. As we continue to grow our market share in a very competitive environment, were very pleased with the balance of shared and profit growth. It looks like an industry at large, cigarette volume has been increasing 3 to 4 . You mentioned 2 in the quarter. Is 3 to 4 the ballpark of what youre expecting into this year as well or are those losses at all . We have seen that in quite a few of the past several years. We saw that in 14. And thats what were looking at in 15 as well. How is the tobacco consumer doing . You would think that cheaper gas prices puts more money in the pockets of cigarette smokers. We talked that with the cfo of coke. We really are a domestic company, a domestic business. We dont have fx headwinds. And we are seeing the gas prices the biggest channel is convenience gas. And the convenience gas retailer is talking about seeing a robust sale. And so that is a good influence for our consumers. I know theres a lot of questions for you about this massive deal that youre trying to get done. Number two and number three, tobacco company. You expect it to go through in the first half of the year. Any more color on how that process is going with the ftc and why youre so confident that its going to get done . I know a lot of investors arent. You can see it in the share price. I think what i can say, it is not a transparent process but it is proceeding as expected. We continue to be confident that it will close in the first half. Of course investors are making their own minds up as they evaluate the environment. And well see how that unfolds, assume weg close in the first half of this year. Are they looking at competition for broadly not just cigarettes, for example, ecigarettes menthol, cigars is that all factored in . Well you look at the total Tobacco Market of course Reynolds American was the First Company to go into total tobacco and make the commitment to transform into the tobacco industry. And with the vuze the digital ecigarette and the number one seller in convenience in the united states. We continue to offer consumers product alternatives. Zonic rt gum thats rolling out in 18 stores. That will continue to expand. We continue our commitment to transforming the industry and driving innovation in the category. Susan, its david faber, if i can just follow up briefly on the antitrust side of this. Youve heard something, its fair to say from the regulators that would change your opinion of your potential success in putting these two companies together . I mean david, as i said its not a transparent process. And we continue to work with the ftc, as they look at all the facts. And i continue to be confident well close in the first half. Just one more question on vuze. You mentioned the growth. It has been stunning. I know you rolled it out last year, you say its number one. Are you worried at all about an increasing number of u. S. States going at it alone. Regulating the department of health in california just put out a pretty sharp warning about chemicals citing a number of studies listed in the ecigarettes. This is clearly an issue gaining traction. How much of a headline is that . Our vuze digital vapor cigarette is the only one in large distribution made here in the united states. So we are very confident of our product and the Product Differentiation that we have versus some of the important brands. So we will continue to work with the states to look at really you know weve talked before about some of the risks and some of the flavors that we believe should be related. We work with the states to be sure theres no underage purchasing in vapor. So, i think, you know it is very topical. Its still a relatively small segment. But consumers are trying. And are trying these vamerpor products. And if they have the potential to reduce harm then this is something that the states also need to take account of as we look into the growth of this segment. Well continue obviously to watch that. I know a lot of folks are getting on the regulation bandwagon. Susan cameron, thank you. When we come back a lot of controversy swirling around this years Sports Illustrated swimsuit cover. Some say the cover is too reveal. When we come back the cover model hannah davis will join us along with the publisher. You dont want to miss that. Dow is up 100 points out of germany, too. Well get to that in a moment. Anything . No. You . No. Aflac what are you guys looking for . Claims legend has it these hills are full of em. It can take months for an Insurance Claim to surface. Claimin takes patience. Aflac paid my claim in one day. They got some newfangled kinda one day payin machine . Hehehehe yea, i got aflac at work. Aflac. In just one day, we approve and pay. One day pay, only from aflac. Aflac. Sports illustrated out this week with its annual swim suite issue, the top selling issue of the year gracing the cover is model hanna davis first discovered on the caribbean tennis circuit has done ralph lauren to levys. Along with Group Publisher brendon grip. Good to see both of you. Good morning. We had you on last year. Every year we ask, how are they going to get more attention for the issue than they did last year and every year you find a way to do it. Somehow we figure out a way to make it bigger. This year was two platforms through individual as well as consumer facing events. Well be doing a fan festival both in Harold Square which one took place yesterday and another one today, and then we shut down broadway in nashville and we will be doing a Large Consumer fan festival in nashville wednesday and thursday this week. Fewer ad pages from the 50th Anniversary Edition last year right . But do you think it will be the best seller . You know we hanna thinks it will be. Of course it will be. Were proud of the franchise across video, digital, five part series with the travel channel which is brand new. We continually push the franchise in more mediums and not think of ourselves as a print only. It is a risque cover. A lot of people are saying too much of you is showing. They dont want their kids to see that in the grocery aisle. How would you respond to that . I think every year Sports Illustrated like you said they try to do something a little different and ive been saying that this is the year of the torso. I think everybody is talking about what you cant see in the picture. That to me is odd. You cant see anything. Do you know dont take it so ser youly. When on the shoot, taking hundreds of photos. Do you know the moment you think you got the cover . Did somebody say thats it right there, we got it . No no no. That was the last shot of the day. I had been riding horses i was on a farm in tennessee. And normally covers are shot on the beach. So i by no means, thought i was getting the cover. I was quite sweaty in that picture but i had a lot of help hair and makeup wise to get me ready right before. I know hanna told matt lauer the media is making it out to be more naughty than it is. When the line goes this far, whats left in subsequent years . Weve been doing this for 51 years and for all 51 covers people have various opinions of the cover and were comfortable with that, okay with that and proud of hanna and the Franchise Growth overall. You cant really pull her bottoms down any more than that can you . Thats a question for you. Im not going to answer that question. I didnt know it was the year of the torso. Im way behind here. To come back to the business i can look up timing stock now, forget its a public company, and they worry or wonder about good oldfashioned print versus digital. Give me a sense what you can expect when it comes to revenues from this issue digitally which is the future for your company . Absolutely. What youve seen this year is a publicly traded company, time inc this wasnt a Sports Illustrated launch it was a time inc launch. Obviously si. Com and in addition to kings leon concert streamed live from nashville across all of the sites as well. We didnt view this as a Sports Illustrated only launch. We looked at it as a time inc launch as part of our future. Youve been doing this for a while and youre not that old, obviously, but how has modeling changed . We talk about the Digital World with brendon all the time. Does it feel different in your line of work . Yeah. I think when i came up you didnt share as much and we didnt really have social media wasnt important. So now i think pictures like that you post to instagram and twitter and all that is really important and people want to get to know the model now and now youre able to. Youve been if Sports Illustrated before, just not on the cover. How does this change the entire equation for your career . What does it allow you to do that you want to do . I think it just it gives you incredible resources and opportunities and im just meeting a lot of different people right now and kind of figuring out what i want to do. Do they call you, do you get like an email or how do you find out you got the cover . Did somebody well they actually i was filming an online segment on si now. Si. Com. And the editor came in with the billboard and surprised me right there and then. I think ive seen that picture. See the video online. What does derek jeter think of the photo . I think everyone is pretty excited right now. I was waiting to see how you would deflect that question. Congratulations. Thank you. So great. Always good to see you. Thank you for having us on. Appreciate it. All right. Now lets send it over to jon fortt with a look at whats coming up on squawk alley. Top that jon. This is the squawk alley tease which is a bit less exciting perhaps than the Sports Illustrated tease. Weve got a lot of great things to talk about. Tim cook at the white house talking about Cyber Security a and next steps there. Senator ed markey talking about car hacking and what we need to be careful of now that we know the extent of what can happen and michele phan the youtube star will join us to talk about whats next in social the empire shes building all that coming up on squawk alley. We choose to carve our own path, in the pursuit of exhilaration. The 306 horsepower lexus gs. Experience the next level of performance, and theres no going back. Sunday dinners at my house. Its a full day for me, and i love it. But when i started having back pain my sister had to come help. I dont like asking for help. I took tylenol but i had to take six pills to get through the day. So my daughter brought over some aleve. Its just two pills, all day and now, im back aleve. Two pills. All day strong, all day long. And now introducing aleve pm for a better am. Theres nothing more romantic than a spontaneous moment. So why pause to take a pill . And why stop what youre doing to find a bathroom . With cialis for daily use, you dont have to plan around either. Its the only daily tablet approved to treat erectile dysfunction so you can be Ready Anytime the moment is right. Plus cialis treats the frustrating urinary symptoms of bph, like needing to go frequently, day or night. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. Do not take cialis if you take nitrates for chest pain as it may cause an unsafe drop in Blood Pressure. Do not drink alcohol in excess. Side effects may include headache, upset stomach, delayed backache or muscle ache. To avoid longterm injury, get medical help right away for an erection lasting more than four hours. If you have any sudden decrease or loss in hearing or vision or any symptoms of an allergic reaction stop taking cialis and get medical help right away. Why pause the moment . Ask your doctor about cialis for daily use. For a free 30tablet trial go to cialis. Com opportunities arent always obvious. Sometimes they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Welcome back to squawk alley this morning. Joining us this morning kevin oleary chairman of oleary funds investor on shark tank and jon fortt and Kayla Tausche where the market had good gains at the open but lost them awfully quickly. We have had comments from the german finance minister that perhaps all this encouraging news over the negotiations between the groek government and the eu not going as swimmingly as we thought. The reason the dow is up only 29 points. In addition to coke earnings and other things. 8 00 a. M. At google headquarters in mountain view, california 11 00 a. M. On wall street, squawk alley is live