consumer discretionary was the worst performing in the past week after similar drops, the sector tends to rebound, outperforming a month later. check out the yield on the ten-year 3.07%, coming down dramatically after the comments we heard. you will hear more about that right now. see you back here monday bye. ♪ good friday morning. welcome to ""squawk on the stree street". futures back in the red. investors wonder now whether a case is building for a fed pause

in december or no hike at all. brexit in may's future continues to assume europe futures pointing to a lower open >> the lackluster forecast is dragging down chip makers. nasdaq is set to fall. >> facebook under pressure denying reports that it ignored and then tried to conceal russia's attempts to disrupt the 2016 election. stocks are set to open lower following yesterday's rally in which the s&p did snap a five-day losing streak moments ago on squawk, fed's vice-chair said he disagrees with those who say the central bank is moving too far too fast on rates. >> the fed began hiking rates almost three years ago so it's been a very gradual cycle. the economy this year is growing north of 3%.

unemployment is at a 50-year low almost and so i think also right now, you think of the policy rate that we set, the federal funds rate, it's just barely above the rate of inflation for the first time in a decade so i wouldn't agree with that. >> he did tell steve, no clear signal from the market he said we're getting close to the vicinity of neutral, jim >> you know what it's cramer 1, fed 0 he is wrong for trying to do some work, which is what he ought to do. what i think is when i look at what happened in 2007, it's exactly what they did this time. we had people in the fed, very well meaning, saying what he did. of course, he did slip in at the end data dependence. their record is not as good as mine i'm sorry to be like that. i'm sorry to be like bill parcels. you are what your record says you are. they are 0-1 they have to start shaping up and stop being ideological chairman powell the other day

started to say it. get more data dependent. they have to do more work. they have to stay up later it's a huge -- you have to make the calls. like i do. >> a couple -- >> sorry to be so arrogant. >> that's all right. comparing to '07, it's not a completely apples to apples comparison. >> true. they are wrong now like they were wrong then. >> i am going to tell you, listening to you for a couple of months now six weeks at least talk pretty negatively about what you see coming i will have to say that i'm starting to hear the same thing. >> you are >> yeah. business confidence, there's a question how much it's getting shaken because of the potential trade war. you hear it more often i'm hearing it from investors who even if it doesn't end up necessarily being true, are pulling back these things become self-reinforcing or self-fulfilling. not to mention, of course, as you pointed out, so many times

the home builders. and retail, which has been kind of a mixed bag we will look at it this morning with nordstrom, macy's the other day, dillards. i'm starting to agree with you >> 98,000 people work at jcpenney you have to find a home for them >> you have all the ceos talking to you today, it's the journal. called, america is not an island, in which the page says the fed needs to rethink a december hike. the president needs to think about his tariff war how lucky does he feel he suffered a bruising midterm election defeat with a strong economy. >> are you feeling lucky it's like a dirty marr yiy harr situation. i'm shaken by what's happening it's happening faster than the fed seems to realize fed doesn't show -- >> and it's global

we have to point out, the slowdown is occurring at a faster rate and certainly foreign markets show that. look at the performance for performance markets international versus our own it's china at the heart of it, even though frankly the consumer here is really not suffering very much as a result of the tariffs it's the perception of this going to continue for some time. it seems to be shaking certain -- some decisions in terms of businesses and potentially, i guess, at the more consumer level. >> let's talk about what the vice-chair said. he said there's nothing in the market that gives the signal that's wrong it's the first amendment he has the right to be wrong but he is wrong. when you see oil fall like this with the speed of light, when you see the freight fall like this, when you see applied materials falling, part of the new economy, when you see the home builders, the auto,

retailers, service economy, what you have to do is say if you are him, we have new data. the new data in the past six weeks have changed we don't want to react necessarily to the last six weeks. if it continues, we may have to rethink what we are doing. if you say, we have been raising slowly and we're being prudent -- they are not. they are fooling themselves. they are being rash. they're not being careful. their policy -- they need to be careful. jay is a careful and prudent man. these are people who are my age or younger i don't want to see them make a mistake. we could say, we're journalists. who are we i'm not a journalist i've been speaking to business people offline say something. so i'm saying it these guys are my junior a lot of these guys would have been people i would have employed at one point. it's okay to say, come on, do more homework.

>> help our viewers understand, are you pointing to just the slowdown in activity, or are you pointing to concerns about credit, high yield, investment grade deal, highest since 2010 is it about bud and ge and ford and campbell >> campbell's is in shambles ge is in shambles. i think he will spin off health care it will make it -- i know this >> you keep coming back to the ge health care thing >> it's a $90 billion division >> i know. is this hope what are you basing this on? you said you are not a journalist >> i'm using this. you use it want me to show you the text that i'm not supposed to show you? i'm not going to show it to you. this is what i do for a living >> i thought we were together on this >> i will show you off during the commercial this isn't -- i'm not saying it's high yield necessarily.

i deal with s&p. there are a couple companies -- >> credit is not -- it's nothing like what we saw ten years ago, 11 years ago. >> you have peter novaro who says we have to contain the chinese. we contained the soviet union. how much business did we do with them while we were containing? what did we sell them? arm & hammer went over there he tried to do business. i remember interviewing him when he was a businessman he wanted to talk about smashing opec and containing china. this is who you elected. you elected this guy we elected, whatever i'm saying, these are not new thoughts the containment policy is something i favored for a long time it's difficult for me as a person who likes stocks to

contain, as a person believes the prc must be contained, i'm thrilled but understand, it's not about trade. it's about military. >> right it's about a lot of things you pointed to the pence speech four weeks ago >> everyone should read that the anti-marshal plan. >> back to the fed for a second. does the president's jawboning make it less likely that powell will feel like he can or has the latitude to do that, because if you do, you are almost seen as knuckling under to the white house. >> he has been so foolish. he is being so foolish now he will come after me. be my guest. call my mommy. >> talking about trump now. >> yeah. >> talking about ceos, you did speak to james quincy. we will hear more tonight. this is what quincy said about trade. >> the world is not quite flat it's not flat enough for global

brands everywhere. it's not so dissimilar it can be local brands everywhere. we need to find that sweet spot between what is it that really works in a place that has portability to other countries we can create either global brands, regional brands or even local brands that use the same chassis, if you like, around the world with different approaches. >> big implications there for global supply chains more tonight on "mad money." >> there's a business that doesn't have economic sensitivity. he is a worldwide ambassador they are like the state department they want to bring the world a coke he is successful he has 6% growth, which is shocking for that business he is doing a great job. he is personalizing. he is not -- his business is not going to suffer. just like, by the way, if you look at coca-cola from march of 2000 to march of 2001, one of the best performances in the s&p. this company is a company you want to own if what i am saying comes to fruition, which is a

tone deaf fed that can't -- it's only looking in the rearview mirror and doesn't want to be criticized because just like when they finally -- when the actual -- the transcripts came out where they made fun of me in the meeting after irsa said they know nothing, they will have a meeting, i'm saying, i know more than you last time i didn't i said i talked to a lot of people now i'm saying, i'm older than you, maybe i've been around more than you it's okay. the fact that i'm on tv should not be held against me if i worked -- let's say i was a professor at columbia or harvard, where i went, whatever, would they listen to me? probably that's great there's a credential for you as my father said, that and being a professor yourself is good, because you know what? i'm not even paying for your gasoline bill. gasoline he did come on, i worked all my life. you are going to take a m.i.t. professorship? >> i will attest to the fact

that you speak to many people in the business world frequently. >> i'm tired my wife is working i'm working. >> you work harder than anybody i've ever seen i'm trying to keep up with you sometimes it's the delivery that is a little off. >> i had to speak -- you think i want to speak to these people? there was a good green bay game last night no i'm speaking to these people. >> i keep forgetting there's football on thursday night. >> who knows when you work >> when we come back, we will talk about why the market will open lower today a lot centered around chips. >> i got that bad boy. >> gotta downgrade for home depot. jim stewart says amazon chose the wrong locations. we have our 50th 1% move of the year yesterday remember when we couldn't get any at all back in a moment

you're still here? we're voya! we stay with you to and through retirement. i get that voya is with me through retirement, i'm just surprised it means in my kitchen. so, that means no breakfast? voya. helping you to and through retirement. when it might be time to buy or sell? with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today. starts with a december to remember at the lexus december to remember sales event. lease the 2018 rx 350 for $429 a month for 36 months. experience amazing at your lexus dealer. from capital one.nd i switched to the spark cash card for 36 months. i earn unlimited 2% cash back on everything i buy. and last year, i earned $36,000 in cash back.

which i used to offer health insurance to my employees. what's in your wallet?

i am a techie dad.n. i believe the best technology should feel effortless. like magic. at comcast, it's my job to develop, apps and tools that simplify your experience. my name is mike, i'm in product development at comcast. we're working to make things simple, easy and awesome. got breaking news on industrial production. goiod morning, rick. >> the october read for industrial production, up one-tenth of 1%. that's light we lost one-tenth last month there's good news here

utilization rates continue to be strong expecting 78.2, we ended up with 78.4 last month was 78.5. 78.5 is the best number going all the way back to january of '15 on the revision. 78.4 isn't very far behind a bit of a mixed bag, average on production well above average on utilization rates and of course we see treasury yields toying with the 308, 309 level. technically important. we will talk about that throughout the day back to you. >> rick, thank you very much chip sector is under pressure today. invidia is down after posting a quarterly revenue miss the company's working through excess inventory left over when a crypto hangover. goldman removes invidia from a

conviction buy clearly, we were wrong i think it's red again for the year >> they're too hard on themselves i got this one right sell it. what happened here is very interesting. cfo and jensen wong, i'm looking at the previous data, he said it's hard to estimate. but he did think that it was very, very small so i think goldman is being too hard on themselves what happened is, he said, it's hard to estimate no matter what. this is the previous quarter they believe we reached a normal period bas basically, they felt there would be no contribution from -- actually, $500 million in revenue -- i'm sorry, in inventory, which is one of the

biggest mistakes. >> the growth story here has been both, obviously, the chips for gaming and coupled with bitcoin mining, which many people expected would come to -- or slow. what's going on with gaming given this very large channel inventory excess that they are talking about? >> it's hard to know how much is gaming revenues are expected to climb meaningfully they don't know -- that was the problem. when you spoke to them, they never were sure what people were doing with the chip. were they using it for gaming or were they using it for crypto? they got it wrong. they said, we were as surprised as anyone else when you hear that, the excess inventory, you know there's two quarters they have to work off they still don't know. they can't figure out whether it's gaming. they got it wrong when they thought it was mostly gaming they do have a new gaming chip that's very good only one company is seriously --

this is -- this is going to be wrong to own for the next two quarters >> what do you do with a multiple here? this trade has traded at a high multiple because its growth rate has been amazing now that's in question, certainly. >> the data center i didn't like i thought they were light in the data center. the head of a & d foreshadowed there could be issue here. both of them are struggling to try to figure out where the data center is slowing. i think they thought it would accelerate from here i think it's very good then you are not going to make -- you are not going to have multiple increases. do they know how to forecast clearly not. do they have the best chips? throughout the conversation on the call, he repeatedly said

traditional semis, they make gpu. it's more powerful and runs a little cooler. i think that they got it so wrong that no one will trust them for a while. >> intel adds $15 billion to the buyback and is going to open lower. >> the semi is going to be down it's in a bear market. if you listen to applied materials, they thought it was going to come back applied materials, they're not talking about a rebound until the second half of 2019. what do you do if you own that you go buy coca-cola because i'm not going to wait until the second half of 2019 to buy, even one of the finest companies. that's what i want the guys from the fed -- this is the nitty-gritty of it we're a great manufacturing country. we make planes, heavy equipment. no slowing in boeing, by the way. that's a huge -- that's our biggest export a lot of the companies are saying, wow. people aren't using as much as

what we thought. a lot of that is tariff. a lot is people -- go on the william -- >> you have to do retail >> they said, a lot of what -- there was congestion in the ports as people tried to beat the tariffs. the numbers were dramatically overstated to begin with >> we will get to surging imports. >> the fed isn't on -- >> we will get to nordstrom. don't go away. i think that she's a very nice girl... ...you never got the brakes looked at? oh yeah. no. at cognizant, we're helping today's leading manufacturers make things that think and do automatically. imagine that, a world of new digital products and services

all working together for you. can i borrow the car when it's back? get ready, because we're helping leading companies lead with digital.

get ready, because we're helping leading companies i am an independent financial advisor. for our firm, it's about trust and transparency. trust that we do what's right for our clients, without the constraints imposed by the traditional brokerage houses. transparency in the way we're compensated. our philosophy is one of service, not sales... that's why i'm independent. charles schwab is proud to support more independent financial advisors and their clients than anyone else. visit findyourindependentadvisor.com

♪ globetrotters getting ready to ring the opening bell at the new york stock exchange. we get ready to end the trading week six minutes before we start trading. home depot, a feature this week. in research, i guess this morning. >> devastating downgrade by bank of america it reads like -- new york state has big mountains. peak, peak, peak listen to this we are downgrading home depot shares we believe 2018 was the peak in earnings growth and 2017 was the peak in comps. our u.s. economic team estimates 2017 was the peak in home sales. what they're saying is get out of it. not enough for expansion they prefer lowe's

when you read this, you say, okay -- i think the company is better than that the cfo laid out a good case does it matter this is what controls things people say it's down so it's bad. they shoot first ask questions later. we're in a bear market there's a couple -- coca-cola is not bear because of the sectors, because of -- you don't want individual stock risk who came up with that? what matters is certain sectors are in bull mode health care, consumer product is in bull mode might as well be k.b. homes. they said the last five, six weeks we gave up our year. that's why the fed -- i'm going to harp on it again. the fed is 0-1 they got to look at the conference calls it's so boring

my wife says, why do you keep looking at it? she's playing with the dog >> speaking of retail, nordstrom, the opening bell coming up. stay with us 4-w-p is more than a store. we're truck and jeep experts, and have been for over 50 years. from wheel and tire upgrades. to full custom builds. 4-w-p has you covered. whether you want to order the best parts online or shop in-store. do the work yourself. or get it done by a pro. all roads lead to 4-w-p. do your rig right. shop online or find your store at 4-w-p.com.

if you're waiting patiently for a liver transplant, it could cost you your life. it's time to get out of line with upmc. at upmc, living-donor transplants put you first. so you don't die waiting. upmc does more living-donor liver transplants than any other center in the nation. find out more and get out of line today.

♪ whoa! (phone rings) daddy, mommy's on the phone! hi! how are you guys? at&t proudly offers wireless and tv discounts to military, veterans, first responders and their families. visit att.com/hero. ♪ (whistles) ♪ come on. come on, squirt. (dog barking) whatever your financial goals are, a u.s. bank wealth management advisor can help make them a reality. talk to one today. u.s. bank - the power of possible.

you are watching "squawk on the street," live from the financial capital of the world the opening bell in a minute the dow is on track for the worst week really since march, after that rally yesterday futures are red. we haven't talked about the carrousel of trade headlines from ross and now this growing sense that g20 is a framework at best >> yeah. i reiterate this is not about trade. if people think it's about trade, then they're missing the bigger picture this is an ideological battle between what we think is a nation that does not quite bear. it suppresses free speech,

attacks minorities, does all the things that have nothing to do with democracy let's stop funding them. they are asking -- resource. get away from china. let's bring china to its knees we don't negotiate with who you think are terrorists the rhetoric is unbelievable from the administration. people have to understand, this is not about trying to work out a really good deal where we sell a lot of cars. people have to stop kidding themselves >> less than would weeks away from the big meeting s&p on the big board today it's the harlem globetrotters highlighting its fan-powered world tour starting next friday. what's important to watch,

retail or chips? >> there are a couple chip companies doing well zilinks is doing very well >> yes >> silence was deafening >> invidia is down 20%. >> it was a shame. they got it wrong. i don't understand -- why anyone would think they would get it right, why didn't people listen to dr. su? right here where she told you that there were issues these analysts refused to do downgrade. i don't know if they were afraid she told you that there was a slowdown people didn't want to believe it i think that people have to -- look at qualcomm i know qualcomm is caught up with apple >> qualcomm has a lot going on >> qualcomm is not that bullish right now. they are bullish on 5g

we have to start talking about 5 5g soon. when is 5g going mainstream? >> it's a while, until it's mainstream i think we're talking years. >> when will -- >> there are going to be enormous implications. people need to focus on -- as you say, we will talk about this in the weeks, months and years to come. the lack of latency is one thing. the lack of time it takes to go from your phone to the edge of the network and back is milliseconds or more that changes the whole way these things are constructed you are not going to need as much computing power because so much can be on the edge of the network. that's one of the much imp implicati implications >> you are not going to need your game console. it can be on the edge of the network. these are -- eventually, you will have network cars all over the place. it's going to change everything.

it's years to come. >> you are close to verizon. >> i am. >> they have often said they are closer on 5g >> they are starting to light up various parts of the country starting doesn't mean that you are really there fully or that you are going to be geographically ubiquitous. verizon stock is up almost 12% this year in part because they have focused people on the 5g opportunity. they stayed away electrfrom lare deals, whether it be charter, content. they have been rewarded for it this year. >> i'm glad you mentioned that there's companies that have kept the eye on the prize verizon said we can offer a great product. we will offer a great yield. we will make money we will raise the dividend i have to tell you, it deserves to be where it is. >> they have benefitted from the lack of price competition that was so strong in this industry

for the last few years and has abated >> that's interesting you mention that if you have a 5g war, arms race, you do, i think, actually need what leathngth ledger said, a m >> if you have a strong number three that can build up the network on 5g, which is what they are arguing we will see. >> how about the new cash flow at at&t? better or worse post time warner i hoped it would be better what do you think? i think it's more subjective -- >> i think they are planning on an addition that's very important for them, given the debt load they have. not that they don't have plenty of cash flow they do. people are watching that pretty closely. it's one reason why the stock has not performed well at&t down almost 23% this year. >> oh, my.

>> it's supposed to be a safe stock. john malone with me the other day talking about what he believes -- hbo, which is a great property, but can it compete in the streaming world with the 2.5 million it spends versus 12 that netflix spends. amazon will spend 15 >> where did that come from? that's fancifufanciful >> yes >> it didn't seem right to me. rates are signaling a lot of what we're talking about >> that's what people ask. fur righ if you are right, how come the ten-year hasn't come down? i'm reading an e-mail from a one-time hedge fund manager. he likes to throw criticism our way. market is short duration if you are right, there should be a large move in yields as funds scramble

the bond market is telling us inflation say concern due to a tight labor market >> t i won't name the name. >> do you know what creates a less tight job situation >> what? >> layoffs layoffs. by the way, a lot of the problem in the supply chain and freight -- what james quincy told me, the ceo of coca-cola, when they change so you can only drive 50 hours a week, that's what caused the trucker shortage they will solve that i don't know how they're going to solve it, but they're going to solve it. you are going to see less inflation along the freight lines. i think the union pacifics of the world were caught a little unaware about how much trade there would be a lot is pulled forward from china to get the goods here. you will see layoffs when you get the layoffs, you won't have that problem with the labor shortage. >> you get layoffs at wells fargo, 1,000 we talked about starbucks.

under armor. they want to try to maintain margin going into q1. >> coca-cola had a slimdo down t the corporate layer. it's a mosaic. it's the layoffs are coming or the layoffs are here anything related to housing is just plain bad >> we saw kb yesterday. >> wells fargo -- he knows it's not coming back soon i have a 2.58 mortgage do i want to trade up to a 5% mortgage that's what people are thinking. not do i want to trade up to a better home. do i want to trade up to a higher mortgage. the fed is oblivious to that they don't realize they ought to -- go to zilla i'm not being if-- >> i want pcg on the record. the pre-market -- >> thank heavens >> price target is 40.

the public utility commission in california is suggesting that they would apply a cost cap for damages because you want to make sure the utility can continue to serve. >> the move in the stock is ridiculous yesterday, it's down 30% after hours, regulator talks to some research firms and the stock moves up the dissemination of information, not great not great. >> that's unfortunate. i remember dealing with that public utility commission as a reporter he said they were going to shut down the plant >> tell us all instead of after hours telling one person -- come on >> that was bad dissemination. >> the news is important the stock is rebounding dramatically. >> that would have been terrible that's a lot of debt we haven't mentioned it yet. go ahead what are you hearing today >> on what >> tudor jones.

>> what are you talking about? >> he was on "mad money. he was saying the end of the year would be good. >> he said to would be phenomenal >> we sold -- a lot of people bought apple then they sold people, he is not running your money. david is not running your money. he is running his money. people ought to -- that's like saying, listen -- it's like the panthers let's say he wants to bench somebody let's say he wants to bench mccaffrey. co-ha big mistake. i'm going against him. >> we were talking streaming earlier and the money being spent there. we haven't gotten viacom numbers. not doing much viacom was up -- they have had the call give you a couple specifics. now it turn ed lower paramount doing very well.

if you haven't seen "mission impossible," that was great. domestic affiliate revenue up 3% on the call, they were talking about benefits from all the money being spent by netflix and others that are streaming services new revenue stream he runs the paramount studio and saying, in fact, that they have their own new partnership with netflix on a multi-picture deal. >> i thought that would move the stock. >> which is a positive for them. there is concern about directv, at&t, it's not until next year but will there be a carriage fight there? it's t co it comes back to that. >> will they drop networks concern about their guidance

they anticipate revenue growth being the single -- mid single digits we expect low single digit growth in 2019 >> they were cautious. everyone talks about the idea they will merge with cbs. >> i've been reporting on this nothing now. let's wait until next year let's keep a close eye on it. >> i think it's important -- if you did a lot of reporting on that cbs story it would be fantastic. it might bring the house down. >> there's more reporting coming on cbs for sure. we have not read yet facebook cracks 140 -- actually, 139 now. >> that's bad. >> you will have to go back to march of '17 to see a level this low. >> yeah. we're trying to figure out what to do. we have a $50 basis.

it's jarring this is one -- i asked quincy, does he use facebook messenger it's how he gets his customers in brazil. the narrative of how good it is and how good instagram is drowned out by what i regard as being the neixon white house, al the president's men. i have to mention william goldman. >> reports are he passed away. screenwriter for "all the president's men," and "butch cassidy. >> is it safe? >> one of the great. >> read the books. >> a couple of names i wanted to get to before we move on dvmt yesterday, the big story about bringing on 17% of the

share how o shareholders carl icahn stepped aside he said i'm not going to fight i'm withdrawing litigation in delaware the stock itself of dell's tracking stock for its share were still perhaps below what some believed. this morning a note out from -- i think it's deutsche bank dell appears to be valuing its core business. some investors think it. higher than a street they believe dell is confident and was willing to be flexible on the equity stake because it is confident it thinks it's closer to five ty times. it was $13 billion on the floor. we're going to pick that up. carl icahn said, no, that's ours maybe it was 11. now they split it more they threw more equity on the plate.

william-sonoma down did. >> they did so many things wrong. it was very -- other than west elm, dispiriting how things switched remember, they have a sourcing problem. there were a lot of things that didn't go right, including they did not have the merchandise in hand they had good demand but they couldn't have the deliverables because of china. they are trying to resource, is the term they use, mitigate. they are hostage to china. i think this is all part of what we have been talking about that the fed has to get up to speed on, which is the tariffs this is the quarter where the tariffs hit home not for sysco. some of the companies have great secular trends this is -- even when you -- i had zebra technology on the other night. it's bar codes the bar code readers are made in china. they have a committee to deal with what happens if it goes to

25 a committee of people. they have a war room, basically. >> i have one more i want to get to it's been a small one i have been following there's not much else to follow. i don't know if you saw the bear rate on this. >> someone called me on that >> achc, there was nasty stuff going around on acadia somebody screwing around using my name. we will get you. >> let me help on that. >> please. i want to add that the process itself seems to have been stalled in terms of a potential lbo. kpr was a leading bidder i'm now hearing from people close to the situation that it's been stalled not looking particularly promising at this point. that's just a little bit of update on a small but well followed lbo that's been a bear slash a lot of hedge funds >> walmart leading the dow

lower. below 98 >> cut our losses in half but still two to one declining to advancing stocks the retail debacle continues good enoughs from macy's that started. good numbers from walmart. semis down banks flat to down oil is rallying three days in a row now. that he stabilizing the energy sector there's a little bit of good news i want to point out what the actual news is on these companies. nordstrom would have beaten by a penny if not for the charge for the credit overcharge. i know the valuation is high but 12% on that? williams-sonoma, the sales missed because there were inventory delays because of chinese ports impacting their brands they bring in this stuff from china. 13%. nvidia was disappointing due to the crypto slowdown.

the auto business may be of record 18% on a slowdown. my point is where are we in the stock market right now it seems to me like we are getting large stock moves that unrelated to the importance of the news, the magnitude of the news i think the reason this is happening, it's not related to the stocks necessarily, it's related to the ma crow -- macro intention. that's what's causing the confusion. i'm concerned there's no catalyst until the g20 is that november 30th? the expectations are low there maybe they could turn that around we're sitting around looking at this for the week. retail is back to we have problems again after middle of the year things were better. semis, energy down, health care. that's a big stable sector banks haven't been -- the market is down 1% to 2% this week retailer -- middle of the year, a lot of people will fight against amazon

see what's going on. this is just daily what's happening here the last few days i want to point out, nobody talked about but intel announced a big buyback. $15 billion. they have another $5 billion sitting around this could be a 10% reduction in the shares outstanding intel is a small class along with apple and ibm and exxon that are buyback monsters. they add 6.6 in 2002 they are down to 4.5 billion they have reduced 30%. that means all of the things being equal, their earnings are 30% higher as a result of that it's going to go down likely to 4.1 or 4.2 billion in the next year or two if they do the b buyibili buyback. >> thank you trying to keep our eyes on yi d yields and the dollar. >> you know, it's always fascinating -- i always love to try to do market forensics

when steve had his interview with the vice-chair today, there's bill doubt he affected the market not only in a time faction but in a yield curve fashion it's adding to a move that's been a food in that direction and gave it a push look at a two year, you can see the drop around the time steve was talking. now look on the other side of the curve. see how much less affected it was? this is a fed issue. it's an issue that many have been focusing on, is there going to be a pause? i've had exchanges on it all week if you observe markets like all of us do, it's hard to miss the details that were underscored. they really hit home if you look at that ten-year i was talking about, consider this for the week, we're down a dozen basis points, down 15 on five, down nine on ten, down two on

30 let's open that chart up to ten. see that it's holding that's the big line. when you open it up, that defines the weakness in the double top the dollar index, obviously has a fed channel as well. you could see channel as well. you can see it showing up there. it was already in the shutes coming down before that and it accelerated. it's almost a half sent on the week lost the 97 handle covering around 96.5, let's see, we have carl, jim, and david back to all three. >> i don't know how you keep it straight sometimes, rick santelli as we go to break, look at the worst-performing movers on the s&p today. nvidia is no doubt the biggest laggard, about an 18% decline. but over the past six weeks down about 44%.

for decades banks have been getting away with it. charging you excess fees. making you wait in line. keeping billions of dollars of your interest. they've been treating you like you're lucky to have them. that's not right. show them who's the boss of your money. you. better is out there. ally.

do it right.

but you can't. at cognizant, we're helping today's leading media companies create more immersive ways to experience entertainment with new digital systems and technologies. get ready, because we're helping leading companies lead with digital. seeing some buyers step in here dow is down 13 points but we're

watching facebook closely, still below 140 as they takes you close to the lowest levels since the spring of last year. we're back in a moment but everywhere else... there are chefs, bakers and food order takers. doctors and surgeons and all the life savers. the world is alive as you can see, this time of the year is so much more than a bow and a tree. (morgan vo) those who give their best, deserve the best. get up to a $1,000 credit on select models now during the season of audi sales event. most kids today will have jobs that don't exist yet. the engine management systems coordinate with autonomous vehicles. financial data, so now we can predict the future. our new flexible propeller design. by collaborating with public schools on a program called p-tech, ibm is helping students build the skills they'll need for tomorrow. revolutionizing. aerospace industry. it's an entirely sustainable approach. any questions?

when you rethink education, everyone can put smart to work.

i am a techie dad.n. i believe the best technology should feel effortless. like magic. at comcast, it's my job to develop, apps and tools that simplify your experience. my name is mike, i'm in product development at comcast. we're working to make things simple, easy and awesome. jim, what's on "mad" tonight?

>> certain stocks are leading the market, coca-cola, mcdonald's, so we have james quin quincey. he's fabulous. just before we leave, nordstrom. one of the reasons why it's down, they charged higher interest -- occurred as a result of settings implemented in 2010. only 4% of nordstrom card holders. >> the worst week for nordstrom in a decade. >> a disgrace they did this. i love the brothers but that's not right. >> jim, see you tonight. "mad money" is at 6:00 p.m when we come back, pulitzer prize winning columnist jim stewart on why he believes amazon chose the wrong locations for hq 2 dow is down 16

♪ whoa! (phone rings) daddy, mommy's on the phone! hi! how are you guys? at&t proudly offers wireless and tv discounts to military, veterans, first responders and their families. visit att.com/hero. i cowe can do theyour screening at her house. hi. this is the man that's going to check your eyes grandma. cognizant ai solutions are helping healthcare companies advance diagnostics and prevent blindness

in patients with diabetes. everything looks good. you have beautiful eyes. ♪ ♪ this is the part when i -- welcome back to "squawk on the street." i'll carl quintinilla with mike santoli and david faber of the pink that. after that bruising after market last night courtesy of the likes of nvidia and in order strnords back almost four points.

stocks mixed over the fed, slowing growth and tech. after the scathing report in "new york times," facebook shares and mark zuckerberg attempt to explain. >> plus, sonos stock is spiking higher this morning. patrick sense is going to join us. >> a few big themes driving the market the fed's view on how quickly it can hike rates the corporate earnings picture, nvidia, nordstrom are down this morning and any movement on trade ahead of the g20, which is now within two weeks, of course federal reserve vice chair sat down with liesman for an exclusive and he joins with us more hey, steve. >> markets interpreting remarks of the new fed vice chairman richard clarida. his first interview since taking the job in september somewhat dovishly. the fed has more work to do but may not have far to go from here

from the current funds rate of 2% to 2.5%. >> as of september, the long run neutral policy rate by members of the committee was in a range of somewhere between 2.5% and 3.5% so currently the policy rate is below that but it's getting closer towards the vicinity of that range >> he wouldn't say specifically where he thinks neutral is but he suggests the fed needs to get there. there's more work to do and maybe most importantly he didn't endorse the need to go above neutral which some fed officials are forecasting. clarida said the fed needs to get increasingly data dependent. he added he is not get anything particular signal from market gyrations. >> i don't think there's any clear signal it's hard after the fact to attribute any given news in market there's some volatility so i think right now there's no clear signal that i would take from

i it. >> he said it will likely depend on the interplay between strong economic growth, a tight labor market and inflation he had suggested he needs to see stronger inflation to do more rate hikes than he forecast. >> what a key interview today, steve. thank you so much. steve liesman in d.c with clariclarida's comments ind the s&p and nasdaq are about to snap a two week win streak seven sectors, including tech, are still in correction territory. joining us in post 9, oppenheimer asset management john stoltzfuss. and john fink. happy friday >> good morning. >> so clarida, no signal

>> i think the fed is very clear. if they sense inflation they'll tighten. if they don't sense inflation, they won't do anything if they sent deflation, which is still a possibility in a world where technology and globalization play huge roles in the way the economy moves. very possible that they could cut but i doubt that you still have a new chair there was never a honeymoon. it's like an old dog at the family, they check out -- a stranger comes to the house, will they be friendly to the family or not? >> what's your base case for december >> i think they're going to raise and raise just to remind any animal spirits within the market we're serious about this, we're normalizing, we want to have enough bips on the fed funds rate to cut when we need to. >> part of the fed discussion is

what sorts of things the fed should be incorporating into its decision making process. slowdown overseas, the potential for further trade frictions. what happens to the dollar in that scenario. so it seems as if the fed was just focusing on the unemployment rate and consumer price index in the u.s., they would be business as usual what do you think those global concerns do to the fed equation, though >> well, it's hard for me to say th that i agree their primary focus needs to be data dependent i don't think they cast a blind eye to external events or issues that create market shot or volatility i don't think they'll react necessarily right after that news and continue to follow the plan they've been following going into next year. >> so what do you think the key swing dynamic is in markets right now? through the end of the year into

the first quarter if it won't be navigating the fed's intentions. >> well, i think you have to look at brexit and the trade wars and the summit coming up as having short term impact on the markets. they will spike volatility or if the news is unexpected so there is a reactionary flow to the market ultimately we look at really the long term value of companies in the markets and sometimes we look at the spike in volatility as a buying opportunity. >> is anything getting your attention in terms of value at this point >> i think what it is that we have a lopsided thing here where tech is underperforming right now. consumer staples and utilities that you've got a market that's focusing on defensives and we think that's a late call now we think the call is take a look at cyclicals, with think

cyclicals will be recognized the main things to watch are an agreement with china, whether it's by the end of the year or by the end of the first quarter, we think it's highly likely. in addition to that, the focus has to be on future earnings how is the market going to get tougher calms when we digested what happened. >> and for q1, what do your earnings estimates look like >> we're still formulating those at this point but we would accept high single digits. we would be happy. we think you can't expect the market to grow at 25% earnings. >> single digits is consensus. the risk is that it's too high. >> i think that will be likely realized and the risk if you consider it usually is we project negatively into the future we want to say you want to be

cautious to do that because the dollar looks like it's beginning to weaken and the fact that oil is cheaper, that should be good for the economy. nobody said that yet but cheaper oil looks like a good thing for the consume yr. people were saying we're paying less at the pump, we feel like shopping >> tom, the back-and-forth regarding trade, the conflicting headlines between navarro and kudlow and lighthizer, is that shaking out a certain class of invest s investor or is this just obvious chop when you go into a meeting as important as buenos aires is? >> i think in the short term i am sure it holds some people back the reality is this, this will play out the way other things have played out. the election recently played out. i think the real issue is if the trade war continues and gets

worse, that creates a real worry about emerging markets or a future china slowdown. if there's better news you can see more positive momentum in emerging markets where people are willing to come back in. >> tom, though, in advance of any news, kind of quietly chinese stocks, emerging market stocks have gotten traction. do you think there's any signal in that or is it just kind of an oversold market hitting some kind of a low? >> probably a little more to the latter i'm not an expert in equity markets, i have great people that work for me that do that. but my guess is money sometimes comes in ahead of the actual event based on the speculation >> what are people saying about corporate credit and comments the likes of what what we got yesterday. >> i think that's always a possibility but so far when we

look at it, the default rates are not beginning to look like they're about to spike you've got a good economy. tax reform creates liquidity for companies in higher earnings this year and into next year that could help offset the feds' tightening, or the effect of the feds' normalization processes. a little more none the bucket to take care of refinancings, meeting needs that might be challenged otherwise. >> but you think they can look past downgrades. >> it reminds us of the huge chasm between traders and intermediate to long-term investors who are three to seven years forward in what they're expecting. >> john, tom, thanks, guys. when we come back, facebook

shares down again this morning one top analyst will explain why it's still among his top picks there's a look at the shares below 140. as we go to break, a look at the top performing names on the s&p. dow is down 13 don't go away. alpha seems more elusive today. is it because so many go after it the same way, chasing after short-term returns? instead if getting caught up with the crowd, the investment managers at pgim take a long term view. uncovering opportunities for alpha across public and private markets, while anticipating unforeseen risk, has powered our rise to a top ten global asset manager. partner with pgim. the global investment management businesses of prudential financial, inc. starts with a december to remember at the lexus december to remember sales event. lease the 2019 nx 300 for $329 a month

for 36 months. experience amazing at your lexus dealer.

[ready forngs ] christmas? no, it's way too early to be annoyed by christmas. you just need some holiday spirit! that's it! this feud just went mobile. with xfinity xfi you get the best wifi experience at home. and with xfinity mobile, you get the best wireless coverage for your phone. ...you're about to find out! you don't even know where i live... hello! see the grinch in theaters by saying "get grinch tickets" into your xfinity x1 voice remote. a guy just dropped this off. he-he-he-he. facebook under fire again, ceo mark zuckerberg responding

to criticism of the company's slow response to russian interference he says the company is now creating an independent body to screen content the stock continuing to move lower. now hitting the lowest level since march of 2017. internet analysts still believe in stock, putting facebook along with amazon and twitter as the firm's top internet picks. so it seems like when it comes to facebook it's gone beyond publicity and a tarnished image. it's gone to questions about leadership and the business model so what gives you confidence to say at these levels stock can perform >> certainly we've seen the company and heard them come out multiple times over the last several months and year, talking about how they could have moved quick everover the last couple years and if they made mistakes along the way, it's certain play we've seen now in terms of a big buildup around safety and security, going from 10,000

people to 20,000 certainly spending a lot of money around that investment 50%, 40% next year so they are taking more serious steps than a year or two ago from a business perspective, we're seeing signs of users in 3q a little better stabilization in the user base than we saw in the second quarter revenue growth that's still in the mid-30s right now. we think it will decelerate but we think that deceleration can be managed and certainly instagram growing extremely fast and, you know, can be a big asset going forward. >> we're showing the stock down another 3% today it's been a tough market but facebook looking bad even in that context what's the market waiting? what is it afraid of right now is it just about margin pressure is it just seeing if users go away or do they feel like they need to see some other kind of more rapid change in how the company behaves or who leads it?

>> so i think markets looking far few different things first of all, you know, clearly there's just the pr, the perception and headlines remain fairly negative and we do need to see kind of over the next several months that that starts to lift more so i think that that's number one. two is seeing more stabilization in that user base around core facebook and just confidence that the revenue growth and the deceleration can be manageable and i think third that you have kind of new revenue sources and i mentioned instagram which, of course, is growing very fast but that there's other ways they can generate revenue and monetize and get value out of this user base that's 2.6 billion people across all their assets. >> doug, i would think one of the larger overall threats to facebook is simply regulatory scrutiny or changes in regulation that impinge their business do you think the "new york

times" story yesterday makes such an outcome more likely? >> so in terms of regulation, i don't know that i would specifically say that i feel like that story makes regulation more like ly there is a possibility of something tighter around privacy and data and we've seen that to a degree in europe and there's a possibility of having a similar version of lighter versionover that in the united states. but i would say a lot of these companies have changed their business practices, moved to a gdpr type of model on a global basis. so far what we've seen over the last few months -- and it's still early -- i don't think the businesses are being impacted very much from kind of an advertising perspective because of those changes. >> so what are we going to be looking for, doug? obviously it's over two months until the company reports results again. it's not as if you can necessarily realtime track

holiday consume yer trends and v it bear on facebook. what are we watching to determine whether the market is coming to terms with this and the stock got cheap enough. >> i think the key thing here through the fourth quarter is from a business perspective. signs you're continuing to see innovation in terms of product, that they're getting more success on core facebook with things like facebook stories, facebook watch and really that the advertiser base is continuing to show up here in a strong way certainly the fourth quarter, while it's a big holiday and e-commerce quarter, facebook play answer important role in that so we want to see the long tail of advertisers that they have are participating the same way and that you still have good growth in the business. >> just to pivot over to amazon since it's the time of year we want to talk about those e-commerce sales trends, stock

is down over 400 points since its top couple hundred billion in market value out of that. is that just a valuation adjustment are people reassessing the cost of its growth at commerce? >> we like amazon but there is an adjustment taking place some of it is as they have the acquisition from a year ago in terms of the optics but there are other things in the back half of the year that create some noise and lead to deceleration but look it's obviously a very big business coming off a big base it's decelerating some we think they can do a high teens to almost 20% type of growth rate on revenue in the fourth quarter and we look for reacceleration in the business in 1q which is what you get

seasonably 4q to 1q. >> all right i know you're looking for mid-teens in general forrers commerce sales for holiday with amazon getting a big chunk of that doug, appreciate your time this morning. thank you very much. >> coming up, shares of sonos are higher on an earnings beat it's one recent ipo that's done well we'll speak in a first on cnbc interview with ceo patrick sense, "squawk on the street" will be right back an august to remember,

starts with a december to remember at the lexus december to remember sales event. lease the 2018 ls 500 for $769 a month for 36 months. experience amazing at your lexus dealer. ...you never got the brakes looked at? oh yeah. no. at cognizant, we're helping today's leading manufacturers make things that think and do automatically. imagine that, a world of new digital products and services all working together for you. can i borrow the car when it's back? get ready, because we're helping leading companies lead with digital.

i'm not really a, i thought wall street guy.ns. get ready, because we're helping leading companies 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 it left behind an when environmental issue.down, it was environmentally contaminated. one of the biggest successes we had early on, was entering agreements with the epa on cleaning up the property. we're recycling over 98% of the products on site. the impact that this project will have on the community will be enormous. ♪ ♪

time for our etf spotlight dom chu looking at chip stocks getting slammed with the sector in full bear market territory. john >> michael, stocks are lower on the day but we're trying to get up there we can see the s&p has moved off of its lows. the broader market put the dow up a little bit. you can make the argument that semiconductor stocks are the biggest driver of the negative sentiment today. now shares of nvidia and applied materials are two of the worst performers in the s&p 500 today

after both companies issued disappointing forecasts. one of the biggest exchange traded funds that tracks the industry is the semiconductor fund that ticker smh which some traders use as a leading indicator for recent market volatility another semiconductor focused etf is the i shares semiconductor fund that ticker soxx as you can see there, still down 3.5% over the course of the year-to-date period. these are two of the larger ones broader tech etfs have exposure to many big chip names as well including the vanguard tech etf, that ticker vgt. also the spdr ticker slk, most broader chip stocks are one to watch. they're already off their lows of the morning it could be more interesting to watch how they could be indicators for how comfortable traders are and investors are with buying dips we'll see if they can catch a

bid. >> could be key, dom, thanks dominic chu. shifting the spotlight, sonos delivered a beat in their third quart earn earnings. stocks surged on the news up about 13.5%. with us on the first cnbc interview is the ceo of sonos patrick spence patrick, welcome back. >> thanks, great to be become. >> pretty interesting numbers here, adjusted ebita 4x. what drove the quarter >>. >> it was a great quarter, our first one as a public company so great to get back under our belt and it's really the strength of our portfolio over all we have -- different than most companies we have a strong product portfolio which new customers are really buying and as well we're seeing our existing customers come back and buy more of so we see ourselves getting into a number of new homes and our existing customers coming back and adding a beam to

their home so you're starting to see the power of the model now that we're a public company. >> is there seasonality in the traditional retail holiday sense when it comes to speakers like that >> absolute ly this holiday season is a big one. there's natural seasonal any what we see as well so you can expect that in the quarter we're in right now no surprise consumers want to pick up audio products for their home. >> a lot of the analysts, even if they applaud that, talk about competition creeping in and the need to keep coming up with the next big thing as your rivals try to do the same thing. >> if you look at it, 2018, we just wrapped up our fiscal 2018. it was our best year in terms of the space of our growth since 2014 and we did that in the face of more competition in the segment than ever before i don't think it's a zero-sum

game if you think of the auto industry, ford and toyota could be selling cars and bmw continues to do just fine. so i see a lot of activity in low price points and this's where you see players like amazon and google introducing smart speakers over time what happens is consumers are looking at a longer-lasting solution for their home, something that supports all the services, something that looks and sounds great so sonos is well-positioned to take advantage of what we're seeing in this momentum of streaming and spamart speakers in general >> it seems that you define your edge as continuing to be a hardware edge. so it's a technology edge and having access to all the third party stuff. how fast can that premium part of the market grow do you have a sense of how many people are very focused enough on the technology piece? >> so i would -- one of the

things that i find interesting about sonos is over half of our engineering team is on software so everybody sees the hardware products and that's how we monetize but it's a system we build and how they work great together and how they support the services that consumers really want at the end of the day. so all of that together puts us in a position to take advantage of the 175 million people that are paying for streaming music today and that's expected to grow over $300 million we've been very clear about our long-term guidance that we expect to do 10% or better annual revenue growth and we expected to be double that on the ebita line and we feel very good this quarter being a great example of that. we feel very good about that kind of pace and dhiek in this market >> patrick, from how many times i have to update the app i would imagine you guys are as much a software company

it puts in mind you have a good deal of data about the customers of all of the providers who are part of the platform how are you monetizing that, if you are. >> i've been very clear in our statements that we're taking that responsibility very seriously so we really -- the home wes here in are some of the most important and attractive in the world. we take that very seriously. we use it to make the experience better so those updates you're seeing which you can make automatic updates and you don't have to always acknowledge them which i know has been a comment in the past we've talked about. as we go through that and do that, we're making the system better and we're understanding how people are using their sonos. so a great example would be when we added vice with amazon earlier this year when we added air play what would i watch is how are customers using their sonos? so that's a good sign we're

working on the right things for people to get more out of their sonos. so we're using that data to make the experience better and think about what products and services we should offer in the future. >> patrick nice gain, 14%. we'll see you next time. thanks for coming on patrick spence of sonos. let's get to a cnbc news update. contessa brewer has that prosecutors have obtained a sealed indictment against wikileaks founder julian assange. assange's identity was mistakenly revealed in a court filing it's not clear what charges he would face. the northeast is digging out at the first major snowstorm of the season in new york city and in all of the surrounding areas, what a mess traffic at a standstill. the george washington bridge looking like a parking lot long lines at the port authority where the buses come in and out. lots of people stranded by their commutes and horror stories to tell about it. a brawl in have's

parliament lawmakers supporting the prime minister threw books and chairs at police who escorted the speaker into the chamber he adjourned the house into mound. listen to the hoots and hollers. a painting by david hockny broke the record for a work sold at auction portrait of an artist is considered one of his premier works. that's the cnbc news update. the coastal divide ridens with amazon's hq 2 did they pick the wrong cities we'll talk to "new york times" columnist jim stewart wh quk t street" continues. dow is up 62

welcome to emirates mr. jones. just sit back, relax and let us entertain you... ...with over 3,500 channels of entertainment, including the latest movies and box sets from around the world. ( ♪ ) we even have live sports and news channels. ( ♪ ) and your free wi-fi will start shortly. enjoy your flight mr. jones. world's best inflight entertainment. fly emirates. fly better. . welcome back to "squawk on

the street." i'm carl quintinilla with mike santoli and david faber at the new york stock exchange. yesterday's reversal started in the red but the dow is up 83 points now s&p up four as we continue to weigh all kinds of factors ongoing discussions regarding trade which makes its way to the journal op-ed page. >> and third day in a row where you've had this rally attempt, maybe it's muscle memory, maybe weer anticipated it. >> apple shares up well, not too big too fail that's the message jeff bezos hadden if amazon employees at an all hands meeting last week in a recording obtained by cnbc he predicted the company would one day go bankrupt but adding that it's their job to delay that for as long as possible

amazon is continuing its plans for growth announcing sites for hq 2 but our next guest says its pick misses the mark joining us now at post 9 jim stewart. come on, it's so good for new york, conceivably, increasing the tax beak you're a new yorker, what's the problem? >> i've been kind of obsessed with this whole race from the beginning and have written a fair amount about it i got excited about it all and i have to say i was a little deflated when the results came out even though, yes, i live in new york and i think of a lot of good things that can come out of this but i grew up in the heartland and when i heard they were going to do two, i thought well at least one could be a not to the middle of the country it reinforces the idea that we basically is two countries here, we have the coasts, we have the heartland. we have the coastal elite, the tech elite the blue states and we've got everything else in between and

aems has only cemented that idea by its pick. let me say it's not amazon's obligation to heal the divides in this country. i readily concede that ch amazon never said we want to be transformative they won't move the needle in either new york or the washington metro area. >> don't you think metro availability was the key we're already seeing foxx conn suffer through early travails. >> thno question. in their rfp they put labor force after immediate availability and costs it's clear in the end that was the determinative thing and it was very data driven

the cold reality from their point of view is if you want to hire 50,000 highly educated sophisticated technology oriented workers you have to go where the labor pool is and they were saying some of these are great cities i went to college outside of indianapolis, i love indianapolis they said well, indianapolis just doesn't have -- it would be too transformative the it couldn't sustain an influx of 25,000 people so i get it but all these tech people feel -- it's a network effect. we have to be where the tech companies are. the tech companies say we have to be where they are and they're ending up in the same place. >> we are getting some breaking news regarding cnn's lawsuit against the white house and the press credentials. eamon javers has that. >> it's a win for cnn in court temporarily in any case. a u.s. district court judge

ruling cnn is right in its temporary restraining order to remove the press pass from jim akos a you remember that press conference in there acosta and the president of the united states had words the white house accused acosta of laying his hands on an intern as he was trying to question president trump. now the administration has ruled that the administration must return jim acosta's press pass which it revoked while the case moves forward so a win for cnn the white house will have to return that press pass the case ultimately will continue to move its way through the courts. >> thank you eamon, due process rights for now

i'd love to come back to the contention that you don't think it will move the needle but they've transformed seattle which already had large corporations, boeing, starbucks, costco. >> microsoft. >> microsoft, thank you. you can make an argument it isn't just 25,000, it will be tho those employees who might not otherwise be here. why don't you think the impact will be large? >> we're looking at a metropolitan area with 20 or 30 million people i feel 25,000, even when you add the multiplier effect around it is a drop in the bucket. i've noticed real estate prices in long island city have been leaking. apparently giant lines were forming to snatch up real estate and it's nice that at least it's

in a borough i think there are good things that will happen but new york city is already on the map it already has a vibrant tech sect sector. >> but it has an enormous budget that needs a larger tax base to support it. >> i live here i love new york. >> and infrastructure that's falling apart. >> somebody came up to me and said if you love the heartland, how come you're not living there? i said well i did live there and grew up there, went to college there. i had if job that forces you to be in a place like that. if i didn't have that job with new york being my first choice i don't know i think pease theme are in for a shock. who's going to subsidize when they go shopping. >> we talked about your tax rate or our own the larger idea that there is

some -- that companies should be thinking more than just about what is in their best interests. do that you believe? >> no. companies always felt that way for amazon i was thinking some of their critics have said they have done damage to the urban fabric and the small town fabric of retail america. they can't put that back and i wouldn't expect them to. visa is talking about they'll go bankrupt someday i think politically shrewd to recognize they want to do something to rectify the social and economic changes that they brought about. >> the fact that they didn't do

that and nashville is already a boom town, i wonder what it says about the pretense of the exercise in general. they landed on the pretense of places that are already thriving yet they got other areas to participate in this bakeoff so what does it say about the overall approach >> i ohm not sure it was foregone at least they didn't go to san francisco. >> it was data driven how they came to the decision. >> right it was data driven i think they went through a genuine exercise they went around all these places i hope they'll share what they learned because they've got this data, they have a storehouse of information about where to do business in america. i hope they'll share that with the cities who will have to find another way of getting excited but i think in fairness to them,

i don't think it was a foregone conclusion i think maybe if we thought about it harder it might have been but i think they did go at it with an open mind. >> they can -- two sides still have opportunities to walk away and given the criticism about the helipad and everything else in new york, do you think it's solid? any risk at all? >> i think it's very slight. the upside here is great i've been hearing, for example, that these giant subsidies in both new york are really rebates on future taxes. if they'd gone to dallas they wouldn't have had any tax so they're still going to be paying a fair amount. it's going to raise to greater infrastructure investment. i can't believe anyone would walk away from that. >> jim, thanks amazon's move that we've been talking about to long island city faces risk of sea level rise and flooding. what does this mean for new buildings that they are planning

to build there diana olick joins us from long island city for more on that >> long island city may seem like a deal, stunning views of manhattan, easy access to transportation and shiny new residential towers rising by the water but there is a rising risk of water -- flooding at the proposed four to eight million square foot amazon office development. >> this is clearly building square in the danger zone for frequent flooding. now amazon can protect their investment very locally by building sea wall, barriers designing their development in a way that would be robust even if it does flood, even the water comes high but then you have to ask how easy will it be to get to and from headquarters >> new research from climate central and zillow shows the area could see significant coastal flooding by 2020 by 2050, extreme projections of sea level rise have low lying

buildings underwater developers at nearby brooklyn navy yard's new dock 72 that literally hangs over the water are battling the same problem. it's a collaboration by boston properties and rudin management. >> we have a very strong plan in terms of sustainability and dealing with storms, ohr lobby is eight feet above the water line all of our mechanicals are on the second and third floor and so we are very focused on resiliency. >> from 2005 to 2014, queens saw an additional 31 days of coastal flooding researchers say due to climate change if queens saw a six-foot flood, which scientists expect by the end of the century, that would put $13 billion worth of property at risk of damage that's about 34,000 homes. we asked an amazon spokesperson what the plans are but he said he could not comment lots more of this on cnbc.com

right now. back to you guys >> dan, i'm sure once we get closer to the process of building we'll hear more about that stuff diana olick. as we head to a break, let's get a quick check on the markets. a rally built up throughout the day after a close on the nasdaq. just below the flat line as semiconductors weigh on the sdaq dow up 101 much more equity wh"squawk on t" when we come back. a new beginning. some welcome relief... or a cause for celebration. ♪ what's inside? ♪ [laughter] possibilities. what we deliver by delivering.

but you can't. at cognizant, we're helping today's leading media companies create more immersive ways to experience entertainment with new digital systems and technologies. get ready, because we're helping leading companies lead with digital.

housing stocks getting hammered this year, but one technician says the chart looks so bad it's actually good. find out why on tradingnation.cnbc.com more "squawk on the street" is coming up.

hey, what are you guys doing here? we're voya. we stay with you to and through retirement. so you'll still be here to help me make smart choices? well, with your finances that is. we had nothing to do with that tie. voya. helping you to and through retirement. let's go out to the cme group in chicago rick san telly is there with the santelli exchange. >> good morning. thank you, mike. exactly what does the fed look at

my guess is they look at the economics and fundamentals of the various economies, maybe stressing the domestic economy more they look at systemic signals thachlgt look at market signals. they should look nahs they look at market signals. they should look at everything just like we do. so then why is so much guidance needed so much guidance is needed because we need to be guided because the signals that the market used to give aren't trustworthy because the underlying commodity or security or equity or whatever type of financial instrument have been manipulated and can't send the same signals when the stock market gets toppy, is it toppy because of the economy or the economy is weakening or the notion that easy money is ending do we have a bubble in treasurys and if we do is it because of the harvesting by the securities

of central spreads and trustworthy since certain central banks have taken lots of corporate securities and causing it to be speculated against by pushing many investors and risky assets these are all important questions, but ultimately steve liesman's interview with the vice chair today underscores the necessity that it is now time to wean investors off of the type of guidance that has been needed because they weren't able to do it on their own. the central banks and our fed took us to a place they need to return us to a place of normalcy and the process does require guidance, but the real question is it's now investors' turn and that ultimately, i hope jay powel and the vice chair ultimately do push back on investors the notion that as fed meetings approach it is their job, not the feds, to be on top of the fundamentals and economics and

market signals as they become more true because ultimately, whether to hold them, raise them or lower them cannot be so advertised because the fed cannot in and of themselves be a fundamental to the marketplace and that's what i heard in the vice chair's testimony, and i'm imprinting that on jay powell, but i sort of thing that his pragmatism is leading to that exact spot the symmetry of a neutral weight will be harder for investors, but better for everybody in the long run david, back to you >> okay. thank you, rick santelli >> it's now time to send it over to john fort and get a look at what's coming up on "squawk alley. the senator from virginia is trying to get part of the new amazon facility and he's been putting pressure facebook after the neyo setw rkomimes blockbuster story and we'll talk to him about what's next in regulation what does all this mean?

that's xhag coming up on "squawk alley. iew. uncovering opportunities for alpha across public and private markets, while anticipating unforeseen risk, has powered our rise to a top ten global asset manager. partner with pgim. the global investment management businesses of prudential financial, inc. when it might be time to buy or sell? with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today. ♪ ♪ put your data to work on the cloud that drives business. the ibm cloud. the cloud for smarter business.

i'm dominic hugh the dow and the s&p remain higher energy and healthcare are

leading the s&p as you can see behind me. meanwhile, consumer discretionary and the biggest laggard, at least one of them right now dragging everything lower here on that side of things and the retail etf and the xrt on track for the sixth straight day of losses among the biggest losers there you have nordstrom doubling down double digits now on pace for the worst week since 2008. hanes brands and michael coors you guys. >> thank you very much, don. >> the dow is up 88. the s&p 2700 another good test this week. we've spent a lot of time right in the zone yesterday. the low of the day was right below 2700, but right at the break even point of the year for the s&p 500. so it seems like a lot of people, i think, have been anticipating one of these triggers just being the one that gets a more forceful rebound, but really not a lot of

followthrough in the market and right now it seems very tentative. i'm surprised we're not hearing more during thanksgiving week and maybe it's good that we're no longer relying. >> the talk of hedge fund redemption. >> exactly that shows you how the conversation has changed right now. >> waiting for the signal that certain parts of the market are sold out and maybe can rally and then next week earnings dry up and we'll start building up to the g-20. >> that's pure seasonal. >> when we come back, facebook continues criticism as zuckerberg and sandberg right the ship we'll talk tthe ceo vi chair of senate intelligence mark warner when "squawk alley" starts in a moment we enable you to reach global markets and drive forward with broader possibilities.

cme group - how the world advances. ♪

i cowe can do theyour screening at her house. hi. this is the man that's going to check your eyes grandma. cognizant ai solutions are helping healthcare companies advance diagnostics and prevent blindness in patients with diabetes. everything looks good. you have beautiful eyes. ♪

good morning it's 8:00 a.m. and facebook headquarters in menlo park, california, 11:00 a.m. on wall street and "squawk alley" is live ♪ ♪ ♪ ♪