Begins with walmart taking a hit after the company cut its Sales Outlook for the year. The ceo is saying theyre on firm grounds in the United States. Another component on the move, ibm getting an upgrade at Morgan Stanley. Just the beginning ever apples battle for privacy. Number of ceos weighing in, including google. Walmart, a Fourth Quarter, 149, beats estimates, but revenue u. S. Compss to a stronger dollar, store closures and battles theyre fighting in places like brazil. Now, look, maybe they felt like they had to cool expectations. Its just an under promise, i dont know. The outlook, first quarter, 1780, the eps for fiscal year 2017, 4 to 430 versus 17 consensus, revenue flat . Versus plus three or four. Although they say if not 44 in 3 to 4 . Is that an excuse or not . Geez, i dont know. Maybe the 6062, but i think it ran to 66, because there was a whisper there was a turn this corner and not just that it was in line, but a turn. Im a believer of what hes trying to do. But if we remember, go back to what he said on mad money when he came on after squawk, give us a couple of years. Give us sometime here. Its the early days for that turn around. Yes. And that plan to fight amazon, which we could look back at 2015 as sort of the one crucial turning points i think when you look at the dominance of walmart and growth through the many years and amazon really being able to just crush it to a certain extent. On the call, mcmilan saying they do see strength, it wasnt there a year ago. I like that. And their Customer Satisfaction scores they say have risen significantly this year. I mean, brazil, off point, but thats a disaster in the making that country. A dumpster fire. Everything i hear is if things continue to get much worse in brazil, and it is not an insignificant economy. No. Remember, brazil, russia, india, china, the olympics. Are you supposed to go ahead of nbc olympics, zika and the economy notwithstandings. See you late. Yeah. Dont touch my tough. I mean, but i i thought it was a peach assignment. Then venezuela cuts, i mean, again. I just think that if you have business in brazil, im taking your numbers down right now. I mean, literally, its that bad. Walmart, its okay, the stock ran, you know, amazon. They reported after close. Bruce said nordstrom is such a service company. When you come in, they know my size, the shirts i want. But bruce complained that the best Customer Service in the world is amazon, and theyve spent about 3 billion to keep up with amazon. Walmart a has a percentage of sales has not done that. I know walmart has a big office. Youre trying to get the computer scientists and go to work for them. But facebook has dorms set up for computer scientists that are apparently very luxurious. Apple is building this campus that would make it so you feel like youre in disneyworld. A spaceship actually. With the martian. I mean, theyre going to go, brad pitt is there, right. Theyre going to pick him up. Walmart, wow, computer scientist, im going to walmart. Ge, i can get that, moving to boston. But the computer scientists, their first instance is Mark Zuckerberger calls him, mcmillan calls him. A very competitive environment. Hiring and retaining, its it was about this time of the year, we talked to mcmillan about the wage hikes, which the second step will take effect i think in a couple of days now. So labor costs as theyve well telegraphed are going to go higher. But your point is, second best dow stock of the year, the runup didnt, it is not deserving of this report. No, i feel bad that people got ahead. I know 63, thats pretty good, yields 3 . Suddenly 66, there wasnt there was this kind of moment that happened where you started hearing companies talk about how gasoline, spending, price line poll, very good call, great interview. But the problem is, its uneven, where that additional dollar is being spent. I thought it was going to be spent at walmart. Now, again, walmart is not saying the u. S. Is bad, but i think that Doug Mcmillan tried to tamp expectations and he couldnt do it, and he did it today. They got experience from headwinds from meat and Dairy Products on the call. This was great on the walmart u. S. Ceo and additional pressure from warmer than typical temperatures, of course, so many retailers have cited. Talk about delays in irs checks. That actually has happened periodically. It has, and from what we know, wa know. We had a number that was bad. I said listen, take a look. Great deoperatiflation in the m january. Boom, i was going over Industrial Production last night. Up from the st. Louis fed. Industrial the capacity. Yeah. Going over home building. Hey, guys, weve seen a peek. Its not going off a cliff, but were seeing deflation in food, numbers are just important as just hanging in there. We know Wage Inflation is almost all mandated by the government. We are not in a situation where we need to raise rates, and i would like to say that my close is jay. As expectations are falling, the fed not remotely close to considering negative rates. There is a dove building a nest above my doorstep, right above in brooklyn. Really, a dove building in brooklyn. A dove building in brooklyn. I was thinking synergy. That dove, which is a sign. He is no longer a hawk. He is sim pat co. He may be a little bit more than i am. Now, look, i make fun. The guy is a terrific guy, but completely agrees with me. Thats all it takes. No tall ceos out there. Completely agree with me, get on my good side. From walmart to disney here, disneys espn says it is in talks with Digital Streaming Services to offer the network over the web. This is what espn john skipper said yesterday at the code Media Conference in california. A number of people have expressed interest and were in discussions with a large number of people. I cant really make i think other people will enter into some market with lighter packages in this calendar year. All right, did he point outgoing alone, not the best idea in his view. But left open the possibility that they are talking to an amazon or apple. Those of us that know skipper, he is the most straight shooter guy. Look, bob eiger runs the company, but he has been known to get off the reservation. Pretty bold comments from this man. Yeah. This has been the focus for many Media Investors trying to understand the changing landscape as we know and the power of programmers perhaps what will be less power in the evolving environment where broad band is the key product and ability to access over the top platforms, groups of programming that are put together by the likes of an apple if that ever comes or amazon or on your own, for the younger generations, even though the bundle may represent an economic, you know, maybe economical, for a big family. This is the world were dealing with. So espn as we know, will it see fewer subscribers, not including sports, so expensive. Whats the average family taking home in this country . Whats the number . 60, 50, Something Like that . You have wireless bill and then you got your cable bill. You are looking for opportunities to cut that down. You know, its funny you say that. Because my energy bill is down big. My cable bill is looking like, im like, ive got we dont have comcast where i live in brooklyn, okay, we have f ios9. I dont want most of the channels. The ceo, isnt this completely breaking the contract . And you know, basically he said these things are funable. Verizon has found on the skinnier bundles they offer, people dont take a lot of sports. They dont want the sports. I get the espn channel that i love, i do get it, but. Skippers point is can an existing streaming services only espn really, really thrive. Right. Weve seen polls from cell side guys with cell ratings to be sure that a large percentage of americans said i would cut sports to save 8. Youre not cuts sports. Youre cutting, no offense to the conference, because they put up good games. Youre cutting off the mac conference. Whats happened is that there are great stations if youre really interested in the nittygritty sports, of which skipper said they like those contracts. And honestly, thats d those are fantastic if youre interested. If youre not, wow. I mean, you get that, the greatest programming in the world is that i happened to love sports, the fantastic espn programming, and youve got your handheld. I love watching it. You do have streaming services over the top for sling tv for example, whats offered by dish, that do include some espn. Theyve included 175,000 subs, dish just reporting numbers being reviewed. Yeah. The call isnt until noon. Well get more from charlie then on that whole subject. Because he is always interesting to listen to. Yeah, i mean, i listened to skipper and he is talking about 100 a year figure that he mentioned for over the top. And i said im trying to calculate, what does that mean for them . I would point out, most importantly, disney stock, bottomed at 86. 95, like a rocket. More to disney than just this espn number. Just like there is more to the market than china. Maybe more than some of the things weve been worried about, you know, yellen. Sarah said this this morning. Sarah and dom on this must watch 5 00 show. You have to get up for this thing. Its really good. Dont look at me like that. Sarah is dynamite and they have talked about the decoupling. I like it. It is a red hot show. What theyre saying, do you want to explain to some of the viewers what youre talking about. We can start ignoring china, ignoring oil. It may be its not locked. All the trades not from the quantitative machines. Do you get up after that show . You do not get up to the five . No. Im going to give you a buzz in the morning. You set your clock. Do not do that. Do not do that. I check twitter and a post from you an hour earlier. You know, i got the music was too loud the other day, we got that fixed. I mean, they played this rock and roll spotfy. No, its the substance. When we come back, a lot of apple news to get to, a day after the blow up stories, what some of the other ceos are saying, travel ahead of marriott and what happened with ref, that company. Morgan stanley, the president announcing his cuba trip for march 21 and 22nd. Here is another look for the premarket. [ male announcer ] fedex® has solutions to enable Global Commerce that can help your company grow steadily and quickly. Great job. mandarin cut it out. See you tomorrow. Ngo to ziprecruiter. Com and post your job to over one hundred of the webs leading job boards with a single click. Then simply select the best candidates from one easy to review list. And now you can use zip recruiter for free. Go to ziprecruiter. Com. Man 1 he just got fired. Man 2 why . Man 1 network breach. Man 2 since when do they fire ceos for computer problems . Man 1 they got in through a vendor. Man 1 do you know how many vendors have access to our systems . Man 2 no. Man 1 hundreds, if you dont count the freelancers. Man 2 should i be worried . Man 1 you are the ceo. Its not just security. Its defense. Bae systems. Apple debuting apple pay in china today. The first attempt to break into the asia payment market. Separately, some new data shows the iphone experiencing a sales drop for the first time ever. According to gardener sales, the down 44, in emerging markets. A lot of buzz surrounding opposing the judges order to help the fbi break into the cell phone by one of the San Bernardino shooters. The head of google, with a tweet storm overnight. We build secure products to keep your information safe. And we give Law Enforcement access to data. Thats wholly different than requiring companies to enable hacking of customer devices and data. It could be a troubling precedent. Yeah, you know, i talked to a number of lawyers who are actually involved in these contracts yesterday. And they basically said that, and they all have the same star, which is of course, we want to get the bad guys. But having looked at the contracts of what the company has said, its almost, its just not possible for tim cook to say here is the information. Just cant do it. He has to be ordered by a court. Now, those of us who have been involved in one of these situations, i was involved in unfortunately two twausituation life saving, where another provider, i had to go to Law Enforcement and the reaction was listen, were not helping you, and the reaction of the fbi is we dont give a damn. Give us the information. The Law Enforcement wishes i dont speak about it on air. But there are ways that some companies can cooperate. Im not going to mention which ones. But it is a back channel way. This is obviously a very front and center way that the government has gone, and i dont think tim cook is even i know he is very pro Law Enforcement, but they made promises, and they made promises to the extreme. Journal, background, under the radar for a while. The fbi apparently, apples encryption has stiefled, over the top, right, make it part of a large conversation . Yeah, well, relying on the all ritz act, something from 1979 is interesting. It does have the feeling this will wind up in the supreme court. It would seem we need that, because were listen, were going to be dealing with these kinds of issues, whether irrelevantits privacy, security, go down so many different roads, dealing with both ethical and perhaps constitutional questions as we advance so quickly on any number of technological roots, artificial intelligence. War on terror, then you have situation where really should be no issue. You have to give it up. But its not a troop ship list in a war time situation where you know that youre putting this, peoples lives at risk. Obviously this is one of the situations where i believe that if you get a judge who is pro Law Enforcement, and just overrides cooks e edict, appea court, supreme court, and you probably have 4 4. Free speech, you were talking about privacy. Also about protected speech. The First Amendment is always trumped. Its the weakest of the bill of the rights. Always trumped by the government when both the Justice Department and judges have almost always trumped this, except for the disestablishment in terrorism for when its religion. Apple says you do it this time, you figure out a way to hack this phone, it gets out, next thing you know, the chinese have it, and all bets are off. Or what can a court ask a company to do if theyre asking them to constructs something new to aid in surveillance, limiting were principal to that. We know what theyre capable of. Its behind the scenes for now. But when youve been involved in one of these life threatening situations, the companies cave. They cave. That was before encryption. Right. It was before encryption. Thats a really good point. Technology is like more money, more problems, you know what i mean . That could be untrue. The too rich, you cant be too rich or too thin. Having just finished that cleanse, you can be too thin. Im taking that one off the table in terms of death taxes, too thin. Cramers mad count to the opening bell. Coke by the way with a hike just now to the tune of about 6 . Talk about this ibm upgrade in a minute. Every Auto Insurance policy has a number. But not every Insurance Company understands the life behind it. Those who have served our nation have earned the very best service in return. Usaa. We know what it means to serve. Get an Auto Insurance quote and see why 92 of our members plan to stay for life. For your retirement, you want to celebrate the little things, because theyre big to you. And that is why you invest. The best returns arent just measured in dollars. Td ameritrade®. Five and a half minutes before trading. Lets see if we can get another up day. Quite a rally we had. Since 2011. Even some energy names seeing a bit. Yes, they have. Listen to this, david. Devon, which basically gave you a great story when they reported, some people, some of the bulls were saying, hey, the one thing they didnt need was capital because they told a good story. 55 million shares, the demand so great, 69 million shares at 18. 75. Over subscribe. Why, because the pioneer deal and it worked. People saying 31, this company, which traded here, maybe a buy here with 31 oil. This is the key to this market, david. The ability of the companies to sell equity, even at extremely depressed prices, some would argue. I have no idea, hess, i knew they sold here. Im sorry, buy, bought back here. Did they buy back . Im not going to i dont know. Hess had the numbers. It was a fabulous story as far as buying low and selling high. You were a hedge fund and you got stock, you just made 0. 50. I am bating thetting they put t good hands. 70 for the year. Energy 21 has come off of its high, ultra, there is a real money worked on this stressed out index, but some Companies Really stressed out. Sharply yesterday, again, thats right. Chesapeake, by saying they can meet the payment. Devon is a well run company, but david, its in the energy business. Yes, it is. Yes, it is. 55 million shares. No, they under it to 69 million due to demand. 18. 75, even after they told you, well, david, devon is key. Devon is the horseshoe. We have the opening bell coming up next. Stay with us on squawk on the street. Hundreds of crash simulations. Thousands of hours of painstaking craftsmanship. And an infinite reserve of patience. To create a vehicle that looks, drives and thinks like nothing else on the road. The allnew glc. The suv the world has been waiting for. Starting at 38,950. Ashley bryant, you are a teacher of small children. Thats right. I have read it is the hardest job in the world. Thats why im here. Can you. I can offer advice from the accumulated knowledge of other educators. Thats wonderful but. I can tailor a curriculum for each student by crossreferencing aptitude, development, geography. Sorry to interrupt. But i just have one question how do i keep them quiet . pause watson . There is no known solution. Opening bell brought to you by power shares qqq. Youre watching cnbc squawk on the street. Opening bell in just about a half minute. Coming off of the best threeday gain since august. You remember what that was like after we took the big spill, 5. 3 over three days for the s p, last four day streak was in october, so its been a while