the bull market. people are finally going to start coming in and that's going to be the big story for 2018 >> that could be the exuberance stage. >> great being with you. richard bernstein advisers, google it. make sure you join us tomorrow "squawk on the street" is next ♪ good monday morning, david faber is back at post nine here's something we haven't seen in a while, futures are relatively weak coming off the best week in the s&p in over a year and big week for investor conferences and bank earnings. europe is slightly positive. 10-year around 2.47. the roadmap begins with the

record stock rally off to the best start, best yearly start in more than a decade. >> apple addicts, billionaire share hoerlds urging the iphone maker to take action against the long term consequences of children's smartphone overuse. >> nvidia saes big bet on autonomous driving, teaming up with vw. >> the best start to a year since '06, closing the week at record highs and s&p and nasdaq turning in the best week since december of 2016 and the street now beginning to look ahead to earnings season -- wells fargo coming out with results later in the week we'll get inflation numbers and retail sales and citi and media conference and morgan health care conference. >> you mentioned nvidia and wong going down to consumer conference tomorrow. what's happening is an interesting opportunity, the futures are down for once. people can get in provided that

the stocks themselves don't go up i'm talking about caterpillar, united technologies and nvidia, they are ramping, maybe let them come in and get a chance the research is so everwemiovery positive other than someone coming out midday, this is all much ado about nothing, what we knew. we knew earnings would come up david, you have a fresh look you were away last week any skepticism here? >> sure there's skepticism as you might expect and might rightly about the case, people sending around a few letters and i don't typically read the hedge funds letters with as much vig or as i was able to and sitting on the beach not that you want to spend all of your time doing that but there is jim people who believe we're in the last leg here, that's sort -- the blowoff that was getting steam last week and what his name's letters and couple of others.

>> and my friend ken fisher who does a lot of money, wealthy individuals, saying listen, this quarter could be the blowoff focus on europe because europe hasn't had the blow-off yet. we are a little euphoric >> that said, when you speak to people as i did this morning, they are more focused on wh announcements will we get about the benefits they are going to near term from tax reform. and cash tax benefit and in excess of 200 million for fiscal year '18, talked about adjusted diluted net earnings better share of 30 to 35 cents. those could have an impact off the bat and that's what people are -- >> last week walgreens reported and here's a one-two punch they reported -- the number was okay but and the stock didn't do much but now you're going to get the cvs effect they did really great last week.

cole's, not only were the numbers -- the comp sales much better but this domestic, it is still not in. >> it's going to cut both ways, lulu raises the guide but talks about tax liabilities because of forced repatriation and it's going to make not only the earnings but guidance cloudy. >> the good news about l ulu, they are based in canada, in the end a lot of people were betting on a short fall for lulu they did not pan out they had a great holiday season. a lot of companies had a great holiday season. >> to the point you were making, see what we get out of jp morgan or ces, the jp morgan health care is an enormous conference it's hard to overstate how many people attend that gathering. >> you're so right and you'll see if we get major news out of it but certainly there will be news. >> celgene making that acquisition. >> yes. >> that helps them.

>> private company but a large -- an awful lot of money for that company too $7 billion. >> kroen's disease current trial didn't do well, they need to have an iron in the fire but this is the kind of thing that comes out of this conference i think that people don't realize the conferences are playing a major role people are listening to the numbers and saying, wow, that didn't usually happen. look, there's -- what do you do when you've got these situations where you've got a stock like kohl's moved up 15 points from the bottom and turned out to be not enough. >> is that overdone, up 8% >> i don't know. >> i'm sort of surprised at the numbers. >> that's the dynamic behind the caterpillar upgrade, we missed most of the run last year and still upside because of immediate expensing and the tax effect and the beginning of what she calls a 10-year cycle in the resource business. >> it takes your breath away i remember when no one thought

caterpillar could ever ever go back over 110. the goldman sachs downgrade a couple of years ago they thought that -- went to sell it and with the stock thinking it would go to 60. had they said 160, could have been a home run, could have been a quarter pass. >> is that sometimes though a sign that we're nearing a top when you see the analysts playing catch up >> the target is 200 on cap. >> geez, i know, it takes your breath away, you can still recommend stocks aappear and have it right. the depreciation, that's an accounting change that people didn't expect. one year so it pays to buy caterpillar equipment. there's a change in the law that directly benefits them let's accept the fact that the law changed and it was positive. i think that's really important. >> i've got a couple of stories regarding apple today. two major apple investors calling out the company saying it must take a stronger stance on the mental health effects of

excessive smartphone use, especially in children and teenagers. jana partners control nearly $2 billion in combined stock and in an open letter the company under the headline think differently about your kids, companies say apple can play a defining role in signaling to the industry that paying special attention to the health and development of the next generation is good business and right thing to do shares under some selling pressure in the premarket. there's a lot of other headlines affecting the company. some involving users of the echo, using their smart phone less, surveys like that. >> interesting things for a number of different things, social impact investing, maybe something that we hear a bit more about there have been attempts at it a few years back and may recall black rock gave it a shot and in europe it's had a lot more currency than it has had in the u.s. barry rosenstein often times we speak about the successful hedge

fund managers, many times their success is rooted in the ability to meet an unmet need in the marketplace, more so than their actual ability to pick stocks or do an incredible job for garnering returns for the holders and certainly mr. rosenstein is always been able to position his business in an appropriate way. so i think it is interesting that he's moving into this area and -- good for him. he certainly sees an opportunity. he'll be with scott wapner and friends at noon. >> geez, i'm on that show today. >> you'll be able to ask him when i come back to it as an opportunity or -- there arefy do you remember yfiduciary, pension fund, are you saying you're willing to accept a lesser return for a larger social return or is your fiduciary duty to find stocks and/or make investments that maximize your return --

>> what a great point. one of the ways to do this, have a tobacco restriction, i would say the safety of having anyone have a cell phone is good. now, just so you know, the prevailing wisdom in the mental health community, they have professors talking about -- the prevailing wisdom in this country is that the parents aren't playing a big enough role it is not the institutions and not the kids but it's the parents. i thought that was a very interesting lack of understanding about what the prevailing wisdom in mental health is right now, if the parents would play a role, that is -- i mean, unfortunately i'm close to this. and i said one of the biggest is really important to not minimize if the parents were to get involved but the parents have shown of the troubled youth, a definitive lack of commitment so i think this is -- >> in this case, in the long letter they cite obviously studies con ducked by the center on median and child health at the university of alberta and

teachers comments in terms of the impact of excessive cell phone use. but again, $2 billion is a very -- we're talking about a very small amount of percentage wise but apple has responded in the past when they've had people say things carl icon comes to mind and the willingness to engage there. interesting to note wal greens in the news, i can remember when jana was pushing walgreens to move out of the country, no, we're not going to do that and now they are a beneficiary of tax reform here. meanwhile, apple keeps all of its intellectual property in ireland. you could argue there's maybe more of a social good coming back here. >> i was surprised they didn't say, why doesn't apple set up a program the 100 largest institutions that are currently dealing with this in our country. you can fund them. they need scholarships typically cost between 30 and $50,000 for the best ones per month. i was surprised they did not ask

directly for apple to do what the mental health communityhas determined to be the most important thing, which is to get the parents involved is that tim cook's job to get the parents involved i don't think so >> i don't know. >> and in this case by the way we should point out they did own the equity and you could make the argument therefore they simply own it because they think it's attractive. but there's certainly an opportunity here for hedge funds. i know we're not going to be hearing the last of this in terms of this social impact investing because when these guys see an opportunity, they typically will move towards -- >> it's great. at the should go after the coal stocks and oil stocks and should -- right. >> reducing the carbon footprint is one of the key things if you can perhaps find an independent power producer or things like that, to reduce the carbon footprint. maybe you could argue it is better for the business as well. >> conflatting the two is interesting, can you bring those two together in a way that works. >> i think you should diabetes is a national epidemic would you go after coke?

would you go after mcdonald's? apple is a convenient target except for the fact there's a user issue and the user is the parent the kids do not go to verizon and buy the device, maybe should they go after verizon and at&t, we don't devices sold no anyone under 11 what happens there, you talk to the parent and say is this going to be used someone 11, here's a pamphlet i'm saying the mental health community should have spoken to them because the mental health community is so determined to get the parents involved but that wouldn't hip. that would not be -- >> my wife came back from the verizon store yesterday after trying to get a new phone for two housrs she needed a mental health expert. >> that a lowell -- >> i don't know, it was half the day spent there. >> i see this thing and it would be absolutely great and everybody wants this and everybody wants -- can't we all get along. >> while we're talking, go ks

pro is cutting view on revenue, $80 million on what they are calling price protection for the hero 6 black and other models. woodman taking his comp down to a dollar and cutting the workforce from about 1250 to less than 1,000 employees worldwide. >> yeah, that was suboptimal and i think they are one of the few companies that didn't do the number because there's a lot of gaming pieces today that talk about the gaming pieces doing the number gopro is a particular situation, i think the problem is the dogs won't eat it people don't want the product as much, even the drone product i'll tell you one of the things that's incredible, is that what you can do to link yourself to get a stock up, like seagate does today, talking about they own 4% of ripple, which you know is a -- >> yes, i do. >> we had the ceo the week you were out. >> i know. >> a know a lot about ripple. >> you have these things where companies can keep issuing

releases and people get excited. sea gate is suddenly a cryptocurrency. >> gopro ceo departing and not yet resumed trade. >> michael raises his price target best buy 33 to 38 i don't know, best buy split it's a little late you buy the stuff at best buy. >> 68.87. >> he's anticipating a split there. >> 30 bucks below. >> you know, what can you do >> a man much conviction though. >> tremendous conviction >> always been. >> and one of the problems about trying to be negative here is that the facts keep overrunning the negativity but you know what, maybe everyone says at one point, okay, enough we have bought stocks high enough let's wait for a pullback. right? i mean, why don't we make the stock market great again and take a look at the valuations?

you're nodding. >> i'm back to nodding. >> we've got to go >> that took 15 minutes. >> when we come back, the nvidia rally rolls on, the company teaming up with uber and volkswagen on autonomous cars. we'll get the calls on utx and pan dora and cat and a lot more. see that's funny, i thought you traded options. i'm not really a wall street guy. what's the hesitation? eh, it just feels too complicated, you know? well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step until you're comfortable. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy. what's the hesitation? it's just complicated. step-by-step options trading support from td ameritrade

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partnering with uber and vokz wagon, vw will use the company's drive nine platform which includes features like facial recognition and gesture controls and nvidia ceo spoke last night in las vegas. >> also delighted to announce that uber the company that put mobility as a service on the map, has chosen nvidia technology and we're partnered together to create future autonomous self-driving ubers.

we've built pcs, laptops and game consoles and super computers and i can tell you without exception, building a computer for autonomous vehicles is at a level of complexity the world has never known. >> number of customers here for these chips now in the hundreds. >> yeah, 320 car companies what i think -- actually understated, they have a chip -- a system on the chip that can do 30 trillion operations per second it has nine billion transistors on it and they are sampling it it only uses 30 watts of power and trying to get it to be cost of a regular car and talking about trucks too but this man is a genius he's a genius, no one seems to ever talk about him. his parents mistakingly sent him to a private school in kentucky that didn't realize was not a for advanced kids, it was for kids who were troubled oregon state, stan ford mba,

this man is different. >> what he's proved is identifying the areas properly that should be focused on down the road so this company has been so well positioned and we've talked so often about it given the incredible performance of the stock price over the last couple of years but he continues to be in the right place. >> exactly, we know that brian krzanich speaks today and he's affiliated with waymo because of this israeli purchase. but what a battle this is between krzanich and waymo, they have the best car. then volkswagen is the second largest builder of cars. who would be better to team up than uber. this is going to be a battle royal and i think jen sen is ahead. i've spoken to brian and brian is saying what's the love affair with nvidia for me

i want to see what brian has to say. he will not be confined -- >> the car is an enormous battleground the chips and screen that will basically control so much in what will be the back seat because you won't really have much of a front seat because you're not going to have -- >> have you been into a waymo car? greatest thing, you say to the car, take me to the best pizza parlor and it takes you. >> based on its zagot rating >> yeah, and dominos tweeted a picture of their own self-driving car. >> ban nan that pepper, no cheese pizza that's to die for. >> amd's lisa suh, we'll talk to nick woodman of gopro as well and the opening bell in about eight and a half minutes

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squawk on street, it's a mad dash for a monday as we count you down to the opening bell a little less than six minutes before we start trading on wall street where do you want to go today? >> united technologies, goldman upgrades, this is really interesting. 173 price target david, defense and market accelerating but the gt -- the gte, the -- it's a -- tur bow fan, gtf they say it's no longer to lose money, it's going to be fabulous this is the engine that is

better than other engines regarded as being less pollution and that's going to be important. the gear turbo fan has stimied debt. >> i think this is the year that greg has no issues and hayes, independent -- >> do you get concerned by seeing a stock that's gone parabolic? >> no because otis is doing well and h vak better than expected this company is on fire. >> really? >> every single division will have up numbers, that's extraordinary. but the gear turbo fan, that's it that's their big -- they sell it and then they get years of service revenue, he's a competitive guy. >> i'm aware of that. >> ain't going to happen honeywell also benefit here too? >> i would say that honeywell is splitting, it's much more in the camp of what you're going to get -- >> not splitting the main parts, they are --

>> aerospace is so strong. incredibly strong. >> i like the way you move since you come back. >> thank you. >> we have opening bell a few minutes from now we'll keep an eye on other moves the stocks will be making after this

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you're watching cnbc "quauk on the street. going to be a busy week as earnings season kicks off with lenar and deaend delta and bank friday you mentioned the upgrades of caterpillar, second upgrade for utx in a week and second downgrade for snap in a week as well. >> wow, a lot of the snap is playing right into the hands of instagram, where instagram clearly beat snap at its own game, zuckerberg is really -- i mean, you missed it david, he wants to fix facebook. where would he trade if he fixes it it's the first i knew it was broken facebook is killing, killing snap >> let's get to the opening bell

and s&p at the bottom of the screen at the big board it is medical technology company and celebrating its acquisition of cr bard. nasdaq, heritage financial, based in washington state, celebrating its 20th listing anniversary. >> to your point on facebook, jpm, best idea, target 2.30 now. >> this is a race. we also -- by the way, it's kind of a fang day. we do have a couple of research notes on amazon raising price targets there because of the great holiday season i think that when you're -- there's a note about netflix saying they had better sign-ups. so all of this is playing in the hands of the people who stay in the high growth and cyclical stocks, not by the way health care we need -- out of meg terrell, she's going to have health care announcements i'm sure.

>> humana did cut the guide -- again, a reduction in earnings based on the jobs -- tax -- >> when you come in today, it takes your breath away because children's place, which has been one of the great stories probably the best story in retail what do they do? they say they are even doing better than expected they have same store sales off the charts great business for retail because of cold weather and a lot of it i think was just plain out consumers doing better than expected. >> consumers -- it was as strong as they've been in 10, 15 years. >> i think so. >> which is why this guidance out of dave and buster's made absolutely no sense -- >> that's surprising i talk positive about dust and buster's last week look at this pushback. you have stocks reacting to dave and buster's as opposed to

children's place if retail comes down not unlike what macy's did, you're getting more of an opportunity i think that at a certain point, look, people are going to say, i can't keep paying up for the same thing, but i do think that people are anxious for the group to come down so they can start buying retail. >> right >> we've talked a lot about the tax law this morning already and the expectations that companies will continue to give guidance either the short term charges they are taking to allow them to bring the cash back because remember starting to pay taxes or the benefits of course of having that much lower tax rate at 21% it does figure into an upgrade today from moffett on charter. they go to -- better late than never, price target $436 a share. the stock like a lot of other -- like our own parent company after the september sort of guide down if you want to call

it that from comcast, a lot of these names, sort of took it on the chin for a bit and then had a bit of a rebound as the year ended. moffett saying they will still be a beneficiary tax reform even if they don't have a lot of cash earnings at the moment at charter because they are not a significant cash taxpayer. it doesn't mean they won't be over time and won't be a beneficiary in that cut of the federal tax rate to 21%. that and number of other reasons behind the upgrade and you can see it is benefitting the stock price today. even though comcast is down. >> well, look, i think that that's a great call because you remember when they downgraded comcast, that was the top. they have a lot of impact. good firm. >> speaking of just research not necessarily from a firm, this morning just so people know it, this is an area candidly i do not know and saying seagate is an investor in ripple, talking about it being worth 8 billion

and i don't know whether this is the kind of note i put credence in. >> i don't know what to make of this ripple and the xrp, the currency that is associated with it, the digital currency it's very hard to fully grasp. >> isn't it? i think all of us are struggling here with the value. >> the value of the currency they have at ripple itself is worth an enormous amount except it's not really worth that because you can't -- >> it's not worth it until you sell it. >> look, crypto currency, i don't know a lot about cryptocurrency accuse me of being honest but the idea this one division could be worth x, i don't know but it is moving seagate. >> it is, taking it back to levels we saw in the spring but it's an article about a research piece about the potential ownership that they have. >> there's a very -- it's 'derivative nature i want people to know why seagate is fine, i don't ascrib

to the idea, it's a disk drive company flat on its butt companies have invested in various forms of cryptocurrency that if we started talking about we would get excited and i don't want people to be excited like that that's a mistake >> we are getting headlines from reuters and others about the saudi aramco process inviting banks to make pitches in the coming weeks, including citi and goldman and deutsche, according to reuters and that train continues to chug along. >> i can't understate the size and scope and importance of this deal and i've said it many times, not like taking a company public and more like taking a country public and as you might expect, any number of investment banks are going to be want to be there, not just for the ipo but for the long term relationship that will come along with it for the advisory capacity that might -- it might bring in the

future for the opportunity to sell future stock and do all sorts of other capital related transactions for what is going to be the largest market cap company in the world when it comes public there doesn't seem to be much doubt about that unless apple were to go up 100% from here. >> i'm glad you brought it up, how did oil get above 60 the conspiracy theory is the saudis have really cut back and that drove the oil price, the nonconspiracy theory is that there's -- that the glut in oil has been diminished radically by the fact that the big budgets for drilling, for the big international countries hasn't advanced yet so the depletion is great. i don't know whether the conspiracy saudi theory has a lot of graph tas, but it's working. >> finally, you mentioned to fang -- record highs for google

and amazon and facebook today. the amazon front we did see jeff bezos last night at the golden globes where they along with netflix and hulu take some of the major awards. >> i'm glad you mentioned that because as long -- the more they are associated with the original content, the more people stop worrying about what happens if disney cuts them off. >> if disney cuts them off, it's more -- >> what it would mean. >> original content can drive things for these companies >> and that's -- i mean, there's so many shows on netflix at this point, nobody even knows what most of them are and yet netflix knows what you're watching and all it really takes -- >> netflix knows i watch punisher don't let anyone know i watched it. >> all it takes is one show you like and wing to pay $9.99 a month. >> did you binge on vacation >> we didn't have any tv actually it was really -- >> was that because of health

care >> excuse me. >> mental health >> it was a mental health break, yes. >> staying away from anything -- >> did janice -- not to make light of it but honestly, david is a parent and i'll belt you control what your kids watch. >> my kids read books on vacation actual books can you imagine that i had my son read shoe dog, it was great book. >> she couldn't quite take emma, tried to get her to read emma, couldn't quite get there. >> they read books did you bring books? >> we brought actual books. >> on paper, bound >> i read two novels that were sent to me -- >> nice of them. >> who sent to you, jana >> that's not true. >> yeah, they did, i read both of of the books they cents me. all getting conflated. i don't know even know what to say. i'm stunned. speechless on speechless, i come back after one week and alibaba is up 10%.

>> it traz like fang, triple a and not talking about bogus you know, mortgages and i'm not talking about -- you guys remember aaa it's so great. >> i do notice ge up 6%. >> did you read the note today. >> i saw you made a note of it. >> hidden within -- idiots and fools was a positive mention about they are a bit of an oil company and then the turbine business might be better i know people think it's produce announ pronounced turbine, ge accounting or trying to figure out their pension, they don't pronounce it the way we do. >> even though it's a target cut to 16. >> a lot people thought would get to 15 and might suggest 100 million share offering not as negative. >> that's a big deal. >> yeah, he was a bull in bear's clothing. >> it is hard to be more negative than he has been or

more right. >> that's true well put >> all right, 6% all ge is going to get this year is the question, jim. >> well, there are some cash flow issues. i meaning the essence, it's hard to believe there's an industrial down 50% given the united technologies. >> the steel companies -- you know what, ge does things differently. >> the best dow stock so far this year -- ge -- >> as negative as people are, now it's a real enterprise the oil is up so much, this is the flannery gift because you know how much the business is oil related. don't forget about pension, forget about the long term liabilities, focus on what isn't hidden, which is the oil price and how great that is for if he wanted to get rid of baker hughes. >> you're right, there are beneficiary of it as they have of course -- >> been a victim of it.

>> the gear tur bow fan united technology directly against ge. >> ge engines, yes >> ge, 6% gain for the year. dow did set a quick record high. let's get to bob pisani. >> happy monday. we're modestly in the red. let's look at the sectors today. retail is a little bit kohl's is helping them overall we see the industrials doing say little better but not greatly show banks and semiconductors which were market leaders, they are in the red right now as you can see here i'm going to remind everyone despite the slow start, we're at historic highs and everything is working and that was my theme last week and it's my theme again this week. you look at small cap, mid cap, big cap, s&p 500 working equal weights working, not just market cap weight. the ftse, biggest etf you can buy, that's at a historic high sick lickals like industrial

materials and low volatility is lagging a little bit but not by much guys listening were mentioning ge, but we're seeing energy which was the big sector lagger last year also do well this year, some of the oil services and exploration production and refiners had a pretty good year but even they are beating the s&p 500 right now. elsewhere, mentioned the retailers and kohl's had good general sales and raised guide and overall, macy's all up the important thing is the number of companies that are raising the guidance in retail is pretty small. we hear all about reports better than expected sales, jp penny and macy's were better and barnes & noble was worse it's still positive but it's a small group. not everybody is said everything, they are going to wait until we get the numbers out in the beginning of february look at the xrt. we had a horrible year going into december and turned out to be a respectable year because they heard sales were better than expected. we'll see if it translates into

a higher numbers this year right now it's pretty modest we're going into earnings season, one of the big issues what's going to happen with buybacks, you know how important buybacks has been. it's been hard to quantify but here's a little bit of a problem. there may not be enough stock around and this may be moving the market look back at 2006, there was about 307 billion shares in the s&p 500, total amount of shares. by 2010 it increased dramatically because everyone in the wake of the financial crisis, a lot of people set out or put out news stock. particularly the big financial companies and big banks. they started aggressively buying back stock very quickly. the amount of stock available went down very quickly now we're back 2017 in 306 billion. that's exactly where we were 12 years ago. the world is completely different. the demand is higher for stock than it was 12 years ago the prices have doubled. look at the price of the average s&p stock. today it is $107 you think that's demand pressure there. i think so so we keep asking this question,

how much do stock buybacks help the market i don't put a percentage on it when you look at things that move the market, i think it is very fair to put buybacks into one of the reasons the stock market is at new high in addition to the usual big 3 explanations global economic expansion and record earnings and low rates. that's a very fair observation to make. we want to know, what are the companies doing with buybacks for first quarter of this year meantime, you heard the guys talking about apple and activist letter talking about trying to get more investment or more interest in research on developing software to make it easy for parents to control access to iphones this is part of the whole wave of i think you'll hear more about esgs, environmental social and governance issues. this is one little tent kel of that there hasn't been a lot of interest in investing this here's the biggest etf, called dsi owns 400 companies and apple is not one of them

but they look for companies with good social and environmental records. that's fair. this is got less about $1 billion in investment, that's not an awful lot and far away the biggest ones there are other ones out there i shares that's one called the esg select and only got a few hundred million dollars in it. my point is it's certainly a good idea to look for companies that might have different ways of being valued based on environmental and social issues but investors have not shown that much interest in it maybe this is the year it's going to happen and this is one little tentacle from this letter that's part of that social and environmental aspect of this but again, i keep waiting for this to blow up. this is one of the big issues last year and etfs, when will they start buying this millennials fascinated by this and we're still not seeing big dollars. maybe this will be the year that changes. the dow is down 33 points. back to you. >> see you in a bit. >> let's check in with rick san telli in chicago as well.

>> good morning, carl. all of the treasuries are basically down two points, parallel shift, no real curve implications, still holding tough. one week of tens shows we keep bouncing across the 2.40 area. one week of bunds show it's deteriorating a little bit what's fascinating where they are deteriorating to and where we are drifting upwards too, all 10-year yields have been higher than 2.40. a bund yield closes been higher than 2.42. as we look at a december first start to 10-year, you can see what i'm talking about, career crowning above that level significant, all traders using a pivot if we should break under 2.40 and start trading in the 2.30s. if you look at bunds since december, you can see even though it looks deteriorated to some extent today maybe we'll get the low yields close for the year you can clearly see it has like tens escalated since the end of

2017 in terms of the level of those yields if we switch to dollar indlex having a pretty good day, if you look at one week of dollar index, you can see the upward drift. but if you look at a july start to the dollar index, it gives you the real reading, 92 seems to be an area that the dollar index is fighting a constant war and any victories or defeats seem to be small as we go either side if you look at what's going on euro versus the dollar, it's all about the 1.20 level which is kind of like the 92 level and dipped back below it how signature is 1.20, it's what you're supposed to pay attention to to know the euro is the most significant percentage of that evaluation 10-year chart shows that you defend 1.20 from both directions, this is a big level especially considering that investors have big plans for european capital to flow from many different points on the globe. they are ee namerred with the

european economy and uk economy, even though both have glaring issues and the u.s. of course has a central bank that seems to be really pulling the other two central banks more in its own direction. back to you. >> rick, thank you very much when we return, an exclusive with amd's lisa su, what she has to say about chips and security flaws. now settling back, dow is down 36 s&p down almost three points

approximately 10% on the various exchanges we follow. some news this morning regulators inspecting local banks. this time, south korea that offer bitcoin. seems like every country has a day where they have headlines about regulators inspecting it >> i think regulators are also at a loss about what to do because the whole process is about not being regulated. unfortunately, the lack of knowledge about who owns what and who's important, it's almost

like a netherworld, and i find the more netherworld it is, the more liked it is it's very opaque i'm trying to find experts i really am. experts who are not, let's say, who are neutral to things. when i read my twitter file, i talk about this this morning in real money, when i read my twitter file, everyone who talks about it, obviously, has a lot to gain from it. there's not a lot of people who come out and say here's the pros and cons cryptocurrency is really hard for us to cover. >> i'm with you. we're just not of that digital generation somehow that maybe it just intrinsically gets it >> i know how to get music >> good. >> and messaging >> look, you got interesting texts here >> stop it >> while you're talking, go-pro has resumed trade on the warning for the quarter. and those workforce reductions down 23.5% >> they're not a hero. >> not today

m aomt.t to "stop trading" with jiin men dow down 26. ...it starts a chain reaction... ...that's heard throughout the connected business world. at&t network security helps protect business, from the largest financial markets to the smallest transactions, by sensing cyber-attacks in near real time and automatically deploying countermeasures. keeping the world of business connected and protected. that's the power of and.

time for jim and "stop trading. >> i know it's a cliche at this point to talk faang, but alibaba, i wanted to point out,

we talk about that trades with faang. i'll tell you an interesting alphabet if anything, nvidia is negative for alphabet because they do not team with wamo doesn't seem to matter and what i'm saying is that this group, apple obviously hobbled, which is interesting you take a position and then you're negative on it. but just be aware that the group, i think, needs to pull back because it's been etf'd my travel trust owns alphabet. this group has gotten a little too hot. i'm just concerned there will be some sellers because the volume is very low in what's being bid up i'm just urging people to wait until better prices. that's talking against my book >> you're going to get a chance, i think. you're on tomorrow >> by the way, not today >> oh, it's tomorrow >> anything that brings people's attention to this is fabulous. anything

i just want people to know that it's not like tim cook is out there saying, you know what. we got to get these in the hands of underage. the reason i put this is doesn't mcdonald's in their commercials want to put it in underage >> you can't dismiss this as an increasing issue we're dealing with >> it's an important issue >> overall as a society. and it extends to video games and everything else. >> to cite apple, they're one of the weaker people. samsung sells more phones worldwide. it's just i think it's wrong that they're targeted. if it raises awareness, i'm totally in favor of it >> sure. what's on "mad" tonight? >> we have exact sciences, which is the colon cancer drug they had great numbers, but the bears just simply don't like it. and we have alchemies, which is saying great things but the bears have been very vociferous. two companies really battling the bears. amazing that there are still some bears, that they're not extinct. they're there. >> jim, we'll see you tonight. >> oh, my god, yes

>> "mad money," 6:00 p.m. eastern. >> and david back. he's not as septical as i thought. >> give me time. >> i have to go. >> eli lilly's david ricks find out what's in his company's peneitthdodo 27. do you want the ss and seamless experience across web and tablet? do you want $4.95 commissions for stocks, $0.50 options contracts? $1.50 futures contracts? what about a dedicated service team of trading specialists? did you say yes? good, then it's time for power e*trade. the platform, price and service that gives you the edge you need. looks like we have a couple seconds left. let's do some card twirling twirling cards e*trade. the original place to invest online.

good monday morning. welcome back to "squawk on the street." i'm carl quintanilla with david faber. michelle caruso-cabrera is here. sara is off today. markets opened up with a record high for the dow and nasdaq, but settling down despite upgrades for high profile dow names on a busy week for earnings and conferences. our road map begins with shares of gopro slammed after issuing weak guidance. we're going to talk exclusively with the company's ceo >> and addicted to apple two major investors urging the tech giant to take action against iphone addiction amongst kids we'll tell you why >> nvidia making a big bet on driverless cars. teaming up with uber and vw. we have the details.

>> markets mixed after hitting record highs in the first week of the year. will 2018 continue the record run we saw in '17. brian jacobson is wells fargo multiasset strategist. peter is a chief strategist. good to see you both it sounds like you have been paying attention to some of these names trading well above their 200-day trading averages >> markets and trading is a disciplined type of business and if you're so far above your 200-day move in average and you had a lot of success, perhaps it's time to take a little off the table. the hardest thing in the world for people to do is to take some gains. everybody wants to buy the dip, but you have to rebalance your portfolio on both sides. doesn't mean you're negative or anything it's just smart risk management. >> does it mean you miss out on whatever euphoric gains you might get in the late stages of a bull >> we all mark our personal portfolio to the top tick. sometimes we regret the fact we get out, but discipline is

survival in this business. discipline before vision >> brian, it sounds like peter is advocating discipline right now because of the gains we have seen would you do the same thing here >> well, what we were thinking as far as going into the end of the year is people would sort of be waiting until the turn of the calendar to take a few profits because of the changes in the tax code, more clarity there, and you get a little rebalancing in the beginning of the year for the most part, our clients want to take the longer view as far as investing over three to 30-year investment horizons. over that horizon, we're very constructive on adding equity exposure really fundament elwhat we like to do is take a look at what are some of the macro drivers you want to get exposure to and what are the assets you want to be in to get that type of exposure when you look atgrowth outlook people are stuck in the secular stagnation mindset, thinking tax reform is going to bring a little growth boost, but it may be a pop as opposed to a

permanent change in the trajectory why you might see short-term selling here or there, stuff just happens, but generally speaking, we're still constructive on credit and then also equity exposure over the long term. >> so stick with the market here basically? do everything the same that you did last year? >> well, what we're really looking at as far as with the growth outlook, what could be changing is i think that's where a lot of the disagreement is, is whether or not the growth boost -- >> i want to know what you think. is the market expensive here or not, do you add to equities or don't you? >> we have been adding to equities we're still overweight equities with client portfolios it's still a good environment. if you're looking at the valuation metrics that suggest the market is overvalued, last time i was on, i suggested that type of basis, you went from maybe nose bleed levels to eye watering levels. if you move out of this 2 to 2.5 gdp growth range closer to 2.5

to 3, maybe during some quarters 3.5 range, suddenly, valuations look a little more neutral and valuations are merely kind of a longer term guide, and so to the other guest's point, as far as the discipline versus the vision, if you're using valuation, that's morewhat's your vision for the future the discipline is you want to make sure you're not getting overweight too significantly to certain areas of the market. >> to the degree you're being disciplined in what areas are you, and do you disagree with the notion that we're maybe headed for a sea change in the way the economy works? >> i'm an economic historian, my job and role as a strategist is to get people to think think out of the box just don't do more of the same so in this case, we're looking at sort of visa, mastercard as sort of the new brokers. whether you're shopping on your coach or whether you're going to the store, that's who you're using. they're near record highs right

now. we don't advocate -- we're going to look at that as signs of weakness when they sell off. we're saying in the market, we're just afraid when you look at history, if everybody talks about tax reform, oh, i love it. i love it. okay, after '86, what happened nine months later? after the 2001 tax cuts, what happened in 2002 it was down 25%. we all know what happened in october of '87 be careful what you ask for. it's discipline. thinking out of the box. everybody regrets a dollar lost more than the opportunity cost of what they could have made on a dollar gains >> are you tried to price in the probability of an '87-like scenario >> absolutely not. outliers, you can't price that in it's just a question of discipline i look at go-pro today big moves happen from oversold conditions trying to pick tops when you're overbought is a very dangerous game we want to be disciplined. when it starts to go down and if the technical indicators are there combined with fundamentals

we'll take a.m. action right now, fundamentals might be stretched. >> economic historian. last year was historic, wasn't it got to blow your mind what's happened >> 14 months in a row without a down month records are meant to be broken you go broke trying to bet against records being broken and you go broke betting they will be broken because you can't time them a tough business >> broke a lot of ways there >> a tough business. >> it is very hard to do well brian, peter, thanks, guys >> speaking of visa, we're getting news on that kayla tausche has more >> we're going to add that name to the list of companies that are making investments in response to the tax reform bill that passed. a memo i obtained, the company is announcing a potentially lucrative increase to its 401(k) match program. they had a policy of contributing $2 for every $1 that employees save, but the cap is being raised.

let's use the example of an employee making $100,000 if they saved $3,000, visa would pay $6,000 now, that level is raised to 5%, so if an employee saves $5,000, visa will add $10,000 to that savings. in year one alone, that would be an increase of $4,000. a visa spokesperson tells me the change is intended to be permanent and the company is, quote, actively exploring a range of options with a focus on long-term sustainable investments versus one-time actions. so certainly, this is something that for employees who participate in 401(k) plans, could mean a very big windfall for them over time back to you. >> increased 401(k) matching good for them. thanks so much apple under fire from two of its investors. jana partners and kousers are urging the tech giant to take action against growing smartphone addiction in children josh lipton joins us now with more on that story >> michelle, jana partners and

kousers collectively own about $2 billion of apple shares but now they say they're concerned about the impact of apple's flagship product on children the shareholders sent a letter to apple saying as one of the most innovative companies in the history of technology, apple can play a defining role in signaling to the industry that paying special attention to the health and development of the next generation is both good business and the right thing to do specifically, the shareholders want apple to start offering parents more choices and tools to help them insure that young consumers are using apple's products in what they call an optimal manner they say citing research that u.s. teenagers who spend three hours a day or more on electronic devices are 35% more likely and those who spend five hours or more are 71% more likely to have a risk factor for suicide than those who spend less than one hour

they want a panel of experts to study the issue, to partner with experts to conduct more research, and offer parents new tools and options. bottom line, they say there's a growing unease about whether some people, specifically kids, are getting too much of a good thing when it comes to iphones an important point to remember apple does already offer parents ways in which to restrict the apps, content and services kids use on these devices, but these shareholders seem to want apple to do more when it comes to usage. some could counter that's a question not for necessarily device manufacturers but for parents and that these shareholders are concerned about usage, maybe their real gripe could be with the apps these kids spend so much time on, like snapchat and facebook. back to you. >> michelle is shaking her head, josh what >> apple is supposed to be a parent now i mean, give me a break. how many conversations are we going to have about video games, about television i wasn't around for the invention of radio, but maybe

there were concerned about that, too. why don't you kids go outside and play i mean, give me a break. >> i think they would say, listen, our letter is specifically saying we want you to give options to parents to allow them to better police the usage. as opposed to you being the parent, apple. >> how about you being really stern and saying, i'm going to look at everything on your phone? i mean - >> it's an interesting area. >> yeah. kind of the inverse of the ad campaign they now have going regarding the watch where they show all these athletes and people who have changed their lives for the better because they're able to monitor fitness, right? in the end, they're just a big target they're a big company, big target just the way mcdonald's has been for years. >> without a doubt as i said earlier, i think we'll see if there is momentum behind this particular area of investing now. bob pisani mentioned it as well. it hasn't really been something of focus here, in part because you do wonder about can you pick

stocks that both maximize the value you're trying to create as a fiduciary whether you're a pension fund or a hedge fund, or not. and do you go down that road anyway if you can raise the money against it jana certainly thinks there's an opportunity here >> call me a cynic you really think jana is super concerned about children's phone addiction? i just don't believe it. >> um, many hedge funds that have proved successful have proved successful in not necessarily being great stock pickers but meeting unmet needs in the marcus place, moving their businesses to meet those needs and therefore raising assets against them because that's the way you really make money. as i pointed out many times. marketing is a very important part of the hedge fund business. >> certainly okay, tomorrow on the halftime report, don't miss jana partners managing partner barry rosenstein he's going to talk about the letter sent to apple over the weekend, and i'm sure he'll try to counter the cynicism.

>> that's tomorrow in the meantime, when we come back, the ceo of eli lilly, david ricks, is going to join us from the largest health care investing event of the year. plus, go-pro announcing it's cutting its workforce by 20% stock down almost 27% on the weak guidance. we'll talk exclusively with nick woodman th hr ensqwk t street" continues ies are reporting today. and, how's it looking? >>i don't know. there's so many opinions out there, it's hard to make sense of it all. well, victor, do you have something for him? >>check this out. td ameritrade aggregates thousands of earnings estimates into a single data point. that way you can keep your eyes on the big picture. >>huh. feel better? >>much better. yeah, me too. wow, you really did a number on this thing. >>sorry about that. that's alright. i got a box of 'em. thousands of opinions. one estimate. the earnings tool from td ameritrade.

health care conference kicking

off this morning our meg is right there in san francisco. she joins us now with a special guest. meg. >> hey, david. joining us now is the ceo of eli lilly, dave ricks. this is really the week that sets the stage for the rest of the year in health care investing. of course, it was at this conference last year that president-elect donald trump said that the industry was getting away with murder when it comes to its drug prices how has the year been for your industry and what are you looking at for the year ahead? >> well, it was certainly a busy year in the industry i think that looking back, the one thing we would have to say is it's a tremendous year for innovation the first gene therapy, the record number of innovative and generic approvals. medicines are getting to the market for patients to solve their problems that's what we have to step back and reflect on a great time for science in the sector for lilley as well, we had a successful year. several drug approvals and read-outs. the science is there what we need to do is work on a

system where people can afford medications and we can reach all the patients who need these medications. >> how do you look at that situation really with drug prices and the language coming from the administration, but not a whole lot of action? are you expecting to see some more government action on drug prices this year >> yes i think there should beaction from all sides on the issue of affordability for patients at the counter. that's, i think, the fundamental problem. and there was some action. and particularly at the fda. gottlieb came in, he said i'm going to approve more generics he did we didn't have an epi-pen situation last year. that's a good thing for the industry those aren't our businesses but we get painted with that same brush. what didn't happen is very much change at the affordability at the pharmacy counter if i'm a part d senior or in a commercial plan, we see a continued rise in out of pocket costs patients while total spending on medications is pretty low

the growth rate is, i saw a study recently, 1.3% in 2016 growth that's much lower than medical inflation. so the system isn't paying more, but people are and we have to do something about that and individual manufacturers can do something about that. we offered a program last year where people could get 40% discount on lilly insulinat the counter if they didn't have insurance or a high-deductible copay, but we need plans to step up and make changes. >> michelle, you have a question >> thanks so much for joining us while we're talking about government actions, can we talk about the tax cut that just went through? what's the impact on eli lilly we heard from visa, they're going to increase 401(k) matching do you think it's going to prevent inversions which was happening a lot in the drug industry >> well, i do think it would prevent inversions we were net interested in that, but we're worried about the lopsided nature of foreign competitors who had better tax environments than we did that's now addressed i think strategically, that's

the most important thing that came out of the tax reform as american-based companies like eli lilly, 140 years based in indianapolis, can roll up our sleeves and compete on a global basis with a strong corporate tax rate it will allow usulse to invest without thinking about the tax rate so much but rather put plants and labs where it makes the most sense, where the talent is and where the markets we're serving are. so overall, it was a successful package from a pharmaceutical sector no big fundamental changes in how we allocate capital or how we think about fnlsing the company. but i think it does level the global playing field, and that's a good thing >> i also want to ask you, of course, about alex azar, who was an eli lilly executive now the trump nominee for secretary of health and human services expected to have a confirmation hearing i believe this week. what can you tell us about him having worked with him >> alex worked for us for a decade or so he worked for me for quite some

time he's a talented guy and had a successful career at the company. he also had a successful career at hhs prior to coming to lilly. as a private citizen, i would say he's well qualified. he gets stuff done he's smart there's different views across the political spectrum, but i think knowing him, he would represent the needs of all americans in their health needs pretty well. and we'll see what happens tomorrow in the hearing. but you know, he's a good person he believes in a strong health care system in america, and i think he's a talented manager. >> some of the criticisms he's received have been about the price of insulin at eli lilly. what does lily do to make sure that patients can afford their drugs, that there's nothing going without. you hear these terrible stories of patients running into huge health problems because they can't afford insulin >> we have taken list price

increases on insulin, as have most other medications, but the net price is basically the same as 2009. what's happening list prices are going up, rebates are expanding dramatically, payers, the biggest customers, are getting a better and better deal, including state medicaid, which pays almost nothing for insulin. and people who have to pay out of pocket are paying more and more we want to address that. one way we're addressing that is through this program we announced last year, which gives a 40% discount at the point of sale so alleviating a large part of that growth in price we need more programs like that. we're interested in partnerships with payers to pass through rebates in our own health plan, for my employees, we're passing through rebates in high-deductible setup so that the rebates that are negotiated get to the patient i think that's a basic issue and we can do more we have a program out there now, so anyone who's feeling like they're being pinched at the pharmacy counter can get a 40% discount today >> that's important.

another of course national issue for the drug industry and for everyone really from a public standpoint is the opioid crisis. eli lilly has late stage pain program that's not an opioid in partnership with pfizer. what's your evaluation of how the industry has responded to the opioid crisis, and can it do more >> we have responded well. we can do more lilly is not it, we don't make opioids, but we're working on a next generation therapy with pfizer that is a non-opioid and could alleviate the need to use those medications. we know that a huge percentage of patients who have an in-patient procedure, are prescribed opioids, and some fixed number, 1 in 15, go on to become addicted. interrupting opioid use is key today's program with pfizer, it could be one option. we also have new migraine medications coming and believe it or not, one in four migraine users are

prescribed opioids we also need to do other things on the public health side. so pharma stepped up and supported the cdc recommendation for a five-day prescription limit on all opioids, and i think education is a key piece as well. we need to educate the public and physicians that there are other alternatives in many cases, they don't even work that well to alleviate the pain i think we have stepped up we can continue to do more the biggest thing we can do, what we i think society expects us to do, is innovate and create something new and better that's what we're working on >> one of the biggest stories of 2017 was amazon. we don't even know what they're going to do. have you had conversations with them about them potentially coming into the industry >> we're not commenting on that, but we would welcome competition in the supply chain. the pharmaceutical supply chain is very concentrated sometimes that reduces choice and perhaps ships valiant away that's not in the best interest

of more r&d dollars and lower patient costs. competition could help thereat, and we certainly welcome competition in the supply chain. >> dave, we'll leave it there. thank you so much. carl, back to you, and of course, coming up on "squawk alley," tune in for our interview with emma wamsley. >> as we're watching biote biotech have its worst day since october, we want to get to dominic chu. >> what we have is ripple, the second biggest crypto currency out there by market cap dropping by about 30% in the past 24 hours. according to our quotes on cnbc.com right now, ripple trading at $2.32 per token that's a 15% drop over the last close, if you want to call it that but we're also watching what's happening with bitcoin, with either, with lightcoin there's something we'll keep a close eye on we're also watching the same price action on bitcoin vufutur.

volumes light in the markets, but something to keep an eye on. if anybody out there has interest in what the prices are doing, the kinds of volumes associated with them, go to cnbc.com/cryptocurrency. we have a dashboard showing all those prices in one spot back over to you >> there are reports online, dom, that the chinese government has ordered, a quote, orderly exit from bitcoin mining unconfirmed by us, but on all the bitcoin sites. i wouldn't be surprised if that's part of what's pushing all these currencies lower if china, where we know the biggest mining operations are, are telling them they have to stop >> we have seen a lot of that volatility happen because of the way governments have gone through and tried to regulate or at least go through and impose their will, if you will. the last time we saw a massive drop in bitcoin prices was when we saw that chinese government intervention maybe shutting down some of the exchanges and what not. so these types of things will be a source of volatility something a lot of people out there, traders, novice or

expert, have to be aware of. >> all right, dom, thanks for that >> when we come back, stocks continuing their record run, but will this be the greatest of all time a look at where you can put your money if you're banking on calm markets in 2018. dow is down 48 pntois. s&p down almost two. back after this. but if that's not enough, we offer our price match guarantee too. and if that's not enough... we should move. our home team will help you every step of the way. still not enough? it's smaller than i'd like. we'll help you finance your dream home. it's perfect. oh, was this built on an ancient burial ground? okay... then we'll have her cleanse your house of evil spirits. we'll do anything, (spiritual chatter) seriously anything to help you get your home. ally. do it right.

welcome back to "squawk on the street." stocks coming off their best start to the year since '06. this morning, dow and nasdaq hit new record highs but reversed. dow down nearly 50 points. for our etf spotlight, mike s santoli joins us with where investors are betting on continued calm and strong markets. >> this has been sort of the dominant trade of 2017 was to bet on this very calm low volatility climb and the etf world gives you very focused instruments to bet on this this is etns, exchange traded notes that vote on the vix or against the vix.

essentially, the vxx is on a way to on a daily basis bet on the vix going higher the xiv is its counterpart they only bet on vix futures and there's a kind of built-in structural reason why one will go down over time and one will go up, but coming into this year, the big question was can we expect volatility to pick up from historically low levels, even if it doesn't get to be an ugly market, will volatility pick up? right now, the way investors are set up is they're more leaning on the direction of we're going to stay calm if you look at the asset levels in each of these, when these first came out, people would bet on the vix going up as a hedge to their stock portfolios. as it happens, more assets in the fund that bets on a low vix than a high vix. it's an interesting trade going into this year one thing i'm watching is even if the market stays strong, if it has more energy to it, if it goes up in bigger bites and jumps which we didn't see last

year, you could see the volatility index go up even if the market is not on the decline, and that would be a little more of a kind of a late cycle type market that gets a little bit jumpy before a turn >> mike, thank you for that. a lot to digest this morning regarding various cross kurnlts. in the meantime, let's get to sue herera >> good morning, carl. good morning, everybody. here's what's happening at this hour new york city fire officials say a fire in trump tower's heating and air conditioning system caused smoke to billow from the roof and two people were injured. the fire started at about 7:00 a.m. this morning at the building that contained president trump's home and business offices syrian activists and a war monitoring group say at least 25 people have been killed by a car bomb blast in idlib last night it's the country's largest rebel-held city. no group has claimed responsibility so far. >> the u.s. navy has joined the search for 32 crew members

missing from an iranian oil tanker that caught fire after colliding with a bulk freighter off china's east coast over the weekend. none of the missing crew has been found no word on what caused that collision. and it might be bitter cold in large parts of the u.s., but there's a dangerous heat wave in australia. the temperature in sydney hitting a high of 117 degrees on sunday just one degree shy of the record set way back in 1939. thoub thousands have been left without power. you're up to date. that's the news update this hour carl, back downtown to you >> sue, we'll see you in about an hour. >> when we come back, go-pro's ceo nick woodman is with us, after announcing his company is cutting the rkrce wofoby 20% "squawk on the street" will be right back

shares of gopro sijing on a new round of announced job cuts,

restructuring plans, weak q4 guidance we'll send it out to josh lipton out west with the ceo of gopro, nick woodman >> thanks, carl. nick, thank you for joining us we appreciate it >> thanks for having me. >> a tough report this morning you see the stock is nose-diving. investors reacting big restructuring, significant layoffs. whole business lines are getting killed off you're getting out of the drone business a miss on that all-important holiday quarter. walk me through, nick, just what went wrong here. >> well, let's start with what went right the launch of our hero 6 black camera, our new flagship, went extremely well and as planned and hero 6 black was selling to forecast so we're really happy with its sell through the problem was more in our one-year-old legacy product hero 5 black, and as we shared on our earnings call back in november, hero 5 black was soft in terms

of sell through. and we were hoping that marketing programs and promotions we had planned for it would lift sell through, but it didn't and as a result, we missed the fourth quarter because that hero 5 black was a very important product for us but all of our data indicated that a price drop of $100 on both hero 5 black and hero 5 session would have significant impact on sell through and that's what we have seen happen since lowering the price $100 on both of those products, we have seen more than a two times sell through lift on hero 5 black, and more than three times on hero 5 session there is significant demand for gopro at the right price >> when you talk about hero 6, that's the new flagship camera introduced in late september you already had to knock $100 off the new flagship device, right? >> we just lowered the price on hero 6 black yesterday, on sunday to align with our $199, $299,

$399 pricing strategy. but hero 6 black was already selling very strong at its original $499 pricing, but given the other price moves, every indication was that our business would improve if we lowered the price of hero 6 black as well. but that flagship was succeeding at $499. >> let me ask you, a big part of the release is significant off of this company. you had about 1,200 employees. now you'll have fewer than 1,000. when we spoke in april, i asked you at that point, was that the end of the layoffs you said, listen, you expected the end of the layoffs here we are, another big round what happened there, nick? >> well, as you noted, at the beginning of the interview, we shuttered our drone business karma was successful in its category it was the number two selling drone at $1,000 and up, but as we looked forward, when we considered the regulatory

environment for drones, when we considered the amount of investment in the category relative to the profit margins that are possible in that category, we determined that it just wasn't going to continue to be a sound business investment for us the majority of our customers, more than 4 million a year, of our customers are looking for us to make great cameras with a great app experience, and they're subscribing to our subscription program that's what they want from us, not a drone, so we're investing accordly, and that resulted in job cuts >> michelle, i think you had a question for nick. >> thank you for joining us. should gopro be a stand-alone company? would it help if you had a bigger company that helped you with marketing and distribution instead of relying on just one product? have you thought about it? has anybody approached you think about going private so you don't have to deal with public markets? >> that's a very good point. and i think what's very strong at gopro is we have an incredible brand we have historically proven that we built a terrific product.

we're always best in class in each category that we enter. if there are opportunities for us to scale awareness of gopro globally by being part of a bigger company, that something we would entertain but of course, we need to run the business as though we're going to be independent. and we're planning accordingly and looking forward to benefitting from the improved sell through we're seeing on all of our products at their new pricing and we're looking forward to profitability in the second half of 2018. if there's opportunities for us to unite with a bigger parent company to scale gopro even bigger, that's something we would look at. >> i want to ask you -- i'm sorry, go ahead. >> i was going to ask, do you regret going public when you see how punishing the markets have been >> no, i don't regret going public at all. the markets aren't punishing they're actually accurate. as a public company, we are rewarded or punished, as you say, for our execution as a

business as a consumer product company, we're doing extremely well, as i mentioned, with the strength of our brand and the strength of our products as a public company, it's our job to translate that consumer success into profitability that's what we're focused on 2018 the markets are fair and i am still glad we took gopro public otherwise, we would have far less visibility globally >> about the drone, you said in the release, that business is going away you're killing off the drone business you mentioned some of the reasons. listen, there's a lot of competition, regulatory risk here and overseas. those risks were well known. why were you blindsided by those, exactly >> we weren't blindsided but the world has changed since we began our drone business. gopro has changed. and we have recognized that there's more opportunity for us to focus on our cameras, our

app, and our subscription business that's where gopro's core business is, that's where our growth is, and that's where we're investing. >> as you move forward now, i have been covering the company since 2014 to me, it does feel like the story kind of shifts when i first started covering you guys it's we have a camera, and we can't be disrupted by smartphones. you used to hold up a smartphone and say you can't attach this to a surfboard. now, the narrative is, do pro has a camera, and you want to integrate with smartphones, rely on smartphones why should investors believe that's the right narrative, that's the storyline that's going to work for gopro? >> well, when gopro first became successful, people were buying a gopro and tethering it to their computer to offload their footage and share it to facebook and youtube. now the phone is a computer in your pocket. now people use a gopro to capture and share their lives in exciting ways. they don't need a computer anymore when they have their phone. the gopro offloads to your phone, and the app creates a

video you can share. what we have seen since we went public is gopro has become far more convenient, far more mobile, and it's not a story, it's reality and we still think that we have a very large market opportunity globally because the world is only becoming more social, and gopro is how you capture and share your live on the go. >> david, you have a question? >> yeah, thank you, josh mr. woodman, just on this pricing issue, i'm curious, in terms of understanding the price sensitivity of your potential consumer, what did you assume that perhaps was not right previously that you now feel as though you have gotten right i want to try to understand that a bit more giving the pricing reductions you have taken. >> well, we have new data that helps us understand we have more repeat customers than we thought we did and that is really important to understand as we price our products we understand that our customers demand either a significant upgrade from year to year on our

models or they demand a price reduction in our older technology and we achieved the significant upgrade aspect of our value proposition to consumers with hero 6 black it's been selling really well at its previous $499 price point, and we expect it to sell even better at $399, but we missed the mark with our hero 5 line of products they were a year old we priced them at the same price as a year prior because demand was strong going into the holiday season but once you recognize you have a significant number of repeat customers in the second year of a product's life cycle, many of your customers either own that product or they're waiting for a price reduction, and we didn't provide that to them >> all right nick, thank you so much for joining us we appreciate it >> thank you very much >> carl, back to you guys. >> josh, we appreciate it. >> when we come back, invideo striking a big deal on driverless cars.

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the world's largest consumer electronics show, ces, is under way in las vegas nvidia kicked it off with a big partnership announcement in driverless cars. jon fortt is in san francisco with details morning, jon >> morning, carl yeah, nvidia is up a healthy 2.5% after announcing a partnership with both uber and volkswagen for self-driving cars uber planning to use their chips for its artificial intelligence

computing system, while volkswagen is going to use their drive nine platform and facial recognition and gesture controls in its self-driving efforts. they spoke at ces last night about the deal >> i'm also delighted to announce that uber, the company that put mobility as a service on the map, has chosen nvidia technology and we're partnering together to create future autonomous self-driving ubers. now, we have built pcs, laptops, game consoles, super computers, and i can tell you without exception, building a computer for autonomous vehicles is at a level of complexity the world has never known. >> also announced big format gaming displays called bfgds, and a beta launch of their cloud based game streaming service be sure to stick around.

"squawk alley" is going to have amd ceo lisa su here with me at one marked in the cnbc exclusive. we'll talk about the chip industry security headaches, details on the chip collaboration with intel, and a lot more >> thank you, jon fortt. >> on a day when bitcoin and other crypto currencies are falling, venezuela's leader over the weekend ordered the creation of 100 million units of a new cryptocurrency called the petro. he says it will be backed by the country's oil production michelle has been digging into this it combines two of your areas of coverage in a very interesting way. venezuela and crypto what is he trying to do here >> this started out with how will this work now the story is most people think it will not work a lot of block chain and crypto experts are extremely skeptical what venezuela is trying to do is actually going to materialize. let's show you the video here is venezuela's resident,

nicolas maduro, late on friday, making the announcement of a creation of 100 million crypto currency units that will be backed by the fuel key reason expertsexperts are skeptical is lack of rule of law in venezuela ultimately to have trust in a unit of exchange backed by an asset, regardless real or crypto, you have to believe you can actually redeem it for the underlying asset can you redeem this for a barrel of oil in a country like venezuela, how do you know they are going to deliver, and if you don't, what's your legal recourse there's an enormous amount of counterparty risk. experts are also technically skeptical. venezuela hasn't announced what they are going to use or create their own, in other words, if it's going to be based on ethereum or something else they make up. experts don't doubt there will be a lot of asset-backed cryptocurrencies in the future, they are just doubtful this one will work. by the way, a number of

countries evaluating this, sweden, estonia, canada, singapore, china, also russia. if you think cnbc covers cryptocurrencies a lot, we have nothing on venezuelan state television it is a constant topic there have been several hour-long specials dedicated to explaining it, many ministers go on tv to advance it. the head of the project is featured weekly on maduro's talk show, this is the guy on the left in charge of the project showing off the mining machines that they've brought in to do this they are going to have a meeting january 14th where they are going to announce the protocol and have all the registered miners meet. >> so if i can learn spanish, i can listen and finally learn about bitcoin and everything else, cryptocurrency, right? >> the more interesting is the asset-backed currencies. if the world works out the way these experts think it is, you can tokenize a lot of different

assets, create new syndication models, and not have to worry about -- >> use blockchain to deliver >> exactly >> turning large institutions obsolete in some cases, right? >> like which ones >> i can't imagine which we're talking about. fascinating, michelle. reminder that it's being driven by parts of the world that are ex-u.s >> for sure. >> absolutely. get a check on stocks, dow is down 33 nasdaq hdiolng on to a small gain back in a minute nobody's putting their money into equities. they're not investing in commodities or fixed income. what people are really putting their money into is what they hope to get out of life. but helping them get there requires a real refusal to settle for average. because when you approach investing with a tireless desire to beat the status quo, something wonderful can happen. those people might just get what they wanted out of life. or maybe even more.

welcome back to "squawk on the street," i'm dominic chu stocks are falling to start the week health care stocks in focus this week at the jpmorgan health care conference kicks off it's the most important week of the year for bio tech investors, but health care is still the worst performer in the s&p 500 today. watch a number of these names leading the downside, all down by 2% in early trading some big stocks to watch, guys back to you, carl. >> thank you very much hollywood's golden night getting a lot of buzz this morning. our julia boorstin joins with us headlines from the golden globes last night hey, julia >> hi, carl. women and issues of sexual harassment and discrimination were in the spotlight, both in the female-oriented films and tv

series that won and across the speeches and host seth meyers opening monologue. oprah winfrey made a nine-minute speech about change, sparking a call for her to run for president. the ballroom was a sea of black gowns and both men and women wearing time's up pins, looking to end inequality in hollywood and beyond the studio with the most wins, fox with seven, including four for three billboards outside of ebbing, missouri, including best drama. the films were about women and issues of abuse. hbo dominated the tv category as usual with four awards for "big little lies," including best drama. hulu brought in its first two golden globes ever for "handmaid's tale," while amazon won two awards, on par with its wins last year

netflix brought home just one award for aziz anzari. another winner was a-24, it had three wins for "lady bird. also a win for barry diller, who financed the movie it's going to be interesting to see how this affected ratings. third year increase in viewing back to you. >> thanks for that when we come back, lisa su is going to join us. you don't ntwa to miss this. "squawk alley" starts in a minute

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