♪ live from new york where business never sleeps, this is "squawk box. good morning welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. our best host is j.j. kinahan from td ameritrade thank you for being here >> my pleasure. things are indicated up with the dow futures up by 89 points. s&p futures indicated up by 9. the nasdaq up by 34. at this point, you are looking at the potential for stocks to erase their declines that they've seen for november. already you have the s&p 500 and the nasdaq back in positive territory for 2018 with the gains that we saw yesterday and

on monday. though the nasdaq is still pretty firmly in correction territory. we'll talk more about all of these things a few more days left in trading for the month of november. so far the dow is down 1.5% for the month. the s&p 500 is down by 1.1%. the nasdaq is down by 3.1% look at what happened overnight in asia, stocks were higher in japan with gains up 1% the hang seng and shanghai closing up by 1% in europe you're seeing some of the early action taking place, it looks like a mixed picture for the markets. big gains for the cac, up by 0.4% the dax up by a quarter percentage point things are slightly lower for the ftse and the italian stock index. in spain things are up by a half percentage point looking at the u.s. treasury market, right now the ten-year is yielding 3.055% that is just below the yield that we saw yesterday.

the two-year, 2.835% if you look at the 5-year, 2.883% >> alan greenspan said i'm watching the ten-year, someone earlier this week said the two-year is the one to watch. president trump renewing his criticism of fed chair jay powell in an interview with the "washington post" the president said he's not even a little bit happy with the selection of powell he said the fed is way off base with what they're doing. the post said president trump blamed the fed for the recent stock market selloff and general motors plans to close plants and cut 14,000 jobs. he said the fed is making a mistake because i have a gut and my gut tells me more sometimes than anyone else's brain can ever tell me

cha chairman powell will deliver a speech today at the economic club of new york he also said he believes the fed is a much bigger problem than china, which, to me, is fascinating going into this meeting this weekend with xi jinping. >> the fed is something he can blame on something else. if he said china was a problem, he would have to blame himself for the tariffs. >> and you also look at gm, do you blame the fed, china >> do you blame americans changing tastes for cars >> or do you blame the bailout where they didn't really have to -- >> that was a decade ago >> which is not long the people that you are now on the side of, the people who don't want government interference, those are the same people who thought it should have failed and done what was necessary back then and not be bailed out >> but the only reason i machine shun this, if the fed becomes his focal point the question is

what parts of the tariff issue will he realize or not realize or appreciate or not appreciate could be having an impact on the economy. >> if we went to 25% on everything that might match the overall market influence of the fed or might not he's right to the extent that the federal reserve and where we are now with the tariffs, 10% on whatever, it's not at this point not even close to -- anything close to -- not anything close to ten years of accommodation where we stayed at zero with three rounds of qe the party that was being thrown with kerry trades and everything else is ending that's a much bigger deal. uncertainty about the tariffs -- >> hold on do you want the fed to raise or not then >> i don't -- i don't understand what neutral is anymore. why are you smiling? the neutral rate from ten years

ago is not the neutral rate today. would you raise? >> the signals are -- >> i don't know whether we're higher or lower now. i'm saying the impact of the fed is much bigger than where we are now. >> the signals from the fed rite now are they are rethinking where neutral is a few months ago jay powell said we're nowhere near neutral, then a few weeks ago it was said we're getting near neutral >> if there's all kinds of stuff, i agree this is a major deal, but if we -- we just heard yesterday say it's a trade skirmi skirmish, not a war. >> mohamed el-erian said that. >> hopefully with this comment he's saying there's some resolution to it at 10% level or less rather than going to the 25% level.

>> that's what most market watchers think now, if this is not a negotiation, you have to have people rethink things >> i don't remember a binary event in the market. every move has not really been around the fed this time everything that has been a big move the last few weeks has been around tariffs >> you're talking about the g20 meeting this weekend >> and all he has to say is it went well. all he has to say is our meeting went well and the markets will be happy >> my real worry, you set this whole thing up everybody knows this is coming it almost is built for something positive to at least appear to come out on monday morning or over the weekend in a positive way. the markets then rally on whatever this news is that everybody is singing kumbaya, and then on wednesday people say i'm not sure what really happened >> i agree but comparing it to the fed -- >> by the way, worst-case

scenario could happen, you don't know >> where it changes is march june still staying high. but the market iscused on this g20 meeting, he could come out and say it's good, wednesday we don't have details and then the markets selloffment >> what did el-erian say -- >> 65% he thinks something is resolved >> both sides claim minor victories. >> 30% it's good, and 5% it's bad. >> i think they'd like to eventually become part of the global world order in terms of intellectual property. don't you think they know this is not sustainable forever

>> when they become the owners of intellectual property they won't want other people to steal it. >> or do they think we will run the world in 2030, i don't care what it takes to get there >> when you have a 2025 plan or a 2030 plan, the plan is to take over the world >> you never look inside your soul and say this is wrong >> but as a culture they're very patient people >> do you think they feel that it's okay to work this way is that part of the culture? they're able to steal intellectual property and be unfair and -- >> i think people sometimes forget they're a communist country. they have a very -- >> they put out the lers yesterda list yesterday. >> it's a hybrid it's not a pure communist -- what does that mean? they're amoral cheaters -- >> i'm not saying that they have a plan they live by that plan

they don't vary. >> and their ability to take on pain as a society may be a little greater than ours there's some other stuff going on we'll get the second read on third quarter gdp. did we get a third read on second quarter yet >> yes >> is there really that begs the question, what was the first read on third quarter gdp? anybody? anybody? anybody? >> 2.8 >> 3.5 >> 3.5 that comes out at 8:30 a.m. eastern time then new home sales are out at 10:00. quarterly reports from tiffany and dick's sporting goods, and then theresa may will take her brexit sales pitch to scotland today. we'll get a live report from london in a couple minutes let's get into the markets

joining us for more on this conversation is simien hym arc nd, and jj is still with us. simien, what do you think today on whether you should go long or short the market >> we're trading 15 times 2019 at this point, so it's hard to be bearish with the number around 3%. the inflation could be exacerbated by tariffs and the bleeding in to a reduction in pretax markets from corporate tax cuts we have had over 20% earnings growth two quarters in a row let's make up a scenario that pe multiples stay flat for next year and we get 8%, 10% earnings growth, there you go it's hard to get bearish >>hard to get bearish but ther are big headline issues where

people will be watching what powell has to say, where they have concerns about what happens at the g20 what do you want to hear from powell today >> you know what i think would be a nifty answer is the one that mnuchin has been floating maybe a couple fewer hikes but a faster wind down of the balance sheet. imagine two hikes instead of four but the balance sheet winds down more quickly. >> it has the same impact of drying up liquidity but less impact on main street. >> it would quicken the normalization of the yield curve and reduce the odds of a flattening so that cash alternatives don't get crowded out by fed funs but the long end drifts up to the 4 handle >> it wouldn't impact auto loans, home mortgages. >> some are fixed, some are floating it would be closer to a step of normalization without a four rate hike cycle. >> that is something we have heard from kev warsh for a

while. jj, what do you want to hear from powell today? >> we have the fed minutes coming out the fed minutes didn't take into account what's happening with crude oil, or energy i should say. where does he stand on inflat n inflation? we're not seeing any inflationary pressures whatsoever we know we saw a little bit of wage growth, we'll get a report in about a week here on employment again i think what's going on in energy has that changed his outlook at all >> i would still argue it's the conversation about normalized rates that is the issue what is normalized you don't want to see inflation if you just want to get back to a normal level >> oil could just be an indication of how strong the economy is >> it could be, but the numbers are still strong as much as everyone says he shouldn't do things, housing has weakened if you think about the mandate,

it's employment and inflation, they're not supposed to care about the stock market employment is going well, inflation, not a whole lot of pressure there at the moment again, how is he sort of rectifying those two yes, we need to talk about normalization, but the normalization and the environment we have now or the environment we see perhaps happening in a year. >> simeon, i know you're looking at 15 times earnings and thinking that's cheap. if something happened at the g20 this weekend, something that is bad and indicated that china and the united states won't get closer and the tariffs will roll in and raise to 25% in january and go to all 5$500 billion worh of goods between the two countries, would that change your mind about 15 times earnings looking cheap >> not in a huge way of course there would be a selloff on the news. but i think we're priced in for margin compression we are seeing heightened

geopolitical tensions all over the place. any military thing will cause a flight to quality. that's about the only scenario where you would actually see the long end of the curve really come down. but to bet on that is expensive insurance. >> let me throw one more worry out there your way the idea that things are slowing down in the economy around the globe, and that eventually that will wash up on our shores despite the good news we've seen here from the economic p perspecti perspective, but that's not something we can withstand that goes back to oil being an indicator of what's happening out there. if the economy weakens and you have these other issues does that change your mind? >> i think the u.s. expansion is ahead of the rest of the world if you look at the selloff the last two months, emerging market equities outperformed the s&p in an environment even where oil is dropping precipitously for emerging market stocks to hold up when commodity prices are falling and there's a selloff in the u.s., there's as much of an opportunity for

growth to pick up. we're trading at 10 times pe in emerging markets >> that goes back to a call we heard from morgan stanley, they were downgrading their u.s. stock outlook but upgrading -- >> there's been a few voices becoming more bullish on emerging markets you can wait a few quarters but it is a possibility. >> i was going to follow up on that the one tough part for the audience watching your show, a lot of retail investors, when they hear emerging markets they're not sure how to evaluate them or what to do with them so if they are going into there, they want to do so through an etf or something larger. people have a tough time assessing country that they theoretically understand that are in the u.s when they good to emerging markets, i hear people say that a lot. there's nothing wrong with it, but i would caution people watching the show do you understand the political environment in those countries and do you understand the risks there? that's how sometimes people get in trouble quickly is they go

into these without understanding was goes along with that >> you also have to have a few on the dollar if you're investing in overseas markets. if the dollar continues to strengthen are the gains overseas not going to translate back into quite as much? >> absolutely. there's a lot there. i don't want to belittle the recommendation, i tend to agree with you overall, they are much cheaper on a pe basis than in the u.s., but too often i see people run into that fire without understanding at all what they're running into. >> very short-term, we had a good day on monday people were saying it was not good this is rebounding it held. yesterday we looked like we were down 130 or so premarket ended up 108 is this -- at best most people would say this is a bear market or a rally in a correction -- we have turned. we're half empty on viewing this

market those are two good sessions in the day. have we reached an intermediate term bottom based on the vix >> i would say you reached a point where people want to take off risk as much as they can heading into -- >> so they will sell into this >> i think actually a lot of firms may have been sold into the rally, so a lot of bigger firms are just flattening up some things. also one of the things you've seen recently is has this gotten overdone with technology it's kind of funny >> has it? afrnl >> a little bit, but f.a.n.g. stocks really have not performed overall. i think apple is the one with suppliers that people are the most nervous about >> we're around the flat line for the year on a lot of the averages will we end up with a 5%, 10% gain >> i think they'll go for a 10% gain >> you think that will happen by the end of december?

>> that's a high -- that only happens on the 5% you talked about earlier if things are great. you think we're in -- you think that >> we had a pretty good first holiday weekend. retail numbers are strong. the consumer is strong i think you could have a little rally into the end of the year i'm not sure i'm on board with the technology side. >> the only thing i would say is if we have any settlement at all, people will come for those stocks >> 174 on apple. i don't know apple is related to china but could be just as important if that makes a stand psychologically i think it is >> thank you for coming in jshg jj, you're sticking around more coming up this morning. tiger woods coming up in the 7:00 hour. i'll say it again and again. in between that we'll talk about automakers they're gathering in california for the l.a. auto show

phil has a first look at bm work's new luxury suv. we'll give you a look at it after the break. as we head to that break, here's the biggest premarket winners and losers in the dow.

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my name is mike, i'm in product development at comcast. we're working to make things simple, easy and awesome. ♪ we are in the chairs this morning and talking autos. the los angeles auto show is kicking off. phil lebeau got there early and caught up with the ceo of bmw north america. >> the world premiere of the bmwx7. this is a new suv going on sale in a few months. the starting price $70,000

the ceo said even though it has a rich price tag, this suv will do well in the market. >> i think the x 7, we've been waiting for this car for years our dealers and our customers are waiting for that car i'm sure you know the suv market in america is growing. on the non-premium side as well as the premium side. >> the new x7 will be built at bmw's facility in spartansburg, south carolina not only for sales here in the u.s. but shipments worldwide, including many sent over to china. that's the story from l.a., back to you >> i'm into it what do you think? that's got three rows. >> still not that big. >> not big enough? >> it's bigger -- bigger for that kind of car, but not big enough for four kids

>> i know it's built in spartansburg, take your pick from the -- i can give you some names. >> i know. >> the big tahoe, the big -- >> those are too big that's a truck >> you don't get the really big escalade or whatever or suburban >> you get the tatahoe, it's shorter. >> but this will drive like a bmw. that's a real thing. >> i don't need -- i don't need -- i don't know >> i tend to agree with andrew i think a lot of people who will get it who have one or two kids. >> bmw is not -- not for nothing, the ones they have now, those little suvs, i have no desire >> the x5 and the x3 you don't like >> i don't like the mercedes suvs >> you don't i like the big boxy one. >> you going to paint houses

>> no, the boxy one. not the van. the l.a. auto show, we have more on that still to come we'll talk to volkswagen's u.s. ceo in the 8:00 hour they also have something else coming up, bigger third row situation. if you are going luxury and you don't want the minivan -- >> you need the third row, but if you're using it a lot, you have to get into the third row >> you have to do the chairs >> the bucket chairs >> captain seats, yae. there was a heist in the art world. it was a renoir painting stolen from an auction house the day before it was to be sold the painting depicts a coastal

landscape, it has an estimated value of 120,000 to $160,000 that's not that much for a renoir >> i like to hear these stories. my kids like to hear heist stories. any kind of oceans 11 story is good for them. >> the cut up paintings is worth more than the renoir >> that's -- >> yeah. the banksy >> does that make sense? >> no. the art world is -- people say deep down the art world makes every other business where there's shady things going on it, makes them look -- >> legit >> yeah. >> the ultimate nontransparent market >> beauty is in the eye of the beholder. >> i think wine, have you seen how that works >> a great "american greed" on that one >> on what >> on wine >> as seen on cnbc prime time. >> i love "american greed.

>> check your local listings. it's beginning to look a lot like christmas in new york city. the 86th annual lighting of the rockefeller center christmas tree is tonight. the city is preparing. police are lining the streets with barriers, armed guards will be present and security officers will screen those attending. before the 50,000 bulbs light up the night, the star-studded lineup of performers will be rocking around the christmas tree you can catch it all tonight at 8:00 p.m. eastern. >> do you have names >> i have never seen it live, have you >> i've seen it from the window. we're not going to -- >> that's the first time i ever met you. i was still at "wall street journal. >> are we not going to tease the ten performers >> go ahead. >> i don't know. >> i believe john ledge jen is among the ten. >> he's a legend >> there's nine others >> nine others i don't have a full list we have to go.

>> i don't know all the famous current big names. >> we have to go. when we come back, president trump calling out general motors for closing american plants. we'll talk about the political backlash for gm after this. and bitcoin prices bouncing back this morning. we will talk to early cryptocurrency backer jim breyer he will join us in about 15 minutes. and later don't miss our live interview with tiger woods. he will talk about his new partnership with golf tv that's at 7:15a.m. eastern time. "squawk box" will be right back.

♪ welcome back you're watching "squawk box" live from the nasdaq market site in times square. good morning, everybody. welcome back to "squawk box. let look at the u.s. equity futures. so far we are looking at green arrows dow futures indicated up by 71 after a gain of 100 points yesterday and 350 points on monday s&p futures indicated up by 7.5. the nasdaq up by 28. salesforce.com reporting better than expected results demand for cloud products continuing salesforce forecasting revenue for fiscal 2020 above what the street is expecting. analysts say it's the first time the company has done that in three years. speaking to jim cramer last night, marc benioff said

salesforce is in peak performance mode >> we see hitting our big goal, which is 22 billion, $23 billion in revenue by fiscal year '22, and here we are giving fiscal year '20 guidance for the first time at 16 billion we're really excited salesforce remains the fastest growing enterprise software company of all time. that's incredible. traders responding to that salesforce shares are up more than 8.5% in premarket trading. sources say tesla's head of global security is out after 11 months on the job. jeff jones managed teams at the car factory in california and a battery plant in nevada. during his tenure a whistle-blower filed a complaint alleging tesla hid the theft of raw materials from investors campbell's soup is targeting the former head of pinnacle foods to be its next ceo mark clouse led that company

until it was bought by conagra the shares of that company are up. the president lashing out at gm's ceo threatening to cut subsidies over the latest job cuts announcement. the president saying very disappointed with general motors and mary barry for closing plants the u.s. saved general motors and this is the thanks we get. we are now looking at cutting all gm subsidies including for electric cars. general motors made a big china bet years ago when they built plant there's and in mexico. don't think that bet will pay off. i'm here to protect american worker joining us is reuters david shepherdson. good morning to you. inside general motors they say this tweet and what happens?

>> they've been bracing for this since they were planning this announcement i think a lot of people in gm thought the president would have tweeted monday, and then in response to questions from reporters the president did criticize the company a bit on monday clearly he ramped up the rhetoric on tuesday with this subsidy threat though i think that's largely symbolic given he can't take away those 7,500 tax credits that gm is getting for electric vehicles those will phase out soon any way. this color clearly caught gm by surprise when gm announced it would build the chevy blazer in mexico, president trump stayed silent. >> is there any vehicle that they have that you could imagine could get repurposed into one of these facilities in some kind of agreement or cooperative,

something, so that president will trump will be happy and mary barra will be happy >> i think with lordstown it's difficult. that's an older plant designed for smaller cars, so to build a new suv would have to spend a lot of money to retool the paint shop and factory you could see something going in detroit, they have other facilities in ohio they could add investments to, add jobs but it's not over. these plants are moving to no production status. other plants reopened years later. this is not going to end until the end of next year and i think there will be pressure >> what kind of reception is mary barra getting from others in washington? i imagine they have their lobbying groups in full effect i'm surprised they're not trying to move on other republicans and

conservatives to actually speak out against the president, which is to say this is about as anti-free market some of the comments he's been making as you can possibly imagine historically you would have been hearing from people on that side of the aisle >> you're right, but given gm is playing a tough hand now mary barra just announced tough job cuts a month before christmas, up to 15,000 jobs, 8,000 salaried jobs being cut. normally republicans would be out probably defending the company. i do think you'll see more of that going forward >> democrats already have come out and backed the president on it >> senator rob portman will be on our show in a bit >> he's a republican in ohio, michigan, maryland, you'll have all the usual suspects with their -- whatever it is >> you won't get republicans backing him. >> no. >> portman is furious about the

jobs >> i'm sure he is. >> all the democrats are making this the message of the tax cuts didn't work. elizabeth warren and everybody is using this as the whipping boy. >> why didn't gm understand that >> weird timing. >> you do this right before christmas. do you it in a sensitive election state where the president was campaigning and where he won you do it right in the same year that you got these massive corporate cuts i understand it from the business perspective, wanting to manage your business, but understanding the political employ blowback, it seemed easy to read the tea leaves >> i think the decision was this couldn't be decided until after the election they see these small car sales imploding, and they will take the heat to save $6 billion in costs. what is your sense that this is

idiosyncratic to gm, that these are vehicles and plants that don't work for gm and what do you think -- or do you think there's something much larger to be said because there's a lot of economists and others looking at this saying mary barra is making a call not just on her own vehicles but on the larger economy. what does it say about other automakers and about the strength of the economy? >> i do think it shows there's a lot of worry about the state of u.s. auto sales. they're either flattening or going to decline next year with rising interest rates, there's big concerns a at the same time companies will use this angst to shift more resources towards electric vehicles, autonomous vehicles and move away from low-selling cars what are you hearing from other automakers in the wake of the gm announcement is anybody saying we will draft right behind mary barra now, we won't take the heat. >> certainly ford is the one

coming next with some sort of restructuring, some additional cost savings by early next year. i don't think it will be as big as this but you would anticipate more >> is there a legs ssson for th who learn about the politics of dealing with this. >> mary barra's initial plan was to go to the white house and inform them in person, then on tuesday, but it's hard to do that well given the bad medicine of five plant closures >> will people having kids now at some point say kids, that's a sedan over there you don't see too many of those anymore. that's what they used to look like or do we wait for the next spike in oil prices to go back to no big suv. there's a real change. i'm amazed that at a mall parking lot, i can count 9 out of 10 regular sized or small suvs, no sedans. >> 30% of sales are cars

used to be 50% five years ago. it's shocking. >> it is kids, that's what they look like only two rows of seats all right. david, thank you very much quick programming note, we'll talk about the backlash from the gm plant shutdown with ohio senator rob portman we'll talk to him in the 8:00 hour, 8:10 a.m. eastern time back in a moment >> we have a huge lineup still to come. first jim breyer will talk to us about investing in china then discovery ceo david zaslov will be our guest host and then tiger woods will join us stay tuned, you're watching "squawk box" on cnbc it can take more than 10 years to develop a single medication.

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welcome back to "squawk box. tiffany just out with quarterly numbers. the company matching estimates with quarterly earnings of 77 cents per share. revenue slightly below wall street forecasts as were

comparable store sales mike pompeo and jim mattis are scheduled to testify today, this will involve the jamal khashoggi killing. pompeo argues the u.s./saudi alliance is vital and a powerful force of stability in the middle east in regards to khashoggi's death he said the u.s. will consider further punitive measures if more facts about the journalist's murder come to light. when we return, jim breyer will join us from the east west tech conference in china we'll get to him next. as we head to break a quick check of what's happening in the european markets it's been a mixed picture so far. relatively flat for the dax. sec up by 0.2%

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deidre bosa joins us now with a special guest. hello. >> good morning. that's right i'm joined by jim breyer, breyer capital. welcome area >> we've been talking about it the last few days. you've been to china about seven times this year. so you know it well. what are you hearing on the ground when it comes to rising tensions ahead of the g20 meeting this week? >> i think there's real apprehension about what a deal might look like. so i think that there are concerns people are hopeful that some trade deal becomes important both from a product and intellectual property standpoint as well as the tariffs but most of the people here and most of the people i talk to are more in the free trade camp. so there is concern. >> it's interesting to be here at a tech conference because it feels like tech companies are being used as a bargaining chip. what are you hearing from china versus in the u.s.

are you hearing similar concerns >> well, i think big tech in the u.s. would like to see the china market more open, would like the ability to see them deliver products and compete with tencent and alibaba in particular but it remains to be seen how quickly that will open >> right let's talk about apple in particular talking about bargaining chips earlier this week the president said there could be tariffs on iphones and computers. who does that ultimately hurt? >> well, my personal view, it hurts the consumer apple is truly an unbelievable company. we can argue about the pricing but their supply chain here in china is the most advanced supply chain i've ever seen. and i've visited the supply chain several times. the products are terrific. they're priced too high, perhaps, but apple is a u.s. treasure and i think that for many of the companies i would view as u.s.

treasures and i would put walmart and others in that category, great u.s. companies, they would stand to be hurt dramatically by big tariffs. >> right and we're talking -- you mentioned some of them -- some of the big tech companies are looking at how to get into china. and we've seen google take another look, facebook take another look after, you know, leaving this market before do things need to change is it profit or principle? do they have to choose between the two? is there always a compromise when you look to china >> i think there's always a compromise the question is what degree of compromise apple does a lot of business in china. we talked about starbucks doing a lot of business in china the tech companies have to figure out how to enter in an appropriate way and these are radical times in terms of controversies that are created everything's a little louder partly due to facebook, twitter, and social media companies so i think they would like to see it open. and i believe at the highest levels for the u.s. companies,

they would like to see the intellectual property protected a little bit more than has historically been the case >> okay. speaking of facebook and controversy, you know this company well you were a facebook board member for nearly a decade. what are your thoughts on what's going on right now has zuckerberg mishandled the last year? >> i don't think he's mishandled it, but i met mark when he was 20 i invested when he was not yet 21 i've seen tremendous evolution and we lived through the mobile strategy during the ipo and watching how he handled that but the company itself has mishandled many of these topics over the last 12 months. again, as a shareholder -- he is ultimately responsible, but leaders often mishandle situations i would come back and invest again and again in mark zuckerberg i believe he should be the chairman and ceo, but the company to its own admission has, i think, deeply mishandled

the last 12 months >> so what needs to change then? >> my advice is there just needs to be a radical change in terms of how decisions are made. and that doesn't necessarily mean it's mark and sheryl that are at fault i think mark and sheryl are about the best team there is in the technology business. but with a lot of the departures, they need to rebuild in many cases much of the management team. and i think they're doing that >> okay. let's take a quick look at founder-led companies. it's not just zuckerberg there are others through your career you backed a lot of these companies and i'm wondering, is it time to rethink the kind of structure especially with some of the big tech listings of next year >> i don't think it is time to change if one wants to achieve enormous upside if we think of the faang and bat stocks, most of the big ones are

founder-led still. >> for a time. >> for a time. and i believe if we look forward over the next ten years, ai is the fundamental platform that will drive value and 18 of the 20 most valuable companies in the world will be technology oriented and in the u.s. and china. >> if you had to choose one and when we talk about faangs and bats, they seem like a big selloff. what would you be choosing going into american stocks >> i really like alibaba and amazon and i think both of the companies stand to do extremely well and alibaba in particular has built the deepest management team in china. >> thank you for being with us today. look forward to the rest of the conference >> great to be in the bay area >> back over to you guys >> okay. thank you. our guest host this hour has been j.j. kinahan from td

ameritrade we'll see you again. you didn't give me any insight on where the vix was headed. can you tell me that quickly >> i don't think there's a reason to think it's going to sell off certainly into this weekend. then we'll see as andrew started the show with, you know, we may get a temporary rally going into next week. but i don't think vix will sell off without great detail >> what's the range between now and the end of the year? >> i think we will trade around this historical 20 level for the rest of the year >> okay. j.j., thank you. a big two hours ahead. david saz love is going to be our guest for the next hour. he's going to talk media deals and advertising. he's bringing us an interview with tiger woods who just signed with discovery golf tv we will have that live in a couple of minutes. back in a moment what's critical thinking like?

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media and your money discovery ceo david zaslav is here and he brought some great guests we'll hear his thoughts on business conditions, the economy, and the shifting landscape of content a "squawk box" exclusive legendary golfer tiger woods teaming up with the pga, discovery, and golf tv he joins us live to talk about the partnership, the state of sports, and his match with lefty. and if that's not enough, bobby flay joins us with his recipe for business success. >> a little friendly competition tastes so good >> we're going to find out what he's got cooking in the kitchen as the second hour of "squawk box" begins right now. ♪

live from the beating heart of business, new york, this is "squawk box. >> good morning, everybody welcome back to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. take a look at the u.s. equity futures this morning there are green arrows across the board. futures indicated up about 125 points s&p futures up by 12, the nasdaq up by 41 this comes after some down days. yesterday dow was up by 100 points we'll continue to see what happens. you're looking at the dow down for the month of november, but they are within a percentage of actually breaking even for the month of november.

here's what we're watching this morning president trump renewing his criticism of fed chair jay powell in an interview with "the washington post," the president said he's not even a little bit happy with his selection of powell he said the fed is way off base with what they're doing. powell will be giving a speech this afternoon cnbc will be covering the event live economic numbers will also be part of today's investment landscape. the government is set to release its second look at third quarter gdp at 8:30 eastern time economists expect the third quarter number to remain at the same 3.5% growth rate. and salesforce.com is among our stocks to watch. the stock is soaring this morning after reporting better than expected results. we'll have more stocks on the move and corporate headlines in a just a bit couple of other stocks on the move this morning. credit suisse saying it's reflected in whirlpool's stock price.

also delta air lines and american airlines group were rated positive in new coverage from zest questisusquehanna fin. provided by its atlanta hub and feels that american has strengthened its overall network. we're going to need an hour. our guest host, david zaslav, president and ceo of discovery normally we would be talking about your stock it's the best performing media stock except for fox it's up 37% this year. >> thank you, joe, for pointing that out >> food network. it's been nine months. i figure that's probably going well none of this matters -- >> it matters to me. >> it does but we need to talk about what came out yesterday i think at about 4:00 and that is a wide ranging partnership with the greatest golfer ever tiger woods. >> yeah. transformational figure, really. it's the cherry on top of our golf strategy.

as you know, we're in business with the pga tour everywhere in the world. globally we own the tour with jay monahan and the pga tour it's a long-term partnership what we're trying to do is really create a golf netflix create an ecosystem where everyone can get what they want on the phone or on euro sport in europe as we put it on our channels around the world >> we're going to talk to tiger, obviously. >> that's why i'm here because i brought tiger. isn't it >> actually, that is why you're here no, no, no you could be here either way but initially i was just struck that a guy who's so private and has always been so private and so focused and with only one thing in mind and that's winning, winning tournaments 80 tournaments he's won. i don't know if i thought he would beat jack on the majors, but i think he's got a chance again. >> he's playing right. he's determined. >> i looked -- it almost sounds like a reality show starring tiger but it's mostly going to be about him trying to bring his

knowledge about golf to everyone else that's been a fan for a long time. it's more than watching him eat dinner or something. >> it's multifaceted a couple years ago we got into business with oprah winfrey globally when we bought scripps, food, hgtv, travel we own those everywhere in the world. we have natural history with discovery. and so for us, we really took a big pivot four or five years ago when we went from a traditional nonfiction company to asking ourselves how do we create content that people would want if they could want anything, if they could see anything? and it was a world that at that point people thought why is discovery getting into sports. why do they own all the cycling and all the tennis in europe why'd they do the olympics but we see golf and particularly with tiger, tennis, cycling, the

olympics, food, home, natural history. the rest of the media business is in scripted disney and bob iger, probably me best media company when it comes to scripted and traditional story telling. >> five years ago, a guy that obviously had a big part of your life and maybe the -- one of the clearest thinkers in all of media, john malone did he really ask you if people could watch anything they want at any time, do you -- that's a big question do you have the content where people are going to have -- that must have shook you a little >> it did. >> moved you into action. >> malone is a gift. because he's like bobby fisher he sees the future he's brilliant and he has conviction. and he did see when we were on o roll we had taken our stock from $15 to almost$90 everything was working great for us we had ten channels everywhere in the world john said is our content good enough well, they watch us.

so we really completely shifted. and tiger is really an important part of that strategy, because we think people love golf everywhere in the world. so think about china two of the best players on the pga tour are from china. we own all the golf in china and they love tiger. you know two weeks ago, we did a deal with chip and joanna gaines from "fixer upper." two authentic, great personalities. they're back in our family so we're about -- we're going to -- we see this whole idea of scripted there's loads of people in that space and they're fighting over it for us, that's kind of like the soccer ball in a kid's game. we're the rest of the field. so if people love food content or golf or -- so i think we have a real chance. >> when do you think the other players decide that they need this because the big question has always been, do you need more scale or in terms of independence, would somebody look at this and say you know what there's a global play here

>> we hope that we're where the ball is going to be. >> the uck. >> the puck. if apple says at some point or google or any of the faang companies or any of the big media companies say globally, who's above the globe? you know, the faang companies, they're so powerful because they're above the globe. they can reach everywhere in the world. the only media company that's truly above the globe that has ip rights everywhere in the world is discovery so we can -- we basically have a menu whether it's food, home, natural history, golf. so we think we're moving in a space -- >> is that an argument for one of them to eventually try and buy you or try to compete with you by trying to copy what you're doing >> well, you know, for us we hope we're sustainable we're growing effectively. but we haven't overinvested in content. because we do believe that we

need to reach these 4 billion devices. and the best way to reach that is to have stuff that people really, really want. people love oprah, so they can pull oprah and get her if people love tennis, they can pull it. >> i ask the question because i wonder whether there's a benefit to having golf, by the way, globally or there's a benefit to having the olympics globally under one umbrella and how you think about that >> well, look. this business started with cable systems around the world then it went to satellites the companies that have created the most value for shareholders are the global companies because of the leverage. what we're doing is we're saying we think owning all this global ip, we can partner very effectively. we don't need to sell. we can partner with any one of them we can do a global business with google or apple. we can go into business with oprah ourselves and together we can reach every regional player in the world >> part of what you've done is

team with these personalities people love. which maybe that makes you a little immune from some of the rights strategies down the road that other players are kind of competing with if you own a tiger or an oprah or a chip and joanna gaines. >> we don't own them we partner with them >> but you own that space with them and people look at you and think that's the way to get to those people >> it's -- people fall in love with great stories and with people if you think about the media business and the rush to netflix, hbo, hulu, those are all great. disney buying rupert's company and he's going to build the product that looks a lot like it if you're sitting at home whether you're young or old and you want to spend $10 or $15 and get scripted series, there's going to be ten choices for that and the movies are commoditized. they're on each platform if you want something else, if you want to see golf or natural history. so that's our bet. our bet is that we're completely

different than the rest of the guys and that we have superfans >> do you think those fans will pay the same kind of money they pay for a scripted series program. meaning all of these sort of bingeprograms. there's netflix at $11.99, whatever you think disney does in terms of the price point, do you think there's a different price point for what's traditionally called expensive content relative to either reality or other >> our content is $400,000 to $500,000 an hour scripted is $1 million to $10 million. we have a much more efficient model. the answer is we could actually charge less. here in the u.s., we have 18 channels so we're the second biggest tv company in america when you look at our 18 channels, the amount that we charge for those 18 channels is less than one regional sports network. and so we -- you know, our costs are less but we can make a lot of money

even if we charge less that's why we're on every skinny bundle we have great channels but we're not that expensive >> i can't believe you're back to content >> that's how we started together, joe. me, you, and becky well, becky came later she's a little younger than us >> she is. >> not much. >> and you're right back here. >> that's the business we're in. we need to get great characters and great stories and create great brands that people will say when they can watch anything that's what i want to watch. >> did you misspeak when you said the greatest company was disn disney did you say disney or comcast? >> nbc universal where i spent 18 years with you guys is -- well, i'll say that brian is an amazing media leader it's a fantastic company more more i love this place. >> this is great and this is content and you're pointing to us when you said we need characters.

>> that's why this works people love you guys even when you argue. >> that's very rare. all right. discove discovery's david zaslav is with us for the hour. i hear there's a little bit of a delay, like three seconds. tiger's in the bahamas, i think. >> playing a tournament down there. >> we're going to be prepared for that and let him opine you know he has a love for golf i think that's what this is about. i tried to figure it out does he need to be more famous no does he need more money? no does he need to be in business -- >> need to hang out with me? no >> does he need to see our games some day which i'm sure is in the cards. no when you came in, you said are we going to play and you said we can play i was like i'm not talking about us >> sure, we'll play. we play all the time no, with tiger when we return, the big man is going to be here. tiger woods making headlines this week with his shootout with

phil mickelson now he's signed with mr. zaslav, discove discovery's golf tv. he is our exclusive guest in a couple minutes you're not going to want to misit. meantime, take a quick look at the futures. dow in the green 115 points u e gh yoarwatching "squawk box" on cnbc this scientist doesn't believe in luck. she believes in research.

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welcome back to "squawk box" this morning take a look at the futures the dow looking it would open up 115 points higher. nasdaq also looking to open higher 37 points right now the s&p 500 looking to open about 10.5 points higher tiffany out with quarterly numbers just a short time ago. company matching estimates of 77 cents per share. revenue was slightly below wall street forecasts youtube is shifting away from premium subscription channels just eight months after it was launched. reports say that youtube's original shows including kocobr kai will be free next year the content is in the hundreds of millions of dollars

far less than what netflix and amazon spends. does this come as a surprise to you, david >> not really. the scripted business is so crowded. so youtube's trying to get into scripted say there were 200 scripted series five years ago. there's 800 now. it's hard to break through it's very difficult. it's way too crowded and that's why we're happy we're not doing that that's a tough game. >> what do you make of some of the other guys like katzenberg trying to do scripted but in a bite size format does that make more sense to you? >> jeffrey is a great guy, very innovative we're going to have to see his bet is that people will want to watch short form scripted content on these devices we haven't cracked the code, any of us. if you think about what premium content people view on their phones, none of us have cracked that we're working with hard with verizon and at&t to come up with content from our brands that

will work. i think jeffrey's got a shot, but we're going to have to see >> david zaslav again our guest host for this hour when we come back, 80-time pga tour winner, 14-time major champion, and now a partner with discovery, legendary golfer tiger woods will join us after a short break for an exclusive interview. "squawk box" will be rig bk.htac

it's beginning to look a lot like christmas in new york city, but not quite yet. the 86th annual lighting of the rockefeller christmas tree is tonight. catch the lighting tonight at 8:00 p.m. eastern on nbc all right. as we just -- we're going to get down to tiger right after becky takes us to break one more time. tiger's getting his thoughts together >> i think we're getting our technology together. i think that's more of it. >> that might be it. when we come back, we'll get a check on the markets and the top stories. more importantly we're going to get to tiger woods here are the futures at this hour dow up by 124 points s&p up by 11, nasdaq up by 39. we'll be right back. still to come, celebrity chef bobby flay on what's cooking in the food industry >> that's what you brought here?

bring it on. >> he'll share his secret recipe for business success and hot restaurant tndres. that interview is coming up right here on "squawk box.

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good selection there discovery announcing an exclusive partnership with 14-time major champion tiger woods. joining us now from his foundation's golf competition in the bahamas, the legend himself. legend implies looking back, that's definitely not it we're looking forward as well with tiger's career after the tour championship. welcome, tiger it's great to have you on the show we heard from david zaslav about this new arrangement a little bit. we're going to get to that and get your take on that. but first i need to ask you about what we all watched last week i have a two-part question number one, was it fun and number two, was there the same type of pressure as an important tournament, maybe not a major but a real tournament? was there more, less, or about the same because it looked like there was some pressure.

i guess $9 million might do that to people. >> yes, there was some pressure. and yes, it was fun competing like that. no, it was not fun losing. on the 22nd hole we both enjoyed it one of the things i said, you know, after the match is that i got lost into the competition part of it and was trying to beat phil's brains in. phil said the same thing he says, i can't think of any side challenges because i'm trying to beat you i can't talk right now i said yeah, we're both having the same issue because this is 20 years in the making of us going head-to-head. we both realize that this is a moment very not unlike an nba all-star game. a lot of high flying, next thing you know, last quarter playing locked down defense, hitting heart fouls, layups swatted down, got to go to the line to

earn your points it was the same thing with us. we were going at it. then i chipped in on 17 and i gave my fist pump and looked straight at him. it was just like the old days. >> i thought it worked perfectly. we all wanted to see some of the comments and the, you know, talking to each other and giving each other some grief. i fully knew by the back nine, i wasn't going to get a lot of -- knowing how you focus and even phil, i don't think we needed any -- that much talk on the back nine. the golf spoke for itself. i mean, you were supposed to get 150,000 viewers and there were a million people signed up for it which i think is -- that says a lot. all right. let's get to this arrangement now with discovery i know david is beaming over there with the whole idea of it, but trying to figure out why such a private guy like you needs to either make more money, be more famous, and i don't

think it's either one of those i think you really want to bring the game to your fans. and i think that has a lot to do with why you're doing this >> yes those two components are part of it, but i think the part that intrigued me the most is that i will have the ability for the first time to talk directly to my fans. and answer their questions, show them what i do i can video a press conference, per se, and say listen to all the silly questions i have to answer post-round. okay now, here are some real questions. what are your real questions i'll give you real answers or i've been working on my game. for instance, at the tour championship, you know, one of the things we had nitpicked leading into the event was my bunker game. my bunker game was not quite up where it needs to be and so joey says, hey. we need to spend twice as much time in that bunker even though

the green is not situated well, it's not a very good green to hit bunker shots to. but you got to hit bunker shots to get used to the sand. i spent probably three times as much time. i'm in a bunker every day. nobody picked up on that but that's something i could tell all of our viewers and the people who are following me, things i need to do to get better at the end of the day, i didn't get up and down -- the only time i did not get up and down which was the last hole of the tournament when the tournament was already over so that's basically what it would be >> the fun thing for me, i think, is what we talked about the idea we create something together with the pga tour and jay that goes to the next level. bringing in young kids when i was growing up, i'd be reading a golf magazine under the covers and waiting by the mailbox. now we can create something together and it's going to be a journey, i think, as we talked about.

what do people want to see what do they want to see from you? what kind of instruction,what kind of content? it's a way of igniting golf around the world together. and we're going to do it in every language you know, when you think about it, what are you most looking forward to >> well, i'm most looking forward to it as you said. i'll be one of those kids that's waiting for a golf magazine to arrive at the house. i'd take it to my room and read it now kids don't do that they take their ipad and read it in their room. well, we can put golf tv right there in their ipad. we can have all the content and play from all around the world have my instructional pieces there as well as my speaking points, what i'm talking to and working on some routines. so we're able to create far more content than any other golf magazine has ever been able to do and it's on a global level put all that in one spot, and golf tv is going to be a home run.

>> hey, tiger. i'm curious about this moment in time which is to say i always thought of you as a very private person this is an opportunity for people to come behind the scenes with you in a way they haven't done before. how much of that is about your own personal journey and getting to a place where you wanted to let people in, if you will how much of that is something that speaks more to even the transformation of media and social media and the direct connection that people now have between athletes and celebrities like yourself and their fans >> you know, the world has changed. it certainly is evolving very quickly with the advent of social media this is a way for me to have direct connection to the fans. yes, i will show some stuff that is behind the scenes, but it's controlled you know it's on my terms it's not someone hopping over the fence and invading on one of

my practice sessions that's what it sometimes feels like then posting it online we've had that a few times at my home course. it's not going to be like that this is, hey, guys, come on in this is what i'm working on. these are shots that i think may help i'll ask what do you want me to do or demonstrate. i want people to learn and grow in the game. i want them to be able to feel like they -- after they watch golf tv and all the golf around the world and my instructional piecing, they feel like they're a better player. hopefully we can draw a new youngness and demographic to the game of golfas well. >> when i thought about aproeping tiaproep i -- approaching tiger, we had a cake but it wasn't fully baked

we can get all the golf and we can get all the editorial, but getting a transformative figure to come on top of that so the match was that we spent the few billion dollars and we think we could build a golf netflix. we could emerge with 2 million, 5 million, 10 million people that will pay to get golf. but by putting tiger on top of that, he gets the benefit of all of our tour content. he gets the benefit of all of our editorial. he and i as partners, who knows more about golf than tiger he can help us craft that product. a lot of people will buy it for tiger, but i think the product is going to be a lot better by having tiger work with us on what people want to see. and i think that's going to be a big part that's exciting for us. >> hey, tiger. i've always thought of you as being one of the hardest working athletes of all time this is no small undertaking i've been thrilled to see how well you've been playing this year been amazing to watch and see the crowd turnout as a result.

is this going to take away from what you do in any way or is it easy to wrap this into the routine you already have >> no, it'll be just wrapped into it. i'm still going to be doing the same things, how i prepare and how i play i may -- i know i may. i will say things that are slightly different than i would in front of a media scrum and post round i can say something off to my camera phone which will go directly to golf tv. something i normally wouldn't say to a media scrum i think that's what the fans want to hear i'd probably get fined by the tour and that's not always a good thing >> you know, tiger, i could imagine a rematch between you and phil you'd probably like that too i'm trying to figure out whether -- and this is not talking about discovery for a second but this is just golf.

that worked pretty well. and i didn't know if it would like a boxing match pay per view i'm wondering if you think that without tiger woods whether it's a business model that works. i mean, i think the tour championship, the sunday round was triple last year because it involved you could you see like a justin leonard/jordan spieth or a d.j. against brooks koepka? will it work with other players to do a head-to-head that's going to garner that kind of attention? >> i don't know if it'll garner the same type of attention it has to do with the fact that this happened to be two brands that have come together that have been going at it for over 20 years so it'd be similar to a chrissy and martina. or andre pete.

or connors and mcenroe you've got to have something jack and arnold. something that has lasted for a long period of time. that's when i think the two brands work. and something like this is able to be pulled off i think that's why we saw the success we saw with the match. >> so if you could see it in any other sport, who are the two you'd want to see? we were talking about would you ever put lebron on a court, who would you want to watch? >> who would i want to watch play >> try to do the -- >> play golf or play their sport? >> in some kind of one-on-one similar approach to the match? >> i see what you're saying. yeah, yeah, yeah >> well, it would be interesting to see if steph and lebron could

play i don't think lebron could guard him outside of the three that would be kind of interesting to see a lot of bomb threes a lot of lay-ins it would be kind of hard to figure that one out. it would be cool to watch. we see fed and nadal go at it. it's been legendary. that's legendary matches but you need matches that happen prior to this and i've done it for a number of times. that's only the reason i said these other brands >> you have the match and then behind the scenes. tiger in a practice round on a wednesday with a bunch of his buddies on the tour.

what happens in a practice round to get ready you see him on camera thursday morning. but this idea of -- it's like the opposite of the match. in our business, it's quite interesting. what really goes on? what are those practice rounds like how do they get ready? that could be compelling for people >> yeah. you know, a lot of guys use -- they call it the wednesday program as sometimes their first look at a course also it's their last day to test clubs. and you'll see the majority of the guys with more than 14 clubs trying to test clubs for that one particular week, what's going to work. and i'm no different to that some weeks it's a 2 iron or 5 wood have different bounces in my play should i add more loft to my driver take loft off?

try to -- should i start practicing drawing on the ball little things like that. trying to be ready for thursday. you see a lot of guys tinkering around on a wednesday for sure and i think that's one of the things we are entertaining our proam partners but we're trying to tee it up the following day and compete. >> tiger, after the -- your victory at the tour championship, i think golf fans everywhere started thinking about next season. and the whole season will be great, but we're thinking about those majors i'll bet you're thinking about them too you're still young and i know how much you'd like to win more majors so looking -- and the pga is after the masters. is there a venue you're most excited about in the four majors next year? you're just ready to try to compete in all of them

>> i'm chomping at the bit to compete. i'm trying to figure out my schedule so i'm rested and ready to go for the four major championships. and how my prep -- i need to play a little bit but not too much as i was saying yesterday in the press conference, i played too much at the end of the season. it was 7 of 9 events that won't happen this year. learned my lesson there. so it's a matter of spreading it out. playing a little bit but not too much make sure that i'm physically rested and ready to go for the big events >> yeah. there are some -- when you were young and the greatest ever, they weren't as quite -- maybe there are great players now. it's going to be a great season. did you or any of your people look at the fine print in this

agreement with discovery are there any mandatory matches or foursomes with zaslav have you seen his swing and are the other players determined in the foursomes? was anything decided on? >> yeah, the only fine print in this contract is i don't have to dive with sharks other than that, we're all good. >> sno shark week. >> that was my one try at arranging a foursome but tiger woods, thank you very much for all your time today. >> you got it. >> people just love hearing tiger speak honestly about things so we appreciate it. >> thanks, tiger >> thank you. >> go win that tournament. >> you got it. thanks for having me, guys >> thank you again when we return, a celebrity chef and one of discovery's biggest stars bobby flay is here we're going to talk about the media business, content creation, and of course cooking. that is all next

make sure to keep it locked on cnbc we will be covered fed jay powell's speech happening in a few hours from now we'll see if he responds to the latest comments by president quk x"etns after this. your brain is an amazing thing. but as you get older, it naturally begins to change, causing a lack of sharpness, or even trouble with recall. thankfully, the breakthrough in prevagen helps your brain and actually improves memory. the secret is an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. healthier brain. better life. from capital one.nd i switched to the spark cash card 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?

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scripps acquisition. bobby flay is here he's the chef and food network personality. good morning to you. >> good morning. >> you brought some beverages and food we'll do in a minute. but i want to understand what this deal is going to do for you and for the way food is going to emerge in the media world. >> i'll tell you one thing i was lucky enough to cook for tiger's charity event he has in anaheim every year a handful of years ago. one of the benefits of that was the day of the event, you know, the charity dinner was at night. he took me to a bunch of clinics he was running for kids, for adults all day long he spent the whole day doing it when you watch how people react to him when they're sort of right next to him, the fact you'll be able to do this from a streaming standpoint to me is just -- just as a fan, i'm totally excited about it >> just that interview, it's weird. even when he's way down in the bahamas. >> he's tiger woods.

transformational figure really everywhere on earth. >> exactly >> how much of your business is being transformed, though, the way his is this idea that people now want to see not just what's in front of the camera? they want to see you behind the scenes and all of these component pieces >> well, they want access to it when they want access to it. i think that's what's starting to happen. that's why i'm so excited to be in business at discovery i've been at the food network for 22 years and now we have new leadership here which is incredibly exciting one of the things i'm excited about is the sort of globalization of my business i love going to places like in europe i love italy it's the place that i love to go on vacation. and i'm not really recognized there by the locals in italy in the united states, yes, i get recognized i look forward to actually having my business transformed >> is your expectation if we're sitting here five years from now you're going to have a

restaurant empire that's not just u.s. centric, it's going to be everywhere? >> for sure. i think that's one of the possibilities. i think i will just want to speak a lot of italian. >> what's the difference between the leverage and power of the network, if you will, and social media these days the reason i ask is you see so many chefs now and restaurateurs using social media how does that compare to the power of tv still? >> i think they're paired together i think they work in unison. the great thing about social media for anybody whether it's, you know, tiger woods or a chef, is you get to tell the story you're doing your own public relations in a way and so i think as we get more comfortable and better at telling the stories of who we are and what we want people to think about, i think social media gets used in a much better way. >> you know, i was watching your guys' coverage on friday and you had a number of the

consumer product analysts. they were talking about the fact that i think it was you making the point with them that if you're just e-commerce without a traditional store -- >> you need both >> and the thought was all the store wills go away and everything will go to e-comme e e-commerce but if you use that example in media, for instance, we can take bobby and we will take bobby everywhere in the world. we'll take him all over the world in every language. but then on top of that, he can reach out on social media or, you know, directly with consumers. but the pga deal, we wouldn't have gotten that if -- the big funnel is still the tv set. >> how do you think of the classic tv model versus the netflix model? >> i mean, i would say that i think there's room for all of that i let david make those decisions for me because i'm in his camp

and i know that -- you know, i know that if i give proper content, he'll get the right platforms. i can't answer the questions i don't know if david says to me, we're going to get your content out there. i'm happy. >> when you look at what you thought through and what you planned, i've looked at what you and others from food network have done. people care about food they never did 10, 15 years ago how much of that move that you made was really one that was planned out and how much was it just took off? >> you know, my back story is really simple. i dropped out of high school so i'm not formally educated and don't think of things that way >> not true. you went to cooking school >> culinary school, yes. but i learned through life

i learned through the things in front of me and made decisions based on what's put in front of me at that moment. and i have a picture view. so i make decisions for the longer term than the shorter term i don't know what's going to happen tomorrow. i'm okay with that i'm totally excited about the surprises that are ahead and the innovations that can help my business and partner with somebody like david. you know, i try to do what i do well which is teach people how to cook, get them excited about food and their lifestyle and i let the people like david do what they do and hopefully it all kind of works together >> he brought food, by the way >> the interesting thing about food is people might wake up and say i want to see the crown or a popular scripted series. there's only one thing on earth

that every human being in the world asks every day what's for dinner? everybody has this common -- >> or breakfast. >> what am i eating? people love food and there's nobody better than bobby. but it's a very compelling genre globally, this idea of food. we can take bobby together with amazon into the kitchen. and what would that look like? it's meaningful. >> my question for you is you were the pioneer in terms of chefs on tv. who you d.do you look at now log at saying they're really interesting whether it's in traditional media or social media? >> we have a lot of people on the network right now who are sort of starting to show their wares really well. people like molly yai. there's a whole new sort of team that are being developed to me that's really important. i'm always looking forward to,

you know, really strengthing the roster at the food network because i know the stronger team that we have, the better for everybody. >> is this a frittata? >> it's a spanish tortilla eggs, potatoes, onions, red pepper pesto on the bottom >> do you bring food everywhere you go >> david made this. >> is this a pairing situation because this is a smoothie but no protein >> there's oatmeal so that's good for you, right? yogurt, oatmeal -- >> added carbs, i think. >> you made this >> i didn't make it. >> are you a better chef or a better golfer? >> i'm not good at either one. >> that is great. >> i hang out with people that are good >> david is actually sending me out to a meet iing and he's mad sure it's at pebble beach tomorrow >> and final question. news you can use you stay so trim and yet you eat

all day and everybody wants to know how you do that >> well, i think health is an important part of happiness. and so i don't want to think of food as an enemy i want to think of it as a friend i have to eat it and cook it all day long it takes work. you have to go to the gym in the morning. you have to have some discipline in terms of how much you eat when you eat like i don't eat late at night anymore which is what chefs traditionally have always done because it just doesn't work for me and so i have to be really careful. >> bobby flay, thank you for coming in this morning sorry you had to come after tiger. the legendary one. >> tiger didn't bring us food. >> we don't want to talk about people as legends because as you said, backward looking >> it's weird to be a legend and be in the prime of your game which i think some could argue tiger is back completely so he is a legend and it's weird. a living legend to see play. >> it's a great american story great human story.

>> but my question is, he needs to be more famous like you need more money you know what i'm saying anyway, we're going to get to -- it says some final thoughts. you look great >> i have a follow-up question for you. we've been talking a lot about apple these days in large part because of what's going on with china and everything else. but i want to ask you about apple and whatever their media strategy is or isn't people are trying to figure this out. what do you think it's going to look like long-term? >> i think apple is the company in media that's going to surprise people the most they have 600 or 650 million credit cards they're in business with every month with over 600 million people they're a great company. they're a respected brand. and all of us in media, we want to get those credit cards. you know netflix has 125 million credit cards. they're already in business with loads of people that love them and love their brand that's like a super highway. in the end when eddie and tim

decide what they want to put on there, they have the connection. >> here's the three upside and three downside for company rating domestically could continue. euro sport could provide growth internationally. and something about fx head winds will stabilize the downside is ad and ratings weakness for discovery, margins are going to be hurt by spending on new shows, and there could be some negative foreign exchange swings are there -- what are your biggest worries and concerns right now for discovery? >> look. the scripps transaction was great for us we were generating about $1.4 billion in free cash flow. and our target now, we think we're going to double -- we have a chance of doubling that next year pretty soon we'll be generating $3 billion on cash flow. over the next three to four years, we'll have $10 billion to $12 billion. >> that's you need at this point. weapon scripps we're the leader of sports in europe we may be the biggest when you put olympics and sports together the biggest thing is the issue

bob iger has and brian and steve are thinking about it's who's going to get to these devices. people are spending less time on tv whoever gets to these devices is going to be the winner >> thank you thank you for bringing the great guests too coming up, the markets and your money we'll get back to the markets big-time with blackrock's rick rieder right after this.

president trump targets general motors the president leveling serious criticism at gm after it announces its idling plants and cutting jobs we're going to ask senator rob portman what he thinks this means for business in his state. fed under fire, the president also slamming federal reserve chairman jay powell and blaming him for the recent market sell off. now it's powell's turn to talk and making sense of the markets with guest host rick rieder he is blackrock's global fixed income chief the final hour of "squawk box" starts right now live from the most powerful city in the world, new york, this is "squawk box. good morning and welcome back to "squawk box" here on

cnbc live from the nasdaq market site in times square i'm joe kernen along with becky quick and andrew ross sorkin the futures right now are indicated higher after a hundred-point gain yesterday which came after a 300-plus point gain on monday so we're closing in on 25,000 again on the dow i know most people like to watch the s&p now. i don't know what you call this week a little bit of a snapback and an ongoing correction. maybe we did -- we stopped saying garden variety correction we started saying this is a bear market where the attitude in the last month changed completely what period we're in right now >> when you got to november and started seeing losses again after the october losses >> nothing really changed, though, in terms of consumer confidence and in terms of multiples are better and everything else. nothing really changed to all of a sudden be looking at a

recession in 2019. >> but we're looking at a lot of headlines and we're wondering what the fed is going to do. >> it is the fed >> and china i think china is more than you think. >> may be more than i think but not that you're following bobby flay, tiger woods, and david zaslav. how are you feeling? >> it's pretty bad >> nobody knows the yield curve better than that >> it plays right into what we are watching our big three stories this morning. general motors coming under fire from president trump trump blasting the automaker in "the washington post" interview after it announced it is idling some of its u.s. factories and cutting back thousands of jobs gm's stock falling on that news. but it is slightly higher this morning. up by about 26 cents number two, wall street watching and waiting for a big speech today from federal reserve chair jay powell

the central bank was set to speak at noon after he was criticized from this president and three, a revised read on gdp expected this morning. it's expected to remain at its 3.5% growth. that will follow new home sales coming out at 10:00 a.m. eastern. few stocks on the move this morning. tiffany reporting earnings just a short time ago matching estimates on the bottom line with profit of 77 cents per share. revenues missing estimates tiffany reiterated its prior year earnings forecast dick sporting goods also out with earnings. earning 39 cents per share that's 13 cents above estimate revenue was in line with expectations dick's also raising its full-year forecast so all this doom and gloom, i don't know and then smucker reporting quarterly profit 17 cents below

estimates. revenue also fell short of the food maker estimates and the company cut its full-year forecast amid what it calls a competitive environment and lower pricing. let's get to our guest host. rick rieder is from blackrock. he's joining us for the rest of the show how's your memory? >> pretty good. >> what's your last appearance >> my god. >> about a month ago. >> yeah. >> we have seen some recent conjecture about where the fed is and whether they've recalibrated or rethought things do you think there's been a change in the last month in their thinking about the progression in interest rate hikes? >> i do. we talked about it actually last summer on the show about, listen inflation is not accelerating of any significant magnitude.

the fed's favorite metric tomorrow we think it's going to drop to 183. you're still not at the target the same rating. the data, the intrasensitive parts of the economy report on housing. the housing day is a is soft some of small business is soft so i think the fed is starting very slowly. and i think they'll lay it out it'll be interesting to see what chair powell says today. but i think of the december meeting, they're going to talk about what's happening to residential. they'll start talking about, gosh, you know, we've moved in december it'll be ten times. why not step back and look at what the data is from here >> i was glad to hear that guts are more important than brains because we're both good on the guts side. what is your gut telling you next year how many hikes >> so i'm low.

>> where are you >> i think they're going to go in december. i think they're going to be very data centric they could be zero i think the base case is you go one to two times that's it. so meaning that most of the rate adjustment people have called for or what's priced in the market today has happened. >> the market acts like they've already overshot or were they doing -- is the market looking at terminal pricing. that's too much because we're not neutral already, are we? >> i've gotten into debates before if you take the intrasensitive parts of the economy, they are breaking quite markedly. >> autos what we're seeing from gm. >> totally are we at neutral? you can debate we're there today. will the fed go one or two more times to get closer to 3%? i think that's right but i think we're close today. you can make an argument on how much home builder stocks are down that's a reflection of the fact that housing affordability is tight today.

it's a really big deal i think growth is slowing. i think we're going to go to 2% gdp next year. that's pretty good >> did you watch oil and think what the heck? or did you just write it off to supply did it scare you >> when you were trending to what looks like $100 a barrel, that sort of move -- you have to think about global demand. and the rest of the world is slowing markedly so clearly demand is down, but supply is the primary driver >> 70/30 >> it's 60%, 70% something like that >> but that is unacceptable based on the politics and the math of our own balance sheet as a country. right? i mean, that's the other piece of this. to make the math work of the tax cuts and everything else that has gone into this over the past

year and a half, 2% may seem fine by historical standards, but it's not fine based on what we've just done. >> the debt's too big. i mean, the reason why rates can move mad rattly higher is the debt's too big you're right we have to pay down in the coming years. >> and the model was based on this expectation i'm not saying i expected it, but the expectation was put forth by the administration and congress -- >> he was too smart to believe that he's been around >> i don't think most people thought it was the case. >> we live in a global economy where we look at potential growth in europe we are going to grow i think in this demographic cycle with a debt on the system, it's a two economy full stop you put the amount of fiscal and monetary stimulus the past couple years, can you run at 3.5% for a period of time? you can. but you're going to migrate to 2% >> can you average 2.5 prs%?

>> yeah, i mean, yes but we're not going into a deep recession. i would argue we're not going into any recession for an extended period of time. but we are going to come off the board marginally totally. >> all right good rick, stay with us >> i didn't bring food either. >> you didn't bring any food you didn't bring any golfers >> this is good, by the way. >> you're not bad at -- what was that we were playing cribbage what was that stupid thing >> hearts. i'm learning >> oh, i'll play hearts with you. >> ready to go >> larry fink thinks he's an expert >> it's the best game. >> you don't even know what it's called you stink at it. >> yet i was still playing >> you were okay >> no, i wasn't. i kept trying to do -- what was it kept the old maid? >> keep the queen of hearts. >> i kept getting held with the old maid. >> you don't want the queen of spades. >> i'm mixing etaphors

when we come back, gm halting production at american plants coming up at the other some of the break, we'll talk to senator rob portman on what the closures mean for the ste u are watching "squawk box" here on cnbc our new, hot, fresh breakfast will get you the readiest. holiday inn express.

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president trump takie ining dirt aim at general motors. ylan mui joins us with more. good morning >> good morning. the closures have gotten under the president's skin president trump publicly addressed his feelings it was described as close to anger. the white house says the closures did come up in a phone call with justin trudeau yesterday. one of the plants affected is in ontario. last night trudeau tweeted they found a way to help workers affected on both sides of the border as far as we know, the white house is not working on a bailout or aid for gm or its employees. instead, trump seems more interested in revenge. however, this is a benefit that actually goes to consumers they get up to a $7500 tax credit if they buy a plug-in or hybrid vehicle but the catch is that the credit phases out once an automaker

sells 200,000 electric cars. and gm is expecting that to happen by the end of this year so this subsidy was going away anyway however, gm and other automakers have been lobbying congress to get rid of the cap and extend the tax credit they were hoping for action during the lame duck session of congress gm is committed to maintaining a strong manufacturing presence in the united states and they appreciate the steps the trump administration has taken to improve america's competitiveness in manufacturing. guys, the white house said there is no specific timeline for ending the tax credit and they would need congress to do that anyway back over to you >> all right ylan, thank you very much. joining us now with what this means for his state is senator rob portman. >> thanks for having me on >> why don't you tell us what you think about it all >> it's deeply frustrating this is a plant that has been doing a great job for general motors i was there back in the day when

the cruz was first introduced. gm made a $500 million investment in the plant at that time and the chevy cruz isn't selling as well. let's bring a new product in that's what i've been pushing not just for the past several days but the past few months they've taken that plant already down to one shift. 1500 workers left. and now they're making an announcement for next year to eliminate it all together. what we want is a new product and the opportunity to again show off our ohio workforce and be able to be part of the general motors future. >> senator, we spoke with someone who's covered gm for the last 12 years and pointed out that that plant in lordstown, it's an older facility, smaller facility and it would be very expensive and difficult to retrofit for a

new vehicle. what do you think? >> i don't think that's accurate the concern they've had isn't the size of the plant. it's the line itself is made for a small vehicle. although the line is less of a problem in the paint booth now we have this opportunity over the next five years, general motors is saying for 20 new electric vehicle models. this is 20 new cars. one of those cars certainly will be small enough to fit into the same frame we have now for the cruz it's called a delta frame. we think it's perfect for the smaller electric cars that likely to come along so we're going to fight for it we're going to do everything we can to ensure general motors makes the decision to continue to invest in ohio. ohio's been good to general motors and general motors ought to stay in ohio. >> as you mentioned, you've had a lot of conversations with them have they told you anything that would lead you to think they may be leaning towards something like that? >> well, they are not making decisions right now about the production of these electric vehicles in the future i think they're planning on two

in the next 18 months. then 20 in the next five years and we want to be sure we put our best foot forward. to have the opportunity to once again show what they can do. >> senator, you were having a calm, collected, and civil conversation about this topic. the president has spoken out in a much more vociferous way with the company and has begun to threaten the company do you think that's appropriate? >> first let me say the new tax bill helps gm a lot to stay in lordstown. so there's confusion about that. it also provides an incentive to provide to those in lordstown to have immediate expensing it's more likely they would invest in the united states than anywhere else. including in mexico where there's a 30% corporate tax and

they don't get the same ability to write off their investment. the new tax bill will be something that general motors looks at positively which they do and one they would use to invest in lordstown in regards to the electric vehicle subsidy, it is correct there is one to the consumer if you buy an electric vehicle but there's a cap. and ironically general motors is about to hit that cap. there's not a whole lot of subsidy there for them we could change that law i don't think we're going to do it in -- >> senator, in general it's a bad idea for governments to say keep something open for employment that's how they do it in europe. they worry more about employees and then companies go out of business and there's no employees left sometimes you know as well as anyone about there's winners and losers in capitalism and if they've got these plants when they're turning out stuff that can't be retrofitted, that

any normal person running the company would say this needs to be closed down or we're going to end up where we were in 2008 again. no one wants them to end up there again. so if this -- i see china keeping plants open to keep capacity going and that's not the way a capitalistic system works. it looks like crony capitalism is is that fair to say for you as a republican? >> that's not what i'm suggesting >> does seem to be to some extent. >> look. they're going to make a decision based on what's best for them and i hope that's for all their stake holders including workers. >> i wish there was middle ground >> i think there is. i think there absolutely is. look they've made a $500 million investment in this plant recently for the cruz. the line is a modern line. it's not selling as well as it used to be by the way, when it was selling well, they loved the plant and the uaw made concessions to track that product all we're seeing is we have proven ourselves time and time

again. let's put the new product lordstown. everyone in the state wants to be helpful i think there's a way forward here and that is if they're going to produce these new electric vehicles, some of them will be smaller cars that fit in the lordstown frame that we talked about. let's put it in lordstown. >> would you be supportive if the uaw decides to hold gm up? would you be supportive of the union or the company >> what do you mean hold them up i've been working closely with management and the union and the union has been very responsible in this case, joe. >> that was andrew >> they've made concessions to attract general motors there in the first place. they'll continue to work on that >> as you know, in 2000 -- this coming summer -- what they're proposing technically is not allowed under the current uaw contract therefore this is all going to get negotiated what i'm asking is the uaw could try to, quote unquote, hold them up if they wanted to what i'm asking you is which side of this you ultimately will

support. >> if there is provisions in the contract that make it more difficult for them to leave lordstown, they will consider that this is the opportunity we have. we have a great plant there. we have a relatively modern line that's ready to go we're shifting to new products i understand that. that's what the market dictates. let's be sure that lordstown has a shot at that and if they do choose lordstown, i know it's going to be successful why? because they've proven that in the past the community is totally supportive we as federal and state and local lawmakers are interested in being helpful i think there's a recipe for success. >> senator, it's joe again do you think all subsidies should go? if you take it away from gm, you ought to take it away from everyone and let the marketplace decide what they want to drive

>> i think electric cars are part of our future as well as other technologies and we've got to invest in that. the way to invest in that is do it through basic research to provide the appropriate subsidies to get that up and going. if you don't -- just as they try to do in steel you know, 15 years ago had 15% of the world's steel production. now they have half of it they're doing it with electric cars now more than half the electric cars that are being driven are being made where in china we've got to stay ahead of that. that is part of keeping america competitive. the government does have more there. it's more the role of making sure the basic research dollars are there we are investing in innovation and invention in this country. that's an important part of gm's future and really it's about manufacturing here in america. so there are other companies that are doing it as well including ford, including honda,

including toyota and others that are invested here in america >> senator portman, always good to see you >> thanks, becky right now want to get back to the los angeles auto show where our own phil lebeau is standing by with a special guest with him phil >> hi, andrew. i'm joined by scott keogh who is the new man running volkswagen in north america i want to pick up on the conversation with senator portman. ev incentives are now in the cross hairs of the trump administration if you don't have the 7500 tax credit to offer somebody buying an electric vehicle, how much does that hurt the challenge of even selling many evs? >> i think we have to be big picture here evs are important for the future it'sa start-up market and start-up markets need a little help making massive investments. i think that incent igiives the confidence to jump in. >> if it's not there, how much do we see sales fall off

50%? 40%? what do you think? >> i don't want to speculate i think it works i think it's needed. i don't think we should look at a couple of different issues that are happening and say trigger response to it it's been a place. i think it's working and i think it'll continue to work >> evs are a big part of what you're hoping to do in the future here at voex klkswagevoln they're on the drawing board >> they're beyond the drawing board. >> overall you're making big commitments over in europe how close is it to really catching because we hear this for years now and everyone says but i don't see many out there on the road >> i think the press does interviews once a week look, i think they are going to come on the road it takes a little while for the tail to come across. but if you look at what's happening, the pricing is right. the technology is right. and the adoption will be there so i think this marriage of coming together of a cost position, price position is exactly right. >> volkswagen, you guys are in

the midst with a partnership with ford. do you need to have that partnership because the cost for developing evs and avs are so high >> there's so lot of talk with ford but you're right these massive investments, you need a artner. i think these conversations make sense. where will they lead to? we'll see. >> if general motors and honda, do you expect more of this >> 100%. with massive investments, massive technologies, you need more partners to firm up these things. >> last question you are the latest to take over volkswagen in north america. you know the history here. this is a brand that has been falling on its face for a number of years why should we believe that you and your team can help this? >> i'm right here. that's why

no we're having a great year. we're doing what we should do. volkswagen will work hard each and every day with dealers we're going to launch products and get exactly where we belong. i'm confident i and the team and everyone here will make it happen >> add more to the lineup. >> absolutely. we have two suvs rocking and rolling right now. speaking of local manufacturing, we'll be adding a second suv down in tennessee. we'll launch that car at the end of next year so we think we have great products >> scott keogh, guys there you have it. you will hear a lot of this at the l.a. auto show regarding evs and incentives and the need for the industry to keep these if not expand them. >> all right, phil very good. thank you. coming up, market-moving gdp revision data. could be minutes away we've got the numbers when "squawk box" returns alpha seems more elusive today.

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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. we are just a few seconds away from the second read on third quarter gdp. we've been watching the futures this morning and they've been picking up steam all through the course of the morning. right now the dow futures indicated up by about 170 points after a couple days of gains we've seen this week

monday 350 points. yesterday more than 100 points s&p futures indicated up 14 points also watching the 10-year note again, jay powell the federal reserve chairman is going to be speaking at noon before the economic club of new york. we will be watching that speech closely. 10-year at 3.046%. let's get to jim iuorio with the numbers. jim? >> thanks, becky we're looking at gdp annualizing 3.5% same ast last month. the gdp price index, 1.7% as expected core pce, slightly worse than expected so for the most part, these numbers are coming in as expected with major a hair worse. like you said, the s&p was relatively buoyant coming in if you look at it over the last three weeks, the market is telling us that the fed has

pivoted at least a little bit. and the market's starting to take out some of the tightenings we had that's why these numbers are important. with powell speaking today and the slew of speakers yesterday, we want to look for confirmation that that thesis is right. and these numbers are doing nothing with that coming in. by the way, throw inthe g20 is this weekend and they feel there's more good coming out of that i think those are the reasons. fed, china back to you, becky. >> thank you for that. want to check in with our guest host who's been watching all of it blackrock's rick rieder. and steve liesman who i believe we're going to get to in a second is in washington right now ahead of -- not in washington you're right here, aren't you? where are you? >> i'm in englewood cliffs, remember that place? the mothership, so to speak. >> what's your quick take? >> well, i think there's an

important and interesting change in the makeup of gdp here. consumer spending downgraded just a little bit from 4% to 3.6% but what was upgraded was equipment spending and biusines investment it's still not as strong as it maybe should have been it was 8.7% the prior quarter. that was upgraded from 0.8% to 0.5%. what happened to business spending with the tax cuts it's still weaker but it's closer to zero it's in that 2.5% range. and i do want to pick up where jim had left off and talk about what rick talked about earlier. which is this change in the outlook for the fed. and you can see it by just going back to our prior fed survey where the outlook for 2019 was the debate between 2% and 3% we had two and a half as the expected number of hikes for 2019 rick earlier in the show says

the debate is between one and two. what's happened is a quarter point has come off here. that's assuming that they add it at the end that's really i think the parameters of the debate right now. i think rick's got it exactly right. >> what do you think of that >> so i think that's fair. the next one could i mean, the next one, you're going to see it decelerate a little bit into the fourth quarter. listen i think most economists still have three to four hikes in their forecast for next year as steve said, the markets are debating a smaller number. >> you think the markets are debating it but the markets are not. >> no. i think they're going to see a change and identify residential as being a drag. or coming off the highs. and i think you all have a fed that's going to pause and say -- i still think they'll get another hike or two done but i think in december they're going to describe something that's different in terms of how you have to keep moving on this path of we're going to move >> hey, rick

>> go ahead. >> can we talk about something that i don't think gets a lot of air time which is you know the fed next year, if it fulfills the kind of plan will reduce the balance sheet by $600 billion. "a," do you think the fed ought to go through with that. and "b," what's the effect in our survey, is people think of that as the equivalent of a 35 basis point hike. >> so steve brought up what i think may be the point of what nobody talks about in system we're draining so much liquidity. i think the fed could slow down the balance of the sheet you can't tell the reason liquidity is so different today. the fed is reducing the balance sheet. by the way, the treasury is issuing additional debt, draining liquidity from the system that's why you're seeing assets go out of equities or people go out of equities. people go out of some of the debt markets in front of the yield curve because they're draining so much do i think the fed should slow

down the reduction of the balance sheet? i do nobody talks about likt -- liquidity. >> when does that become a real problem? >> it's become a real problem. that's why you see crises hit in places like in argentina like italy to some extent. the pressure of liquidity and markets today is difficult because you're draining so much from the system around the world. the delta of liquidity -- we were going through for two years massive amounts of liquidity in the system now you've reversed it 180 degrees. it's arguably a bigger deal than the debating the basis points. >> rick, that would be a huge reversal for the fed, right? the fed has said we're going to take this balance sheet reduction plan and put it over here on the side and we're not going to react to incoming data as a result of it. so jay powell would have to kind of do a pretty good about face here if it was going to reduce that balance heigh plan right now >> i think at the end of the day, they're going to probably

stop reducing the balance sheet probably around july of this coming year. >> wow >> that being said -- one man's opinion. people are underestimating this strain of liquidity that is a delta in markets from a year ago. by the way, it's why volatility is so much higher in the system. >> the president who's going to be going to argentina this week to speak with president xi said he thinks the fed is a bigger problem or bigger challenge than china. is that right? >> i wouldn't say necessarily the fed is a bigger problem. i think the fire department can adjust today i think the fed can say we've moved ten times. let's look at the data the data does seem to be evolving the european data is slowing and you're seeing the intrasensitive parts. >> my question is somebody that watching these markets, what are you worried about? what happens over this weekend or maybe what happens plays out

over the next year or two in terms of our relationship with china. >> for me i think the fed is hugely important today and i think that dynamic where we go in liquidity is an important thing. listen chinese growth, you are saying two things that are important. if you say what is third, it's hard to come up with what is third. because growth is dramatically different to the system. and they're doing a lot to stabilize their growth >> before we let you go on this issue, how do you set yourself up for this weekend and early next week? jim iuorio was making the comment he thinks markets are up in large part because there's an expectation something happens this weekend right? you don't build up to this without trying to come up with some statement does the market rally off of whatever that is invariably what we've had -- the move we've seen before is the market rallies off of some statement. then a day later everybody wakes up maybe the detail we don't know then it falls off again. >> i think what the markets have and what you're pricing now is some form of we're not going to put in place the next round of

tariffs. and we're going to negotiate from here. if you see something disappointing, the market is going to have a tough time i think the base case is you're going to have what is a good set of meetings. we are going to negotiate from here and i think the markets will like that so we've added a bit of risk going into next week i think, you know, monday should be a happy day but not without risk >> steve liesman, thank you. and rick you're not going anywhere president trump lashing out at his hand-picked federal reserve chairman jerome powell we're going to talk to the hoover institution's john taylor when "squawk box" returns.

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look at the equity futures right now. 158 up on the dow jones. 350, 1 50, what is that 600 so far this week >> we haven't seen the opening bell yet, so we're segoing to se >> we've got 49 minutes until the opening bell we'll see whether it holds on. i don't know whether this is going to be met with selling when we get back to 25,000 or whether we made a decent -- a more decent bottom i guess nobody -- we won't know until we know. >> but today's big event to watch is the federal reserve's jay powell

this speech comes a day after president trump blasted powell again in a wn"washington post" interview. president trump said he's not even a little bit happy with his selection of powell to run the central bank joining us now is john taylor. let's look at the logistics we may hear from powell later today. you said you thought the fed was on the right path when it came to normalization what will it mean for a december hike and hikes for next year >> well, given where the economy is and we're getting good growth numbers, 4.2%, 3.5%, i think it's because of tax reform given where we are i think that path they've indicated with the dots is about right. they've advertised it's data dependent. vice chair clarida mentioned that yesterday morning in this speech and i think they'll continue in that direction, of course, and looking at the economy as indicated data dependent is the word sometimes used so i think you'll hear more of

that >> if you start looking at some of the data, there have been places we've seen data that shows we could see a little bit of wobbliness when it comes to home sales, car sales. when it comes to how confident ceos are feeling that could be a combination of a lot of things. when you take that into account, it does seem like the fed when vice chairman clarida spoke a couple weeks ago, it sounds like they think they are closer to normalization than a few weeks ago. is that your assessment? >> when you said they were normalized than a couple of years ago -- >> a couple of months ago. clarida said just a couple of weeks ago that we're getting very near to normalization and the markets have been keying off of that. >> yeah. well, they've been pretty clear with their so-called dots about where they think they're going i don't think that's changed very much.

we'll see it come down a little bit. but i think they're -- what's different now is they're indicating what they're doing. i think in a healthy way of course if the economy weakens, they'll make an adjustment if inflation changes, they'll make an adjustment right now given what their forecast is and what other people's forecast is, it's been positive let's face it. 3.5% again, investment is picking up i think they're helping, actually people are skeptical but since they've begun to normalize, the economy's been doing better let's not forget that. you'll want to step back from that for just some reasons that don't add up of course they got to watch it and of course they are watching it but let's be careful to move them in a direction or help move them in a direction which is not right. >> rick rieder is our guest host today. >> one of the points becky made, i was looking at revenue the guidance by companies is the weakest since 2009 the earnings guidance is actually negative 10% after

plus-20% a year ago. if you look at companies in the driving of capex and wages accelerating, that's going to impede their ability it certainly suggests that the economy may be breaking from what we're hearing from companies. do you think that's right had or it's a near term factor? >> i think that's a factor but i still think you've got to take into account these other changes that have been made. the other thing the vice chair made yesterday morning is there's a healthy increase in productivity growth. that's on the supply side. and i think that some people should take note of that but you're right there's other things that are happening. but basically the fundamentals here have changed. and i think that's important and of course you got to look at these shorter term numbers but in the meantime, have a strategy and that's what they've emphasized a strategy that they're working off. you want to criticize that strategy about maybe they shouldn't be normalizing maybe the rates should be different in the future. that's fine. but ultimately they're looking at gdp growth and those

fundamental aspects of the economy. >> hey, there's a story out today that treasury secretary steven mnuchin has been querying folks trying to get their opinion on whether they think it will be better for the fed to tighten liquidity at this point by unwinding balance sheet faster rather than raising rates. that's still something that would serve to tighten up liquidity but wouldn't hit mainstream as hard what do you think about that idea >> you know, i think what's been positive about the fed compared to the old time when they had the so-called taper tantrum is they've been pretty clear about what they're doing so to get off of that, they think they have a good reason. they've described their so-called normalization process for the balance sheet. and of course it's right to question and think about it all the time but it's quite a bit different than it was several years ago when it shook the markets up it's been pretty smooth so far compared to what people thought. i wouldn't disrupt that. unless it's a really good reason to it's a process that's working pretty well. >> hey, john

can pro-growth policies for lack of a better work, reagan-esque policies of less regulation and lower taxes, can that boost an economy from an average of, i don't know, 1.5% to 2% to something above 2% people are constantly -- >> absolutely. absolutely >> people that absolutely say that we don't have the population growth and we don't have the productivity growth to get anywhere above 2% and it's just an exercise -- >> i think we said 2.5%. >> kind of said 2% go ahead, john i want to hear you i know at the hoover institution -- i don't know. i just remember we grew so much faster than europe because -- >> we did. >> for obvious reasons for 50 years because we're not an entitlement state and we do things differently here so what can we grow at for five

years? what can we average? could we average 2.5%? 3% what can we do >> we could average 3% absolutely but we have so much evidence we can do better. and so far that productivity number is looking better and labor force is looking better all those things are coming in and so we're not there yet, but i think there's been some fairly substantial changes in policy. >> that's what i mean. if we can grow at 2% with the the private sector not being the apple of the administration's eye, we get a tenth of a percent when we do something pro growth? that makes no sense to me. >> i agree i think the outlook i've been writing act for a bunch of years now is we can boost growth to

3% >> it's going to drop off any minute to some people. they'd rather be right >> i think that's the direction of policy. and let's not forget that. >> hey, john thank you for joining us today >> thank you >> john taylor from the hoover institution. when we come back, a lot more on "squawk. we're going to head down to see jim cramer live from the new york stock exchange. hear what he has to say about where things may or may not be headed i'll tell you where the market's adheed up dow about 162 points we're back in a moment

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year, we had 3% to 5% rally. we are almost done with that you had a lot of good guests this morning i think it is a little binary. if we don't get a deal this weekend, maybe push back the 25%, i think we can go higher. if we get an all in president really done and not really negotiations, i think we go lower. i know a lot of people have different views of what powell going to say we got three hours, why don't we listen the idea that the economy is strong as your previous guest said is ill-informed that's all right because he may be a great guy >> jim, you know we know domico and a lot of things have changed on a lot of this stuff with china and i don't know when the right time to deal with some of these stuff. i don't know if that was an evolution in your viewpoint or

not. you are tieing it all to whether we somehow have a favorable out come with this are you against doing this or with the market going down, are you willing to let the market go down a little to get what we need >> my father's business is wiped out by the chinese i will never forget it because it changed our lives steel prices are below where they were when this whole thing started. personally i want the chinese to stop its communist country i favor a regime change. the long gain, work for stalling or lennon. i don't think this guy is any different. it is a communist regime >> you want to put your sou soul -- you would not throw in the towel to get the market back >> i don't want to do that as an american, i favor what's going on

my viewers are all in stock. i have to tell them listen i think it is not good for the stock market right now i favor containment policies, i am not that different from pence. since 2000s, i am not changing my view. this is my view, i am never going to change my view. i know it is a communist country that does not have that level of leadership and i think vice president spelled it out well. >> thank you, jim. final word for today -- final word from rick reid when "squawk box" comes back. you ok there, kurt? we're about to move. karate helps... relieve some of the house-buying...

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we want to thank your guests this friday. reid, some final thoughts. >> what it is going to mean going into 2019, is the fed going to keep on pressing on things the key when you go to 2018, you thought of what's happening and bonds and stocks are down on the year, stocks are marginally higher after the recent move what does it mean for 2019

you can have some reasonable returns. not like what we saw two years ago. i think it is going to set up for december meeting where he's got more time and a press conference >> he wants to make a statement or he's trying to get through the hour >> i think it is going to be a word or two in there that's important about some moderation of the economy and inflation of where it is today verses where it has been and those are going to be important. we'll watch for one word or two words. >> they're supposed to take q&a from the audience, what's the question to ask? >> how do you think of the last few months and where is inflation targeting and what do you have to do from here and at the pace of what we are waiting to see >> rick reider, thank you. >> what a morning. rick and tiger

>> who else? >> john taylor >> pretty good show. >> it was a good show. >> and becky quick and joe kernen >> that's right. that could be what turns the market dow futures are up by 161 points make sure you join us tomorrow right now it is time for "squawk on the street. ♪ good wednesday morning, welcome to "squawk on the street," i am carl quintanilla with jim cramer, big morning as powell speaks, futures up 160, suggesting the bar for good news both on the fed and the president meeting the chinese this weekend europe is higher about half a percent. watch bond, the third quarter, consumption is