Merge. Hacking america, a secret military unit is said to be behind a series of attacks, but our friend, china, denying the reports. And countering it was the victim of u. S. Hacking. And the bulls are back from a threeday weekend. Can the s p 500 post an eighth straight week of gains . Weve got four days to find out. Its tuesday, february 19th, 2013. Squawk box begins right now. Good morning, everybody. Welcome to squawk box here on cnbc. Im becky quick along with joe kernen and Andrew Ross Sorkin who is back from vacation. Lets get started with the markets. As joe mentioned, the s p winning streak has been a strong one. In the meantime, the dow is coming off a second straight weekly loss. Although, really, if you looked at this last week, it was the ever so slightest of losses. U. S. Equity futures are indicated higher. Dow up by 21 points. S p is up by two points above value fair and the nasdaq is up about 3. In 20 minutes, well turn to predictions on where the markets go from here. Then in the next hour, delivering alpo. Well talk to the manager of a 11. 5 billion hedge fund. This fund was up 30 last year. Dont miss pine rivers ceo brian taylor. On our radar this morning, we have earnings and the economy. The National Home of Home Builders releases its numbers for fen. After the bell, you have dell thats going to be a focus. The company in the middle of a buyout battle. Its going to be posting Quarterly Results after the close. Our guest hoefs host this morning is sure to have an opinion on all these stories and many others, as well. The always forthcoming ken langone will be joining us on set starting at 7 00 eastern as our guest host for two hours. Squawk will be hopping behind the wheel this morning. A week ago, there was a huge controversy that erupted over the tells sla. Today our own phil lebeau will be taking the vehicle to boston. Well get to all this in just a moment. Andrew has the mornings top headlines. Welcome back. Thank you, becky. Lets talk about the big headlines this morning. The office depot is in talk toes merge with smaller rival office max. Expected to be a stock for stokz transaction. The deal could come as early as this week. Kayla tousche will be joining us to talk about it. Also, a dreamliner 787 was forced to make a Emergency Landing last month. The yet flown by all Nippon Airways was forced to land after it failed. The carnival krooud cruise ship triumph said a diesel line was touch ago hot surface and caught fire apparently. The investigation into the incident is likely to take as much as six months. Well likely hear more about that. In tech news, oral arguments are set to begin between david even owner and apple. He wants a judge to block apples ability to issue preferred shares. We work that if the distributed preferred stock was, say, a 4 yield there would be a stable demand. Shareholders that want to own apple for the up side in the operations would continue to simply own the comment. They will take a lot of money to the preferreds. The wall street journal says the company has been investing heavily to allow technology to improve the experience of playing the new console. Its expected to allow users to connect to facebook, twitter, or youtube fairly easily. And microsoft has officially launching outlook. Com. If company will upgrait grade every hotmail user to the service. Microsoft is financing the biggest in the history of the email, financing 30 million to 90 million on the outlook campaign. And the wall street journal reports that google may not open Retail Stores this year. Reports at the end of last week suggested that the search giant might launch its first retail presence this summer. I have no idea what they would sell. Devices. Phones. Because you cant what i use google for, i dont need to go right . If you have an android phone. Dont talk to me about smartphones. I happen, mr. I love the ipho iphone. You have so behind the times. Youve had the iphone for, what, four days, five . And now you are youve got the blunt instrument. Its so backwards. Youre waiting for the blackberry ten, right . I dont know what im waiting for. I heard on friday, i saw the do you need to know any of the nations ski resorts that got more than 2 inches of snow last night . No, but he has an app for that. What are you going to do, drop everything and go skiing when you hear the report . I need to know some of these things. I knew on sunday morning that both beaver creek got 7 inches and snow map. I have weather in every place that i might even think about visiting. I have ncaa basketball scores scrolling as theyre happening. I know who is playing today. I can get a preview of whats playing. Its a different world. I was just reading about how could they do something with just email. Who just considers email as the only thing that they do . And i was reading about you. No, its not. I realize it. I have an ipad. I have all the apps on that. Listen, the iphone, when youre doing it, you press three letters and it knows the word youre looking for. You are the greatest spokesman for apple. Fantastic. I feel like a whole revolution you are not a since i left on friday. Office max and office depot, theres still like 2600 of those stores around and theres staples and amazon and ive never gone in. Why do we need four different place toes buy supplies . Staples is fun, but what are these other two also ran . Sth knot a merger of, like, growth, wow, things are good. No. This is like, oh, im drowning, help me. I wasnt here when einhorn came on. Whats happened, briefly, is apple david went to apple six months, eight months ago and said you should issue these preferred shares. Right. Apple not only said no, apple said, you know what . Were going to put in our proxy as part of a governance package that we will never be able to issue these types of preferreded. Twout the shareholders no, no, no, never be able to do it again. I thought the vote was they have to do more. But its not to say we will shares again. Ssued preferred my understanding is it would preclude the board from issuing preferred shares. Without the approval of the shareholders, i thought. I have to go back and look. Im not sure thats the case. But it could be. Now you stumped me and it that was my understanding from what i read. What hes arguing is there shouldnt be this provision and that the board should be allowed do you guys have questions about apple . Because i have an iphone now. And you are the expert auto all things. China is our friend. They would like to shut down our grid, but theyre our friend. Im going to sound like a traitor for saying this. They came back and said it was our fault. This is not the first time youve been sounding like a traitor the. They came back and said were the biggest threat to them. North korea is the i bet we spy on them. Of course we do. I hope so. Were not hacking into them. Why would we get all our stuff . Who would bhie our bonds . But this theyre not shut it down. The scary mrilt guys. Sth t story on the front page of the new times. . Fwaus the New York Times has been hacked by these guys. They dont like their coverage. No, when it happens to them, they finally get mad. Its a good story, all the cyber wars that are taking place. Check it out this morning. Thats an amazing story on the front page. It is. Does anyone else have it . No. They can do good work. Were going to solve our income disparity in one fell swoop. You dont have to solve everything. Sometimes its to make you think. Stls another story from the New York Times that is the reason why were doing the story im talking about right now, phil lebeau is in washington this morning. He has his coffee and is hes ready for his trip to boston today in a tesla. This is a story that came about because of a huge controversy taking this very same trip that youre about to embark on. Were going to do the exact same route, buckeye, and were going to stop in delaware, in new york, dare, about 170 miles away. Then well stop in milford, connecticut, and ultimately just outside of boston. Thats the route well be taking today. It was the same route that john broader for the New York Times did because he said his tesla stalled, it came out of power. Then it was said, wait a minute, you didnt follow a lot instructions in toerms of charging it up all the way. So we want to give you a send. The range, 2670 miles. And we expect were going to be able to make it there no problem to our first stop. Again, this is going to be in new york, delaware. A little bit later on during squawk box, you will hear from us. And by the way, we are going to be live the whole way right here on cnbc. Were going to take you up to pill ford and well give you a sense of what its like. Kwel snow i live. Well check in periodically live on the road. For now, were going to send it back to you. I. Phil, what is the temperature there . The big issue with the New York Times story was the temperature. In the meantime, do you know how warm or cold it is . You know what . Before i left the hotel this morning, i checked and i thought it wag Something Like 45 to 48 degrees here. Its cool for washington, d. C. But it is definitely not hes out of the range of our truck so to speak. Wait a second. Im not allowed to talk on my cell phone while im talk driving, but phil can talk live and do a report with the cameraman sfp. Yeah. He looked okay, but it must be a big roomny model. Seven hours, 36 minutes. Thats going to get him times this afternoon. He could make it faster in ra tesla. You dont want to speed in a tesla because that drains the battery faster. That was part of the problem, apparently. But you use more gas when you speed, too. That doesnt mean youre not going to speed, does it . Thats true, but this is an ourselves theres no battery. Youre not going anywhere. Why build a car that can go that fast if youre not allowed to drive it that fast . Thats true, too. Lets check on the markets this morning. The futures are indicated higher. Last week, the s p was up again. This is the First Time Since 1960 something snap the s p has been up for the first seven weeks in a row. Oil prices have been ticking steadily higher at the bump. This morning, oil prices are up to 95. 43. The tenyear note is 1. 997 . Thats where its been for several weeks at this point. The dollar is up against the euro. It is down against the yet at 93. 53. It was the biggest drop weve seen in over three months. This morning, up 1 . 90. 1,611. 40. And now its time for the Global Market reports. Kelly evans is standing by in europe. The main thing people on this side of the pond are talking about are the italian elections. They happen on sunday. Today, though, a pretty good example of the broader paradox which europe is facing. The zew index jumped to a threeyear high. That sparked the markets higher, up 0. 7 . The ibex doing okay with giving up some ground. A strong session in paris and reasonably strong for the ftse, as well. Its a bit of a paradox, this comes at the same time that we learned european car registrations, guys, in january hit a fresh alltime low. Tan lists are jpmorgan point out its 25 below the annualized pace in the kwourth quarter in january. Markets like france are seeing car registrations dune an annual 30 for january. Not a good sign for manufacturers. Nevertheless, stocks power higher. They think perhaps the worst is wind. Quick look at the bond space because spain did go to auction with thee months and nineyield papers. When you guys were away for the session yesterday, it was so quiet over here. Not a lot of trading activity. People are waiting on the outcome of sundays election in italy. I want to leave but a look at whats happening. The euro dollar is rallying on the back of that news on the zew survey. Now its giving up 0. 1 . Its changed its mind. Thats all right. Those Events People are waiting to get a firmer read of and more clarity, i should say, on just how strong european demand really is coming back through to the other side. I wont mention the yen. Theres a special present for joe this morning. Back over to you guys. Okay, kelly, we were just talking about all the things happening, the mannettary movement, and im trying to tie it to co2 levels. Its more than a questions dense, andrew. 2036 and 2040. But once in a hundred years a meteor it has to be co2. Im telling pup. Hes being facetious. I dont think its a coincidence, all these weather, all these storms, comments, meteorites . Right. But it is scary. If you want to nudge it away from us, you have to start earlier. Who knew there were people inside siberia . And it fell into a big lake, right . Spikin shakespeares days, y would see it coming. Inge al gore does every single thing. Coming up, the s p 500 takes aim at the eighth straight week and the stories likely to make or mistake the bull case. Thats coming up. We created the luxury crossover and kept turning the page, writing the next chapter for the rx and lexus. This is the pursuit of perfection. But at xerox weve embraced a new role. Working behind the scenes to provide companies with services. Like helping hr departments manage benefits and pensions for over 11 million employees. Reducing document costs by up to 30 . And processing 421 billion dollars in accounts payables each year. Helping thousands of companies simplify how work gets done. Hows that for an encore . With xerox, youre ready for real business. Welcome back, everybody, on this thus morning. The first trading day of the week. U. S. Equity futures are indicated slightly higher across the board. Dow features up by about 21 points above have a fair value. The s p up by 2 and the nasdaq up 3. Lets get to the National Weather channel forecast from eric fisher. Good morning, eric. Good morning, everybody. We have very active weather might be affecting travel today around chicagoland. We have snow come down this morning, reaching down from green bay towards chicago. The big story here, though, is the cold and the wind. Thats starting to pick up pt ont front end, wintry mikts across pennsylvania, new york state here. Not a lot of snow out of this one. A lot of this reaches the philadelphia d. C. Car door late morning into the afternoon. The good news for this, a quick hitter. Were watching all this track its way over to the northeast. Same story for boston. A lot of folks still doing that. A lot of School Vacation this week. The snow is going to fall, not rain. It wont contaminate the slopes. And the cold air moves in behind all of this. Look at the changes here across the midwest. 25 degrees colder than this time yesterday in minneapolis. 25 degrees warm ner columbus, ohio. The cold is whats moving in here. Dangerous windchills, 15 the below sfee row in the twin citys, 1 is in chicago and 13 in indianapolis. Lots of layers for all the kids who are going back to school today. Then we catch our next storm, this little pin wheel around the oregon coast. This will dive down around california today and is be a pretty big snowmaker. Coast to coast, 6 to 12 inches in the snowfall mountains. Plenty of snow here around the wasatch. These amounts in the appalachians, on the order of 1 to 3 inches today 37 back to you guys. Beck can he cant believe what she just heard about that cold weather. Eric, theyre melg me, you didnt know it was 25 degrees. Its warmed up in minneapolis since earlier today. Such balmy weather. Its like, ive known this, right . Were here to educate. Eric, i rely on the weather channel. Tell us something, andrew he did. He just told me its 2 22 in nairobi. You need singapore time . You know what else . The clock when you put them all in, andrew, am i right . If its nice, the clocks are dark. If its daytime you guys are going to completely browbeat me into following along and getting an iphone. I think a five is the best. I have a five. I have you dont have a five, do you . I have five i pads. I use the ipad. But why not have it on your phone . Because i can have that and the one thing. Its prehistoric for some reason. 90 of our audience has an u phone. Im going to get a metal driver, too. Its a short week for the markets. Plenty of Economic Data and Earnings Reports for investors to watch. Joig us is chris johnson, director of research at jk investment group. That could be my company and rich steinberg of global asset management. Im going to start with you, chris. Youre fully predicting we need some type of correction at some point because were priced for perfection or the economy is sloeg or exactly. Whats your rationale . Well, we always talk about records being broken right before we turn the other way, right . And the s p has been going straight up. Its just that Investor Sentiment has swung over to that extreme. They were 2 1 2 times mover bulls than bears according to Investors Intelligence last week. Typically, these are those periods where its marked to be raising some cash, put something money on the sidelines because we see a healthy correction. You know, if we were in a bearish trend right now, a longterm bearish trend, we would call it a continuation. Right in in this particular situation, its a healthy correction. We need it and then we can pop even higher, i believe. Healthy sounds big. You like cathartic . No. You mean a healthy one that would help make us healthier . Exactly. You want people to get that sense that its not easy money. I can remember coming to new york city and buying in the studio with you guys back in early 2000. I would get in the cab and the cabby would be telling me what tech stocks i want to buy just before everything went south. Some our smaller trend were getting ahead of ourselves. On march 1st, we have that deadline here. I think that will be the catalyst right now. I think youre looking around in the 5 range here pb that will be healthy, 5 to 10 . How about you, rich . Do you agree or do you have a Different Number . I think were getting close to full value. Earnings are coming in better than expected. Twothirds of Companies Reported sales. And i dont think this is the 2000 period where everybody is talking about stocks, joe. If we get past the sequester issues with sdwb either with a little bit of a pullback, not the 5 to 10 that the other guest is looking for, the markets are going to have to work higher. Theres no other place to put your money right now. The 2 tenyear note doesnt have the competition when the s p is yielding 2 . So were still very constructive. And if earnings continue to come in better, were going to have to raise our target. Even though we may be a value in the short run,