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tv   Squawk on the Street  CNBC  March 17, 2014 9:00am-12:01pm EDT

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on the street." i'm scott wapner with jim cramer live from the new york stock exchange. taking a look at futures, looking a little bit better than last week ended there's the dow with an implied open up 77 points. s&p, nasdaq looking like they both will be positive as well off the open today. take a look at the ten-year, the story last week and the yoeields at 2.66. that will be closely watched, as will the european markets. take a look at what's go on in europe. no red on that screen. all green across the board. that's certainly helping our market look pretty decent, at least implied, off the open. road map today starts with the markets. set to start the week on a positive note. poised to turn around their worst weekly losses since january. ali baba announcing it's selected u.s. over hong kong for listing of its initial public offering. it would be biggest ipo since facebook. and ncaa brackets revealed with
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jim's alma mater harvard set to face cincinnati. so far, it looks as though stocks will open to the upside, as markets appear to be taking in stride crimea's vote in favor of leaving ukraine and joining russia, this comes after a week in which the dow had its first five-day monday through friday loss since may 2012. jim, good to see you. >> good to see you. >> referendum dominating the news flow over the weekend. u.s. says under no circumstances is it going to recognize that. what does it mean for the markets today? >> i think that what's happening is there are oligarchs cashing out. we see a lot of sales of treasury last week. i have to believe that some of the russians are to be thinking, okay, if they do capital controls, i've got to get out of the u.s., that was a lot of the selling. this was one of those big, bad event owes cs occurs, nothing h. i think they hope it go as way.
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i think people hope putin's done or maybe he'll say, look, i think that maybe it's reasonable for me to have a corridor down to where i've got my ethnic russian, you know, my fiefdom. people are looking through this. i don't like the futures up this big. it's just too easy to for russian oligarchs to drill. >> perfect segue. whether the risk at this point is still to the downside, given what's going on over there, the fact that you've got a fed meeting starting tomorrow, thereby all indications likely to reiterate the fact they're going to continue tapering, whether that's taken good or bad by the market is anyone's guess. >> we're oversold, a huge number of ipos, chinese ipos waiting in the wings. the real cloud stocks' workday, veeva, salesforce all in their bear market. >> they have 16 million in sales. come on, jim. up 100 -- they make 16 million.
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>> my restaurant did last that year. >> i've been to the restaurant. the guac is good. there are other ipo signals out there that are ominous, right? 2014 on track to have the most 100% plus pop on the first day since when? 1999-2000. >> perfect. you hear this stuff, by the way, those is the stuft peopf people want to hear at home. they want to be in the ipos. i've been looking at ipos, we've got things this week, sound like real companies, like paylocity, q2 holdings, sounds real. amber road, it's a global trade cloud. global force a cloud-based social recognition software. i want to -- i see that price doubling. globoforce, sound like companies from 1999-2000.
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they had great numbers. public goes crazy. they attack you and me for making a joke. people say you don't know global force. you know what? true. i know what it does. and maybe -- >> therein lies part of the problem, right? you throw your dart up on the board at the stock goes up better than 100% on day one, now frothy, how concerning is all of that. >> i'm doing -- we're working all weekend on these. when i wasn't serving tables i'm working on these -- here's what happens. they will be exciting. and there will be a lot of people behind us cheering and cast light was terrific. sae goes down every day. companies that had great quarters from the cloud go down. ow you can't have two markets coexist. >> alibaba perfect segue on the ipo conversation, announcing it's chosen to list its ipo in
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the united states. a major setback for the hong kong stock exchange. could raise about $15 billion in what would be biggest initial pubic offering since facebook. >> there we are again. >> so many facets to the story. valued as much as 200 billion. >> okay. look, it has revenues, earnings. this is what muddies the waters. is this a good company, all right in china's a growth market. but let's go there. every day what brings down our market, some chinese number that's disappointing and the chinese stock market is just in a world of hurt. this company comes along and it's just like, listen, forget about china doing badly. you have no idea what you're talking about when you say that. alibaba is the crown jewel. look at yahoo! after tax basis, yahoo! looks cheap. at the same time, my charitable trust owns facebook, it's acted
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horribly. you've got the second track of excitement without the first track of fundamentals. and i just don't like that. no one wants to hear that. they want to know why i don't love paylocity. you like workday, paychecks, why not velocity paycheck. no, sorry, i've been there too often. i remember when we were like in zoom and ex-owe does, and i know the companies have earnings, i wish they wouldn't come at once and i wish the real market were going higher. >> makes you wonder whether these companies are rushing for the exit while the getting's still good. >> that's what i'm worried about. it's not because the summer's around the corner, it's 27 degrees. it's because they feel like there's a lot of enthusiasm, capture enthusiasm. i'd rather have enthusiasm for march madness. i don't want enthusiasm for march ipo. >> the other prong to the alibaba story, where the
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company's going to list in the united states, whether the new york stock exchange, nasdaq. as far as usa today is concerned, on the front page it says alibaba has chosen the new york stock exchange, to which bob greifeld fell on the floor. is this still up in the air. >> until now. >> apparently so. >> things happen fast. this stock will open up, if it -- if it were this morning, it will open up at 3:00 p.m. the excitement for this company is so outsized that the next day the headlines will be, is this 1999? one of the things i hate, you can't stop that headline. you want to say don't give me that 1999. but plug power, greatest company on earth, it's microsoft in 1986. when you look at plug power, it's trading hundreds of millions of shares because it
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does have revenue, never profitable. then add alibaba. i'm not trying to shoot companies down. you have to be skeptical. >> jim, you're going off of so many stories and which have a superlative or whatever goes back to '99, 2000. whatever metric, this is the biggest since. when's? as 99, 2000. >> i thought when the market came down last week you'll see the end of the fannie mae/freddie mac tesla. i'm not going to embarrass the guy, raises his outlook, tesla. tesla is the heart and soul of the market, because tesla is maybe losing distribution. i said this weekend, if tesla loses new york, it's bad. guy says to me, rich people don't use dealer they buy everything online. oh, okay. only company that had great
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numbers last week was williams sono sonoma, instagram, pinterest huge part of the business. pinterest, come public, you'll be worth 100 billion. there is so much froth in one section of the market. meanwhile the other second is, look, i love kevin planken, under armour, 2 for 1 split. again, not what you want to see if you're a seasoned pro. but, as gary kaminski said in the previous show, this can go on for a while. don't lecture us about what to do. i'm not lecturing. i'm just saying that i've seen it. people make fortunes. they make fortunes until march 14th of 2000 and the fortunes end. >> what causes, before we get to march madness what causes fortunes to end? is it china? >> insider selling. insider selling. everyone wants to say these things only go down in a recession, no. overwhelming the market is what
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drives down that component. you look at 2000, s&p had a decent year, nasdaq that rolled over. s&p wasn't -- they weren't -- general mills and merck weren't offering stock. what happens, insiders say, i've got get out. this is my chance. six months later my stock's up and i'm going to drill the bid and nobody knows the difference and that kills. that's not happening yet. you can get excited and think cramer's so old, he's pathetic, he's wearing a green tie. whatever, make fun of me, i don't care. >> next one's in your wheelhouse. brackets for march madness out. ncaa college basketball tournament, florida, wichita state, arizona, virginia number one seeds. jim cramer's harvard crimson slated to take on cincinnati. >> bearcats. >> big. >> bearcats big. really big. harvard flyers lost to -- i'm more philadelphia than crimson. i used to cover crimson as a sportswriter. in the en, just don't have it.
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when the quakers got far, but this is not that situation. >> good first game, harvard and cincinnati. >> i find this is capturing america. isn't it interesting march madness delivers. i'm watching bracketology at a sports bar. you know, i'm watching these guys just talk about brackets. and everyone's riveted. no one's saying a thing at a sports bar. rather amazing on the eve of st. patrick's day, wouldn't you say. >> buffett's billion dollar contest stirred the pot this year. >> i have the final four here, believe me, my cold, dead hands you can't pry it from. this is it. right here. i have them. no one's going to learn them, not least right now. >> you'll sar somethihare somet me. >> texas -- i was going to say texas bank. i'm too busy doing -- texas team. >> big buzz over louisville awarded lower than expected
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fourth seed. coach pitino told "squawk on the street," he's optimistic about his team's chances to repeat. >> could not agree with more. >> that guy's over kfent. yeah. that's the case. >> wright wasn't counfident. >> i think louisville getting a four was a joke. it made me want to channel my inner jim cramer with a they know nothing. come on, louisville, a four? >> they make judgments. i don't make judgments. they want to take plug power up, they can take it up. they want to take louisville down, they can take it down. it's the gods of trading and bracketing. >> more sparks in the showdown between tesla and car dealers. one has a message for the electric carmaker, he'll join us at post 9.
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futures, shaping up to be a good open. >> did tesla go all the way around? i'll raise price target? did it finish the lap? raise price target on tesla. >> now dow up off the open, nearly a hundred. more "squawk on the street" live. " live. ♪ no two people have the same financial goals. .
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welcome back to "squawk on the street." february read on utilization rises more than expected. 78.8%.
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industrial production self-up .6, also a strong number. subtle revisions last month lowered to .3 industrial production by .1 to minus .2, ub . the current revitalization rate at 78.8 the best since the december read at 78.9. and that was the best since june of 2008. judge, back to you. >> rick, thanks so much. the people of crimea vote to secede from ukraine and join russia, while the u.s. warns of sanctions. let get more from the region. steve sedgwick live from kiev. steve? >> reporter: thanks very much. we've been talking to a lot of senators this weekend who demand that the president and the administration have a more aggressive response to what they call aggression from va ladimir putin. talking to the boxer, klitschko,
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he hung up his gloves but fighting for presidency in the country in the election may 25th. interesting when i asked him did he think the russians have what they want trt couldnfrom the co >> the goal is not crimea. the goal of russians is of course capital rein, keev. >> you think the russians want the woel hole of ukraine? >> the russians have the goal to come through kiev, control ukraine. nobody not control the capital of the country, doesn't control the whole country. its main goal. that why i talk about the unity. that why i talk about independency. we have to do everything to defend our unity and independent
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si of our country. >> reporter: he thinks pro-russians supporters are trying to disrupt the country, meaning we are v. more russian troops on the mainland. he thinks people are trying to disrupt the may 25th presidency. russians are not recognizing this government in kiev. when we have elections may 25th, he's a front-runner. we spoke to the other front-runner on "squawk"er-year-old. he believe it's important to get the elections under way. one of the most pessimistic talks i've heard. >> thanks, steve sedgwick live in kiev. the mad dash with jim cramer. let's take one more look at futures. looks like a pretty good monday morning on wall street. dow looks like it will open higher by more than 100 points. s&p and nasdaq looking pr ining
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that's why, at barclays, our ambition is to always realize yours. ♪ >> about nine minutes before the opening bell this morning and now it is time for cramer's mad dash ahead of the market open. number one, hertz global, why? >> yes. a talk in the eft about a spin-off. i did the back of the e-mail, you can't say back of the envelope. >> so passe. >> it's worth 4.5 billion, getting that from united
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rentals. 11 billion market cap. you can see why the stock's trading up. something i know from watching your show, a lot of hedge funds are in. maybe a take a profit if. >> a lot. waiting for something like those happen. >> there they go. do they hit the bid or say do new valuation if i think they hit the bid. i want no know people quickly taking aprofiting like the day trader last week. >> regeneron. >> bandwagon. you think of the redskins, people getting on board. citi group goes hold the bite on regeneron. are they early with the stock at 180 last year. >> how can you be early when the sto stock's up 100% over a year. >> one of my favorite ceos. i think citi should have moved earlier. like coming in and saying i've had a hard look at florida, i
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think they should be number one seed. no, they are number one seed. where have you been? where have you been? it's not syracuse, which i thought was going to be number one a month ago. be careful. the stock up last week. regeneron, not fallen. we've got another three biotech offering this week. all going to generate excitement. be careful, froth biotech. >> love the kornheiser bandwagon. >> good old days in d.c. "squawk on the street" going to be right back from post 9. ♪
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[ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ]'ll bust your brain box. ♪ all on thinkorswim from td ameritrade. ♪ there you go. big star in the house today. fashionably late, but that's how kermit rolls, you know? >> yeah. he can do whatever he wants. >> he was doing his brackets or something, trying to figure out why louisville a four, duke a three. >> struggling over where creighton should be, right? buffett's involved with -- he's confused these are -- >> you think he consults with miss piggy or no? >> i think that used to be.
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i think that's old. i think it's frozen in time. should we do a frozen sing-along now? scott, you and me. >> i was hoping you'd do "rainbow connection" or something. >> great to see kermit. that's nice and frothy. what do you think of plug power? is it right here? how about fuel cell? he gave me thumbs up, geez, i've got to take that higher. raising my numbers fuel cell. you like fuel cell? >> he loves fuel cell. yes! holy cow. what do you think of tesla? tesla? >> loves tesla. >> careful with the hand signals. >> wonder if he's playing ipos. >> interesting stories. investor calling for berkshire to pay a dividend. buffett in the bracket, heisman time. no thanks. >> creighton thing, i debated putting creighton high up, it's in homage. berkshire, huge spike up. it's interesting to watch a professional not talk about the fact that his stock has ramped
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beyond all reason. i figured out why, other than hoopla, you know? >> u.p.s. raising rating 4%. >> fedex reports this week. if ed dispints, repsych toll u.p.s. u.p.s. stock stalled since they missed the boat on the holiday season. u.p.s. represents greater value than fedex but fedex will give you state of the state later this week. impressive company. >> if you raise rates, you better get packages there on time. >> they paid huge overtime. trying to make up for that. >> sears are the land's end spin-off? >> they say that would happen. this is one where hedge funding if manager sells off his good, fund is bad. never a guy idea. but you know what? the oligarchs in the hedge fund business do what they want. everybody's an oligarch, now that putin took over crimea, everybody's an oligarch.
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>> why do you think the futures look as good as they do? >> i think the gloomsters overplayed their hand. we did not have a war over the weekend. merkel surprisingly silent. the president has to come out, maybe -- there's talk about 20 names they're going to freeze assets of. there's a lot of other guys who don't have to worry. a lot of the gloomsters expected to see military action. when they seized the gas plant, you can see people are saying this is it. i was out with hedge fund managers came to the restaurant this weekend, they were all short, short, short, doing the market would collapse, doing high fives. overplayed their hand. >> referendum is fine. referendum accompanied by bullets flying not fine. >> when you hear referendum, ethnic russians. there's kermit. >> speaking of kermit. you are watching the opening
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bells. and the s&p 500 realtime exchange back at cnbc. here at big board, as we said, the man himself, kermit the frog celebrating disney's muppets most wanted premiering friday, nationwide. up at the nasdaq, staffing company kelly services. >> how about the faux drama's who's going to succeed eisner? what is that about? that's faux drama, okay? that really is. like, two years away. i mean you can tell the news fleet flow was light. he's running disney as far as the eye can see. stop talking about this warfare that doesn't exist. >> he should, the stock has done exceptionally well, right? >> geez. >> 80 bucks. >> i think kermit's liking some of the speculative biotechs. he likes solar. is he taking up jaso?
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>> kermit literally looks like he's threatening to come down to post 9. >> kermit -- >> off the balcony. >> he's 1999 writ large. where's the grouch? don't own the grouch. i think that the analogies are rich between -- era of good feeling and kermit ringing the bell. >> what we haven't talked about much is china, because of the news in the ukraine. but copper is probably worth keeping an eye on. >> did it bounce? >> some make the argument, copper's up today after getting hammered. >> it bounced off the whatever sum moving average, 30, and five -- look, china, the property number came out, no one seemed to focus on. i wish that all of the expectations for chinese numbers were to come down so the chinese number would come out and it would be beaten. all numbers are too high, estimates are too high for china. got to get everybody down to 6%
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level. everybody's doing better than expected. >> i hear people talking of copper the way we talk about the ten-year of a month or two ago, that copper is a referendum on how we should -- copper dropping. >> the decline from 41 to 35 caught people 'tension. everybody this iron ochbre's go to roll over. anything commodity oriented continues to collapse and people are saying it's all china. it's almost as if no one cares about the commodity use in our country. it's like, the fact that our country's doing well, irrelevant. we always -- we drill down and focus on whatever's wrong overseas. i know crimea's bigger than cypress in terms of the global tension but i know that we focus on what happens negative. i care about froth but i'm not going to hang on every single piece of chinese data, but the market does. the market does. >> below three bucks, that's like the line in the sand for those who are trading
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commodities and watching how the metal trades. how about under armour, jim in two for one stock split. stock up 3% this morning. >> happy days are here again. do people think that it's raising numbers? i happen to like under armour very much. i think kevin plank's doing a gad job. that's why you buyer the stock, not the two for one split. >> he's giving you -- plank has given you fundamental reasons to buy the stock, right? look at the chart, right? it had that big move up after earnings, that earnings day. blew everything out of the water. >> and there was the skating issue of which plank correctly kept mum and the olympics ends and the drive up higher is -- continues. remember dick's had good numbers. under armour is not a cult stocking it's a growth story. opportunities are large. one-fifth the size of nike.
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it can go up for a long time. the brand moved over seas. kevin's a winner. he delivers, delivers, delivers. at the same time we've had sluggishness in pvh. underarmor has the pizza zpizaz. >> love your take on the banks. banks have gotten going over the last couple of weeks. for real or not? >> i think the group's cheap. that's the kiss of death to say something's cheap. you need the yield tucurve. i have to tell you, the community banks, regional banks did very well last week. money centers horrendous. that has to change. you are to see the ten-year go higher in yield, lower in price to make it so the group can have momentum. >> the ten-year last week taken a good dive as you moved later into the week. that was alarming. it was quick. >> oh, no.
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last week was the week that said, all of your data, flight to quality. the world is slowing and then we get a lift here today and some of the stocks that have really been just acting horrendously, going back up. bank of america, which my trust owns, every day, somebody's indicted, some probe. it like the probes have to end. they're probing everything. >> looking at bank of america for the banks. that stock's up today. citi's up today. >> citi's up, very telling. boy, the shorts overplayed their hand. this is interesting. i have one stock down, walmart. i think that -- well maybe they got too short, they have to cover. i don't like up openings. the market's not oversold on traditional oscillators. except the gold stocks. >> what are we talking, 18.50 where we closed below in the s&p
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last week. bouncing above that now. >> people are talking about -- everything -- i heard 1500, 1500, you start hearing that, people get negative and buy a lot of puts and then that doesn't happen. they unwind their positions. this is unwind short position, not a go long. banks look good, that's telling. we're hearing reports of an earthquake in the los angeles area, 4.7. the magnitude, seems to be reported now, described on the bottom of your screen ace strong quake. this coming at half past 6:00 in the morning out in los angeles, as folks are trying to get to work, perhaps just getting out into the rush hour mix there, jim. >> those of white house have lived in l.a. and felt the earthquakes, it's a show stopper. you -- there's -- epicenter, i hope there's no injuries. but next thing you knower people
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talk about which factories have gone down. trying to extrapolate, obviously in l.a. there's not as many factories if it was north, got to stay on top of it. >> morgan brennan is in los angeles with the latest on t quake that hit los angeles. >> reporter: we felt the shake here in our studios ourselves. right now preliminary 4.7 magnitude quake. it hit in the hills north of westwood, near ucla, around 6:25 our time. 9:25 eastern. right now we're trying to get more information. that's what we have for you right now. it's a decent sized quake. back to you. >> thanks. what is a heavily populated part of the los angeles area. >> one of the great areas. >> beverly hills, universal city as we're seeing. santa monica. >> you want to see houses that are on stilts, hoping everything's fine. >> want to go to mary thompson
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on the floor. mary's watching the action on the floor. i would guess that some of this news now of coming out of los angeles is going to be talked about on the floor here? >> reporter: i think so. certainly isn't impacting the markets the dow jones industrial average, best levels of the day, 119 points. broad-based gains. weakness in crude and gold today. look at sectors, industrials, very strong today. banks, retails, all higher across the board. bit of a relief rally. expectations to see aggressive military action in the wake of the crimean referendum it didn't happen. investors coming into market today. how long does the rally last? important things coming up later this week. tuesday, russian president putin addressing the russian parliament, traders listening to that. two-day fmoc meeting, yellen addresses the press on wednesday, and important data like the cpi and ppi as well.
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focus on the positives in the market. notably the spin-offs happening. you mentioned hertz, spin-off of rental construction, rental unit. sears holding spinning off lands' end. chesapeake energy, filing this morning with the s.e.c. about a possible spin-off of the old field services unit. of course yahoo! up as well on the news that alibaba plans to file for its ipo here in the u.s. yahoo! with soft bank, biggest investor in alibaba. its stock higher on that news as well. solar stocks higher today. the reason, j.a. solar coming out with better than expected results, earnings 16 cents a share thanks to cost cuts and stable prices. that's giving a lift to rivals as well. all of them, up or than 4%. you mentioned under armour two for one stock split. for thatmaker, stock is up.
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i want to end with verisign. you might have read the u.s. is going to transition giving control over the domain names it global body. some believe this will hurt verisign because it has contracted to monitor both the dotcom and the dot net names. the dow at its best levels of the day, up 153 points. back to you. >> one heck of a strong open here. let's see what's going on in chicago, the bond pits and rick santelli. rick? >> i tell you what, judge, we have to factor in, of course, that this morning's data in the industrial production, capacity utilization and some extent, empire, all better than expected. so all things being equal in normal times that should push up yields and equities and that's the case. 2.67, up two basis point on tens. we were only up one basis point for the datdata.
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we had 15-basis point down week last week and we're coming back up with two basis points the russian scenario doesn't seem to be a big force taking away the safety bid. we can debate how large it was or why we haven't seen a reversal there. that's monitored most of the session. look how overseas ten-years responded. it up a basis point. if you open up a year-to-date chart, it has the similar look to it, there's momentum more to the downside in yields than upside in yield. foreign exchange, look at epicenter, how the russian ruble looks against the dollar. one-day chart, it has a bounce going. let's see for how long. open it up to ten-year chart or 20-year chart you see what's going on. we'll have to watch and see if there's sanctions. the market seemed to be happy, financial sanctions may have a lot of work going on here. might be implications as to the
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way the stock or currency are trading. euro, 139 handle. open it ul, it's strong. remains at levels we haven't seen since october 2011. dollar index, unchanged today. it was up a bit. hovering at the lowest levels since halloween last year. >> rick, thanks so much from chicago. speaking of potential sanctions between the united states and against russia. eamon javers with the latest on exactly what's happening. >> the president has just signed a new executive order expanding on sanctions imposed in an executive order under two weeks ago. the white house now announcing they're going to block assets of certain russian officials, folks close to put. en. imposing a travel ban on certain officials from the russian federation as well. they say specifically designating seven russian government officials for targeting blocking their assets
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as of now. the white house saying our current focus to identify individuals and target personal assets but not companies they may manage on behalf of the russian state. all designed very much to put pressure on the decodery of advisers around putin, increase pressure, financially and in terms of ability to travel around the world and register america's displeasure with what's going on in crimea. >> eamon javers with the latest there. something about steve jobs that might surprise you and it involves i talked about apple product. [ telephone rings ] [ shirley ] edward jones.
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mass on the border of ukraine we knew the western, supposed to be members. secretary kerry said sanctions would be swift. if they're going after 20 people, that's not really a game change changer. sanctions don't seem to be meaningful which opens the door for putin. putin, look, didn't want nato in his backyard, and i'm not sympathetic to his position but i understand if there's no german reaction of a stiffening of german reaction, the shorts didn't get what they wanted, so they'll cover. now back into earnings, and there's not a lot of earnings news this week. so you can't -- other than fedex, you done see. we have oracle and adobe, but those be good. inundation of ipos, that's go fog cause froth alert and cause people to say, it's 1999, 2000. you'll hear that, it's a
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continuous loop, 1999, 2000. >> a short covering rally, relief rally, how long does it play on before we get a negative headline and back to where were last week? >> a lot of fed chatter, meaningless fed chatter, easy way to sell stocks. down for a huge number of days, didn't get the worst. i saw europe up this morning. i said, no one cares about japan being down seemingly endlessly. until we start worrying about the fed and seeing ipos wednesday and thursday, window here. i don't want to buy them up this high, doesn't make sense. >> if yellen says, tapering continues we're good with that? >> i like that. that says things are better at a certain point a good article in the "wall street journal" saying look, china's uncertain and, yes, europe's uncertain but the united states' gotten better. empire index, that looks good to me. seeing commercial industrial loan pick up. there's enough good if we got
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the european headlines and chinese headlines off the front page, yellen can tell a compelling story. i'm worried about the new supply, which is horrendous. >> talk apple now, stock up 1% today. we know steve jobs had many ambitions but one business he did not want to get into tvs. apple, after steve jobs, the author writes that jobs did not want to pursue the tv business because of low margins. also according to the new book, jobs reportedly said, tv was a terrible business because they don't turn over and the margins suck, in his words. apparently. a quick programming note. kane will be on "squawk on the street" tomorrow. what do you make of this? >> i remember walter isaacson wrote, jobs knew you couldn't roll the cable companies. you could rule the record companies, you could play off
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one versus the other. he was understanding about the power of the cable companies. and that's why i think he thought was a bad deal. you cannot go in to certain companies and say, here's how it it's going to be because those companies, cable companies, very entrenched, very rich, not going to roll over. >> if that's the gospel of steve, does that mean it's the gospel of tim? >> no. i mean i think maybe tim's more -- tim cook's more casual way, less blunder bust, less bazooka, maybe they can make deals. jobs will -- remember, if you go back over the isaacson part he called the record companies, guys, sorry, it's over for you, game over. i didn't think you can go if to john malone and brian roberts and saying, game over. it will be game over for you, pal. >> right. quick thought on apple stocks sense we're talking about apple. stock's doing nothing, why? >> i think it's doing nothing -- i did my book signing at costco,
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people say when's apple going to move? that's a bad sign. they say, why don't you think good things about 3d systems? anytime you get that -- i don't want to cast dispersions on people who i'm kind enough to buy get rich carefully, when's apple going to move? when you hear that, it it doesn't move. you want to hear, i've given up on apple or i don't care anymore. it's so waiting for it to go hire is not a winner, that's a bad psychological setup. >> the setup today looks pretty good thus far. dow up 178 points. next, it's stop trading with jim. "squawk on the street" will be right back. mattel started in. disney started in a garage. amazon started in a garage. ♪ the ramones started in a garage. my point? some of the most innovative things in the world come out of american garages.
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>> how about loreal lard. >> where there's no smoke, there is fire. >> love that. >> had to, right? i'm on the bandwagon for lorillard. goldman sachs hold to buy. chatter there's takeover in the name. not an expensive stock. they have half the market for the no smoke cigarette. and i've got to tell you, i i think that stock can go higher, too. internationals can go higher because people felt sanctions would hurt numbers. no cutting numbers over the secretary of state's sanctions. when there's no cutting numbers, there's no reason to stay short for now. >> low, low, lorillard up 2%. you're not thrilled with way the markets opened today? plus 180 on the dow. >> chase the market. what happens tomorrow? putin says, you know what? the market didn't get hit. let's take another shot. let's go seize another village. you know? take a village for that guy. he has to have a bun of villages
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not just crimean. putin's a nuisance that doesn't go away. if you buy here, you get another chance later. i would not reach the multinationals that run this morning. >> talking about tonight? >> we've got -- i'm going over ipos, i think the ipos are the story, overlooks -- after cast light, i've been doing some of the ipos that rolf gaming, this is the biggest story right now, because there is too much enthusiasm for ipos. i want to show people, do you know what you're buying? any idea what you're buying? the answer is probably not, because it's cloudbased. al roker, speak up here. >> cast light giving back 6% off the big, big gain that it had on ipo. it's down more than two bucks. >> people think cast light is a cloud play. health benefits. we get -- the more cloud play we
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get, the more disjointed the market comes because i love social, i love mobile and cloud, this is not yelp, which is very overvalued stock but does have a good bottom. >> have a good show. >> you too. somebody good at noon? >> we do. the dish ceo. >> dish? clayton? >> we do. >> i love clayton. he's writ large. >> mr. clayton. wilbur ross, nailed a couple of good trades. mportant when you're running a successful business. so we provide it services you can rely on. with centurylink as your trusted it partner, you'll experience reliable uptime for the network and services you depend on. multi-layered security solutions keep your information safe, and secure. and responsive dedicated support meets your needs, and eases your mind. centurylink. your link to what's next.
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welcome back to "squawk on the street." i'm diana olick. home builder sentiment up one point in march after the monthly survey fell ten points in february. the hmi stands at 47.50, the line between positive and negative. index in the high 50s last summer and fall. now in the negative. builders cite rough weather as an issue but more concerned about the cost of land, materials and labor. also dealing with a deep shortage of skilled workers. now of the three index components, current sales rose 1.52. sales expectations over the next six months fell one point to 53.
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buyer traffic in the worst spot, though it it did rise two points to 33. regionally, sentiment fell most in the northeast and west month to month but higher in the midwest and south. builders reporting a softening this year. so far the word used by the ceo. kb home and lennar set to report quarterly earnings later this week. er. >> thanks very much. markets starting the week in the green, after global worries appear to be subsiding. crimeans opting to rejoin russia in a controversial referendum over the weekend, plus chinese stocks rebounded after a it tough week. jason trender, the chief investment strategist, greg ipp with us, u.s. economic senator and economyist as well as cnbc contributor. jason, first to you. u.s. investors now, would you buy on this news? looks like so far no major
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surprises when it comes to russia and crimea? >> i think so. i think largely this fits with a story we've been telling, a narrative, very few other alternatives, seems to me. emerging market stocks are cheap. this highlights concerns many people have. equity risks are cheap in the emerging world but the u.s. comes out ahead. economic growth is still going to be strong here. i just came back from asia last week, some of the fears about chinese growth are overblown. so, i'm of the view that probably some of the dislocations we saw last week will be short lived. >> i wanted to ask you about your trip to asia in a moment. first, greg, to you, geopolitical risk is out there. it hasn't faded. i guess investors are trying to weigh what sanctions would do to the global economy. obviously, russia a major player there. >> well, obviously all of this means the world has become a more dangerous place. we've seen markets do well when
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the world was dangerous as well. 50s and 60s the height of the cold war but good period for the stock market. you need evidence that the sanctions or tensions spill over more broadly into political tension, perhaps a shooting war, or more broad economic damage before the market pay as tension. unfortunately the market's unable to map out all of the possibilities that could happen over next three to five years, as russia pulls away from the sort of the western based market economy. at present the linkages between russia and the west are not strong enough to affect overall economic growth or earnings. i think a different story if this were china. >> isn't it more to the point that the politicians don't have guts to go in hard on russia? they don't have the appetite. europeans certainly don't, because they're supplying a third of the natural gas. >> that's a great point. one of the reasons marks are not too worried western governments do care about the extent to
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which their stand-off with other countries affects their economies. putin really doesn't. i mean, putin is prepared to tolerate a lot of pain in his economy -- >> greg, it's more than that. nobody has appetite for intervention these days. no way that the united states is going to get embroiled in anything physical, nor is the european union. in a sense, the a hypothetical conversation, isn't it, that we're having here? >> i would draw a big distinction between what's happening in europe now and the way the united states and europe have felt exhausted over what happened in the middle east and north africa over the last ten year. what happens in europe is central to the way the north atlantic alie apartme lli llie united states. the extent to the way this plays out, it's a much bigger deal for the west than anything else that's happened in other parts of the world. >> take it back to the stock market. you like the u.s. not a lot of alternatives out
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there. jim cramer mentioned multinationals doing better, that was the concern here, companies like pepsico and coca-cola have big exposure in russia with the geopolitical risk over the markets. do you want to be in big multinationals now? >> i think so because i'm look at what multiples are and where the alternatives lie. i think that at the margin the u.s. large multinationals is the place to be. there's a case to be made globally for a nifty 250 or nifty 50 or large companies that really could act as proxies for sovereign debt. the other one point i would make with regard to what greg was saying, i think putin has done more for the u.s. energy industry than the lobbying efforts that the energy lobby has done in the last two weeks, than what the energy lobby has done in the last two years. this greatly increases chance of keystone getting passed.
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i think it greatly increases chances that we become more energy independent in the u.s., that's good for the west, good for the stock market. >> is it good for the stock market if yellen stays the course this week in the fed's meeting? >> absolutely. the big question mark, first of all, i think everybody agrees she's going to continue with tapering, down another 10 billion to 55 billion a month. the big question, what do they do with guidance? get rid of 6.5% unemployment threshold as key that has to be met before they consider higher rates? i think they will. the question is what does she say that takes its place? she has to, for the market, she has to reassure them that the fact they're moving to qualitative guidance doesn't mean they've moved up the data, which they will tighten. given how low inflation is, the first quarter of growth was, i can't see them moving off the second half of 2015 as still the likeliest day when they start to raise rates. >> jason, a delicate dance she has to do here.
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she has to change the communication strategy on policy without upsetting the market. >> i agree with greg. as a new fed chair, forward guidance, it's important to do what they set out to do. i think you'll see a large consistency, there's not a lot of pressure because inflationary pressures are low. anything other than what's laid out would be dangerous for the market. >> can i ask you one small question? do you think the taper is priced? n.? when they go back down by 10 billion, is that priced? the market has greater volatility. it's more susceptible to bad news. >> people are worried about natural tightening. ty tapering, you can set your watch to it, it's going to happen. >> it's not scary anymore. people are more worried about it might be accelerated, you have higher interest rates. i think that's unlikely at this point. >> a big event, no question about it. first time we hear from janet yellen as fed chair wednesday.
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thanks for joining us. alibaba picks the u.s. for its long awaited ipo. the stage now set for the most high-profile offering since social network facebook went public in 2012. that brings us to this morning's squawk on the tweet. alibaba is a mix of amazon, ebay, paypal with a dash of google. what's the missing ingredient needed for world domination? we'll air your responses throughout the morning. i can only imagine what is going to pile in. next, shares of yahoo! spiking as alibaba announces it will ipo in the u.s. more details on that ipo itself and what it means for yahoo's! big picture when "squawk on the street" comes back. ♪
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welcome back to "squawk on the street." check out shares of chesapeake energy higher. it's filed with u.s. regulators for a possible spin-off of the oil fueled services business. it retained morgan stanley to retain strategic options for the business. >> thank you. and unusually late winter storm slamming parts of the east coast today. dumping at least five inches of snow in washington, d.c., and
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forcing the federal government to shut down. big problems for travelers. the weather channel's jim cantore live in d.c. with the latest. no stopping this winter, jim. >> reporter: simon, unbelievable. the fifth time the federal government has shut down, the last time that happened was 2003, where we had five shutdowns. this doesn't happen that often. this is so far now a storm that brings our total up, season total to 30 inches of snow. last year we had three, all right? so, downtown here in the district, reports coming in, anywhere from 6 to 8 inches of snow. notice along the walkway here, just a little bit of melting going on. remember, it was 68 degrees saturday. so there's a lot of radiation absorbed by the ground and it's regradiating back up to melt the snow. the grassy surfaces on the mall, a solid seven inches on the ground. temperatures holding steady at 26. schools have been closed.
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faulkier, 16 snow days, incredible. a summer season for some countries in terms of the days off. our vacation, that's incredible amount of days off. they have to make those up toward the end of the year. big issues at airports, reagan and dulles, snow removaling back open and operational. but the backlog of flights, going to be pretty much dealing with this for a good part of the day here. philadelphia not as much snow. new york, flurries. really the farther north you went with the storm it wasn't owl that bad. but this is just an area that is sick and tired of the snow. and if that's not bad enough, saranac lake, this morning, in new york, 27 degrees below zero for a morning low. it's mid-march. >> it will make the spring and summer even sweeter. you know that? >> isn't the first day of spring this week? >> yes. >> march 20th. >> thursday, isn't it? >> crazy. >> three days. >> thank you very much.
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>> three days. >> alibaba confirming that it will begin its ipo process here in the united states instead of china. chinese e-commerce giant could set records, you'll be aware, as being the biggest ipo ever. dennis berman, business editor and columnist with the "wall street journal." he joins us now. what we don't know about alibaba we'll find out. this is going to be absolutely huge for everybody involved in this process. >> you know, i think it's going to be huge. when you take the biggest commerce force and the biggest commercial market in the world and you put it together with the margins of alibaba, you have investment banker, ipo madness. and to a large extent, i think it's justified, given some of the statistics and some of the characteristics of the business. >> 44% profit margins, how do you get 44% profit margins? how do you value a company like that versus, say, amazon? >> that's hard. these are net margins.
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now you have companies like zu lilly, trade at fantastic multiples, trade on no gross margin. 44% margin, they don't take inventory risk, they don't have warehouses. they sell ads like google does for those merchants who want to reach the hundreds of millions customers in china. it's an information and media business, that's why margins are so high. >> set a good stage where it's going to list as well. fight between the new york stock exchange and the nasdaq is going to be pretty good following the facebook debacle and then of course the new york stock exchange getting the twitter ipo. >> it's going to be, you know, a big fight. can i be honest? i don't think to the end investor it really matters one bit. for the investor standpoint the question, from the u.s. standpoint, what is this company really understanding it, really getting comfort with some of its characteristics. i think there is one risk here,
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a big risk, chinese government. it could declare one day that it's not comfortable with the ali pay business, the electronic paypal of alibaba, and that could wipe out a big part of its earnings. it could say it's not comfortable with the way it does business. there's a big red flag literally and figuratively in the ipo, that's the chinese government. >> are we totally comfortable with the fact that the reasons the ipo is coming to the united states is because the regulation is laxer on ownership structures and the founders can still keep control, which in hong kong they could not have done? are we saying, hong kong you're too old fashioned, that isn't the way the world works or are there reservations in new york, we're sure we're doing things the right way? >> a fair concern. when i talk about principles, they're not principles unless you sacrifice to keep them. give a tip of a hat to hong kong staying to its principle.
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in the u.s., controlling shareholders have dubious control over their companies, via schemes that are frankly allowed and permitted and legal by the stock market. i do think, simon, you put a good finger on a good issue, which is a group of insiders have control without real effective control of the number of shares of the company. >> how about the timing, dennis? as we're asking questions of a number of these ipos that have happened in recent weeks, raising questions about froth in the market, the exit, timing, our market is not far away from all-time highs. >> you probably see it, too scott. ipos coming toing market this week really high. character risk of the ipos are good but not great. they're deteriorating slightly. the window is open, and everyone particularly the private equity firms are trying to shove everything they can. venture cap tappists feel the same way. if you have you a quality issue, alibaba, why not?
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the growth from existing companies muted globally. if you can give flash and dash to investors, they're willing to buy it. seems like the time to do it. >> why is that? why is the window now, why the rush? are they nervous about what the market could do in the second and third quarters of the year? >> you know how the ipo marks work, simon. it's a momentum game. when the window's open, it's open i do think that alibaba could sort of live outside of that binary world because it's in such demand and there's so much interest into it. new money going into ipo finds. i don't think it's any more complicated than that. it's a i psychology thing and companies willing to take advantage. >> dproegrowth growth. dennis berman from the "wall street journal." next, crimea voting to secede from ukraine and join russia, a move that could have huge global implications, a live
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welcome back. i'm morgan brennan with breaking news on the earthquake in the los angeles area that struck 9:25 eastern time, 6:25 local time. it is now a magnitude 4.4 quake, that has been downgraded from preliminary estimates of 4. 7 by the u.s. geological survey. it hit a large swath of southern california six miles away from westwood, near ucla. these are the updates so far. the l.a. fire department, no preliminary reports of damage or injuries. l.a. department of water and power, no reports of water main break or power outages. l.a.x. wasn't affected. ucla says no reports of damage on campus. scott, back to you. >> morgan, thanks so much. meantime, search for missing malaysia airlines flight 370
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covering a huge area from kazakhstan to australia. this, as new details emerge suggesting the flight's pilots could have been involved in the plane's disappearance. phil lebeau joins us with more. >> more questions than answers. let's show you the search area. it's two different paths, as you go away from malaysia to the west. one going based on satellite data, one arc going up into asia, central asia, as far as kazakhstan. the other south into the indian ocean. a ways away from africa as well as australia. you mentioned two piloted in the focus of the investigation. that is where investigators are focusing most of their attention for two reasons. first, it's clear, based on the prime minister's comments that this aircraft was diverted. as a result, they want to look at who would have the ability to maneuver this plane. the pilots are obviously two most likely answers there. but was somebody else involved?
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because they are looking at fact it was deliberately diverted they're looking at time line of events. keep in mind, the final transmission at 1:07, they come out every half hour. malaysia's starting to walk back on whether or not it was deliberately turned off after the last transmission. the co-pilot says, all right, good night, two minutes later transponder turned off by somebody in the cockpit. last time it was detected on radar 2:15. more questions than answers, as you have the search going on intensifying in the southern indian ocean with a number of the search vessels down there looking for some sign of the malaysia flight 370. >> fascinating. phil lebeau in chicago. we're up 179 points on the dow, despite the fact over the weekend crimea voted as expected to asecede from ukraine and join russia, a move western leaders
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declared illegal and vowed to punish with economic sanctions. we heard president obama will deliver a statement at the white house at 10:45 eastern. live to the crimea for the view on the ground there. nbc's ian williams joins us with the latest. over to you. >> reporter: simon, good morning, from what they're calling the independent autonomous state of crimea. that declaration made in the parliament building behind me where they also decided they were going to formally request that moscow allows them to join the russian federation, mps are heading up that direction tomorrow, presumably to make the request in person. parliament also visited, deciding the russian ruble will be reintroduced here, seizing ukrainian state property and declaring as of later this month the clocks will go forward two hours. so, no doubt in their mind where they're heading. the decision now, of course,
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with vladimir putin, he'll be adregs t addressing the nation on the subject and the russian parliament later in the week will give their response. today we've seen new police on the street here, walking around the parliament building in brand-new riot gear. so new if you went up close, i'm sure you'd almost see the price label. they looked like russian policemen. the place feels like part of russia. under occupation by russian soldiers for the best part of two weeks. big questions over the minorities here, at the same time the ukrainian bases are surrounded by russian troops and it's difficult to know what's next. the government said those troops will be declared as an illegal occupier in this new setup. back to you. >> thanks very much.
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we'll continue to check in with you, as we await to hear from president obama at 10:45 eastern time as well. >> straight ahead, global local. mcdonald 'an american icon, when it comes to international locations is it too american for local tastes? who better to help us celebrate st. patrick's day, art cashin, when we come back. mine was earned in korea in 1953.
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on this st. patrick's day, we're all in the green. let's bring in art cashin. hope you had a great weekend. >> i did. i did. brewers had a great weekend. >> ice cubes were certainly busy. no green tie we'll let you off the hook. >> shamrocks and beer. >> my bad. how do you feel about the market after the crimean referendum, is this short covering, relief rally? >> it would appear to be a good deal of short covering. i think it is based primarily on the fact that the preliminarily the sanctions look rather modest, maybe a slap on the wrist, they're going after individuals rather than sweeping. the concern had been if heavy sanctions came in, the eu could see collateral damage and they would have real problems. i think for the viewers, if you're watching this minute by minute, when we got up and through the resistance at 18:50,
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18:53, they exploded up to 18:61. that was al gorithmic trading. that's the modern day equipment of buy stop ors they used to put in. and then but interestingly, as i said, to sarah offcamera, volume's not exploded the other thing i'm watching is that the safe haven trades, gold, the ten-year, the yen, they have reversed that mightily. i would stick with the ten year, i believe. >> what about china? no one's talking about china today. there were -- there was a currency story over the weekend people are paying attention to. got to be continued risks to the story in china. if you look at what copper's doing today, still below three bucks, are you paying attention to moves in copper as to what they could mean for our market here? >> yeah, not only moves in copper but rumors around today about a large developer in china, possibly defaulting on another loan.
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we had a big default last week, are we going to get a bear stearns moment as they said? will this contagion continue to spread? crimea continues to take the headlines, china continues to be a problem, and we've seen they widened the trading bend on the one and we're beginning to see that move around. >> can i pick up on what is happening in the ukraine? you have 20,000 russian troops on the crimea border. this is not over. this is -- >> no. >> this is a process, it's a dangerous process potentially for a lot of people involved and sanctions may get worse. this is not the end game. we may have a rally today but you know, not a lot expected to happen over the weekend. >> no, i hardly agree. i think if the president says something about wider or more severe sanctions, the market will react. i think they're in a temporarily honeymoon window. >> the other thing, what happens
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within russia? we talk about capital flight, without making the point that credit conditions were substantial, you'd have a major emerging market and that in itself is a systemic problem. putin might shoot himself in his foot, that's the kind of guy it would appear he is. >> he's willing to suffer, perhaps let the people suffer, to accomplish geopolitical goals. you have to watch out. rumors last week, a big drop in -- >> treasuries. >> treasury custody bonds and he may have taken that batch out to repatriate money there. keep your eye on sanctions and follow the ten-year. >> u.s. stock market is flying higher. short covering could be at play, technical moves, algos at work. bottom line, u.s. story is bright and the economic signals are shaking off the weather impact. >> they are better than some thought but several of them are
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actually below estimates. so -- >> you're not convinced? >> it's a murky picture. you want to wait and see, you know? we've got the weather has not fully dissipated yet. the government in washington is closed down today due to snow and it's st. patrick's day. >> you don't have the huge build back that we thought we might. when beginning to get weeks clear of the weather, it's not a stampede of economic activity, is it it, which a lot of people predicated their belief that we'd be okay on. >> i know, there are some signs of drag away from the weather. we saw things on the west coast when we had the snow here, why would the west coast drag? you're right, it's an evolving game, as it always is, so it's worth watching. >> good to see you. late volume, maybe not light volume, we know. many of them around. >> people in other places at this time. >> we want to pick up on the markets. as we mentioned, taking all the news on crimea and russia in stride.
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for more on what ukraine means for global markets, let's bring in michelle caruso-cabrera. michelle the rally started in russia, with russian stocks and the ruble. >> absolutely, not just the united states stocks moving higher today but russian stocks moved higher. so, reversal of what we had seen that simon was talking about capital flight so sharp. one-week chart, this is the mcx, top 50 stocks in russia. doesn't make up for the huge decline over the last month. six-months chart, you can see that on the right-hand side what a dramatic fall it was. some of this may be today the reverse ol what we often say, right? buy on the rumor, sell on the news. we knew what the outcome of this referendum was going to be we may have seen people selling into the rum somewhere buying on the news today. market watchers are waiting to see what putin says tomorrow when he addresses the duma. is he going to announce immediate annexation? a lot of putin watchers think
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that he may reserve that, as a bargaining chip in some way. he may not have an immediate answer has to what happens there. the russian stock market and the u.s. stock market. we should point out that the rhetoric has started to ratchet up. run void yo from a main anchor in state-run television. look over his shoulder, a mushroom cloud from anatomic bomb where he goes on to say that russia, and this is a map showing all of russia's abilities to bomb various parts of the world, rush chaise one place that could smash the united states into nuclear ashes into, smithereens. so rhetoric certainly is stronger there and certainly getting stronger here. we'll see what impact it actually has on capital flows. back to you. >> we'll see what the president has to say about some of the sanctions, 10:45 a.m., eastern time. michelle caruso-cabrera, thanks for pointing it out. we'll stay with the global theme. corporate story.
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mcdonald's, an american icon in china, could its american image be holing it back when it comes so sales? live in beijing with a look how mcdonald's is trying to localize itself in china. tasty treats on the menu. >> reporter: definitely tasty treats. china's economy may be slowing down but multinational companies like mcdonald's see a future here. rice, it in mcdonald's men knew china to help the fast food client beef up its business. >> it's growing so fast. 1.3 billion people who love mcdonald's we want to leverage that. >> reporter: back home, mcdonald's is struggling, as more health conscious americans shun fast food. yet to many chinese like edward, mcdonald's mean more than just burgers. >> it kind of learning from western people, not just technology, not just some economy.
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but lifestyle. i say mcdonald's is kind of molding life for china's people, including for me. >> reporter: that iconic status served mcdonald's well. the u.s. company has nearly 1900 restaurants here, its fastest growing market. some believe mcdonald's is leaving food on the table. its chief rival kfc has localizedite menu and supply chain and has twice the number of stores. upstart chinese chains are jumping? >> mcdonald's is being relatively slow to the point where they've been ready to adapt to localized to respond. kfc was much quicker. from the early days they started to think about how to mix up the menu to meet local needs. look at asian competitors, menus are more relevant to consumers. >> reporter: mcdonald's is offering nuggets made of pork, and bringing the successful mccafe coffee chain to china, to
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keep up with young chinese. >> they want to live a more contemporary and exciting life, and they are so keen to hold a cup of coffee and sit behind the glass and being seen by friends who see, i'm having a coffee as my optimum tea break. >> reporter: a feeling mcdonald's hopes will keep them coming back. mcdonald's ceo said international markets are going to be a key driver for the company's future. and this is after recent sales were disappointing in the united states. simon? >> interesting. what a fascinating subject. eunice yune. >> you like pork nuggets. >> no thank you. no. >> solution to the ebay/pal pal issue, one analyst says is the best of both world. google should buy both. the president will deliver a statement on events in ukraine in a few minutes.
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welcome back. live picture of the white house briefing room in washington, expecting the president any minute now really to deliver remarks regarding the situation in the ukraine. 10:45 scheduled time. it's 10:43. the president not exactly one to be on time. >> affairs of the state. >> when. >> obama appears in the briefing room, we'll go there live. >> what happens when china shows signs of weakness? demand for imports goes down, and that can mean big problems for the materials sector. don chu back at hq with more. >> this mine shaft to see what's going on. there are few places in the stock market that feel the impacts of global macro economic slowdowns like the materials
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sector. when the world's second biggest economy shows sign of faltering, there can be dramatic effects here. the china story so key. china consumes these commodities, it's the fuel for building up their country's infrastructure and that's the reason why it's important. over the course of the past couple of weeks, the chinese economic story has take ain't serious turn lower on the negative front, chinese exports fall by 18% in february from the same time last year. industrial production and output for january and february grew by less than analysts thought. economists were expecting a little bit of growth there, but that was the slowest growth there since april 2009. china loan growth slowed as well. the most impact, copper market where prices are down 11% over the past three months. 17% over the last year. chief investment officer bernie williams says iron ore is a similar story of copper.
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it three of the worst performing stocks in the sarp 500 material sector in that business. think freeport mcmoran, down 20%. u.s. steel down 18% during that time here. you can see there. iron ore and cliff's natural resources down 29%. material stocks are leveraged to the china story. so investors have to keep them in mind, have to keep a close eye on them with economic developments, guys. back over to you. >> dom, thanks so much. to the white house now. as a matter of fact, where we're waiting on the president to make his remarks regarding the situation in the ukraine. >> must be decided by the people of ukraine. and that means ukraine's sovereignty, territorial integrity must be respected, and international law must be upheld. so russia's decision to send troops into crimea, as rightly
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drawn global condemnation. from the start the united states has mobilized the international community in support of ukraine, to isolate russia for its actions and to reassure our allies and partners. we saw this international unity again over the weekend when russia stood alone in the u.n. security council defending its actions in crimea. and as i told president putin yesterday, the referendum in crimea was a clear violation of ukrainian constitutions and international law, and it will be not be recognized by the international community. today i'm announcing a series of measures that will continue to increase the costs on russia and on those responsible for what is happening in ukraine. first, as authorized by the executive order i signed two weeks ago, we are imposing sanctions on specific individuals responsible for undermining the sovereignty, territorial integrity and government of ukraine.
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making it clear there are consequences for their actions. second, i have signed a new executive order that expands the scope of our sanctions. as an initial step, i'm authorizing sanctions on russian officials, entities operate in arms sector in russia, and individuals who provide material support to senior officials of the russian government. and if russia continues to interfere in ukraine, we stand ready to impose further sanctions. third, we're continuing our close consultations with our european partners who today in brussels moved ahead with their own sanctions against russia. tonight vice president biden departs for europe where he'll meet with leaders of nato allies, and i'll be traveling to europe next week. our message will be clear. as nato allies, we have a solemn commitment to our collective defense, and we will uphold this
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commitment. fourth, we'll continue to make clear to russia that further provocations will achieve nothing except further isolate russia and the international community will continue to stand together to aoppose any violations of ukrainian s sovereignty and continue military invention in ukraine will deepen russia's diplomatic isolation and exact a greater toll on the russian economy. going forward, we can calibrate our response based on whether russia chooses to escalate or to de-escalate the situation. now, i believe there's still a path to resolve this situation diplomatly, in a way that addresses interests of both russia and ukraine. that includes russia pulling its forces in crimea back to their bases, supporting the deployment of additional international monitors in ukraine, and engaging in dialogue with the ukrainian government, which has indicated its openness to
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pursuing constitutional reform as they move forward towards elections this spring. but throughout this process, we're going to stand firm in our unwavering support for ukraine. as i told the prime minister last week the united states stanned with people of ukraine and right to determine their own destiny. we're going to keep working with congress and international partners to offer ukraine the economic support that it needs to weather this crisis and improve lives of the ukrainian people. as we go forward we'll continue to look at range of ways we can help our ukrainian friend achieve their universal rights and security, prosperity and dignity that they deserve. thanks very much. we'll be available for questions. thank you. >> there's the president, formally announcing sanctions against a number of individuals in russia, senior aides to president putin as well as aides to former president of ukraine,
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victor yanukovych, mr. obama saying sanctions against individuals who in his words provide support to the russian government and threatening that he will use further sanctions if necessary. >> i thought it was interesting that he said interesting he said this is an initial step. obviously, they will continue to increase the pressure and the cost on russia. it will continue to isolate itself from the international community if it does continue with these provocations. also said that biden is on his way to meet with nato tonight and he'll be very much aligned with europe, as well. he'll be traveling there next week. >> we've also had officials briefing in conference call on the detail of what's going ahead. it's 11 key officials in all seven who are leaders of the top advisers to him described as idealists and architects of the annexation report. putin is going to be in front of the russian parliament tomorrow. the reason that more sanctions are threatened. this is a process. you know, if they -- it's tit for tat.
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this could go on potentially for a long period of time. >> well, really depends on the russians and putin's next moves. and continues to have a military presence. >> the real question, eamon javers is what sort of teeth these initial sanctions have. >> yeah, that's right, scott. you've got to imagine this move by the u.s. was pretty well telegraphed last week. any russians with assets in the united states had plenty of time to move them offshore unless we're talking about real estate. so the question is, how, you know, intense will this asset seizure actually be. officials on that call that simon was just talking about were saying this is a very tough set of sanctions, but they did lay out a plan by which they could add additional officials to their list and coordinate a little bit with the european side, which is going to come out with a list of apparently 21 officials. that will be more than the u.s. has been sanctioning. that list expected to come out tomorrow. so there's some coordination going on behind the scenes now between the united states and
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the europeans in terms of exactly who they're going to designate and whose assets they're going to freeze here under this new order. >> we'll wait to see. as the president said, ready to impose further sanctions. thanks for wrapping up the president's news conference there for us. and the market's still in rally mode with the dow up 169 points. coming up, new york state gearing up to join other states that have banned tesla direct sales. we'll talk to the new york auto dealer who supports the ban and gets his point of view on this controversial bill. "squawk on the street" will be right back. right back. there's a new form of innovation taking shape.
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it's connecting over one million low-income americans to broadband internet at home. it's a place named one america's most veteran friendly employers. next is information and entertainment in ways you never thought possible. welcome to what's next. comcastnbcuniversal. still up 151 on the dow. let's get to chicago in this morning's santelli exchange. rick, over to you. >> thank you, simon. and i'd like to welcome the mayor of san jose, california. mayor chuck reed. been the mayor since 2007, i believe. thank you for taking the time, mayor. >> thanks for having me on, rick. >> listen, i've already talked to s&p and moody's regarding chicago and the bigger contributions they need to make to their pension system beginning in 2016 and how that's making many in springfield get some gray hairs. bring us up to speed on exactly
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what's going on in san jose and what you're trying to do via a referendum to address it. >> pension costs are spiking all over the state of california driving service guts throughout the state. we experienced that in san jose with ten years of cutting services to balancing the budget due to skyrocketing retirement costs. so now, i'm one of five proponents for a statewide ballot initiative to change the california constitution to protect what people have earned, make sure they get paid what they earned, but allow cities, counties and the state government to sit down at the bargaining table with our unions and come up with cost savings by changing accruals, accrual rates in future contracts. >> all right. now, you have just shy of 1 million people living in san jose. currently, what is the deficit that you're running. i'm not talking about the underfunded liability itself. but give me both of those. the current deficit, if any and what you believe your pension liability is.
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>> our current deficit for this coming fiscal year is about $1 million. we have gone from over $100 million deficit three years ago to about $1 million this year certainly manageable. but our unfunded liabilities are in excess of $3 billion. now, that's our pension and retiree health care costs. they continue to grow. and we continue to increase our payments for retirement costs. ten years ago, the retirement costs were $72 million a year, this year, $272 million a year. and they continue to grow. >> what is the legal rub, mayor? is the legal rub trying to address those that are already retired? or is it more from the active personnel standpoint regarding pensions? >> well, what we're trying to do is make changes for current employees and enter the so-called california rule, the extreme interpretation which we're living with here in california is that on the very first day of employment, the benefits are locked in and can
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only go up. they can never be reduced over the next 70 or 80 years. that's a very rigid system, it's a very expensive, very dangerous for government to have those increasing costs. we've seen that in san jose. $200 million a year is the increase in retirement costs we've seen over the last decade. >> in the last 30 seconds, mayor, it seems as though a judge is ruling that the initiative language is not to your liking and may not be on the ballot. is that currently what you're looking at, sir? >> well, we're looking at is continuing to forge ahead with this ballot initiative. we're not going to make the 2014 election cycle. we just don't have enough time to collect all the signatures. we'll be charting the 2016 ballot. we don't like the attorney general title in summary, we challenged that, the judge declined to change it. now we need to poll on it, see what the voters think about it and collect signatures for 2016 ballot. >> mayor, thank you for taking the time. i wish to remain apprised of the situation. we may ask you back.
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have a great day, and simon hobs, back to you. >> thank you very much. good morning if you're just tuning in. this is what you might have missed this morning on cnbc. >> welcome to "squawk on the street." here's what's happened so far. >> it's not because the summer's around the corner, it's 27 degrees, it's because they feel like there's a lot of enthusiasm, let's capture the enthusiasm. i'd rather have enthusiasm for march madness. hey, what do you think of tesla? loves tesla. >> got to be careful with the hand signals here. >> this greatly increases the chances of keystone getting passed. it increases the chances we become more energy independent in the u.s. good for the west, good for the stock market. >> when you take the biggest commerce force and the biggest commercial market in the world, and you put it together, you
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have investment banker ipo madness. >> it might be on low volume, but boy have we bounced here at the open today, up 150 on the dow as you can see. events in the crimea coming through more or less expected over the weekend. so perhaps some short covering, though, clearly the game isn't over there. it's 11:00 a.m. here on the east. it's 11:00 a.m. here on the east coast, 8:00 a.m. out west where it's been a shaky start to the day. here's what we've been watching for you this morning. ali baba will hold the ipo in the united states in what could be the most anticipated e ed ip since facebook in 2012 why it's going public in this country. plus, the man behind the iphone, iphone and a whole lot more giving a rare interview over the weekend. what he said about his future at
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the company and the next big thing he's working on. and no letters today, but the paypal fight between ebay and carl icahn showing no signs of stopping. that conversation would likely end quickly if google just bought both companies. more on what that might look like a little later this hour. but first, joining us this morning is the founder, editor and ceo of business insider, our own jon fortt joins us here, as well. good morning to you both. >> thank you for having me. >> welcome kelly evans. >> good morning, simon. henry you're joining us on a day where most of the talk is about how big of a deal it's going to be. why, you know, 130, $140 billion for this company and it's chosen new york. how significant is all that? >> and the big point is big. remember what happened with facebook? they came out, proved to be a huge disappointment. part of the problem was there was so much stock for sale. alibaba might sell $15 billion, suddenly everybody who wants stock can get some. that was a recipe for disaster
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with facebook. >> and i would jump in here and say the scale of this is huge. $1.8 billion recently and quarterly sales, $786 million in net income. i mean, that's a level -- facebook sort of level. but i've got a lot of questions about alibaba. a lot of hype. big company, huge in china. but as it starts to expand. it tries to move into consumer areas where it's not clear it'll be able to get traction. trying to do some consumer credit stuff at the chinese government's backing. people should know there's a lot of risk and unknowns attached to exactly how this company's going to grow from here. >> you're generally bullish here. you raised the point that the signs of this rivals facebook and echoes back to that offering, which while not failed was certainly a troubled one. but how close are the parallels? and is size the most important factor here? >> well, you look at what has driven some stocks like twitter and others. very little stock available.
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everybody wants it. you can't value it precisely. so up it goes, supply and demand. case of facebook, everybody wanted it, everybody was nuts about it. they sold so much stock that anybody that had any interest in getting some got it, down went the price. >> you know, i have this awful feeling, suddenly, this awful feeling this could be the top of everything. if they restrict the float. and if they hype it successfully enough and it rockets to, i don't know, $200 billion, i don't know -- you know, how high could it go if they manage the pr on this well? and that will be the point of which people will say, you see, it's like the dotcom all over again. >> a smart investor said exactly that to me last week saying alibaba may be the top. let's hope not. >> which may be what's coming here. they can see that, you know -- >> jon fortt, let me ask this question. as much as alibaba is almost an internet conglomerate, as much as they can play around with supply to effect the demand for the shares, we are still talking
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about a huge company that's effectively to amazon of china along with investments across a wide array of industries. there's a fundamental value here is there not. how do we know at what point this offering starts to look like more evidence of froth as opposed to a business maturing. >> i don't know exactly how to determine what that fundamental value is. is it the ebay of china? is it the amazon? how much have they invested in infrastructure? what about this issue of people in other countries trying to do transactions, through alabibaba? not needing middle men to do that in order for it to translate? what about the issue of counterfeit goods. how are they going to deal with the increased scrutiny? >> and the key is the price. there's absolutely fundamental value. it's incredible, it's growing super quickly, but the growth is decelera decelerating, the profit margins are sky high. so the question is just the price. what do you pay for it? >> all right. and alibaba, by the way, is the
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subject of this morning's squawk on the tweet. a mix of amazon, ebay and paypal with a dash of google. what's the missing ingredient? tweet us @squawkstreet and we'll get to answers later this hour. now, switching gears, a little peek behind the curtain at apple over the weekend. the company's top designer spoke to the uk sunday times in a rare interview and revealed a lot of details about his design process, including the fact that he works on a team of 15 people with designers from japan all the way to new zealand. henry, what did you think was really most revealing, though? >> i think what's going on here is apple is wisely trying to show the world that there are other people at the company other than steve jobs, but he's been critical, he's a great designer, he's very much a part of their beautiful product design. and i think they're saying it's time that everybody began to focus on that. >> i think the big take away on this was the question to johnny
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ive if it felt like apple couldn't innovate any more, would you leave? i don't see that coming any time soon. there's plenty of stuff i'm interested in working on. this is just the beginning. and johnny ive, not just in charge of industrial design anymore. that group is critically important. he's also in charge of the software interface. him and tim cook. making sure the train's run on time and the company gets run overall, and johnny ive. >> we should mention there's a new book out tomorrow that's very critical, arguably some people have said already in the reviews too critical. and this is an attempt to face that down in many senses saying ive is here, he's been here, part of the heart and soul of apple. it isn't just about the ceo in reality. it's the team that jobs collected around him, which still broadly remains. >> very true, but, again, we are waiting as a world for the next generation of product that apple's going to deliver. nobody questions their ability to keep making more and more
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beautiful smartphones and ipads and so forth. it's the watch, it's the television. that's what everybody's waiting for. and that's what steve was incredibly good at and focused on. >> according to the book, there is no television. apparently steve jobs said before he died, they wouldn't go into tvs. anyway, the author's on the show tomorrow. >> yes. >> and there's no 8-inch ipad until there was either. steve jobs was famous for head fakes he was talking about. people keep their tvs for a long time and very low margin. and that's why it's a bad business. but, hey, things change. you never know. >> steve was totally right about that, though. and i think before we get too excited about the television, focus on what he said. low margin, low turnover. people keep them a long time. apple's big problem is its incredibly high profit margin. and that is coming from the iphone, nothing else. they roll out tvs, puts pressure on the margin. >> they roll out tv, it won't be a tv like we have now, will it? it'll be a much more, much more complicated and in many ways, much more complicated, much more
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simple product. it would be a new product category. >> that is the idea. we will see. tv is already pretty simple. >> if i had to guess, though, i would guess you could make the profit margins on a watch if done right and becomes the next big thing, a lot fatter than you could make the profit margins on the television. >> but you're going to have to sell lots and lots of them on the revenue side. >> twitter's ceo making his first visit to china meeting with government officials, academics and students during his visit. twitter has been blocked by the chinese government since 2009. so this trip, driving some speculation about the company's interest in china broadly. of course, they've got 600 million internet users. and this dovetails with the stories today. as you know, a lot -- one of the popular microblogging twitteresque type services, which on friday filed to go public here in new york, as well, correct. and also, is -- has a stake -- an alibaba has a large stake in the company.
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does it not? so this all sort of comes full circle. to what extent is this part of the same story? >> i don't think this is part of the same story in this sense. whatever he gets in china is not going to help twitter's fundamental issue. that's a growth issue. but it's also a product simplification issue. twitter's really hard to use. it's for the cool kids, you've got your 1 million followers, you can start a conversation. if you don't, you're kind of like the awkward kid at the dance who is like, hey, anybody want to dance? >> simon, do you feel awkward on twitter? >> and i said, you have no idea. >> oh, yes, i do. let me show you some pictures. we'll get some calls in about me in high school. >> i think jon nailed it. to get -- for twitter to really thrive from here, they have got to break into the mass market. and they haven't done that yet. other than occasional following of celebrities, very famous tweets on the oscars. still a niche medium. >> what about waybo? >> i love the honesty.
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actually, i don't know about it rather than tell -- >> i'll look into it. i'll know next time. >> part of the reason i ask, though, we're talking about a market where, you know, 75% of the companies have gone public in the last six months or whatever the figures aren't profitable. we're starting to get some more of these chinese names through, but could be a fundamentally decent business if you're betting on this chinese population of users that may or may not, john, be able to go to a twitter. >> the messaging space is really complicated. whether you count it as instant messaging, facebook is jumping in there. you know, alibaba certainly wants to be competitive. but i think there's a lot of money pouring into the space that could be disruptive. you look at what facebook is trying to do with giving away services like facebook and whatsapp for free. that could interrupt the growth trajectory of that. i think it could be challenging down the road. >> and this is a huge market. these companies have amazing
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businesses, it's been very hard for u.s.-based businesses to break in. and we look at others, these are great companies. >> what is the main way people are sharing information. we were talking at buzzfeed about this. he was using things like whatsapp. >> and e-mail is still big, but facebook and twitter are huge. linkedin is huge. many different ways. >> wow. and business insider generally. would you care to respond? >> doing great. skeptical about digital journalism. i am a roaring bull about digital journalism. >> as we would hope. and thank you so much, henry, for stopping by this morning. good to see you. >> coming up on the program. ukraine on edge after crimea voted to break away and join russia yesterday. so now this vote is over, what happens next. we'll go live on the ground in moscow with the latest on what putin is doing. but first, rick santelli, what are you watching for this hour of "squawk on the tweet"?
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>> ten-year note yields. the whole world is watching this week. let's get this straight, down 33 basis points for the year, up two basis points from the day. we're up nine basis points from the lowest yield so far in 2014. we're going to discuss why exactly those metrics are what they are in about ten minutes. n. [ bagpipes play ] make it happen with fidelity active trader pro. it's one more innovative reason serious investors are choosing fidelity. call or click to open your fidelity account today. they're the days to take care of business.. when possibilities become reality. with centurylink as your trusted partner,
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welcome back. take a look at the industrial
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sector. it's one of the leaders. back at headquarters with more on this one. dom? >> all right, kelly. some of the bulls are glad to see the industrials jockeying with tech. after all, it is important to see a cyclical or economically sensitive sector, like industrials do well. the stock within the s&p 500 industrial sector is construction and building supply company, they're a wholesaler of building supplies, up 2.5%. also diesel and industrial engine maker cummins, and paccar, parker hanofin up around 2%. and textron rounds out the top five. a nice mix of industrials helping to lead the way higher in this market, kelly. back over to you. >> thanks very much. now, 4.4 magnitude earthquake shaking southern california earlier this morning, jane wells live in los angeles with the latest on this one. jane? >> reporter: hey, kelly, i'm just down the street from ucla and the ucla medical center.
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this is a close to the epicenter. and so far, they're telling us that the school and the hospital that there is no damage, you know. it's been 20 years this year since the 6.7 quake. so the 4.4 this morning was more of a wake-up call than anything else. and like all major earthquakes, it was literally a wake-up call. look at the video of what happened at 6:25 local this morning when the quake hit. it was centered northwest of here under the santa monica mountains, i believe, about five mil miles underground. trains and subway lines are up and running again. they halted them briefly to check the tracks. the chp says all the freeways are fine. the quake, though, was followed by a smaller one, a much smaller one an hour later that measured about 2.7. scarier more than anything else. here's some of the tweets of where they were and what they felt. john earl burnett says been through them all since '71. and that sure felt like a 5.0,
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not a 4.3. from killian, felt like god was twerking. that's funny. westwood said jittery shaking for about ten seconds, and finally, it was scary, but everything's okay. and i think that sums it up exactly. >> you guys must be used to it. jane wells there on the west coast. u.s. stocks continue to rally higher to start the week. the dow up 163 points, 164. let's bring in charlie babrinski for aerial focus funds and vice chairman director of research aerial investments. also with us, paul christopher, chief international investment strategist with wells fargo advisers. paul, let me kick off with you. where do you think the market is going to go from here? why such a strong rally today? albeit on relatively low volume? >> i think the market is preparing to treat ukraine and the problems there as another one of those geopolitical messes that's going to go on to the low
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boil, on to the back of the stove in a simmer setting until and unless there's more evidence of an increase, an escalation. so i think this is the beginning of that more positive view in the markets. >> what are you saying to your clients? >> that stocks are reasonably valued here, they were very cheap a year ago. they're not overpriced now, but not as cheap. so you have to go name by name, it's hard to talk about big, broad themes for the market. >> you know, if it weren't for some of the geopolitical unrest right now and concerns about china, where do you think u.s. stocks in the ten-year would be? >> a little higher. and frankly, the third thing i'd throw in there is the weather. we think the weather has masked a very strong u.s. economy. we think autos, housing, energy and a tail wind out of europe is going to bring us back to a 4% gdp growth. when we get that kind of growth in the u.s. >> 4%. we haven't been there in years. >> that's the point. that's why economists aren't predicting it because they're all anchoring on the anemic two
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and three we've had the last two years. there's been reasons for that. all the infighting in washington, all those problems. we think we've got a lot of pent up demand in this economy and the three things turning. when you have housing, energy and auto all kicking into higher gear, that's a lot of middle class jobs with 20 plus an hour jobs. we think that's going to be a nice tail wind. and throw in europe is now going to be a tail wind. >> let me just double check what you're saying here. sorry, let me double-check what you're saying here. this is a very strong u.s. economy. that's a statement of facts is it rather than a statement of hope and faith. >> well, it's a prediction. it's clearly an economy that has been held back for the last three or four months by weather, which had a real effect. if you live in chicago, you know that. and so the actual numbers are pretty solid. but they're actually going to be significantly better when we return to a normal weather and we get 4%, which is not on an historical basis. when you're in as bad of a
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recession as we were in, you come out pretty strong. what's unusual is how slowly we've come out. >> you have to have inflation, though. >> starting to see some of that. starting to see some of that. look at what's happened with energy prices, food prices, corn prices. the only reason why it doesn't show up in the statistics is they take out food and energy from the statistics that they report, which are a pretty important part of the average person's daily monthly bills. >> i'm curious if you share the same view about the u.s. and at the same time, if the u.s. data does start to improve, even if the chinese concerns go away a little bit. does that mean we could see a nice pick-up, a nice rally in some of these cheap emerging markets? >> yes, we could. as far as that goes, china has been a real head wind for emerging markets. but i wouldn't want to buy that bounce if i were you. i still think emerging markets are a source of caution. after all, china's a big player, but there are lots of other smaller players that add up to quite a wait in the indexes. >> we'll leave it there for the
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morning, guys. thanks very much. appreciate your time. business insider making news this month. by announcing a new investment of $12 million. now the profitability and future of business insider is being questioned, most recently in a "usa today" column. under the headline, new cash, new questions for business insider. wolf saying, quote, part of the problem in classic publishing terms is that business insider like the other traffic aggregators is not an expression of a particular coherent vision or sensibility that people are compelled to seek out. it is rather running after the market instead of creating one. we bring this up, of course, we've got henry here, the editor and ceo of "business insider." and before you go, he's laid out tough charges saying, you know,ingknow, ing aggregation model -- why are you different? >> well, first of all, we create a huge amount of original content. but i think more broadly what
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"usa today" is focusing on, there is pressure on add prices. no question, you have google coming in, automating everything. you have lots and lots of folks doing what the "wall street journal" used to offer much more cheaply. that's putting pressure on prices and definitely hurting the traditional competitors with traditional cost structures. and fortunately for us, we are much more productive than a lot of the folks that we compete with. and we charge lower prices intentionally. so it actually creates much more value for our clients. and so we see a lo the of money moving to lower priced alternatives, which we are. >> if you look, for example, i don't know if this is the point that wolf is after. but if you look at cable television, for example, the channels, the news channels have differentiated themselves. most notable of those, of course, would be fox business on the one side and then you'd have msnbc on the other side. is he, do you think, asking you -- fox news. is he in effect asking you to have an edge to go somewhere different?
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>> if he's asking us to have a political bias, we do not have a political bias. >> a unique selling position? >> what we want to do, especially with economics, is call it like the truth. we don't care which side has planted the flag and said this is our policy. we want to say what is better for the economy? we'll call it, and if we get blasted by the republicans and blasted by the democrats, that's fine. we want to get it right. >> what about sponsored content, which is something that generates a lot higher advertising prices for some of these other platforms. do you guys do that? do you expect to do a lot more of it? do you expect to go after the cheapest end of this spectrum? >> we do a lot of native advertising for these clients. sometimes they're content, sometimes other native advertising units. and there's no question that a lot of the market's moving that way. buzzfeed does that effectively. others moving that direction, too. but in terms of the standard advertising units. prices are coming down. but that's good for us. same way amazon was way below
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prices for traditional retailers. that's why so many customers move to them. >> okay. henry, it's good to see you. >> and you. >> thank you for your time. >> appreciate it. >> coming up on the program, will new york be the next state to ban direct sales of tesla cars to customers? we'll speak directly to the owner of a new york car dealer to get his take. plus, alibaba picking the united states for the long awaited ipo. the stage is set for the most high-profile ipo since the social networking giant facebook went public in 2012. which brings us to this morning's squawk on the tweet. according to the "wall street journal," alibaba is a mix of amazon, ebay and paypal with a dash of google. what's the missing ingredient needed for world domination? tweet us @squawkstreet. your answers later on in this hour. hour.
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president obama addressing the situation in eukraine hours after new sanctions imposed on russia and the ukraine. steve? >> reporter: what i can't understand is why the markets around the world are so excited today. because talking to the politicians, the key politicians in kiev. they're all very, very concerned. i spoke to who could be the next president of this country. he's ahead in the polls. he said the referendum in crimea was a smoke screen. he said it's a position for the russians to take into next negotiations. he, too, is also going for the presidency. he said to me, the ambitions of the russians do not stop in the crimea, do not stop in east ukraine. they stop in kiev and with the whole country. i've also had a very long sit-down with the prime minister of this country and asked him what his options are. let's listen in. >> we have two options, the first one is a military, as
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russians started military invasion. so the response could be, military, right? the second option is diplomatic. even despite the fact that russians launched a military attack on ukraine, we can negotiate and try to find a diplomatic solution. do i support the military option? no. does someone support in the world except russia the military option? no. but if they move further and if they invade southern and eastern ukraine, this is the duty of every citizen of my country to protect and to defend its sovereignty. >> telling me there in a longer version of that he did not want a third world war. he said it's all down to russia now. of course, and what they do next.
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whether it's diplomatic or whether it's more aggression and it's the east of the country where everyone's looking. >> yes, and meantime, of course, vice president biden is off to some of those baltic states. and the president says he, too, will be in europe later in the week. thank you, steve sedgwick. let's go to chicago with rick santelli for this morning's santelli, change. rick, over to you. >> thank you, simon. i think the topic of geopolitics and what's going on in crimea is front and center. let's look at the lay of the land before we get to all of the issues. as i look at our ten-year note yield, it settled at 265, it's at 266, we're basically up one basis point after the referendum, which obviously, the outcome is less meaningful to pretty much everybody outside of putin's regime. let's look at something a little bit less intense. let's look at how many basis points we are above the lowest yield of the year in some of the related areas.
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in the u.s., we're about eight basis points above our lowest yield close for 2014. let's look at the bund, it's in their backyard, they're one basis point above the yield close for the year. the uk, three basis points above. in japan, about four basis points above even though it's only 58 basis points to begin with. so the factors are that we're trying to handicap, pretty simple, the geopolitics of the situation and the ongoing issues with china's slowing and the federal reserve. we do have a meeting this week and it's going to be very important. it'll be janet yellen's first press conference and many are going to be looking to hear about the forward guidance. basically, we were given a set of thresholds. and now that we're close, the thresholds are much less meaningful. are they really? when it comes to the unemployment rate, i think the treasury market is paying more attention, actually, and has been all along to the fact it doesn't really represent a lot of good news. some good news, but not a lot of
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good news. with regard to china, i think it's super important that the slowing goes on and there's potential defaults. actually, in my opinion, some of this is a good thing. they're trying to keep the moral hazard bar a little bit lower than some of the developed economies that went through the credit crisis. maybe the most important aspect of the geopolitical issue we're seeing is if you're looking for, you know, the humanitarian side, you're probably not going to get it here. probably status quo is what the markets would like even if status quo isn't as good as it was years ago before the georgia invasion. but one thing i do stress that is important, and that is watch what's going on with the russian stock market, the ruble. one thing the markets will pay attention to, for mr. putin to be aggressive, he'll have to have aggressive revenues and that's what the best aspect of the handicapping the region's
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situation may tell us. back to you. >> thank you very much. coming up next, will the state of new york following new jersey banning sales of tesla cars? plus, forget all the posturing over ebay and paypal. the best solution is for google to just buy them both says one analyst. he's here to explain later on in this hour. this hour. [ male announcer ] how can power consumption in china, impact wool exports from new zealand,
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welcome back to "squawk on
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the street." i'm phil lebeau, breaking news regarding general motors. the company announcing three new recalls as a result of its latest internal investigation. and a new charge that the company will be taking in relationship to the recall and the cost of repair for the most current recall that the company announced that one for 1.6 million vehicle. that charge in the first quarter will be for $300 million. that primarily is going to go to the cost of the repair for the ignition switch recall. at the same time, i mentioned gm announcing new recalls. total of about 1.45 million vehicles in three separate recalls. as i read through this, the biggest recall is going to be 1.18 million. buick enclaves, gnc gmc models. and the saturn outlook from 2008 to 2010 model years. a variety of issues involved in these recalls. but this is clear, kelly, as you take a look at the latest announcement from general motors. this is a result of the internal
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investigation and ceo mary barra wanting to get it out there as quickly as possible including that $300 million charge when it comes to the faulty ignition switch recall. back to you. >> thank you, phil. trying to stay positive, up about .25%. stocks are in rally mode today. dow's up 133 points. mary thompson on the floor ke keeping an eye on all of this. >> definitely a relief, kelly. as you pointed out, the dow up 134 points. keep in mind, though, well off the best levels of the session having come back about 70 points or so. pretty broad-based rally. we're starting to see a weakness in the reits right now. overall, strength in industrials as well as tech. they are leading the way. most of this on the heels of that crimean referendum vote over the weekend. it went as expected. there wasn't additional military aggression. so it's a bit of a relief rally. but we have some things ahead. of course, putin will be addressing on the russian
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parliament tomorrow. so traders are watching that. but today because there was no surprises, the sanctions the u.s. has imposed were as expected. we're seeing investors come back into the market. not only here, but abroad, as well. along with the strength that we are seeing in the u.s. markets, seeing strength in germany. of course, the russian market down for four straight weeks and the eem. we put that up there. that's the emerging markets etfs. they are stronger, as well, today. leading the sectors here today, i mentioned i.t. industrial also strong. industrial production numbers very good for the month of february. nice rebound from january's numbers. so this is one of the stronger performing sectors today. capacity utilization inching up, as well. so, again, the dow up 133 points, but certainly off the best levels of the day. baaing to you. >> thank you very much, mary thompson there. could new york follow in its neighbors' footsteps? autodealers pressing lawmakers to ban the direct sale of tesla cars. a move that if it's successful
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here would make new york the sixth state to put the brakes on elan musk's emerging car company. good morning. >> hi, how are you? >> where do you stand on this? >> i believe in the franchise laws. they help product us as a dealer group. our investment that we have a lot of money invested in our facilities and infrastructure. and the franchise laws not only protect us but also protect manufacturers. it's a partnership that has worked extremely well between the manufacturers and dealer groups. and i don't know why it should be changed. >> what should be protected here? why should you as a group be protected? >> well, if you set a precedent for anybody, then it could leave, you know, anybody could come in and do the same thing. and so far, any manufacturer that's tried to come in with an automobile has not gone that route. they've always gone the route where they want to set up
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franchises and do a smart business plan. >> but if a dealer. if a new entrant like tesla doesn't want to do it that way, it wants to sell direct and people want to buy direct from them, why can't that happen? >> on my side of the fence, i don't know why it couldn't happen. it has started to happen in part of the country. do i believe in it, personally? the answer is no. i think even as a smart dealer organization, you should have, you know, a dealer infrastructure, network of dealers, people that are going to work for you. so to help you grow your company. >> what's the case for consumers? this is ultimately what it comes down to and a way that a lot of the laws will be determined. it will come down to should the dealer model be protected because it offers a service for consumers or protects consumers somehow? >> the dealer model works for consumers because for several reasons. one, gets them a place to service their car, gives them a lot of places. if they're traveling and their car breaks down, they can go to another local dealer that's the same franchise, honor the
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warranty, have the proper parts to service the car. roadside assistance is supplied and normally funneled through a lot of the dealer networks to help the customers. it gives them an outlet, a place to go to. it's kind of a monopoly situation. they're probably paying more in the process. and that's what's on the table, isn't it? >> well, i wouldn't say it's monopoly where they're paying more in the process. i would say that the manufacturers when they set up dealer network, they have in their mind set what they're going to allow a dealer to make profit wise. it's part of what they were going to make anyhow. you have somebody that comes in and they're not discounting that car, they have a monopoly on they're controlling what the pricing is. >> sure. in jersey, the dealerships are paid $700,000 to the politicians, i read, and that's why, probably, they were supported at the end of the day. are those sorts of payments made in this state? >> that i do not know.
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i do know that in any big company or organization, will it be the dairy farmers, the automobile dealers association, we all have a dealer organization so if we need to discuss something or get a law passed or just, you know, we can go to one person, they can go as a group to handle that. >> sure. >> how that's handled, we do not -- that side of the fence. i'm in the business to selling and servicing cars and making customers happy. so that's my main goal. in turn, i also want to protect our investment. >> you make your case very well. thank you for joining us. doug wells. >> appreciate your time this morning. should ebay and paypal be separate companies? should they remain one company? who needs to buy ebay? "squawk on the street" will be back after this. back after this.
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coming up at the top of the hour from here at the new york stock exchange at post 9:00. one of the streaming wars major players is here joe clayton weighs in on the battle for viewers. plus, we're going to ask them about possible acquisition targets. and wilber ross is spending his dime on ipo, but what moves he is moving forward with. where does he think the silicon valley of europe is? and stocks are climbing the international wall of worry today after tanking last week. is the worst behind us now?
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it's all straight ahead on "halftime report" from right behind me at post 9:00. >> looking forward to it, thanks. carl icahn pushing for the split of paypal from ebay. in a note this morning, our next guest says instead, google should buy ebay and paypal. the senior analyst with robert w. baird. what's so interesting about this, you say it's a win/win because google needs this to address its own achilles heel. >> on one hand, mr. icahn has rightly identified there is value for paypal locked up inside of ebay. but coincidentally for google with commerce and payments becoming so much more important across the internet eco system, that is an area where google lacks leadership. in ecommerce losing market share to amazon in terms of search. and in payments, they've really struggled to gain a foothold. coincidentally, google could find a lot of value in buying both ebay and paypal and keeping
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them together. >> now, are you positing they buy both because of being one entity? or would this be a situation where it is spun off and then google buys it? >> well, that would be option number two, i think. in an ideal world, aggregate an ecommerce marketplace and compete more effectively head-to-head with amazon. and then also add the payments layer, which paypal brings. given google is a data company and very sophisticated engineering company, having that complete funnel all the way from ecommerce searches from the transactions and payments. that would be a power house combination for google. >> what do you think about this? the combined ebay/paypal entity on this back and forth? >> well, certainly, ebay has had its fair share of challenges. paypal is the crowned jewel, we believe. and it's a great question. because it brings up the point whether commerce and payments belong together.
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and, in fact, we believe they do. there is more, i think, justification than ever to keep the transaction and keep all the ecommerce data within one platform. and so, you know, we prefer to keep them together whether that's ebay and paypal on their own or combined with a company like google. >> and collin, how much exposure does google have to commerce generally speaking? do you expect them to ramp up efforts in this space as you argue, commerce and payments become more important. >> so google has a number of initiatives underway in commerce. the most recent is product listing ads, which is still an advertising format. that is a bit short of being an actual ecommerce marketplace like amazon and ebay. we think they are still inching towards that marketplace goal, though, and to get scaled there really quickly acquiring ebay would be a great way to get there. >> all right. collin, thanks very much for your time this morning. interesting case to be made for
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sure. >> thanks. >> focus on one thing and be the best at it. that's the motto of our next breakthrough company shaking up the sell on business with low-tech innovation. we'll tell you how it works when "squawk on the street" comes right back. no two people have the same financial goals. pnc investments works with you to understand yours and helps plan for your retirement. talk to a pnc investments financial advisor today. ♪
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♪ happy monday. well in a world of special treatments, cuts and colors our next guest is trying to disrupt the salon business by keeping it simple. let's find out why hot air means big profits. the brother and sister are the co-founders behind dry bar. great to see you both. welcome. ali, this was your idea. michael you said you western sure you get appeal. from personal experience, everyone gets the appeal of dry bar. the question is how big are you and how big do you want to be? >> well, we just opened our 35th store and about to open two more coming up here in long island, in rosslyn and sixth one in midtown, manhattan. we think there's a big market. i didn't understand it at first.
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when my sister pitched me the idea, i len her the money and it took off. we think there's a long way to go. >> ali -- >> a lot of women who need blow-outs. >> let's explain to our viewers who may not be as familiar with what we're talking about. wait a minute how is it possible going to get your hair blow dried is big business. can you explain why? >> well, it's really transformational. most women, you know, can't do their hair that well themselves. when you go into dry bar and you get a blow-out, even if you're going to a board meeting or hanging out with your kids for the day what it does for you and the way it makes you look and ultimately feel is pretty amazing. you feel like you can conquer the world if your hair looks great. you're kind of on fire which by the way your hair looks great this morning. i happen to throw that in. >> it's the biggest perk of this
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job. i'm terrible with a blow dryer. >> you're lucky. >> it's very rare that you see so many female anchors just so impassioned about the business. what are the finances are these franchises, sarah, another one of my colleague said she had been to the west coast and the experience was exactly the same. i'm assuming they are not franchises, they are franchises. how are you funding the expansion? >> you know, when we started out and these things are very expensive to build we did start franchising. seven of our 37 locations are franchise. but when we realized that the experience we were creating and quality control was spore and we realized there was capital out there with the returns we were seeing on invested capital, fortunately we were will be to raise money pretty quickly and decided to focus on company growth. >> does that haeng the trajectory? who are the investors.
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it private equity? will it list? where does that take you >> we actually just hired piper jaffery. we have raised a lot of money almost $30 million mostly from private equity. we started out with friends and family and we have two industry heavy weights who were early investors and sit on our board. >> when people see a good thing they jump on it. that's not just customers that's competitors as well and there are a lot of chains now that are doing this, teen existing salons are starting to get it. how do you protect yourself and make sure you stay the biggest if that's what you're looking for in terms of size and as others grow into this space. >> we create an experience at dry bar. you know what some of our
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competitors are doing or salons putting up they are doing blow-outs or doing them for less, it's so much more than the blow bar at the dry bar it's the whole experience. it's the way we treat you, the customer service. you're watching your chick flick while you're sitting at the bar getting your hair blown out. it's all about the overall experience, something we captured. we've done it very well. >> we also have over 2,000 stylists and the amount of time and energy it takes to train, retain 2,000 20s something is a competitive advantage. >> i'm a long time stylist. i'm the toughest critics when it comes to blow-outs. we put in an intense program to train our stylists to do it the same way. >> thank you so much for exploiting the business this morning. we'll keep an eye on it and kermit the frog can ring the bell here this morning it may not be long before we see you guys here as well.
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>> we'll be right back. [ female announcer ] who are we? we are the thinkers. the job jugglers. the up all-nighters. and the ones who turn ideas into action. we've made our passions our life's work. we strive for the moments where we can say, "i did it!" ♪ we are entrepreneurs who started it all... with a signature. legalzoom has helped start over 1 million businesses, turning dreamers into business owners. and we're here to help start yours. [ banker ] sydney needed some financial guidance so she could take her dream to the next level. so we talked about her options. her valuable assets were staying. and selling her car wouldn't fly. we helped sydney manage her debt and prioritize her goals,
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so she could really turn up the volume on her dreams today...and tomorrow. so let's see what we can do about that... remodel. motorcycle. [ female announcer ] some questions take more than a bank. they take a banker. make a my financial priorities appointment today. because when people talk, great things happen. make a my financial priorities appointment today. ido more with less with buless energy. hp is helping ups do just that. soon, the world's most intelligent servers, designed by hp, will give ups over twice the performance, using forty percent less energy. multiply that across over a thousand locations, and they'll provide the same benefit to the environment as over 60,000 trees. that's a trend we can all get behind.
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sometimes they just drop in. always obvious. 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. let's get right to it. "squawk on the street," if alibaba is a mix of amazon,
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e-bay and pay pal with a dash of google what's the missing ingredient needed for world domination? rick tweets, vladimir putin as ceo. emily tweets a selfie section. and tim tweets espn. okay. that's food for thought as we watch this saga unfold. >> that in turn brings us to the end of this morning's program. from all of us, thank you very much for watching. let's hand it over to scott with the "halftime report". >> thanks so much. good to see you. welcome to the halftime show. here's today's game plan. streaming wars, dish network ceo is here live on his big deal with disney and the battle for your living room. monster ipo as alibaba plans to list in the united states. what's your best way to win? >> wilbur's world after crushing the cold trade billionaire investor wilbur ross is back on where the next great opportunities lie. >>


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