Hershey. Two economic reports today. Weekly jobless claims at 8 30 eastern time and december pending home sales at 10 00. And eu Foreign Ministers are meeting in brussels. The rouble weakening today on the threat. Andrew. Well talk about the big changes happening with mcdonalds in a minute but first a quick snapshot of other stocks this morning. Facebook beating the street on the top and bottom lines but Revenue Growth was the weakest since the start of 2014 and it rose faster. The Company Plans to cut spending by 15 billion over three years as Lower Oil Prices take a toll and qualcomm lowering its outlook for the year. They warn the newest mobile chip will not be used in Major Customer flag ship smartphones. Is that an app . Apple is selling all of these phones. Citrix with better than expected growth. The company is also cutting about 900 jobs. Also salix pharmaceutical will restate financial statements. First three quarters of 2014. Earlier this month the company said it was exploring options including a sale. Las vegas sands topping wall street estimates and theyre hiking the dividend as a result. Thank you. Nbc is an important partner, actually parent for us and it took a lot to get rid of that other music that we always play but the super bowl is coming up. So now im willing right now to say play this every day. Every morning. You feel good marching out to this. We have al michaels. Why not just say listen powers that be suits, why not use this instead of that other stuff. Live from the most powerful city in the world, new york, this is squawk box. This is good. Well its working. Tomorrow is the 30th or something. We have one more day and were down for the year. As goes january so goes the year. Its because of the music i think. Single handedly. I dont think its helping. Anyway i like this. Inflating the market. You were in jersey tomorrow. Two days . Thats an idea. I might wear a jersey. You might pick a team. No, ill go back to the bengals. Charity begins at home. The fed is back in focus. The central bank sticking with its promise to be patient on hiking rates but in its statement yesterday the fed also raises the economy and labor market. Still policy makers saying inflation is well below the target rate and the pressure is holding inflation down has intensified and we have oil prices being the main factor. Im watching. I expected them to say their firm and their resolve. I think if things dont get different theyll fold like a cheap deck of cards in june and theres no way they do it in june. Worried about a stronger dollar. Worried about uneven well be 2 down from 5. Its really hard when the rest of the world is just getting into the gain of quantitative easing to be the one pulling out of it. Whats your forecast for First Quarter gdp . Its not five, its not four but the employment picture has been looking better and better and the question is how long can you keep zero Interest Rates . You cant keep it for 10 years. Stuck with zero Interest Rate policy for forever you start to try to wonder i think they should have already gone off it. Im saying what they will do. Not what they should do. You watch the market yesterday. The fed continuing to say its going to be patient but i dont think the market believed it. There was Strong Language about how strong the economy is doing and thats what the market was focussing on yesterday. You saw a sell off yesterday of almost 200 points by the dow. You want to check out the futures to see they are indicated stronger with the dow futures up by 44 points and youre now talking about the dow below 17,200. S p was down by about 27 points yesterday. Its closing just at 2,000. So these are levels people are going to start to watch closely. The s p futures are indicated higher by 2 points. Nasdaq down by 2 points. Some of the early trading in europe. The situation in greece. The situation in russia playing out there. The dax in germany is down by about. 2 . The ftse is down by. 5 and greece picking up a little bit too. Up by 3. 5 . Well have to check in and see what the latest is a little bit later this morning. Take a look at asia. Watching our markets close lower yesterday and you did see red arrows across the board. The nikkei down by 1 . Shanghai composite down by 1. 25 . Oil another percent and settled at 44. 45. Definitely bottoming. Definitely bottoming. Im echoing what everyone said. We heard every move. Here its definitely bottoming. Check out the 10 year note. Hopefully the yield is bottoming there. It pel to 1. 72 . Lowest level since may of 2013. The 30 year hit a historic low two days ago. The 30 year was hitting a historic low for the yield. If you want to check out the currency market at least right now it looks like the dollar is down once again against the euro. Its up against the yen at 117. 88. Gold prices we havent seen as much activity as you might expect with all of the other volatile moves we have seen but gold prices down by about 10. And mcdonalds head honcho is stepping down in march. The shares rising on the announcement. The stock has been flat over the course of mr. Thompsons tenure. In comparison the dow is up by a third during that period. Joining us is senior restaurant analyst at morningstar and i dont envy the daunting task ahead for the newly named ceo either r. J. Because mcdonalds almost reminds me of ibm. How many times can mcdonalds reinvent itself . It was in a tough spot 10 12 years ago, i dont remember when it was 12 and they lost a couple of ceos and then skinner came in and reignited anything. How do you get millennials to start ordering big macs . He has a long road ahead of him. It wont be an overnight turn around for mcdonalds. Something theyre already embarking on is making more decisions at the local and regional level. One of the missteps this past year is trying a one size fits all approach where you have the products rolled out nationwide. They need to look at the local demand and different preferences, different demographics in each market and start to come out with more localized product decisions and localized marketing decisions as well because theyll start to resinate with consumers. Certainly you can attract a different audience that way and thats the starting point. But its not going to happen overnight either. Don thompson was a good operator and he didnt inspire franchisees or something to the extent they needed to be. Will that help . What can a franchisee on his or her own do to reignite sales. From what i heard from franchisees there were very interesting ideas not acted on at the top level. It does sound like theres optimism with the new ideas that steve is bringing to the table. He gave a presentation at the companys november 2013 analyst day talking about the advanced metrics to look at customer engagement. It gives you hope that he understand what is the customers are looking for. The big challenge is whether or not the company can give what consumers are looking for. How do you do localized . Its a grand Franchise System where i imagine the savings are notice are in providing the same everywhere. You allow for a percentage of variation within the regional markets. I dont think you do it at the local market but certainly a region by region. You can do some variation. Probably a quarter of the menu have some variance at the regional level. Thats a starting point to kind of get people back interested in the story. Certainly, you know attract a wider audience. I think thats a starting point. That wont happen overnight but then you can make a more nimble supply chain. When you try to launch something nationwide with a company this size its like trying to turn around the titanic. You just cant turn around the supply chain. You can get products quicker and compete with the burger kings and wendys that are getting products out to the market in a quicker fashion. But i think you have to keep some uniformity because thats where you get your Bargaining Power and your scale. I dont think thats the expression really. I think its turn around an ocean liner. I dont think youre trying to turn and the titanic. Rearranging the deck chairs. Maybe a mixed metaphor that im going to use though because i like that. Okay. I think trying to turn around the titanic means youre going to try to turn around but its not going to work. Thats possible too. Why would the brand guy why would his ideas not be acted upon by the senior why do they have a brand guy if theyre not going to listen to what he said . He rejoined the firm in 2013 after being ceo of a few chains in the u. K. They have been slow to react to a lot of the things. Setting a blueprint on some of the ideas he had hasnt been fully acted upon. Ill be curious to see what kind of new innovation he brings to the table. Ive been to the mcdonalds in the u. K. They have a little bit of a different feel to them. If you will. Do you think that is what will come here. High end . Paris. Paris too. Its like a hot spot. It feels higher end. It feels fresher. Theres a whole sort of its distinctive. But how have they performed relative to everybody else. Yeah in the u. K. Thats been one of the bright spots for the company the last couple of years and management pointed to that being the blueprint for a lot of the priority markets. Not only the u. S. But japan and germany. Thats what youre looking at. To your point the look and feel of the restaurants in the u. K. Can be a benchmark for the company to aspire too. They have a more modern feel. You have more digital attachment. The locations themselves look very modern. I think that that will be a nice blueprint to look at. But then again you still have the different menu and marketing preferences you still have to address. I think the combination of what he brought to the table it was the head of Mcdonalds Europe and the u. K. Turn around combined with some of the changes they can make in the u. S. Thats probably where at least in the near term to hear what hes prioritizing. In the u. S. The competition is english food. It is true. English food its an old thing. I think i could compete. Maybe 10 or 20 years ago i would agree with you. They stepped it up. In 10 years the entire u. K. Stepped up their food make ability in your view. 20 years. Do you know what the problem is, they should have kept chipotle. Fast casual is kicking their butts. Thats what the problem is. Thats one of the big issues they pointed out. They pointed out a number of things and fast casual was one of them. Thats what they have to aspire to. Take learnings from fast casual because thats the sweet spot of the industry. Im not saying they can turn around the brand imagery but take learnings from that. Customized fresh food. I want to go from knowing everything about this company. You like to talk about what you know. I know everything about mcdonalds. Every item on the menu. I had yesterday most of them. And rj thanks. Just going to stay quite over here. Like anybody believes that. A blockbuster quarter for facebook beating estimates on the top and bottom line. Sheryl sandberg made a big milestone for facebook. We hit 3 billion videos a day on facebook. Consumer use of video is exploding. That gives us an opportunity to do more monetization because our add products follow our Consumer Products. We have the ability to show more video ads. 3 billion by the way, 3 billion views a day was up from 1 billion back in september. Joining us with more on this is dan who covers the stock for Hudson Square research. These were strong numbers on the bottom and top line but your initial reaction was boring. I think because everyone was looking for a bigger beat. Apple spoiled us. So apple is actually growing percentage wise as fast and theyre doing 75 billion a quarter. These guys are doing less than 4 billion a quarter. So i think when youre this big and youre trading at 40 times board earnings you have to beat by more. It was 2. 5 . It was fantastic. Ad revenues are are up 53 . Mobile ad revenues up 100 year over year. Mobile is now 69 of their ad revenues. Mobile only is actually like 700 or 800 million users which is more than any other network by a factor of three. Just look at their mobile only base. People that never see the desktop its a tremendous network so listen theyre doing everything right. The concern is top line user growth. On an aggregate number its 44 million. Thats more than twitter will add all year. They added in the quarter. Only 14 . So again when youre trading at these big multiples, you need to have the growth. And its not just you. We should point out the streets reaction was similar. The stock was essentially flat after the earnings came out. Does this mean this stock is priced to perfection at this point and theres little that can be done to impress investors . I wouldnt say perfection. Its come into a reasonable level. In the 30s and on pe is something i can digest. When they were at 80 times and you look at Something Like a twitter at 150 times or an amazon which has very little earnings. So this is actually a digestible figure but the other issue is they said last quarter and stated again this quarter, were going to spend big on a lot of Different Things that dont have any hope of generating revenue. Sounds like another stock i know. Amazon. It starts with an a. Well, the things that amazon do from where i can tell mostly have revenues attached to them. Theyre just earning very little money when they do those things. So when Facebook Says were going to connect the world theyre literally doing it. Theyre launching drones. One of the things that facebook is doing ahead of the super bowl is trying to get people to treat it as if its twitter. Right. We just talked about it yesterday. Do you think thats going to happen . Do you think the dynamic is going to change . I went to a presentation at ad week middle of last year that someone from coke came out and talked about this campaign that they ran that was sort of like this is america and it had a lot of different racial demographics demographicics and people were negative on it and they started putting ads out during the super bowl targeted to each region. This is before video was an ad product at facebook. They did this with facebook in advance and showed the sentiment shift change throughout. Book has the reach. 1. 4 billion. So you know when advertisers go from tv to the internet they say who is going to see this . Facebook has more people on book than any country has residents. Wow. So they have that reach. So even if youre trying to target within that they have it for you. Would you buy the stock here trading at 40 times forward earnings . No, id like to see it pull back a little bit. Once we have the seasonal slow down you might get an opportunity. Market is volatile. So these high stocks tend to get hit. We had that with facebook last spring. I think the next time the thing falls and its not on fundamentals i think theres an tun but here theres no reason to rush. Theyre going to be around. Thanks for joining us today. Thank you. Coming up when we return the ceo of the Worlds Largest spirits maker getting hit by currency. And discounting on vodka in the United States. I dont know why that would be. Well talk about that though. And a look back at this date in history. 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. Americans arent drinking as much as we used to. Profits dropping 18 . The global drink brand blaming sluggish sales of its three biggest brands. Johnnie walker smirnoff and the captain, captain morgan rum all posting declines around the world. Here to take us inside the numbers is ivan mendez. He joins us from london this morning. Good morning. We had a little bit of a delay. Whats going on. We get into some of the currency issues. Yeah the overall market fall spirits, beer and wine is healthy around the world. So the underlying Consumption Patterns are good. People are drinking better. Now if i just break it into the various regions, in north america the spirits industry is still very healthy. We are seeing good trading up whisky is hot. The good market is competitive but the premium market is strong. And americans are drinking more premium spirits. Are drinking more cocktails and thats a secular trend. Its underpinned by demographics and tastes and as the us. Consumer recovery happens i dont mean to focus on the negative but whats the problem with vodka right now . The middle market of vodka has gotten extremely competitive. We have been taking price increases and smirnoff lost a bit of share. Flavored vodka has slowed down and smirnoff is the Market Leader in flavored vodka. But pure vodka is strong. Premium vodka is doing well but whisky is doing even better. Whisky is strong. Bourbon bourbon, north american whisky and Scotch Whisky but vodka is still the biggest part of the u. S. Market and will continue to remain a very important piece of the market. And thats an advertising issue . Marketing issue . Or trend in the way people are drinking . Well, firstly, our overall vodka business is up. Whats happening is people are moving less into that market so that sector is declining. There will be a shake out of the brans but smirnopf in particular, we have new packages. New execution in place and the last few months our share has kicked up. We will get that business back into growth. I want you to speak to an issue thats been in the papers over where you are. This is out of the telegraph. Threading the backbone of the economy by squeezing suppliers. The story saying you warned suppliers that youre going to take up to three months to pay your bills. Whats going on . Its very straightforward. With each of our suppliers we have terms in which we operate. We have longterm relationship with our suppliers. We have made changes in our policy which is are suggested. We will sit down with each one of our suppliers and get to the right package. We do different terms with different packages thats something were very committed to doing. Do you want to weigh in on what should happen in the euro zone . What do you think is going to happen . What would you like to see happen . How is it effecting you . Ic is very important. Its good for business.