take a look at the 10-yr note yielding below 3.1% after thoughts that maybe the fed won't raise rates quickly. we heard from the chairman on "squawk box. h he's the main reason those come down anyway, that's it for "squawk box" right now you're joining us for "squawk on the street" right here >> good monday morning, welcome to "squawk on the street," i am carl quintanilla and jim cramer and david faber. welcome to thanksgiving week on thursday ge and facebook andrenault any st. joh and more 10-yr yields to 3.09

apple fall now another report that it is cutting iphone production orders >> plus, facebook at war ceo adopting a management style to post its longest losing streak ever. goldman sachs forecasting the company to a small by the end of this year. >> apple is cutting production for all three iphone models. apple's decision for more models make it difficult for suppliers to predict how many components they'll need we know what you think of this piece apparently, jim. >> we know there are problems in the show if you go back to the conference call, the cfo says there will be supply issues. we know the only bit of news here is that perhaps there has been some -- i believe a phone

that's slow. it made it sounds like all phones are slow. i don't know if we believe these stories or not a lot of time it is wrong, it sounds authoritative >> i do discount the fact that -- you will correct the story forever. i remember when we are working, we didn't have anything to write. i mean this is it. facebook in disarray i tend to discount this because if people take the actional need and this is how you sold it at 120 or 150 you can sell it at 190 when you are going to buy it back or do you decide it is finish facebook is a little different this one is -- how different is this one from the time's piece

i don't know a little bit more nuance and a little bit less of the board room ge, apple, facebook, you should have expect a negative article about these everyday the journalists have decided this the narrative >> there is a toll out poll outy today asking whether ge will be downgraded high yield. that's not a journalist. >> i am saying the facebook story is a good story to write >> well, its got a great deal of interest because it is important story on so many levels and as a journalist you want to focus on it because it is important companies. >> okay, take it back. >> i am saying they are great reads. >> and documentaries

>> they're great read. >> they obviously don't have it under control and therefore it is a great read. ge, i feel badly that's a very much influx story. i want to talk more about that apple for a second why would you be a supplier to apple? because you are getting margins on them. >> but you are at their whim, you can't increase price. >> you make it on volume >> it is obviously a disarray. >> we are going get more to it >> does anyone say -- there is a new layer in the journal piece of sandberg in particular

>> she asked about if she's going keep her job >> that was from the "times" piece and this the question is how long >> they can't get a hold of the narrative. it is bad. well, you had stamos, the former security chief on the washington post which he blames congress. the intelligence community, facebook users themselves and the media again. talk about not controlling the narrative. they should have put someone in who was a grown up and who can come in. they did not want that they had a lot to hide they had a lot to hide i don't know at what point do consumer package good companies stop doing business? >> sandberg leaves the company, is that good or bad? >> stock goes up

>> okay, here here is one for you. how about if -- up or down >> he's chair and ceo. >> i am saying that if facebook is at war, he's not going anywhere i remember when google is at war and smith appears. that was the end he was from sun michael. suddenly they had someone to talk to. do you think -- what do you think happens? endless and everyday it goes on. >> definitely there seems to be some pressure that she's under here they represent positive things in the journal in terms of his view of her right now of what i

recall reading last night. >> she should have allocated more resources to this and she told her friends that she may be a little rattled she told friends she was wondering about her security at the firm >> i know. i do think that was the nonsense of this article. the previous one, i thought that was a horrible article >> they can connect them to facebook and targeting for their ads. >> it is like a netflix. it is a netflix 50/50 partner. they're so in the bunker really good people had noticed the iron league if it was so -- >> pivot to apple as well.

you mentioned the story regarding production and we got tim cook in an interview talking about the futures of regulations for both their company and others >> i am not a big fan of regulation i believe in the free market >> we have to admit when the free market has not worked, it has not worked here. it is inevitable that there will be some level of regulation. >> at the same time defense taking billions from google to make that the default search engines on iphones >> look, i am not saying apple is a disarray at all this competition is usual there. you got the only real problem here is pension speech which i thought was basically a cold war is going to get hotter and hotter and what -- >> they play good cop and bad

cop here, is that what the game was with pence and trump >> i don't know. pence's speech, it is corrupt. telling aipac, choose them and with us you will get capitalism and with them you will get religious discrimination and a lot of -- >> a lot of debt they'll ultimately use >> look, i will tell ya, i want to say whether facebook. i think it is a bel-- you searc for something positive my wife says listen i have never seen you so depressed about the eagles it is not everyone tn the eagles

>> how about powell and bostic and the dollar at a one week low. you may get what you have been calling for. >> when you look at powell i think powell is trying to think about, i think he's worried about the debt >> the growing overall national debt >> he did not realize how quickly things can defeteriorat in the company the numbers are autos or housing. now you are starting to get hotel numbers that are weak. >> there is always a recession that's another sign. look, give me something positive here >> now, listen are you surprise that there is more of a negative tone given the lack of joint

communicate out of pay >> that was a bad meeting. we wanted to be a bad meeting. we'll go into argentina with hope and the dinner, she and trump -- there is continued reporting on this idea that we are willing to hold back on 25% on chinese goods as of the new year as a show of goodwill if we can get some where >> pence said listen we can go much higher. we can go much higher, there is a line in that >> sorry, i did not see in that. >> you can go much here. >> could not get much of a joint statement out of it. look let's remember what pence want you go over to the october 4th speech october 3rd, was the article who's writing these articles,

lighthizer or navarro? >> i think navarro >> a poor quality and often it leads to a staggering debt exxon can come in and gives trillions of dollars of us and trillions of dollars of them soviet union verses the united states except china got more money. pence will tell you they'll have more money we cut back our trade. at one point he says listen, their stock market is down 25% we are doing great that's something that trump talked about i did a list -- i did a calculation on the average return of the chinese ipo minus 7% this year and people keep on

buying those >> shanghai is making a series here, 10%. >> i do they're trying to get the market up. >> we got confidence of events here you have hedge fund last week that blew up. >> a number of funds and not just head funds. if you want to redeploy risk, it was seen as an easy play >> you got coal. i am open minded, jb.com is very weak today chinese consumers are hurt that's almost a billion dollars deal >> it is depressing. oil is unable to get a pop out even more talk of production today.

>> the low 56s when we come back. nissan's board is seeking to oust carlos ghosn. he has been arrested we had a busy week of earnings and best buy and housing data are coming in in days ahead. obvious. sometimes, they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group - how the world advances. ♪

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one of the most powerful executives in the auto industry. phil lebeau has more on the ceo. >> he has been holding a press conference for the last hour and raises more questions than answers. here is what we know about the removal of carlos ghosn as chairman of nissan mr. ghosn was detained by japanese police when he landed in japan this afternoon. we have not heard independent confirmation we heard of the term "arrest" being used if you take a look at shares of

anissa nissan they say he's accused of financial misconduct he missed report of his salaries he's accused of missed recording expense report here is the ceo of nissan talking of his feelings of mr. saikawa. >> misconduct, i don't know how to express it, it is difficult to express it in words it is not really fortunate or rather being on sorry. i feel -- i don't know how -- i feel big disappointment and frustration and despair >> this was a surreal press conferenc conference, guys it is taken place right now. several times mr. saikawa is

talking about ghosn, he referred this tome to them as the master minds. carlos ghosn remains the ceo of renault. so if nissan says look he's done all of these things wrong in terms of financial misconduct. we don't want him as a chair of the nissan alliance. the board comes in and says we don't see that we want him as our ceo it brings into question of the future of the entire alliance which has been a successful one over the last 25 years it is a formality. i have to be honest with you, this sounds like a coupe. we are getting this through a

translator at this press conference more than once. there has been too much invested in one person and let's be honest, there has been great affection within japan business circles for the job that ghosn has done whether or not that's rubbing nissan over the years, i am not close enough in the situation to make that determination. when you listen to the press conference, there is a lot of unanswered questions which they can't get into and a lot of commentary of the personality. >> surreal is the right word, phil especially for someone the industry is known for so long wec we'll wait for more details. our phil lebeau is watching the story. we'll get cramer's mad dash. holiday shorten week, we'll be back in a moment.

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we got seven minutes here before the trading week. we don't have thursday to worry about. "mad dash" time, what do you got pch >> wells fargo remember last week pfizer putting up the rising prices it is still a hot button we don't think pfizer to do this

what is an acceptable price increase is what a lot of people are buzzing. what can pfizer do should prices be halted? these guys made a lot of money over the years by increasing by room this was kind of a return of the old days listen, because it is a cash space. it is meeting the botox and it can raise the price. the government does not pay it because it is private pay. >> this goes back to medicare and the in ability of drug prices >> yes, it does. i am thinking when does the president say we have to use va like, va bargain that's a dramatic change in the industry this industry is one of the few leaders in the sell-off. >> just in twitter and on things like that saying it is a pr stunt when they say they're not going to raise price >> i would be aware that this is

one of the remaining groups that's strong. this is a group that's now susceptible once again to political blow back. no one wants to hear about drug company raising prices right now. nobody >> all right, we got opening bell five minutes away stay with us on "squawk on the street."

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u.s. bank -- the power of possible. you are watching cnbc "squawk on the street," the opening bell in a couple of minutes on this monday we have went through facebook and apple and nissan and trade we have not gotten to goldman's. they see gdp going sub two within twelve months >> look. that's a harsh judgment. again, i think a lot of these predicated on what the feds are going to do. >> in their case, they're calling for five, more hikes that would be irresponsible. >> we don't talk about the run

off of the bonds, too. >> there is not much to keep breaks up. look, i think that if they gave you five, that's right that's what will happen. >> i mean goldman's words, they say the fed will be reluctant to stop until it is confident and unemployment is no longer on a downward trajectory which they see early in 2020. >> i think we have to watch lay offs it is beginning to happen in january. i don't want to put any - it is difficult to talk about a retailer to say they could have credit problems. i think you have to watch to see that industry with lay offs. >> i believe that's wrong. i think there will be important housing lay offs >> yeah, that wells fargo, it is

very close in the situation. why lay off a thousand people if you think it is going to stop it did you know that refinances are the lowest since the 2000s i mean think about that. >> let's get to the opening bell at the realtime exchange energy transfer at the big board celebrating the merger of energy trans transfer equity and as the nasdaq home builders, etf has not been doing badly. despite the news out of kbh. >> because a lot of people feel december may be off the table so there is a lot of hope i think december is not off the table. when i speak to the home builder people, our number is so bad, the fed is going to slow down. it is a lot of wish full thinking it is based on others that our numbers are so bad it is not like anyone says i

spoke to the fed and that was yeah, a couple of things that happen on friday the stock was down and came back people believining there were to negatives. people were saying in the housing we got to start buying it now these are hope i think that's all they are. >> we'll find out. >> we'll get nhb in about half an hour. >> we got really important housing. i think they're going to be very negative have not touched on ge yet david. the most important one being john rice, who people may remember he's retired of vice chairman of ge he's going to return and be the new chairman of the ge's gas power business they say of course and power is when it comes to execution at

ge, we talked a great deal about this it is a week ago since we interview larry culp power is the key he was not able to say at that point that it was fully bottom but he indicated it was near bottom i am not sure what abbo bottom looks like or how long you stay there so the future's profitability is in question and not to mention you still have the turbin problem where they have to go in and make some changes and issues with the the operating power plant. >> i think it is 200 millions. >> i like the fact that rice is back i think rice is one of the guys who retired in 2017. a lot of people know that he's a firm hand and this was a good move by ge again, an attempt for culp to find out how bad is it

remember culp did not -- i think he has got to get to the bottom of a lot of things that were opec to board members. if you get rice in there and rice says look i looked it over and here is the real issues. that's positive. that's why the stock is up i know that there is some stuff out there that's negative. when you get someone who comes back and been there and a lot of people has faith in, it makes you feel better. i feel better incrementally with disappointment i am hoping the article reflect the fact that this man was a very revered man >> 39 years at the company a veteran. don't you think that's good? >> yeah. it is. russell stoke.

>> another guy people liked. >> he's being moved and he's going to be ceo of power portfolio. he was the man in charge >> yeah -- >> there is a lot of issues with the company but i really genuinely believe that culp is trying to figure out what's going on and recognizes that turbin has to be in control. you can't do that unless you have someone like that come in >> so it is good we knew him. let's hope that he gets to the bottom of power and culp can try to figure out the real issues and start buying back some bonds maybe and get a little bit more control over the story line? do you think that's possible,

dave >> i do. >> so do i your interview was a pivotal moment >> it requires time and it is difficult to get strong answers when everybody is looking for when it is not quite time to do that >> right i think he's very good i think that he can get his arms around but the question is how much more. if he can say we are to the bottom of power, that's going to make people feel we can focus on something else right now we'll focus on power no one's saying healthcare had any downturn i think that's positive. it is one business it is a big one. >> it is >> as for today, guys, it is one of those early sessions where jay and jay verizon is the dow leaders and nvidia and apple and

3-m. mr. jerome is trying to establish that things are going to get better. this piece comes out by barclays, he's too bullish and that'll be into the december meeting. it is be a big december meeting about whether he's too bullish or not a lot of people feel that 3-m including steve tusa is not addressing the serious problems in terms of many business lines being weaker, including healthcare >> beginning of the year, verizon is the star. >> that's so not what you want if you are a macro player. >> because it is reflective of what

people taking risk down or move to what they view as -- domestic largely and company and what all those. >> by the way, i saw a very negative piece, boy, that's the te theme is it? i saw a negative piece on century link and real issues with their balance sheet no one ever talks about verizon balance sheet because it is good >> it is not bad >> look at the dividend on century link >> is it a lesson and not reaching to own content? i think yes. >> i think its content is really hard netflix had unbelievable skill i watch "the body guard" this

weekend, the most popular series in the u.k. ever att is starting to produce some hits >> they got some hits. they have a lot of them. john malone last week said he wonders how hbo is going to compete and amazon and netflix and disney i think stanky running that division would take an they have content that makes them a must-view >> i thought viacom's quarter was good on friday viacom is getting hit today. it is a lot of stuff of what's going to happen at cbs, we still don't know >> did i read the post

>> i have been here. how many times have i said to you? next year we'll talk about viacom and cbs eventually. it is like a broken record on that they wrote the same thing. there is nothing going on. >> there is nothing. are y >> are you sure? >> yes it is not like there is any offer made or conversations. the cbs board is trying to figure out its board and they still don't have a ceo and unclear it is going to be i iannello who knows? i don't know if they have somebody in mind >> next march we'll be sitting here talking about a different scenario or i would be lucky enough to tell you they do have some sort s of talks >> you are saying they'll be

emerged -- >> how many times i said that? >> trying to she get it on the record >> i have been on the record >> take two. >> we have not mentioned facebook >> no. >> i do want to turn your attention, jim, to retail. this is a big week for it. >> oh boy, is it ever? >> when gwinnet joined us on friday are we going to see a repeat of any of that. >> i just did not think it was nearly as bad as people fell, stocks very poorly received. i think that could be in for a bit of a run downgrade was really vicious nordstrom is bad

nordstrom is shockingly bad. when i say it is bad, they missed the market again. one fashion. >> ulta is looking good today. >> fabulous piece about ulta >> ulta got tremendous momentum. and now you got this kylie's cosmetic line, kylie jenner, that matters i wonder if the sephora situation in jc penney is not getting that strong. that's the hottest retailer. there is a negative piece today of victoria's secret >> what do you think >> i don't have any thoughts for you right now.

>> between victoria's and j. crew, people are moving around >> is it adam brodman? no one really knows. >> we'll have to get mickey onto talk to him. >> we have a lot of companies where no one knows who's really running? that's kind of an odd situation, guys look, who's running fiat and renault? who's running intel? i understand the intel shortage has not stopped. who is in charge of intel? you are supposed to say you are. fairly flat open here. let's get to seema mody. >> good morning. transports are down. this comes after the major index's loss ongoing trade on ncertainty. the latest commentary in that summit deep divisions between

washington and beijing that did not stop the chinese stock market from rallying to a one-month high stocks in china and emerging markets have vastly out the s&p 500. one factor is helping the emerging market is lower oil prices it led to a significant drop and shares over the past week. chevron and exxonmobil on the topic of technology the market is losing some of its tech here for facebook check out how these techs are trading relative to their analyst price target facebook is trading around 38% as we know, analysts many times got their targets wrong. on the technical side of things,

watching shares of netflix getting close to its depth cross. that's when it is 50-day moving average crosses below 200. on the front, earnings on deck from target, best buy and lowe's later this week. expect retail to be a bigger part of the discussion here at the new york stock exchange. >> thank you, seema mody on the floor for us guys, i want to get on the record jim certainly covered the company closely overtime remember it is arconic i want to get on the record here, there has been a lot of reporting from reuters and new york post but this would be the largest leverage buyouts that we have seen. it is as much as 12 years ago.

you are talking about a large number i don't want to get into price right now. i want to weigh in here just in terms of, we are watching it closely. it does seem likely based on people close to the situation that they are going to annoyance a deannounce a deal there is so much reporting on it -- it is not going to be a case and people close to the situation tells me of what mid december they are talking about. they seem to be well positive on the prospect for reaching some sort of a deal it has been reported by reuters for a new york post. you got block stone that includes carlisle and onyx what i can tell you and this is important certainly that eliot would roll into any potential transactions they would not sell their stock

to the pe bid. they would roll in with it that's significance. there is also a significance sign of conference idence that deal with the horrible fire that took place back in june of 2017 in london that's a cladding. they had a building construction business here is part of arconic. it was a aluminum cadding that was blamed of the quick spread of the fire. how do you deal with that liability? that's certainly a key stumbling point and many tell me we would have seen the deal already had that not been the case i am hearing there is a structure that they are working with in place that there does seem to be certainly some positive sense that they made a

lot of progress with bidding groups and financing in place and the like they are looking towards potential for a deal let's call it early to mid december we are going to keep an eye on this one as we move from here. it is important being the largest if it comes to tuition we'll see at least ten years >> wow the arreerospace business is a fabulous business and they have problems i do think that -- they did a lot of good things that wer were -- less cyclical. they got rid of the cyclical he had a very big plan to turn this company around. i guess -- >> it does appear they are on that track, jim. >> let's change tax here and get to the bond pit.

we'll check in with rick santelli in chicago. >> good morning david, what a wild week it was last week just consider the next chart of a two-yr note going back to early december friday's close the lowest level since the 19 look at today at tens. yields are up today. 10-yr closing on friday. if you open up the chart, you can see like the 2-yr note the difference of the 10-yr is the formation of the double topic of 323 looked so comp compelling to traders. if we look at what's going on in foreign exchange and consider some of the issues today regarding china and the u.s. and in front of g-20 and how things did not go well this weekend, let's look at an early chart of what's going on with the dollar

yuan since the beginning of august we are not on the highs but it turned up again today and it is firm if you take it all the way back to 2008, we are not far from a break out that'll put us at that area and finally the dollar index in an isolated fashion did not have a great week. it still imagine natchmanaged th lowest lefvel. it is holding firm at what was a consolidation level at 96. carl, jim, david, back to you. >> rick santelli, thank you very much >> top performance names arconic and ulta a moment ago was number three dow is down at 56.

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keep your eye on apple, back below 189. the low for last week was 185.93 for the time being it's 188 and change dow is down 100. back in a minute ♪ a moment of joy. a source of inspiration. an act of kindness. an old friend. a new beginning. some welcome relief... or a cause for celebration. ♪ what's inside? ♪ [laughter] possibilities. what we deliver by delivering. every investor should ask questions.

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time for jim and stop trading. >> people still trying to get their arms around the nvidia quarter. nvidia quarter is the problem that they misjudged and didn't realize how many of their chips were going into gamers not enough versus going into miners, too many how long is this inventory correction going to last and what happened is -- and i showed that chart because you can see when the crypto mining craze started taking a lot of their cards and now the suggestion is that they have to wipe out that inventory. there are a lot of returns, too, once things got out of the negative that's inventory vex of yes proportions. >> we're watching bitcoin, whether it falls below 5k. >> nvidia will come back. what's on "mad" tonight?

>> we have a good story. boot barn. i know we're getting into granular small stories what are you raising your arms for? >> boot barn all right. way to go. >> david's bridal. we had a david's bridal filing today. >> oh, my god, they filed. remember klein felde's >> yes, i do i do. >> jim, we'll see you tonight. "mad money," 6:00 p.m. eastern time. >> i want to remain positive >> i know. >> when we return, bob lutz will get his take on nissan and the arrest of carlos ghosn dow is down 126.

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a small way to make a big difference. welcome back to "squawk on the street." i'm diana olick. home builder sentiment dropped eight points in november to 60 on the national association of home builders. wells fargo housing market index is the lowest reading since august of 2016, but anything above 50 is considered positive. the index stood at 69 in november of last year and hit a cyclical high of 74 last december the drop is way off expectations of a one-point decline rising interest rates weakening affordability significantly and

the chief economist said in the release they are causing demand to stall of the index's three components, current sales conditions fell seven points to 67 sales expectations in the next six months dropped ten points to 65 and buyer traffic registered an 8-point drop. buyer traffic had broken out of negative but it's back in there solidly. on a three-month moving average sentiment is up in the northeast and has fallen most sharply in the west all of these numbers are on cnbc.com right now. back to you guys. >> we'll get more housing data including existing home sales and discussion mike santoli about after negative news out of kbh last week the overall home builder etf still above the october lows. >> but maybe one-third off of its highs so it's been beating down home builder sentiment has been one of the things that held up better than the stocks and even the underlying data for existing

and new home sales so i wonder if it's almost capitulation by the home builders themselves saying maybe conditions won't get better quickly. >> we'll see welcome to "squawk on the street." i'm carl quintinilla with mike santoli and david faber. facebook is in the midst of its longest losing streak ever mark zuckerberg reportedly adopting a more aggressive management style. >> nissan chairman carlos ghosn is on his way out after reports of financial misconduct. the nissan board expected to meet thursday for a final decision. >> plus a trade impasse. a confrontation between vice president mike pence and china's xi jinping at the apec summit. markets moving lower, a holiday-shortened trading week the dow and s&p falling for the first time in three sessions nasdaq slips deeper into correction territory as goldman sachs forecasts gdp returning to

1.75% pace by the end of next year that i cite tighter financial conditions joining us, the portfolio manager and executive vice president at pimco kirk hartman is global chief investment officer at wells fargo asset management happy monday guys. goldman's point is trade is not pinching too hard but they are looking for five more hikes and they say this is a way to extend the life span of the recovery overa overall. what are your thoughts >> as ben bernanke said, 2020 is a wile e. coyote moment. it's a wile e. coyote moment because the collisions of the forces at that goldman sachs the referring to more rate hikes to come and the fiscal drag. now this drag meaning there's a 0.5 boost to gdp from the fiscal side next year the same then it drops off to a four tenth drop it might get legislated away

it's an election year but it won't be as positive so it may be a good thing. we want to be like australia which had an economic expansion since 1991 not likely but it will be the longest expansion ever dating back since recordkeeping began in the mid-1800s at over ten years next yuan. >> the fact that we've been a little bit on watch for the potential end of the cycle for some time does raise the question of whether everyone is pre-positioning for that whether it happens or not. in other words a year ago global synchronized growth was the dominant story and a year later global synchronized slowdown is the dominant story does the market have it right? >> i think so. i think credit markets hold the key. we've had very accommodative credit markets that are doing

well and as long as they are healthy the stock market will do fine you have a lot of credit issues in china so this is one of those markets where you have to watch the debt and credit markets but i think growth will slow but i think equities will surprise on the upside. >> you're a credit guy you suggest moving away from pure credit beta and building portfolios from the bottom up? >> with strict attention to value proposition of each investment. >> so it's not no longer a cure -- we can just buy credit. >> right, by credit you'll make money, by equities you'll make money. late in a credit cycle there begins to be a disparagement where assets perform differently. it's important there has been a clarion call on credit where you can see the fullness of investor involvement. when the news cycle turns there's very tell tiers you impact on these bonds. there's few major companies that

saw major movements down and widening in credit speds this can happen more broadly so this attention to risk factors, little things like currency exposure, interest rate expose your yet risk, one should look at more so key source of alpha is to be more active and building from the bottom's up as much as possible. >> what do you say to people who wanted to read into clarida/powell last week, that there was a turn >> well, the fed is clearly indicating it recognizes there's some slowdown as we indicated on the way and it wants investors not to worry too much about the fed because it could fuel it more it doesn't mean they'll stop and we would say the fed in december jai alhig highly likely to raise interest rates. so this could be setting the table for a pause, who nose when, march or june. but as clarida and others have

mentioned, it's going to be data dependent. if the economy seems to suggest the falling unemployment rate going forward, the fed will keep moving on a quarterly basis until it believes that will change and it doesn't have a strong enough basis yet to pause. >> kirk, how much does the market need the fed to change its tune a little bit to have that upside surprise you mentioned for equities right now the market isn't behaving in a way that says buying will be rewarded again and we'll have a typical seasonal move upward >> well, i think the market wants the fed to slow down i think the market would like to see one or two rate increases next year and not three or four. but i think the conditions for that in terms of data, you're talking about are positive for a slower fed and that will be very well received by the market and, again, i come back to my point there are a lot of issues throughout right now credit is weakening and i think that the fed signalled that that

they're watching different variables and these will come into play. >> a lot of discussion about the degree to which the fed has a supply issue to deal with and how that affects rates absence everything else they would normally do, here's the jargon, term premiums. yields probably fell by as much as 100 basis points. in other words, the u.s. ten-year yield would probably be 410 if not for the fed's buying so now that the fed is shrinking the balance sheet by $50 billion a month, that should cause the term period to rise. how much the study is maybe five to ten basis points per year. it won't fully unwind because one has to build on an assumption there could be a recession and a rebuild of the balance sheet potential and the fed may stop shrinking its

balance sheet in early 2020 when it gets to 3 twrld so the full unwind is not likely. >> we're going to end at $3 trillion >> most estimates are in the ball mark of two and a half or thre three. >> >> i thought it was complicated before. >> we were in trillion before the crisis nobody had an opinion if that was the right or wrong number. >> well, you could have a computer do this just with the growth of the economy. >> something we'll watch in the months and years ahead tony, thanks kirk, thanks to you as well. facebook is the other big story. shares are down this morning the social network in the midst of its longest losing streak ever julia boorstin is withes for a closer look. >> well, with more reports of conflict in facebook's top-ranked shares falling another 3.5% as investors weigh

the challenges facing ceo mark zuckerberg they're reinventing their business model away from the news feed and toward the stories format zuckerberg warning in the company's last earnings call that they haven't made as much money from ads and stories as news feed ads and he said the effort to shift from news feed to stories hasn't been as smoothed as i hope second, facebook's user growth hit a wall with daily active user growth in the u.s. and canada flat and in europe in the third quarter those daily activities slipped by a million. the company is concerned about fake news and manipulation on the platform which resulted from inciting violence in myanmar and nigeria to attempts to manipulate elections around the world. the company is girding against data hacks and breaches. as recently as thursday instagram told users a security flaw could have inas verntly exposed their passwords. the breach tied to a tool called down lowed your data in compliance with european privacy

regulations and there is the threat of regulation with increasing calls for privacy regulation as well as growing antitrust scrutiny of facebook and its family of apps. just last week four democratic senators asked the department of justice to look at facebook's handling of data breaches mark zuckerberg and sheryl sandberg said they were privacy regulation is inefltable but we have to see what it looks like back to you. >> another leader in silicon valley seems to think regulation is ineffortable. apple shares under pressure as well tim cook spoke to axios discussing the backlash against tech right now take a listen. >> technology is good or eve, as you put it, depending upon the creator and many times it's not that the creator set out to do evil it's that there wasn't an

anticipation of negative things it could be used for. >> cook in the past has been vocal ant his concerns over facebook and google's use of consumer data. the "times" reported zuckerberg noticed and ordered his employees to start using android phones as a result. >> he's clearly korveed out this territory around apple that is saying there is a stark line between us and alphabet and facebook when it comes to privacy and he keeps hitting it. sees it as a positive. >> making it a core to the apple brand and saying some companies don't try to be evil but they end up being evil, including the company whose motto is -- >> whose their initial prospective is don't be evil. >> cook has a singular way of giving back hand he said he wouldn't have been in this position about facebook a

few months ago had to defend the use of google as a search on the iphone, though talk about a corporate stunner one of the auto industry's most high profile executives arrested after significant acts of misconduct, shares of nissan down almost 7% we'll talk to the voice chair to get his information on that. the nasdaq down a percent and a half and the dow is down 180 a february to remember,

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nissan chairman carlos ghosn arrested after discovery of, quote, significant acts of misconduct phil he bo lebeau joins us with details. >> most of the details we have come from nissan in a press conference that just concluded here's what we do understand, at least from nissan's perspective about what's happening with carlos ghosn who is the chairman, still is, at least until thursday, of the nissan/renault alliance. according to nissan, he underreported his compensation this is a report that was filed with the tokyo stock exchange. his misconduct included personal use of company money and that he's being investigated -- the investigation started after a whistle-blower report. now there was a press conference that concluded within the last half hour, the nissan ceo

addressing a few questions but leaving more questions than answers. he says the misconduct went on for a long period and that carlos ghosn in terms of his tenure as chairman of the nissan renault alliance will come up in a board meeting and take place thursday remember, this alliance according to nissan won't change it will continue which is interesting because, remember, carlos ghosn, he's still the ceo of renault does renault want to stay in this alliance and keep him as ceo? what would nissan say? we need to learn more and in terms of the reports that carlos ghosn has been arrested, that's according to nissan. we have not heard independent reporting in or out of japan that police have detained or arrested carlos ghosn. >> all right phil, thank you.

phil bey lowe giving us what still is not a fully clear picture, as he said. joining us now, someone who has worked with and known darr los ghosn for more than two decades. former gm vice chairman bob lutz first, your reaction to this. >> well, it's both surprising and disappointing and as phil lebeau said, let's not forget he's innocent until proven guilty and as for retaining the ceo or presidency or chairmanship of renault, if, he is, in fact found guilty of a felony, underreporting taxes or misroepting company property, there's no way that another large corporation in the world is going to retain him as ceo. that's out of the question so if he loses the nissan job, they're basically all gone he's 64 anyway and he has many, many millions. i'm both surprised and in a way

not to surprised because carlos has always been a highly capable person of very, very high intelligence but also extremely aware of his own capabilities and his own importance and that type of personality can slip into borderline behavior and then no ceo is immune to ceo disease. think about it everywhere he goes all three corporations, nothing but admiration, adulation, yes, boss, eto negative feedback ever the president of the united states, at least he reads the media so there's some constant negative feedback but as ceo, you never get any. so ceos tend to develop -- in

the business we call it ceo disease. ceos tend to develop this, oh, god, i am god's gift to leadership and everybody loves me and i'm fabulous and over a while they tend only the that they're above the rules and the law and they start misbehaving. >> the emperor mystique. we've seen it and heard of it. about what impact on the alliances in on the cross owner sh ship. >> i think carlos ghosn -- i was a huge critic of it at the time it happened. i said it would never work and to my amazement it has worked fabulously well for both companies and this will continue because the business is getting more competitive we have new car sales and so forth so the three-way sharing

will continue because it's the right thing to do. >> you say the alliance will continue but is it an occasion to change anything strategically to emphasize certain things more or less with the potential change of leadership >> well, you know, that's hard to say but -- that's very hard to project but i would imagine that the fact that that alliance has worked for all three companies means that they'll find a way to continue it. >> and what about some of the goals that ghosn said out for many years, whether it be a largely electric fleet, any number of other important sort of ambitious things he had in mind do those fall by the wayside >> i think they may be replaced by other goals that are more realistic or less publicized what we tend to forget is many goal he is put out there and

said nissan market share will be such and such by the year such and such, they never materialized any way so sometimes setting difficult goals will energize the organization to reach them, sometimes they won't and sometimes unrealistic goals will cause the organization to do anything they have to do to reach the goal and that can sometimes trigger unethical behavior or stupid behavior like in the case of nissan in the u.s. for a while, excessive incentives and basically giving away the profitability in order to make the market share call so i don't think carlos ghosn's incredible goals will be missed at all. >> bob, really quick, i have a question on ceo confidence and sentiment. we know we've had some market shop lately, we have the trade thing going on, we have the fed

at work. today chief executive magazine says ceo confidence is down 9% from the january high. home builder sentiment today was no good. do you think that's accurate >> probably. a good ceo should never be super confident. he or she should always be worried about the future there's always threats out there. we've had two years of strong tail winds and now maybe a slight head wind and i think -- but i would say that ceo confidence is or should be still at a very high level because, look, we still have a good economy. we have an administration that's business-friendly, harmful regulations are still being cut. interest rates are not terribly high automobile demand and home demand while down slightly are both still very good so, yeah a

good ceo is worried and if i were a ceo of a large corporation i would do what mary barra did the other week and say look, folks, a picture isn't as rosie as it was, let's tighten our belts and everybody take a slight putting cut because we have to get this place lean in case things get rough. that's what ceos do but i don't think -- they're nowhere near worried or panicky or anything. >> no panic. although our market is selling off this morning, bob, thank you. always appreciate you getting thoughts and insights. >> thank you. coming up, facebook shares falling another point after new reports of executive turmoil we'll speak to where facebook can go from here

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got stocks falling here in a hurry. dow is down a very quick 240 s&p down 25, reapproaching 2700. mike is taking a look at a major market theme right now and that's this intense focus on corporate debt and highly leveraged companies. >> it seems like it's a new kind of worry today in fnode for the. has been since this ge vigil if you look, a pretty dramatic downturn most is treasury yields going up but that last bit in the last several weeks is corporate debt underperforming government debt which obviously means spread widening people getting more concerned about the risk there is. probably important to context

churlize it. people are afraid there is a chance that ge debt -- which trades has if it's been downgraded to junk -- will swap in the market. corporate debt-to-gdp is back to peak wes saw in 2007 but the coverage, the expense the companies have to undertake because yields are low, not that big a deal so spreads are up from the very, very low levels but if you look at it back 15 years, they're not showing alarm. it's an indigestion problem for the corporate bond market. >> so when folks say karpt debt is larger than in' '07, are those things -- >> two or three years, absolutely the amount that's bbb is more of a concern but in the next year it's a tiny percentage of debt

coming due so it's like what's the moment of truth? when will it come to a reckoning? also, talk is ge will do almost anything asset sale wise if they can. >> i can remember the talk about these kinds of cliffs back right after the crisis everybody is concerned about their ability to refinance and roll and/or expand and then it happened >> the market remains willing to float them outside of recession it's hard to see quite when you get that big drop in corporate cash flows that becomes chappier. the stock market is already saying we don't want companies with a a lot of leverage they're gearing up for it. >> let's get a sue update. we'll get one of those and a news update from sue herera at hq. >> good morning, everybody we start out with good news for drivers as they hit the roads

for the thanksgiving day holiday. prices at the pump are coming down in fact, the average price of regular unleaded has dropped 12 cents over the past two weeks to $2.72 a gallon according to aaa. michael bloomberg is donating $1.8 billion to his alma mater johns hopkins university he says those funds will be devoted to financial aid for low and middle income students and this is believed to be the largest donation ever to an academic institution a load of supplies has made it to the international space station. a robotic arm captured the supply spacecraft. it took a ride on a rocket that launched into outer space saturday in the nfl, reports over the weekend said the browns wanted to interview former secretary of state condoleezza rice for the team's head coaching job the team issued a statement denying that story but secretary

rice weighed in saying i'm not ready to coach but i would like to call a play or two next season if the browns need ideas. she also says she hopes the nfl will do more to bring women into coaching positions you are up to date that's the sue update for this hour david, back to you. >> thank you, sue herera coming up, as you've seen, stocks are near session lows the nasdaq, dow, and s&p extending losses after weak housing data n'godot away. we have more on coverage of these markets right after this

welcome back to "squawk on the street", sara eisen is off dow is down 280. s&p getting close to 2700 once again as we see a lot of

momentum names nvidia, sales force, shopify and others >> the big tech stocks are getting revalued aggressively lower. do they have to overshoot to the down side? we'll see if that is the case. >> adobe down 6% joining us, chief investment strategist brian bellsky, good to have you back, good morning. >> thanks for having us. >> i saw yesterday or last week a line saying it was -- do i have this right? a generational buying opportunities in financials? >> we believe that if we've learned one thing in it's that change will be constant and volatility will reign supreme. so you want to be a little contrarian given the fact that we believe the majority of investors absolutely positively

hate financials and they're driving the majority of their positions in terms of institutions based on fear and emotion. we believe most institutions are underweight financials and we remain overweight that sector, focusing on companies that have scapable business models like bank of america, goldman stanley. that's why we want to be in those names in particular. speaking of contrarian, we're buying the dip in technology, too. you notice how everybody hates technology all of a sudden and you yourselves are focused on momentum names today with good reason because they're taking them behind the woodshed but we focus on names that provide stable earnings. one thing people are missing is over the last 15 years, carl, the technology sector has become

the most stable earner. so they have to lay more bets on financials and to have technology find its footing. >> i think it's a great question at the end of the day people have to come to fruition that we'll start to see more business investment from a macro perspective. we did some analysis of where corporate ceos are right now in terms of not only longevity but their age, love jeff city at the highest level in multiple decades, number one. number two, the age of the ceo in america and s&p 500 companies is plus 64 so what does that mean >> t majority of from a macro

ceo for a very specific reason, they were hired to cut cut cut and build balance sheets and cash flow. we think the next stage of corporate ceos will be growthier ceos that will implement the capital and grow and we haven't seen that yet. overall macro conditions and the economy still 3% interest rates we think 18, 19 times is very affordable and stability of earnings and business operations will see fund flows back to the united states out of europe and emerging markets. >> is there any part of the market where sentiment is weak and you think it's deserved? >> i think you guys hit it on the head in terms of high yield. especially utilities and reits i think utilities have been areas people have been hiding in

and consumer staples as well those are areas we would be very structurally aggressive sellers. >> good to see you talk soon. thanks, carl here's what facebook's former chief security officer alex stamos told msnbc last night. >> mark cares a lot about his reputation, the reputation of the company. and i think that is one of the benefits of having a founder-led company. he is not responsive to the short-term whims of wall street. the truth is the things facebook will have to do is going to cost a lot of money they're going to make less money from growing slower. so i think that they're engaged on it. the real question is can they move fast enough with the bad guys

>> this as ceo mark zuckerberg takes up a, quote, war like stance to fight critics, that according to stories over the weekend. joining us now, corporate governance expert betsy atkins, also founder and ceo of baja corps and former facebook adviser moselle thompson betsy, if you were on the facebook board, what would you be paying the most attention to? what would you see as your responsibility given the winds that it finds itself swept up in right now. >> to be a good board member you need to depend on management and there has to be trust and transparency and there hasn't been a lot of that because the report is when the russian interference was presented to the board, management was angry. they didn't want the board to know so that is a concern. and there's also a doiynamic whe you have a lot of power. where you have a brilliant

founder who is the ceo, who's the chairman and who has 60% voting control those are trouble is so i think the board dynamic of trust and transparency is critical to do the right oversight for the shareholders >> as somebody who was an adviser to the company and an ftc commissioner, the possibility of increased regulatory scrutiny is one reason why investors are perhaps selling. what is your thought is facebook trying to walk the fine line by doing the right thing but also what may be coming in terms of the regulatory front >> i think one of their problems is focusing on fixing the problem of what they have. we've seen press about the problems they've gotten into with spin. whether it's getting involved in the politics of what happens on the hill

that should be secondary their real focus is what is their relationship with their users? those are the people they have to provide value to. if you look at what's happening on the hill, there is a need for privacy legislation, i called far in 1999. but now we are in a different situation. you have companies who are incumbent so you have to be careful about what you're trying to legislate because what you could do is keep the incumbents entrenched and not create any playing field for other people to challenge them. >> i guess you say make sure you focus on the relationship with users, moz elle. but they built this free-for-all environment where they try to mitigate around the edges where they can on a reactive basis do to have to rebuild to make sure they have a safe enough platform that will forestall more strict regulations? >> i don't think it's a

free-for-all one of the things that senator warner said was, when he made comments about the wild wild west, the internet hasn't been the wild west for a long time and everyone back when i was a commissioner i talked about this in saying that the laws that apply offline still apply online the question is how do you implement them we're looking at what the ftc does, i think facebook needs to sharpen its pencil it needs to make that transparent for users and for people who advertise on the platform. >> betsy, you mentioned this already the presence of a founder and somebody who controls the company in the form of mr. zuckerberg, what do you do if you think change needs to happen at the high executive levels >> well, i think what you need

to do is have management present to the board the case pro and con for embracing media regulati regulation you can still take the rupes from the russian bus you have to disclose it as special advertising. the more sensation al you just have to comply so you have to make sure the facts are check checked and if they take special advertising from political entities they identify special advertisi advertising. when it's inevitable you're going to be regulated, you're better served to have a strategy

and not just reist >> and mozelle, do you think they come out of this okay >> i think they still provide value. there are a lot of people that use it successfully and i'd like to see that still exist. but this is an opportunity, an opportunity for the hill, an opportunity for these companies to have a discussion about what's the reasonable use of data that's something our leaders have really sidestepped and instead of talking about the politics let's talk about what the substance users should expect. >> mozelle and betsy, appreciate it. dow down 230 with boeing and apple the key laggards we're back in a memont at u.s. bank, we believe one small change

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facebook shares are having one of the worst losing streaks ever and some say there's more pain ahead find out why on tradingnation.cnbc.com more "squawk on the street" is coming up.

let's get to the cme group in chicago, the santelli exchange good morning, rick. >> good morning. i'd like to welcome jim caron of morgan stanley jim, thanks for taking the time. i think most people i'll do with have been saying this for years, qe when it's done is going to have created excesses and distortions that will come back to haunt us and you believe that's why many financial assets aren't as durable as they normally would be. explain. >> that's right. the imperative and the stakes are high for the fed to engineer a soft landing at this point the reason is because there's debt and leverage in the system

and the way leverage is often calculated is debt divided by earnings, effectively, and if the fed hikes too much too fast and creates a hard landing the, the earnings won't be there, leverage ratio there are three paths. if the fed goes to 3% which is probably more appropriate, they engineer a soft landing. between 3 to 3.5, a bumpy landing. beyond 3.5%, then they're going to have a hard landing, in which case with all of the leverage that's been created as corporations issue debt, bought back stock, that leverage is there, and that creates a worse problem when there's a bigger, more protracted slowdown >> jim, if that's the case, and i agree with you that it is, don't we have to spread our conversation to the rate scales and the situations of policy in europe, japan, china

aren't they mitigating factors to some extent about how swiftly the fed should try to normalize, considering those economies are large, and nowhere near the scale of normalization in the pipeline of the u.s. >> yeah, that's right. look, the ecb is supposed to start hiking rates next year i don't think that's going to happen. >> i have to interrupt you we have breaking news. we're going to the breaking news desk. >> okay. >> thank you, rick i want to get to julia boorstin with news on the disney fox deal julia? >> disney tells me it received unconditional approval from china for its acquisition of fox, overcoming a major hurdle to completion of the fox acquisition. and though there are a couple of countries left to still provide approval, this was a very big deal for disney, and based on my understanding, seems like the deal could close in early spring disney shares are trading flat,

but david, worth noting it is meaningful there was question raised whether china could use approval of the disney deal as push back because of the trade battle with the u.s. interesting to note the deal has received approval, disney fox deal back to you. >> that's a big deal, julia, thank you. as you point out, there had been questions with the chinese, slow rolling it again and to your point early spring, may be sooner than that that the deal can close, given it has approval from our own doj. investors will look at united technologies, waiting for approval from chinese regulators for the rockwell collins deal. this deal was approved, has been approved prior to what they're still expecting will be that approval from rockwell collins you can see the stock is reacting to julia's report, again not unexpected, mike, but

there had been concern because of the rise intentions between the two countries. would it be something the chinese simply said let's sit there as we know -- >> fox up two shares from flat a pleasant surprise. >> sooner closed than the market had anticipated. let's take a break more "squawk on the street" after this

welcome back to "squawk on the street." i am dominic chu health care is a huge focus now, one of the best performing sectors on a year to date basis. currently around 59% of stocks in that particular index are trading above the long term trend. 200 day moving average 8 of those in the index below that trend line. you can see a gap developing between health care and s&p 500 overall. check out a chart of some stocks that are moving the most on this large cap pharma as a huge theme developing here. one of the others, large cap pharma, pfizer and merck, and

big did i ver jans back to you. when we come back, more on the sell off in tech, names like via,e and sales force, ndi facebook and more. "squawk alley" starts in a couple of minutes.

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good morning it is 8:00 a.m. at facebook headquarters in menlo park, california, 11:00 a.m. on wall street and "squawk alley" is live ♪ ♪ ♪ ♪ good morning welcome to "squawk alley." i am carl quintanilla with morgan brennan, jon fortt at post 9 of new york stock exchange also wit