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tv   Squawk on the Street  CNBC  February 5, 2015 9:00am-11:01am EST

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the lighting specifications you used to use, do you? >> long story. >> thank you for being here. >> we should say, by the way, the steve jobs pick is out in october. we should talk about that. >> join us tomorrow for jobs friday. see you. bye. ♪ good thursday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer david faber at new york stock exchange. the whipsaw market action continueses. premark higher as we have a $15 billion pharma deal faceoff between germans and greeks. slew of retail earnings. oil's trying to climb back above 50 after the biggest one-day sell-off since november yesterday, 49.50 last check. ten-year yields above 1.8. coming back after a steep sell-off on comments from the
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ecb regarding that waver. jobs number tomorrow. >> $15 billion deal in pharma pfizer buying hospira in all-cash acquisition. >> soft outlook for michael kors has the stock reeling. keurig, l brands and dunkin' moving as well. tomorrow earnings after the bell from twitter. interview with dick costello tomorrow on "squawk on the street." futures on the rise as stocks look to shrug off concerns on greece. lost on the news ecb greece couldn't use bonds as collateral. claims raise 11,000 to 278 but the increase less than expected estimate 290. it has been 15 years since we've had two consecutive weeks below 280. >> wow. look, the cross currents here
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327 yesterday the market looked like it was going to have not one, not two, but three maybe plus 200 dow days. a beautiful thing, setup great. one headline out of europe and kiboshes the rally. headlines 330 and 4:30 headlines get better. down day to up day. back in that european miasma driving everything crazy. in the end, there will be a deal. but -- >> do you? >> i reiterate the greeks win. >> greeks win? what sense? they sort -- get their swap? >> i think they get a different kinder againler germany. what makes me think that? 4.2% industrial bookings last night in germany. one of the reasons germany's -- >> on an estimate of 1.5. >> play nice. german economy is going to be the strongest economy in the western world in and of the three months because of the decline in the euro.
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it's extraordinary what's happening in germany now. i don't know if they can handle the selfishness. i know how they feel about balance budgets but doing so well right now. >> do i want to buy german exporters? assen investor? is there an etf for that that. >> an etf for your walk from west side to here overnight. there is -- look zieman's did not have a great number. because of the currency so good you will find some terrific buys over there. and i just think that it's just germany's going to have to relent because it's too good. >> good retail sales yesterday. you mentioned factory orders here. meeting between the greek finance minister and his german counterpart is -- did not go well, right? basically said it was a terse exchange agreeing disagreen this is going to go on. >> yes i think, as it goes 0, absurdity of the austerity position versus a rich maybe the richest country on earth, is
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owing to start dawning on right wings and these countries. remember europe is about trying to avoid fascist takeover, civil unrest avoid the right wing -- the right wing parties creating the coalitions and watching this stuff. everyone's -- i hear people say, wow, portugal they're going to re-evaluate. no, it's not about that. it about the hard right, return of a fascist party, recognize the germany stance will create social unrest. >> there is a concern, though if in weren't enough to work out and greece did leave the euro, what would that mean? people are getting paid nothing to hold italian ten-year paper, spanish ten-year paper. i don't understand it. did you see nestle's bonds yegnegative yield? let me pay nestle to hold my money.
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>> why is gold attractive? better than negative right? >> it's not -- treasuries are such a bargain. >> i don't understand negative yields. >> no, look -- >> it's negative two basis points on nestle paper. i want to pay for that. >> yesterday at 3:34 there's a wave of future selling because of such confusion. as soon as you hear confusion you hear about the nestle's bonds, german bonds. i come back stuck with companies that report and companies reporting ung believable number including companies doing a lot of business in europe and there's a big change. you know what's incredible this bric things obscuring a turn go on in japan. a big country. we stopped talking about japan in a long time. >> talked about toyota and sony. >> we did. >> i'm seeing a major turn in so many parts of the globe. seeing great numbers coming out of taiwan numbers out of korea. these are not small places.
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these are not small. >> china obviously loosen up bank lending or loosen up reserve requirements to try to get more money out there. >> i think that -- look fighting -- i guess what i'm saying fighting central banks. some of the collateral damages that you're getting up in nestle bonds. but when you fight central banks you end up losing if you're a stock guy. if you're idealing central banks out of their minds. a personal banker jpmorgan never questioned any gains of any mutual funs that i have. never -- that's because of greece. >> buy yourself another house. >> the jobs number of course tomorrow. you still have a chance to nail the number. tweet us predicts for nonfarm payrolls for january use #nailthenumber. receive cnbc ear muffs autographed by the cnbc gang and have one minute until the jobs number friday to tweet us predicts.
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best of luck. david, m&a action in pharma. >> indeed we do with it deal of course, that we're talking about, pfizer agreeing to buy injectable drugmaker hospira for $90 a share in cash about $15 billion. pfizer expects the deal to significantly enhance its global established pharma business, delivers about 800 million, cost savings by 2018 both expect the transition to close in the second half of the year. it's interesting how often they'll see things from -- asking do they have this in china? if it needs the antitrust regulator in china, we assume it's going to take a long time because deals get hung up in china over antitrust. but, jim, from the strategic point of you view talked to a few people, on whaund theyone hand they get it, the other they don't. >> 21 times ebitda it is accretive but a company where
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ian reid talks about innovation. not taking you down the road of innovations, a generics company. >> infusion technologies, please. infusion technology. >> perhaps at some point, idea of biosimilars creating generics for biotechs will be -- could be considered a growth industry. let me tell you -- >> what i thought. >> -- people speculate what this is about. >> spend-off -- >> pfizer not using foreign cash which you know remember the astrazeneca thing? >> sure. >> the same advisers on astrazeneca. i mean -- >> really? >> guides. went so well there. but on this idea of the breakup, which they had not said they were going to necessarily do but already separated out, use well know established products business which includes likes of lipitor and contributes established products of 20 billion of a $50 billion revenue company, maybe more but a huge percent of revenue but going down.
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when pfizer does decide to split the company, two years hence, going to have the established products business sent out to the market. give it some sort of a growth even if it's a little growth it's going to be contracting, it's like a melting iceberg. maybe they include this business with that spun-off business and makes it more attractive. >> i thought brilliant. i thought this is stage one, stage two. >> great. making acquisitions to spin them off in two years? does that make sense? >> no growth and buy a company's that accretive, two different pieces might appeal to people we'll think about it. covidien spun off of tyco, medtronics bought it. >> hospira itself. >> right. >> hospira. abbott. cardinal health spins off. big conglomerate medical companies, pharma companies spend off. bristol-myers did the same thing. spin off businesses and then get taken over. you say, look at the all of the
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wealth abbvie created. >> established products business -- a pfizer spin -- but pfizer is not particularly attractive. will spin off cash flow a lot of margin. lipitor, done have a sales force, it's printing money for those who buy it but keeps shrinking. >> i said why didn't johnson & johnson buy it? able to bulk up a division and sell it. honestly, pfizer's going up there's a sign of -- it's a proof of life. buy. >> they've had -- hospira had trouble with the fda over their plants. >> right. >> manufacturing. >> who hasn't one time or another? i haven't. >> but yeah to the extent they're buying something though it's 21 times growing at a decent rate and it's accretive in a handful of years, using u.s. cash. >> interesting to see how much they have left there. most of the deals we expected pfizer looked at would have been access foreign cash. >> true. >> all reason behind the
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astrazeneca screwup. >> i sat down with mr. falk at kimberly clark. hyh, a year from now, like all of these, talked about the notion of discrete companies that have anything in the hospital people want particularly hospitals all want to deal with one company. affordable care act made it there's an explosion of population coming. they don't have a purchasing manager. pfizer will be a company it deals with. we are under estimating these behemoths. medtronic we interviewed the ceo -- impressive fellow i thought -- but that is a juggernaut. covidien, one stop shop. they want a kroger. they want a kroger in health care. >> all right. >> hopefully you're not -- anthem, for instance with the hack. >> holy cow. >> fire eye, come here i need you. >> they have hired fire eye. >> just -- pfizer eventually,
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they spin off established products and have a midsized consumer business, ecology vaccines and pharma. it's more shrink to grow. >> you want innovation new drugs, breakthrough technology. that's not what pfizer's about. >> not what pfizer's about. >> it's about sales force. >> it is. >> not salesforce.com. sales force. >> capital. >> he want -- he's stuck in the era when they invented viagra. he remembers viagra. >> back in the '80s. >> yes. >> viagra was '90s. merck was everything. >> merck had nevacor. >> those were the days. >> those were the days. >> if you want franchises and blockbuster. >> going to gilead celgene -- >> no. it's done. did you hear what happened. >> gilead and abbvie? >> no i said disney's blockbuster blockbuster. the day of the blockbuster
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biotech ended with the price cut. >> from lipitor to "frozen." >> will ferrell, i love that man. impressed watched will ferrell do the lip sync. >> i haven't seen it. >> kevin hart's good too. very funny. >> when we come back news involving twitter ahead of tomorrow's exclusive with the ceo, dick costolo, 9:00 a.m. shares of cigna, tripped since the ceo in '09. get his perspective on the anthem hack attack. haven't gotten to retail. ralph lauren esty, under armour armour, more "squawk on the street" in a moment. can data help cure a disease? the right treatment for you is out there. the problem is some of it's in this lab. some of it is in her head. some of it's in this new journal. and the rest of it is in your personal medical history. ibm watson can not only read this
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google to boost online presence. tweets visible in google's search results as soon as posted twitter ready to report quarterly reports after the bell. join us tomorrow ceo dick costolo here on squawk on street. only closed above 40 two times since thanksgiving and a couple bucks above that today. >> i thought the timing interest. made me feel like wait a second, maybe the quarter's not going to be that good. this is gigantic. i was talking about the staff this morning, i said wow, you mean like really kind of what the holy grail, what i wanted.
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i look up something in google and i want to follow it and i hit. and people said that that was kind of there already. >> they had a prior deal that former cfo -- coo let expire a few years ago. >> really. >> yes. at the time thought the data licensing rebvenue was not as important as keeping control of their stream. >> don't worry about monthly users. takes the narrative away. positive. congratulations on the interview. that -- he's the man of the hour. i've got to tell you, look monthly average users are going up and this doesn't, then hey, all is you know -- >> all forgiven. is it that simple jim? is it that simple. >> that's all it takes? >> yes. >> take-two had a great quarter. he delivered, delivered, delivered. now it's like he's one of -- i'm saying that -- truth in reconciliation, remember who did truth in reconciliation?
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>> no. >> i remember reconciliation when the affordable care act was being passed. >> i don't know where you're headed. tell me. >> south africa, after a apartheid. >> with mandela and his name -- bishop. >> de klerk. >> f.w. de klerk. >> bishop tutu. >> who you -- >> i met bishop tutu. the guy -- he was dynamite stand-up guy. >> pretty cool. pretty cool guy. >> jokes a routine. i mean, he's got to have a rim shot. >> telling jokes? >> i pattern myself after him. >> retail michael kors down on fourth quarter guidance. overshadowing better than expected q3 results. l brands home of victoria secret upping regular dividend 47%, special dividend of $2 a share. but on kors discussion if you
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strip out fx maybe the comps are in line the guidance though -- >> we've seen 90 80 forget about it. you want 90 80 think of the 90/80 guy, l brands, still there, works every day. people say the mall is a dead place. the mall's not a dead place if you're bath and body works, victoria secret. numbers are incredible, once again. this has become the most consistent mall story. victoria doing well. i am -- leslie wex ter was the dean of the mall and still is. great man. >> still is the dean of the mall. >> by the way, charitable. go out to ohio state. wow. >> retail circles, call costco and lb mr. and mrs. mrs. consistency, to some degree. >> deserving. >> after ralph lauren yesterday, worst day as public company, and after tiffany and kors today, is
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gatsby index taking a hit. >> i was struggling last night, i had -- i had brunswick on and orders are through the roof 27% numbers, plus europe. it's so hit or miss. how could -- how could -- there's a length -- year-long waits for nice boats from brunswick right now. you can't even get them. so i just think apparel's not translating, rich apparel's not working but when it komtcomes to boat, they'll get back to levels we used to have in '90s. >> interesting. >> gatsby index is split. i went -- when you look at shake shack, that's a gatsbyburger. >> restoration guiding to 24% sales. >> friedman delivers it again. we're seeing a bifurcation between those executing well. ralph lauren poor execution. and those who aren't. i'm struggling with the notion
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the index has to be blown up. too hit or miss now. brunswick extraordinary last night i cannot believe the wait list. list. opening a second factory in hungary, nordic demand, strong. >> easier to afford a shake shack burger than a boat. >> 17-foot boston whaler. >> yeah. >> you know, you go to shake shack enough, you can save up enough. it's yes cheap. >> yeah. >> inexpensive boat. >> still put the kids in intertube behind it. >> where do you keep that? do you know where it is. >> right now at my -- it's -- my friend joel's house. >> somebody else's house? >> yes. >> we should shoot video of us on the boat. good tape. cramer's "mad dash," count down to the opening bell. a look at premarket as the dow of course lost that midday rally on oil's reversal. see what happens today. good open setting up. back in a moment.
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♪ one more time♪ ♪ less than six minutes barch the opening bell. "mad dash." try to do two. under armour. >> you know under armour as arnold told us kevin klein said that on the under armour conference call, taking on nike. a couple of acquisition, spent more than $500 million to become 120-million network of fitness and a new -- this guy steph curry, he's wonderful to watch. >> real deal.
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>> and their shoe comes out next week, part of the nba all-star game. a lot of momentum. keven terrific on "squawk." bears wait for him to trip up and he keeps setting traps for the bears. he did it again. great story. >> you want to get back to keurig keurig, i guess. >> a tough within. you're going to say, candidly i like cure rigkeurig but one of the worst conference calls. some people kind of new. one person who told you to get out, caroline levy she's the dean. >> joined us the other day. >> she was fabulous. fabulous when she was on. she told you to sell it. that was a good call. going to be down ten. i still remain -- obviously this is where you should have sold -- but i believe the worst it gets notca-cola buys them. iteration not that good. this was a bad quarter on so many different ways it's going
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to be a study in how not to run a company. >> wow. >> it's that bad. they admitted it. >> how not to run a company? >> they said boy, did we screw up. like their honesty. >> need to recognize what you did wrong and fix it. >> i think they're doing that. i'll give them credit. boy, a -- it was horrible. i felt bad for them. they didn't -- they didn't give it. >> i don't think they did. i felt bad for seattle fans. opening bell coming up after this. a lot of stocks. we haven't gotten to yet. grace is split in two. ipg getting into a deal with elliott. so many things to talk about.
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you're watching cnbc "squawk on the street," live from the financial capital of world. opening bell 45 seconds. news flow continues. good economic data out of germany, factory orders. as jim mentioned, up 4.2 on a 1.5 estimate. green chutes as jim would say, out of at least german economy continue to show themselves. the stand-off between the greek finance minister and the german finance minister continues though those talks are likely to go on and be as testy as they
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have been for weeks or months. and of course all earnings that we barely gotten to twitter tonight, gopro tonight, linkedin buffalo wild wings. going to be a crazy day. there's the opening bell. and a look at s&p at the top of the screen. big board, fashion brand vince, highlighting new york fashion week, which starts next thursday. over at the nasdaq american heart association honoring the go red for women movement. a lot of people you'll see wearing red tomorrow. we mentioned green mountain jim, with david eight telestrate telestrator telestrator. dunkin' missing by a penny, 46 cent but was hiked the dividend. dunkin' and keurig missing. howard schultz on the cover of "time" magazine talking about not just the success of starbucks but whether he would run for president. david geffens told him he should do it. >> look i'd be -- i think howard feels he's on a mission to make it so he's create the
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grade world company that's the great face of capitalism which i think he has succeeded. dunkin' brands like the dividend boost everybody don't mind the comp stores aren't that good. it just -- it's one of the few places that's been getting a pass. starbucks, kind of blow it away, the stock continues to trade higher. starbucks, disney, a couple of the companies that have become3m --s distinguished themselves as courtrporate portfolio. consistent growers, 3m starbucks, disney hire multiple on higher earnings which is healthy. >> few excuses on forex or weather or anything else. >> by the way, under armour didn't mention once anything about forex and moving aggressively internationally. stock should be up more. >> moving aggressively internationally, netflix apparently going to expand to japan this fall as european expansion appears to be on track or ahead of schedule. >> goes higher. just goes higher.
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>> up. >> just goes higher. look that's -- that's the case of -- that's a sign up play. that's what -- you know that from the last quarter, new programming and sign-up play all people focused on know it does lead to greater economist scale and a lower -- it's a way to be able to figure out they're going to make a lot of money. i think they'll make a lot of money. >> very well may. >> raise the price, like amazon like costco. they can raise. >> shrink to grow in full force at wr. grace. >> shrink-wrap, splitting into two. new grace, catalyst technologies and materials, technology business segments and new gcp, what they're calling it comprised of grace's construction product business segment and derek's packaging business, tax respin, shareholder, expect to complete in 12 months. stock up over 10%, w.r. grace. >> a great company. always been a great company.
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once a cruise line had many different divisions, had as asbestos problems. doing good things for shareholder. like the break. >> ipg, interpublic group, recall in a fight with elliott. but this what is we're seeing lately. settlement settlement settle meant when it comes to activists. today it's ipg with elliott. three, new independent directors, john miller he used to run aol, tall guy. >> yeah. >> nice enough fellow. >> and two current directors will retire from the board. so you know elliott in here, they were a part of the process that brought these directors to the fore. a quote from jesse cohen, guy at elliott who helps run activist stuff, particular focus on technology. but what's interesting to note how many settlements, in the
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midst of nominating window for many companies, meaning it is open for a month where shareholders can nominate directors. and i think what is -- what is most reflective of the current environment when it comes to activism, nobody wants to fight except dupont. >> dupont. >> except dupont, nobody wants to fight. because it's so distracting, takes so much time and effort not to mention shareholder money. >> yes. >> and activists don't want to fight, especially three board members when asked. dupont only one, interesting to watch. >> i thought the guy who joined decent background again, guys seem to have decent background. look bill johnson added to the board of pepsico. >> yes. >> did a great job at heinze. that's not a bad idea. >> no. i told people at doourp,upont, look, the slate they're proposing -- >> is not a bad slate.
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>> not a bad slate. those are good people. >> nelson amongst the four directors they proposed for dupont. interesting to note first time in pepsi that it was not a trian, it was not nelson or darden. >> the dow chemical board, you know, ray millchovich, miller turn around. those guys report in a weird way. additions are not wackos. they're like guys you know what? i don't mind. the say when nelson went on the board of heinze johnson liked it. >> i'm not sure i -- rosenfelt likes having him on the board. >> it's not about fun. >> no. >> you have a club somebody comes in you done like them but what do you do? it's a public company, a public club. hey, nelson owns a lot of dupont. i think it should matter. >> it may. but right now, still fighting.
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>> amongst the other names working today, based on either guidance or earnings estee lauder, snap-on, good results. >> love snap-on. >> allergan 217, beats by 34 cents. people saying they should have asked for more. >> no no no one believed that they -- i mean no one thought that there wasn't a vicious overpay going on there anyway at actavis. david pyott came on mad money over and over and said we can do this huge number, and everybody said it's not true it's not true. he said, no we have earnings power. only one man believed him, the ceo of actavis. ceo of actavis was right. >> so far. >> so far? >> so far pretty good. pretty smart. >> what do you have to win -- you know what? so far the patriots are good but let's see. >> it's over though. i disagree with that al le gory. >> deflate-gate. >> talking about the season as a
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shareholder. yes, it's been a very good ride. >> a -- >> let's see how the integration goes. see what the next deal. >> numbers at allergan unbelievable. i've been a huge supporter of that team -- that team -- at snap-on, how many times does he have to tell you we're not just a tool company, we're a solutions company. snap-on is going higher. 8 billion company going higher. it's just that they're not promoter because they're from wisconsin. >> s&p 2050 rather own s&p or the russell here? >> wow. geez. i think i like -- i still like the russell because i still think there's too much turmoil overseas. >> i had a feeling you would say that. >> give it to russell. >> let them take it. >> right. >> by the way, guys know we have seen a lot of m&a last couple of days. smucker's deal between the deal this morning, potential deal overseas mall corp acknowledges it's potential talks. >> that's a russell thing, too.
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>> the -- staples crushed yesterday. people saying antitrust here it's one to two, a bridge too far. today it's flat up two cents. seemed to have stabilized in number one sector for u.s. m&a so far this year health care. >> health care. >> 25 billion. this time last year 16 billion. >> we'll see, remember when rich kinder said we'll see a lot of deals in oil patch soon. >> i'm hearing that. >> are you hearing it too? new money that blackstone's raising. you'll hear deal after deal. >> health care as carl said those are areas i'm hearing. and i think there's more coming. >> hard to be as bearish as you'd like to be off of the macro when you know companies are getting together. i have been trying to do about the piece, the break up value, companies combine. give me baxter break up baxter. you feel like -- you feel
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energized by it. >> yes. somebody doing something. let's get to bob pisani on the floor with the dow up about 90. bob? >> a lot of things going on. greece, still in turmoil, hammered for the second day in a row. look at grek the etf for greece, weak today. and european central bank saying late wednesday they won't accept greek government bonds as collateral. that's causing an issue there. stocks and earnings today we heard from autonation yesterday great numbers from group one automotive today as well. i think it's very important they did well. they get a significant part of sales from texas. it's supposed abslowdown there. we didn't see evidence of that based on the earnings. i think very good news for that. and it's not just the car sales companies. guys selling parts, o'reilly automotive easily beat numbers posted 6.3% comparable sales force gains. what they're doing that
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companies are doing, still aggressively buying back shares. take a look, 2011, 140 million shares outstanding. today 102 million shares outstanding. that's like a 25% reduction in the share count. that's a major driver of earnings growth and it's going to be another driver of earnings growth in 2015 as they gave their guidance. as for michael kors my attitude on michael kors give them a break. do you know how amazing this company has done? yes, they -- guidance was disappointing but threw in the dividend here comparable stores below expectations. this is the lull of large numbers they're encountering. 20132.1 billion in fiscal year 2013 fiscal 2015 going into the fourth quarter, fiscal 2015. 4.57 billion. doubled their revenues in two years. what kind of company would not kill to have a doubling of revenue in two years. it's the law of large numbers, part of problem. l brands knocks the cover off
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the ball. secret sauce, millennials love them. victoria's secret up 16% in body works, pink doing well. price points reasonable. rotating new merchandise. they don't promote as much as everyone else. the company's one of great companies in retail. finally, i want to show you the floor i'm on now. the new options trading floor of the new york stock exchange. we talk about the fact that the cme is closing some futures pits at the nymex and in chicago. this floor, just opened a couple of week ago. it consists of options traders we used to call the old american stock exchange. they trade equities options including major equities apples googles of the world, russell 200 index options. it just opened. options trading is different thain futures trading. options trading is complicated, buying lots of puts selling lots of calls, vice versa. a lot of complicated way trades are made. that's the difference between
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options and futures business. options trading floor business is still continuing to do very well. and you can hear the volume pick up around here. days walk in here all of a sudden people start screaming at each other. it's just like the old days. not trying to say it's going to make a roaring comeback but the floor-based options business here at the new york stock exchange quite viable. back to you. >> thanks very much mr. pisani. yesterday fox reported earnings after the bell and they actually were a beat stock moving up after-hours until they had their conference call. as jim will tell you. the call important part of earnings release and in this case that was the case because during the call they lowered guidancen it's funny, fox has been asked a lot, hey, can you keep that 8 plus billion ebitda guidance that you have? can you keep it? they wouldn't capitulate. early in the year they were at
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a media conference though didn't present but they certainly indicated hey, seeing headwinds from the strong dollar. but we're going to be all right. well, they capitulated last night in the call. citing 200 million as a result of incremental currency impact and that stronger dollar. deconsolidation of shine remember that was elizabeth murdoch's company that they bought? that's going to cost 100 million. lower organic trends maybe mostly made up of weaker advertising contributing $300 million decline from where they had thought they'd be. no longer at 8 plus billion or 8.1 billion for fiscal year 2016. now in the mid 7 billions. stock's adjusting. you can see there, down 5% this morning. of course, 10 billion in cash. you may recall. and there is going to be that call out there. why aren't you returning to shareholders? why aren't you buying more stock
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now, perhaps that given is lower at this point. i reported some time back value, looking at an opportunity to get larger. on the call itself a couple of people focused on this particular comment from chase kerry, the man who runs fox, talking broadly here about that transition to digital that so many investors and media are focused on whether viacom on fox or time warner or discovery. turning to the broader industry difficult transition continues to be a glass half-full story for us the movement of advertising dollars and shift to consumer viewing going to continue. i think it's fair to say this trend recently has been a bit faster than many expected. he went on to say, either side is, of course we'll benefit from this eventually. but this the larger question, jim, for so many media investors, if you will right now. how much of the stuff is moving to other platforms that we don't
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control and aren't getting paid for in. >> incredible to go back over disney and not have it come up. >> not have it come up. a fallback excuse when you aren't quite there? as opposed to the real trend? >> the fact is disney's 90 million names for em sp in fantasy football. a digital -- he'll get to it he'll get to it when he he can make enough money. these guys are realizing, wow, we don't have enough business away we can't not focus on it. iger done have to focus on it everything's working. when not everything's working you realize, this is killing you. you have to have a strategy. disney has a strategy, theme parks, create test. >> right. this morning impact, muted viacom down and fox leading the pack. rick santelli at cme group in chicago. rick? >> good morning, david. of course 8:30 eastern we had date tap nice to see it dropping
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but it doesn't seem to shock anybody. productivity on the weak side for sure. and if you looked at trade deficit, bigger than expected. as you look at intraday of tens you'll see high yield was moments after the data was out. it's dipped a bit. but we are kind of turning into a range-bound commodity here with with regard to rates. look at two-day chart, you can see that. open the chart up year to date 1.71, low yield closed on 15. 1.86 intraday low from the wild october 15th defining the market of late. 24-hour bund chart, rates higher but not huge. but we continue to see the spread between two hovering in the mid 1.40s. all of the following chart a day before the big 22nd of january ecb meeting. look at bund yields you can see how they behaved. they haven't done anything extreme to the downside seemed like it was all priced in. look at euro versus dollar and euro versus yen.
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consolidation mode. maybe the markets are waiting for actual qe in mar of or lead-in fully priced a lot of the issues. another issue that will never be fully priced you know the cbot start its first trade 1848 167 years ago. chicago mercantile exchanged butter and egg exchange opened 50 years late 1848 at 50 1998. futures trading going to cease in the pits some time between now and july. but it should be no surprise let's open the camera up here. here's the futures for the eurodollars, 90-day rate not the currency. and definitely, die-hards here but it's pretty empty. follow me. opposites pit for eurodollars you can see what a difference. this dynamic has been around for quite a while now. vibrant in the options pits. look over you'll be able to see the option pits for the fixed income markets, futures, the
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two-year, 5 year, 10 year, 30 year up in higher zones there option pits going to remain many people say how long. only thing i can answer 1997 when i was in -- the floor for the life ceased trading with regard to live people and the notion then was that the cme and chicago board of trade going to be on its heels, that was many years ago. these aren't multiple listed contracts and the options unique intellectual property. in my personal opinion, look for these contracts to remain vibrant but of course everybody it is a sad day in chicago. great industry. i was enamored with it when i first saw the trading floor in 1979. i don't think i've ever been the same since. back to you. >> it shows, rick every day. we love your passion as always. rick santelli in chicago. when we come back rules for internet. commissioner is going to weigh in on what the agency's chairman calls the strongest open internet protects proposed by
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the fcc. remember to tune in tomorrow exclusive with dick costolo 9:00 a.m. eastern. dow up 111. on track for its biggest weekly gain since the first week of the year. ♪ there's confidence.
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a look at the dow. components in the green, led by pfizer on the deal this morning. laggards include merck. dow 25 points away from break even for the year. we'll get "stop trading" with jim in a minute. opinions. there's no shortage in this world. who do you trust? whose analysis is accurate? how do you make sense of it all? a simple unbiased stock score consolidated from the opinions of independent analysts... is that too much to ask?
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xfinity customers add xfinity home for $29.95 a month for 12 months. plus for a limited time, get a free security camera call 1800 xfinity or visit comcast.com/xfinityhome. time four cramer and "stop trading." >> some companies get it right a slew that were a crowd and started shooting down. they had incredible accelerated revenue growth 75% plus. the stock crushed numbers. if ibm, which says they're serious going in an alitics in a big way, which they are good at they have to buy tableau software. but that's how ibm can get mojo. that's my advice to great people at ibm who are putting together analyst meeting. buy tableau, truth in
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reconciliation committee meets, congratulations on interview tomorrow with dick costolo. >> questions from you? >> he has none i'm sure. >> yes, i want to know about -- he has an interesting piece a read he hasn't been able to get. >> the haters. >> i want to give a chance to block hater whose come back repeatedly with the same names over and over. i can give them a list who does it. if he did that -- >> some memos reported from the verge are interesting, embarrassed they haven't been able to do a better job. >> i've got to be sympathetic. that is my number one beef in my other life my work life. home life i got a lot of great stuff happening. >> what's on "mad money" tonight? >> okay. adco. >> my -- made money on the sales. >> irwin.
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>> natural organic remains king and greg waters blowout number idt, don't do tv i'm excited about the show. and i'm excited about your interview tomorrow. i think -- twitter, my daughter and i tweet for full day, she loves to answer -- >> let sent that person a nice note. >> you never considered leaving never taken a break, never said enough. >> never. people that come in against me, you have no idea who you're dealing with. >> jim, see you tonight 6:00 p.m. eastern time. i am never getting married. we're never having kids. mmm-mmm. we are never moving to the suburbs. we are never having another kid.
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♪ welcome back to "squawk on the street" i'm carl quintanilla with sara eisen, david faber at the new york stock exchange. simon hobbs is off. s&p back to 2054. last week one of the worst weeks, in fact the worst week since november. the gains this week on the dow, in percentage terms, go back to early 14 even in some cases down to 2013 to see a week as
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good as this so far. oil a big part, up 3.5%. >> michael kors deep in the red, names like l brans and underwarmer trading higher. which retailer watching today. plus keurig green mountain seeing steep losses after a big sales miss. much more on the problems that that company is facing. miami real estate on the comeback trail, construction resuming on multimillion dollar condos but will the strong dollar derail all of that. coming up later on "squawk on the street," in the wake of the massive data breach at the health care company anthem we'll talk to the ceo of cigna, his take on cybersecurity, how to procustomers and earnings. >> big stories on the minds of global investors. ecb a hard line on greek debt putting pressure on the country's new government. ukraine raising key interest rate to fight the financial crisis there. michelle caruso-cabrera in new york with more.
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>> out of ukraine, we could be on the verge of a big moment in the stand-off between ukraine and russia because we just learned this morning the leaders of france and germany have announced a surprise trip go to kiev today, moscow tomorrow they're working on a plan to put the military stand-off in the eastern border of ukraine with russia to an end. that could be huge. let's see where they get. in the meantime john kerry, secretary of state for the united states, already in kiev today. he met with the president there. he arrived on the day that the ukrainian currency crashed. why? ukrainian central bank said we're not going to defend it any more. instituted a huge rate increase to fen off the move that you can see on the chart. boy, it was painful. doing this at the behest of the imf opposed to fixed exchange rates and they need a new bailout from the imf. let's move on to germany versus
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greece. the financementster of greece meeting with the finance minister. shoible said we agreed to disagree. varoufakis said, no we didn't even agree on disagreeing. so clearly, the two men are at odds. nobody surprised about that. but once again, varoufakis committed to paying the country's bills. >> let's be clear about one thing we shall endeavor to do everything in our power to avoid any default. no doubt we are going put this "d" word out of court. >> "d" word out of court. investor court on banks punishing today, news ecb saying they're not going to accept greek bonds as collateral. it's more expensive for greek banks to fund themselves. you kecan see what happened to the stock prices. european stocks might be
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taking a hit. on the domestic front, three major indices in the green, big m&a activity has the dow on track for its biggest gain since the first of the year. joining us deutsche bank's economist and the head of cross asset strategy at rbc. good morning to both of you. joe, you've got this waiver thing yesterday, throws everybody for a loop right? the greece tension. and then german factory orders coming in multiple of expectations what happen do you do with europe now? >> europe you have to assume there will be a deal brokers, there will be a solution. europe may surprise people in terms of growth, given how pessimistic investors are. the point is u.s. is benefitting from low rates in part coming from europe. the fact that energy costs are lower, so from a u.s. perspective, things look great. that's why our markets have recovered strongly the past week. >> would you agree, jordan? we don't have to worry about greece running out of money bias early as march and then the
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possibilities of what it might look like and the systemic risk? >> i'm not going to agree. understand that what's going on is a rational economic backdrop in negotiations. but the markets themselves aren't always rational. if you look how the equity indices performed in europe not only outperformed the united states which means ecb action on quantitative easing is overcoming the concerns about greece. however, if that starts to shift, the market starts to get fearful. look how emerging markets are trade, strength of the dollar, weak innocence oil you cannot assume it's a rational result in the marketplace. the u.s. market is fine but the european markets are shaky. we have to keep an eye on it. >> the dax rich at 11,000? >> no i don't think so. look, the vast majority of the greek debt isn't owned by the market. it's owns by the official authorities. how you get a deal how volatile markets are between now and that point. there will be a deal in the u.s. to me the storey is about
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general acceleration flend growth and the fact that once the fed at some point steps away at margin from qe i look at as a positive sign of consumer confidence, already at its highest for the cycle. >> ism, gdp, preliminary spending i mean acceleration seems look a strong -- >> no -- look but in the broad context, think of it this way, last year best year job growth since '99, unemployment 5.6, claims well below 300,000 for two weeks in a row. tax receipts solid. we've got a massive tax cuts to u.s. households. some of the best spending data last quarter we've had in ten years. so to me the general trajectory of better growth is there. the question will the fed have courage and at least gradually step on the breaks? if they do this year to me that is positive for risk assets. >> but missing on inflation target not seeing wage growth
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commodity prices down across the board. why do you see this as a necessary move right now? >> i see it as a necessary move because it's really about where you think the economy's going. but in the context of the fact that rates are at zero inflation adjusted terms negative, they've been as negative as they've been at any point in the 1970s. an economy, by some measures gathering some steam. yet still rates has emergency levels. >> keep something in mind from the u.s. perspective, on a good economic trajectory consumer's in a great position job situation in a great position. this is not 2010, '1 or '12. we've been through the greek situation before. consumer confidence dropping. central banks doing thing untelegraphed and adding to volatility in a way. >> as talking denmark cut -- >> keep the focus higher in the united states to be sure. crosswinds blowing are only
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going to get stronger. do not be asleep at the switch. >> what do you do? buy treasury. >> treasury cut on the uncertainty, goal cut on the uncertainty. european stocks okay place to be. european markets trading poorly. credit spreads widen out. you must be vigilant. >> are you high on street for jobs. >> normally gdp. but, no 240 jobs, which would be in line with trend, the reality is anything plus or mine us 50,000 from estimate is noise. see no reason why the job mark will not do well. >> explain negative yields. we had a conversation earlier, jim, carl and i, about nestle paper, traded two basis points negative. what is the message that's sending, willingness for somebody to pay a company to hold money. >> having governments throughout the world -- paying for right to own a country's paper an odd
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situation. that is systemic. that is symptomatic of a market that's nervous. a market trying to find yield. that environment it's -- speaks to a market uncertain and mark that is sensitive. central banks are going to continue to ease peckexpect more countries to go to negative interest rates. >> i think it's a bubble. >> you do. >> yeah. longer term, this year next year, year after. ten years look back at these levels and say this is the -- >> if i owns the ten year last year i'm up 27%. i cannot expect that again. >> another nine years see how you do. >> all right. so it's irrational, then isn't it? >> yes. it's -- it's irrational in long term. problem is investors and we get marked on the latest forecasts, trade, or whatever it might be so yeah it's rational in the short term but longer term you just -- we never have been in an environment where the ten-year yield traded so far below a
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nominal rate and not have something break. economy will fall through in the u.s. validate where markets are or yields going to respond in the u.s. which is where -- >> free money's worth what you pay for, right? joe's right, it is a bubble. the rule of a bubble buy it it goes farer, lasts longer. >> one friend said one thing i can guarantee you, give away free money, people will do stupid things with it. that's it. >> see what happens tomorrow. and in ten years. joe, jordan thanks. >> keurig green mountain stock on the move punishes for disappointing quarter. what really missed in terms of investor expectations were sales lower brewer sales down 18% from a year ago. keurig down 5%. it was down more in after-hours. having issues with rollout of the new keurig 2. .0. buyers upset pods did not work with the new machine. an issue that management on the
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earnings call said was, quote, transitory, as consumer as dapt to a new product. analysts confident problems can be managed. goldman sachs, ubs keeping buy but lowering target on weaker guidance from keurig. the company hit by 7 million plus recalls of mini brews are spraying hot water. execution bumps when it comes to keurig green mountain, 10% of the business in canada. currency hit hard. this is a momentum stocks, great expectations built in, up 55% over the last 12 months one of best performers on the s&p 500. and a lot on the coke stake. coke taking 16%, working on the cold brewer. out date on that set for rollout this fall in september. they'll have a precedent in may where we get to see that cold machine. there are great hopes for than in terms of the market bigger than hot one. >> cramer willing to cut them slack, based on the candor out
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of the call and the notion that coke will come around. >> he thinks they're going to buy the company. >> as a result of the fall in the stock, have no idea will that be the case. >> a longtime executive at coca-cola. we'll see how the cold machine launches. that's a case along with monster, which coke took a stake? >> under armour find out what we should be doing with the stock and what the ceo had to say an "squawk box" about wearables. tomorrow twitter ceo dick costolo joins us 9:00 a.m. eastern after earnings tone. dow's up 105. "squawk on the street" continues in a minute.
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welcome back to "squawk on
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the street." the diesel engine maker, the stock moving lower after it cuts full-year sales citing weak demand in international markets and a strong dollar. company gets more than half of its revenues outside the united states. as a result shares down by 5% today. back over to you. >> thank you, dom. speaking of earnings, slam dunk for under armour, topping estimates, two fitness apps. when asked about under armour's jump into the wearables fray what the ceo had to say. >> if you think in ten years from now walking around with these 3 x 5 pieces of hard glass in our back pocket no. wearables will equal apparel someday. >> under armour may be making big move but was retailers delivering. let's bring in retail analyst with ubs, covers under armour. long-term vision that kevin plank has for wearables by
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acquiring digital fitness companies? >> well, he's right to point out it's a big growth market. importantly, under armour is at an interesting point in growth cycle, trying to expand internationally. one of the apps that they bought yesterday is based in europe over 120 million users worldwide. of that 43% of the connected fitness that they have now in their community are outside the u.s. 43% of users versus only 15% of under armour's revenues today. you can see where they're trying to moving the ball. trying to become a global brand and see tapping into the core athletic user that way. >> and the earnings and the comps on sales continue to be impressive, michael. interesting that you wrote that apparel growth is slowing yet under armour continues to deliver. why is that? what is it doing right? what's the lesson for some of the other retailers which are not having great quarters? >> yeah. i would say that we view the apparel industry in the u.s.
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slow growth. under armour has a long way to go. put up 31% growth overall last night. they've got a long way to go in the u.s. as international kicking off. the u.s. can slow down a bit from the law of large numbers but a powerful brand. investors' eyes looking at u.s. market, that's fairly slow this year, you still got a lot of growth out of the company. it's definitely trading at a heavy stock premium. but there's a reason why. >> i was going to ask, when it gets expense everybody here. 70-plus price-to-earnings level, investors having high hopes. what's the risk? what point does it become too much to pay for that growth? >> you know it's hard to step in here and look in atraditional valuation metrics on the stock and putting money to work. earnings held back at this point. the company's investing in a lot of the frontier-type retail areas that are holding earnings back today. but if you look out five ten years you know they're going to start turning these into monetized cash streams like investments they made last night and some of the platforms.
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i think investors are saying like i think investor is saying we're not making two-year bet on the company. the company's got a long track record, over ten years, to look ahead to and the earnings profile will be a lot higher. >> quickly, dupont's holtzed for news. after the guidance out of tiffany and the horrific day that ralph lauren had yesterday, what happens happening to luxury? is this about fewer europeans coming to the u.s. to buy? something else at work? >> you know ralph lauren does have quite a bit of tourism business. they points out, mostly russian and middle eastern tour itch slowing, which is intuitive with the volatility in those parts of the world they have big assets on fifth avenue capture tourism trade. that part of the business is slower. but it's a big, mature bran. tough to move the needle for big brands in the u.s. when end
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markets aren't growing that fast. that's a bit of the volatility as well. >> thank you very much. i know you took out the rating on ralph lauren with colleagues. michael binetti, good to see you. as the nation's second largest health insurance company deals with massive data breach talk to ceo cigna about importance of cybersecurity and protecting customers' date tap keep an eye on dupont, figure out what the halt is all about.
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northrop grumman. always gets our attention when a dow component is halted for news. that's what happened with dupont. live shot at post 8. >> making a lot of phone calls. >> yes. >> not getting an answer. obvious question would be whether this is related to their current proxy fight with tryian. i don't want to speculate. we did speak earlier on our show about all of settlements taking place. but dupont close to fight against tri an would have
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accepted one board member this summer. don't know what the news is. let me get back to making calls. higher premium revenue helped cignas fourth quarter profit beat estimates. on the rise on the back of positive earnings. the health industry hit hard with news of the cybersecurity breach at anthem. tens of millions of accounts broken into. what are health insurance companies doing to make sure consumer data better protected? the ceo of cigna joins us. good to see you. >> good morning, carl. >> we'll get to the quarter in a moment. anthem news interesting, no credit card number but was names, income data birthdays, people wondering still what happened to the data? what was your take when you heard the news? >> clearly, carl the cybersecurity issue is bigger than any one company or any industry. we see it transcending multiple industries and reunderscores importance of putting protect of consumer data front and center and continuing to innovate around protections and
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detections which is what we're doing at cigna. >> we'll keep our eye on anthem. they hired fire eye. >> how vulnerable is medical data? that could be devastating if people's medical records released to the public. >> absolutely. so again, number one priority protecting consumer data is mission critical. having -- at cigna a multilayered approach to protections weep take proactive steps to hire firms to attempt to hack into your organization and identify any potential weaknesses and then it's that ever vigilant activity of putting additional layers of security around that as you know other industries are going through as well. we need to keep this front and center not just today but go forward basis phone our company as well as our industry. >> the metrics in the quarter, david, like a lot of insurers pretty good. global health medical cost ratios improve 50 basis points
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year-over-year. how is that happening? >> from a cigna standpoint, another strong year weep grew the top line of the corporation 8% and the eps 9%. very pleased with that. our approach is two dimensions to accomplish what you said engage the consumer and activate them in their health and health and well-being and partner with the physicians around glabration spreentivepreventative care. we had a medical cost trend or elevation level below 4.5% for the year a great result for benefit of clients and customers. >> analysts taking of what they call a divergence in reserve growth for 2014 versus q4 over q4 of '13. explain is the strategy shifting at all? >> i think maybe what you're referencing analysts look at a variety of items. most importantly the absolute dollars in reserve grew for 2014 versus 2013. analysts sometimes look at a specific indicator, known as days claims payable on hand.
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there was uptick in the fourth quarter of last year small downtick this year. on average weights out. extraordinarily healthy as is the franchise extraordinarily healthy from a financial standpoint. >> curious about the deal you made with gilead and whether you consider that a template going forward to help deal with the very high astronomical costs of nut drugs. >> we're pleased with the deal we announced and to your point, the cost acceleration around specialty pharmaceuticals present and will continue. a part of what we're excited about relative to the deal both organizations committed to work on a performance-based and outcome-based program. it has appropriate financing and discounts attached but even more importantly than that for the benefit of our customers and clients, we will work with gilead to innovate performance-based outcomes for the benefit of the customers and we're excited about that. >> finally, if the story of the quarter in the industry's been about premiums what happens the
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guidance for? what would you tell consumers what will happen to premiums over the next year? >> for our business about 85% of all of the business we write in the united states is funded with employers. so the premiums are looked at differently. having said that our premium growth level is moderated because our medical cost growth level's moderated. what i tell consumers or employers the key to driving that what we talked about before consumer engagement around health and well-being good prevention and partnering with physicians to generate positive outcomes so long as we continue to do that we'll moderate the premium levels and importantly improve health which is what our company's all about. >> david good to talk to you. congratulations on a great quarter. david cordani from cigna. >> good to be with you. news from dupont. apparently, david, relates to appointment of the new independent directors to the board. edward green, in anticipation of
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two current directs are transitioning off of the the board to serve asconsultants. >> did you see this? >> i'm not seeing this. used to run tyco. >> yes. >> i'd like a release. not sure why they need to halt the stock for that. >> yeah that was a little strange. >> seems a little strange. i am not -- >> but this dauzoes appear to be the news. not seeing that was a trade, that was the halt 74.27. >> it doesn't appear to be related to trian, i was able to get some sense from them that this was not something they were involved with. but i want to see the full release on dupont. we'll see how the stock trades on the appointment, as you say. >> brings to mind the conversation we had earlier this morning about the nature of activism in general, the way various companies have different strategies allergan earnings another story. dupont, as you said chosen to
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fight. >> they have. in this case my belief that continues to be the case. again, these are two directors stepping off in anticipation dupont now as you say, nominated the two to take over for crawford and brown, who are transitioning off of the board, who will serve as consultants to the company which is being spun and be directors there. so it doesn't appear this is in any way related to the current proxy fight where trian is seeking four board seats. we get any change we'll let you know. >> weird to see a halt on news like this and not unheard of. we'll get energy inventories, nat gas, a day after oil of course fell after four days up 20%. big reversal yesterday. the biggest one-day drop for crude since november. let's get to jackie deangelis at the nymex with na nat gas data. >> a lot of action in the pits this morning. selling off of nat gas before
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the number and continuing go lower here. 258 now. the natural gas weekly storage report appears to be bearish here. down -- sorry, say that -- 115. it's down 115 billion cubic feet. it is in line with what we were expecting. but i will say this last year at this time 2.59 billion cubic feet the drawdown that we saw. substantially different there. meantime, we do know that production is up while demand was up slightly, because we saw that winter storm. it wasn't up that much more than people expecting. the supply/demand balance an issue, not just in crude trade but the nat gas. numbers 2.60 trading lower. back to you. >> thanks very much. as you mentions nat gas under pressure. we'll talk oil. still down over the last month but actually up more than 10% in the last week. up sharply today as well. prices permanently in rebound mode or more pain to come? we'll discuss after a quick break.
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watching oil, up sharply there is morning, after seeing its biggest one-day drop since november yesterday. and that came after a four-day rally. joining us now, the president of lipow oil associates. going back over the tape a month ago you told us wti would test 50. now predicting lower, it's going to test 40 again. >> yeah, i think we'll make one more run down to low 40s because
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inventories in the u.s. will continue to rise over the next couple of months especially at curbing, where this week we peaked over 40 million barrels. i think we're going to 60 to 65 million by the end of april. >> it's interesting that there are some bullish factors that you think would support the price of oil. carl mentioned factory ors coming in strong and germany a rebound in terms of the economic data in europe. and supply issues like fighting in yemen. why is the market ignoring these kind of issues? >> well i think they're focused on the rig count and seeing that big decline over the last couple of weeks and anticipating slower production growth as we get to the second half of 2015. >> so what are you predicting for u.s. production given the fact the big oil companies are cutting cap x plans 10% to 20%. >> we kind of have an interesting dynamic, not only cap in expenditures but reduction in cost going through the complain. and for ever 10% decline in the
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cost of drill, we get to reduce the break even costs $5 to $7 a barrel. by then of the year expecting u.s. production to continue to rise to get to 9.3 to 9.5 million barrels a day. i think it's going to surprise the market. >> on gasoline, you know we got this tick-up here and you can everybody say -- there we go told you it couldn't last. is this all about refining season, maintenance season or something else going on? >> it is about the refining season. we're seeing a significant amount of maintenance on the gulf coast inventories drew down there over the last couple of weeks. and that's supported gasoline prices and the consumer's feeling the pain. the thing that worries me the refining complex running full out because margins are great. if inventories remain high they'll kill the summer gasoline margin that will be good for consumers. >> how low could we go? how much below $2 average are we talking?
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>> i don't see that at all. i think that we're going to be steady here around $2.10 for the one ter and actually move up to 2.20, 2.25 as we make the summer grade gas specification. >> on that note did you see that "wall street journal" cover story? oil, cheap oil, not a boom for all. talking about the negative impacts, deflation concerns around the world, the fact that china's increasing for instance fuel consumption taxes? do we have to rethink this whole idea of being net positive for the economy? >> well i do think it's a net positive especially in the u.s. you can see from the "wall street journal" article there are governments that are reducing subsidies and frying to get more money from the consumer like china, indonesia and if you spend less subsidies in nigeria as well. there are good and bad points. overall for the world, lower energy prices are a benefit. >> and in terms where you play it, you like the big cap oil
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names? even though you do see the price going lower of oil? >> i do. and you know the exploration and production companies have gotten hit on their equity prices. and i do think, over the next couple of years, prices are going to go up. i still like companies like anadarko, noble, who do have exposure here in the u.s. and the eagle ford. but again, break-even costs are going to go down. look back to 2009 where oil prices went to $34, it wasn't but a year and a half later we were at $90 a barrel in talking about increasing prices to $150 a barrel. >> all right. we'll keep an eye on. thank you, andy. andy lipow. when we come back the ceo of cantor fitzgerald joins us with his take on the markets and what he's expecting for tomorrow's job number. dow up 133 points.
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>> take a look at health care sector this morning, doing pretty well. number one sector for u.s. m&a this year 25 billion in deals. dom chu at hq. >> the health care sector like you said m&a very much a part of the story today, led by hospira, up 35% on news it's going to be acquired by pfizer for 90 bucks a share or $16 billion. pfizer up on the deal as well. also moving to the positive
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mallinckrodt. also becton dickinson reporting better than expected profits as well. very much m&a story but earnings driving a good part of the story the past week. broader markets, all major indices seeing strong gains at the hour. dow up 150 points and s&p 500 up more than .8. investors awaiting tomorrow's job report. the january jobs report to see if signs of continued economic growth and labor market improvement are there. joining us to discuss this and the markets at post 9, cantor fitzgerald and company shawn matthew. 100-point swings in the dow, 5% to 10% moves on oil, volatility. >> volatility is great. >> and it's gone from zero to 100, hopefully settles in the middle. >> what is driving it? the divergence in central bank policies and economies the u.s. versus the rest?
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>> i think that's part of it. if you look at the broader market characteristics that are going on people had correlated asset thoughts. people would bias sets hold on to them and trade in unison. now seeing divergence people are starting to look for relative value in as set classes which is causing volatility now. >> the correlation between the stock market and oil something that wasn't there over the last few years, and now it seems like they move together tick for tick. what do you make of that. >> interestingly enough even in interest rates right? look at it oil rises and interest rates go down bonds go down. there's a lot of confluxes going on now but certainly, i think we have relative value, stock market looks pretty good for single digit returns or maybe higher. interest rates will stay here or go back up up the next year. oil is a wild card. >> what do you think the big narrative of the next three months are going to be. >> everything's about currencies now. you have --
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>> thank you. >> the central banks are sitting here, all at zero interest rates what happen is everyone trying to do. >> put on relative value trades in a currency. looking for the best asset clasp first, what's best currency to be involved? why the u.s. markets are in good shape. >> volatility near a two-decade high. i was asking whether you trade currencies. this is new. >> we got into the marketplace, added 20 people over 6 months and we think there's an interesting opportunity to be significant players in this. >> you see something what the swiss national bank did. >> scary. >> you don't want to be a trading desk during that time. >> absolutely. you have -- in today's marketplace control risk. we're a private partnership. we look at things from risk first and having good risk controls is paramount to us. >> something you've done a long time, fixed income. we saw a lot of the big banks having a tough time in terms of actually making more money than perhaps -- making as much money as many estimated they would. what are you seeing in the market now? >> i think january's looking pretty good from the fixed
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income standpoint. the curve has flattened a bit, the nim got taken out of the equation carry went down. asset price appreciation hard to come by. we've seen a little bit in january, why it's been better. but i think fixes income is in a difficult spot for the next year for making real money. look at ficc not great returns its had in the past. >> right. >> volatility's coming back and that's a good thing for everyone. >> when do you see the fed raising rates? >> i think certainly this year they'll raise rates. they've signaled it in numerous times they've started to talk about international concerns as part of the issue. but in reality they're telling us over and over again they want to raise interest rates. i think they'll go from 0 to 25 to 25 and then see what the market does and then move from there. >> the jawboning from jack welch, caterpillar ceo in recent weeks saying please don't, the last thing we need right now. >> look at interest rates, is it going to affect the curve? right? if you look at germany, as an
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example, with the ten year bund under 50 basis points bushing on the springtring by having a qe program. they'll try to start the process of raising rates and once they do, they'll look at the marketplace and see what it tells them. >> right. some say it would be a symbolic gesture, right. >> totally symbolic. >> one and done, we're not asleep, yes? >> correct. again, it's 0 to 25 if you go to 25 you really raised rates? that's something people will debate but it will happen. >> as far as jobs we mentioned in theent duction to the segment, expecting a solid jobs report continued improvement. >> i agree, i think plus 200,000 jobs created. i think over the next six months we'll continue to see strong jobs growth. but it's really about the international marketplace and it's any external shocks as far as financial products which will drive really what happens in the jobs market. >> all right. we will see. thank you for joining us.
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thoughts on the crazy swings. shawn matthews ceo ofcantor fitzgerald. >> apple talking about its own web tv service. we'll talk to pete who are broke that story later on during "squawk alley." dow's up 159. back after a break.
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plus for a limited time, get a free security camera call 1800 xfinity or visit comcast.com/xfinityhome. it's not much but the dow cracked through 17,823. which is the flatline for the year. s&p similarly at about a point above its break-even point for the year. we'll keep our eye on that. markets in the green for 2015. >> want to take a look at dupont. it may still be halted. strange decision on the part of the company, perhaps to have its halt -- stock halted. the news was that they pointed immediately to their board two directors to replace outgoing corrector crawford and brown. and if anything it is reflective perhaps not of what we spec late might be the news before we knew it was, perhaps a settlement, in fact it may be reflective of higher level of hostility with troion nominated
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four directors for the board and engagesed in a proxy fight. putting two new guys on. sorry if i'm getting it wrong out there, people on twitter tell me i'm butchering the guy's name, both distinguished in the business community. maybe a way to squeeze them. i am also getting confirmation reported by another news service, there were meetings between -- meeting between dupont and trian in which dupont said there's one of your nominees we would potentially consider but we will not consider putting mr. peltz on the board under any circumstances. and that appeared to have been a nonstarter. if anything it does appear the tensions between the two are heightened a bit as a result of this news not lowered. >> ant it looks like we still have the last trade. not open yet. >> let's get over to rick
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santelli with the santelli exchange this morning. hi, rick. >> hi, sara. i would like to welcome our first-time special guest, david vouts. the chairman of gasb governmental accounting standards board. thanks for taking the time david. >> thanks, rick. glad to join you. >> before we get into the thick of it let's throw something on the screen that was written in the "wall street journal" in the summer of last year by michael rappaport, states and cities could be forced to report half a trillion dollars of additional costs under rules that would shine harsher light on the growing expense of retired workers health insurance and other benefits. you're head of the group that is the could in that they could do it. what is the status of those recommendations and how much if any, has been implemented with regard to that seven month ago story. >> we've been working on pensions and other post-employment benefits which would include retiree health care.
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the pension standards are already effective ander with a in the process of finalizing the other post-employment benefit section. very much so there will be a net liability appearing on the face of the financial statements. it's producing positive results on the pension side already. policymakers are considering the assets they need to set aside. we believe these new standards that we're working on finalizing right now will produce similar positive results. >> now, there seems to be some issues regarding legal challenges. on one hand the pension obligations, many believe, especially the political class, those are protected by things like state constitutions, but on the health care side separate that out, it's a different animal and according to many articles california, new york, are the worst. california alone supposedly talking about $65 billion. what are the states going to do to comply and i know my state of illinois will have big payments in 2015 and 2016. >> yeah. when you talk about retiree
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health care those particular promises are a little bit easier to modify but i would have everybody keep in mind that those promises are usually locked in collective bargaining agreements. many cases they are truly liabilities and the board and the stakeholders generally agree with that. >> now if you were a state like illinois, these -- coming on the balance sheet, having investors more aware, having more data in your organization is pushing for that, are you nervous that getting to the reality of full disclosure is going to causes these states to have some severe financial hiccups? >> no. i think really important thing is policymakers are going to have to make difficult decisions and the role of the gasbe is to make sure they have transparent relevant information to make the decisions. it's elevated the discussion and everybody is focused on it and those will be positive impacts. >> thank you for taking the time. i'm sure the story is going to
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be ongoing. carl back to you. >> rick santelli thank you very much. after a seven-year hiatus construction starting on luxurious fisher island in miami. our own diana olick is escaping the cold live down there. good morning to you. >> good morning, carl. it may be warm but it's pouring rain outside which is why we're coming from the sales center of polatz dell sol. the new construction on fisher island in seven years. one tower started, another topped off and the penthouse in that one, under crack for $35 million. now while fisher island has always been the most elite land in the miami area an island unto itself in every sense, it is facing a city skyline suddenly challenged by a changing world economy. miami wept from boom to bust to a relatively fast recovery all thanks to mighty foreign cash. now that cash isn't as valuable as it once was. >> unfortunately, what we're
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finding in the last year is all our key buying powers whether from argentina, venezuela, colombia brazil russia all the currencies are falling against the dollar. the foreign buyer who saved us last go around still present, but not as prevalent as they had been. >> still, the condos are going up. 325 south florida towers are planned according, over 41,000 new units, about a third are proposed another third approved, the rest under construction or completed. demand is still very strong but perhaps not for the really high end. not the case here on fisher island, however, where the amenities and new towers are incredible, everything from your concierge and butler service to your fur rooms to keep them just at the right chilled temperature. folks here telling me that on fisher island itself just these towers, have brought prices across the island up 20%. back to you guys. >> wow. not bad. thank you, diana. over to jon fortt with a
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look at what's coming up on "squawk alley." jon? >> well streaming tv. apple putting feelers out. is it going to be your next tv provider. could a tv set be in the works? twitter earnings after the bell. lots of action in that company. what might be coming up next. better call saul the prequel to breaking bad, two actors to talk the future of television coming up on "squawk alley."
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