far on this thursday, november 29, 2018 "squawk box" begins right now. ♪ live from new york where business never sleeps this is "squawk box. ♪ good morning welcome to "squawk box," rear live from the nasdaq market site in times square. let's look at the u.s. equity futures. you can see right now things are pulling back a bit dow down by 104 points that might be something we pay attention to yesterday the dow was up by 600 points as joe mentioned, the dow up by 1,000 points for the first three sessions of this week. up 350 on monday, up over 100 on tuesday, yesterday up 617 points right now it looks like the s&p is pulling back by 12 points it was the second best day of the year, the best day since march 26th for the dow and s&p

500. the nasdaq was up by 3% yesterday, a gain of 200 points. it logged its best day since october 25th you will see this morning the nasdaq indicated down by 44 points overnight in asia, markets all over the place nikkei ended up by 0.4%. the hang seng was off by 0.9%. the shanghai was down by 1.3% as we get ready for the g20 summit this weekend >> give me a 2 handle. i want a 2 handle on this next chart. i have not seen it yet have you seen it >> you're jumping ahead. we have european equities next >> i'm waiting for the ten-year. >> all right we'll look at european markets they are higher. the big gainer is the ftse up by 0.6% the cac is up by 0.6%.

the dax up by a quarter percent. the number that joe has been waiting for -- >> i don't think it's there. >> ten-year, 3.010 so close >> i was looking at that this morning. then i just happened to look down and see the yields across europe god, we have high yields really it's ten times the level of germany. i couldn't do the math on the level of japan like 0.18. >> somebody here this week was talking about -- somebody was saying we will continue to see those rates overseas act as gravity on our rates here, the yields want to go overseas and talk about breaking news happening overnight and early this morning. german authorities raiding deutsche bank's offices in frankfurt. the search was directed against two staff members who are accused of helping clients set

up offshore businesses with money gained from criminal deals this relates to the panama papers and that documented how some wealthy people used offshore accounts to evade taxes. if you remember the activist investor, he made a big stake in this company it's down marginally since when he got in. that news had not broken yet, but it's an interesting stock. >> that was within the last two weeks. >> yeah. back to yesterday's big surge in the markets here's the comment from fed chair jerome powell that sparked the rally. >> interest rates are still low by historical standards. and they remain just below the range of estimates of that level that would be neutral for the economy, that is neither speeding up or slowing down growth >> you know, watching it

yesterday, i checked a lot, we were up about 80 or 90 the next time we were up, we were up 370. you can see it, the stocks surged after his comments. the dow on pace to break its two-week losing streak is it a powell put did powell look at the markets did powell listen to cramer? did powell listen to trump take your pick all of the above wti crude prices falling below 50 bucks a barrel for the first time since october of last year. jim cramer was up and tweeting at 4:18 today. i answered his tweet this morning. >> did you >> i did two days of data dependent fed, oil goes below 50. one and wait is the new neutral. i replied with amazing, with a small "a." cramer has a few followers or

something, then my twitter feed exploded let's get to mike santoli for more on the rally. we have katie stockton coming on i don't know why we need her after i saw you yesterday on "closing bell. you were amazing >> you didn't listen to the disclaimers. >> you know nothing. we have a lot of people around here that know nothing and are never in doubt >> just trying to dial out the lens and look at the context of this move. >> 2,800, you had me worried about 2,800. >> it's not worry, it's a challenge. we have the chart. >> if you look at 2,800, you drew a line across on "closing bell" -- >> if you look at 2,750 and 2,800, that stopped the market five or so times >> it didn't stop it in january or september it has gotten through. >> it's an area of friction you have to get through. the bigger point yesterday, with an intentional softening of

language by powell, no doubt about it, but still within the exact range of the fed's 2019 forecast that they were two months ago i do think there was an intent to say look, why are you getting carried away here? the equity markets only. the bond market figured this out three weeks ago. the two-year yield peaked then the softening of tone and the magnitude of the rally showed how compressed the market was. we tried to build off last week's lows. valuation came down, sentiment was kau shcautious in a different market, we would have gotten over that quickly. >> did the bond market figure this out two weeks ago when rich clarida spoke? >> i think the bond market realized that the characterization of jerome powell to judy woodruff and the town hall was not some kind of carefully calibrated word.

>> this is -- what year is it? 2018 this is 2018 you know how social media is what day did he make those comments a wednesday? on thursday or friday, that's all we were talking about. >> the market talked this into being a bigger issue >> i heard people yesterday arguing far below and just below are the same thing >> this may have been a careful walking back of was the market took and ran with the last time around i think it was orchestrated. the vice chairman came out speaking -- >> you had the two-year, then all stock traders are idiots >> no. there are other things stressing stocks besides the fed >> yesterday in the room, the economists and former fed people there were saying, look this is the same thing we've always said, it's data dependent. but the market hears and looks into every word.

>> no one is saying the market is still not stressed. here's the highs, here's the trading range. we're well within the trading range. i'm not willing to say there won't be new lows. 600 points up or down is not what it used to be it's 2%. >> second biggest move of the year >> but it's still not -- like i said, we have some sages here. some guys that are either 30 years old and really worried or they're very wise because they have a lot of gray is that from the battle scars or just wisdom? just wisdom manifesting itself >> i hope both >> joining us is ed keon mike mark u

mike mulaney also joins us if people hear what you say today and say i need that guy's advice, where are you now? boston partners. >> boston partners >> do either one of you think we're out of the woods or is this just part of the volatility >> not out of the woods yet but a step in the right direction. the overhangs were the fed we have to wait an see what happens with the g20 meeting this weekend that's a key thing the last thing we're looking for is stability in oil prices oil has been down 30% now in the last few weeks that's oversupply. >> exactly right it's oversupply now, but if it starts to go down in the 50%

down range, then you have to start thinking about demand. that means a weaker global economy. that's out there for us right now. >> cautiously -- no bearish -- i'm trying to remember last time, ed you're barely bullish. >> still the same? >> still the same. we liked u.s. stocks all year, still do even though the returns are not what they were, we have positive returns. i do start to worry about next year's earnings. i think we are not yet moving into a bear market >> sentiment wise, talking to a couple guys in makeup together, we talk, we were talking about how quickly we went from garden variety to not only thinking that the stock market cycle was over, we were suddenly thinking about the economic cycle is over nothing changed really >> i think the fed is responsible for that the notion that we would go to something with a 3 handle on the

fed funds rate over the next year or so, that had people thinking that combined with the economic weakness in china, in europe, in japan, not necessarily that things were were terrible but weakening. i think the move down was largely in response to people thinking the fed would go too far and drive us into premature recession. with the comments yesterday, that takes that off the table a bit. >> we're starting to see consumers when they're looking at things, they don't go ten years ago, 7%. i thought that was a low rate. now if it goes from 2% to 3.5, they notice. maybe that question is being answered is it the absolute level of rates or the relative level of where we've been that dictatdictates the consumer doesn't want higher rates, right >> you have to say to yourself we had zero rates for many years in the united states and around the developed world, yet nothing

happened on the inflation front. there's something different. demographics have a lot to do with this. there's something different about the world today compared to the last 50, 100 years. i think the way people respond to going up to 2.5% to 3% is much more dramatic than it would be if the same thing happened several years ago. >> is that a long-lasting effect or something where there's sticker shock an then you get over it because you have to buy a house or car >> i think it's with us for a while. we did see a substantial response in the housing market, other interest sensitive sectors. so i think the chairman is right. we're close to neutral maybe one or two more we're at the estimates of our star, that should be enough >> i also think it's not really sticker shock, it's over the course of years with low rates people tend to buy as much car or house as they can afford. >> i thought cars were still 11

years old, that we need -- >> cars cost a lot more because there's so much more technology in them. >> it's not people saying i refuse to pay 5% on a 30-year mortgage, it's people are locked in to what they already own. >> why shouldn't we think, okay, i was recalibrating multiples on 3.5% terminal rate, now that's not there. why can't i feel more comfortable now that multiples have come down, why can't i feel better about that or more comfortable? >> i keep saying how valuation and sentiment have come way off the boil >> you're our senior what? >> senior markets commentator. i oversee all the junior markets commentators >> have you made this point. >> i'm on every day. i'm out there.

>> for a long time, too. >> we both got to lay off the coloring, get like these guys, don't you think? >> that would give us moribilie credibility? >> this is not coloring. i had black hair on october 2nd. >> i listen to you, people say he is from boston. i got that much. from michael, we will talk to eamon javers in a minute about what's coming up with the g20 this weekend this was one hurdle out of the way for the markets. does this embolden the president po s to say i am staying tough on trade or will he try to get a bridge to an agreement >> i think the stock market is a report card for president trump. i think he would like to get something done at least a truce over the weekend. i don't see anything concrete coming out of this i think they have a lot of work

to do, especially in the intellectual property area, if they can walk away saying we'll work on this further -- >> don't you think the market will soar on that and then two days later -- >> i think that's in the prices right now. if nothing comes out of it and there is a verbal war over the weekend, that will be very bad for stocks >> i think it would be a one-day phenomenon at most if we got what we wanted, we're back to our normal problems to worry about. >> you go back to valuation. valuations are pretty good right now. the third biggest pe correction we've seen >> a long cycle in anybody's book >> it's been very long this is the valuation on a forward basis we were at in 2007 so it's not because the market is expensive, it's because the cycle ended. if you don't think the cycle is ending next year, they're cheap.

>> all right tell me one more time -- >> boston partners >> used to be -- >> fiduciary trust company it's better for you, right do you still have all that weight on -- >> i have a second life now. >> you can buy call options, do whatever you want now. ed, bullishly be ll lly bearish >> yes president trump is headed to buenos aires for the g20 meeting and a meeting with president economy. eamon javers joins us now from there. what can you tell us from the early glim glimpses on things? >> this is a city full of activity today world leaders have already begun arriving this is the front pain of a local newspaper, they are calling the city of buenos aires

an armored city. they're talking about the 22,000 police officers who will be providing security here in buenos aires throughout the next couple of days there's a picture of mohammed bin salman, his arrival here yesterday. the focus of this g20 is going to be on that relationship between president trump and president xi jinping of china, whether or not they can cut a deal final markets around the world have been looking at this moment as the opportunity for the united states and china to perhaps put some of the trade tensions that bedevilled them over the course of 2018 behind them the question is whether or not there's really the platform here for a deal larry kudlow lowering expectations, i would say earlier this week by saying he and president trump have been disappointed by the behavior of the chinese during the course of these negotiations we saw robert lighthizer put out this statement yesterday

china's policies are especially egregious with respect to automobile tariffs at the president's direction i will examine all available tools to equalize the tariffs applied to automobiles so the trade representative from the united states there firing off a broad side on the eve of this g20 we'll see how the president feels when he gets here later on this evening all the events kick off tonight with a cocktail reception and the meat of the g20 begins tomorrow questions here about who the president will meet with will he have a face-to-face session with vladimir putin and what will he say on saturday with xi jinping. >> we follow the markets moves, the markets reaction to this stuff. you know politics very well. hearing tough talk like that from lighthizer, how would you read the political tea leaves in terms of what that is something

callin signaling? did it surprise you to see such tough talk when the market is anticipating that will be something where we get some sort of negotiation or a view of how there could be a resolution to this dismute >> i don't think you can read that much into the light hausoue house -- lighthizer statement. this is a negotiation. you want to go into meeting with your hardest footing he wants to say i can't go that far in terms of a deal here because politically back home they won't support it. that puts the president in a good position in terms of these negotiations then if he wants to cut a deal, he can cut a deal. there's a narrative we saw reflected in the "new york times" that the president has been sort of battered by the stock market weakness and financial weakness in the united states and he might feel like he needs

a deal here this week. this might belighthizer puttin the president in position to cut that deal. we'll wait and see what kind of mood the president is in when he gets here. >> eamon javers, thank you very much later this morning we'll talk about the impact of a deal with china on american business. that's coming up at 6:30 a.m. eastern time coming up, a lot more. facebook under fire again this morning. a new report out saying it considered actually selling user data to companies. we have details on that report in a moment. as we head to break, a look at biggest premarket winners and losers in the dow.

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welcome back some facebook news the "wall street journal" is reporting that facebook waived the idea of charging companies for access to user data. the "journal" citing internal e-mails from facebook executives from 2012 and 2014 those e-mails also reportedly show facebook discussed pushing some advertisers to spend more in return for increased user information access facebook does not deny the e-mails, but says they were taken out of context and notes they have never sold user data i was talking with andrew in the break about this reading the story last night i was thinking the good news is they talked about this and decided not to do it but you're still basically selling the information by selling it to advertisers through saying we'll do x, y, z. giving it away the good news is they didn't do it but i guess the bigger question is they thought about doing this >> it's more about the demonstration of the internal psychology of the company that they would think it's okay to

have a real conversation about selling the data what that means. unclear what data is actually given or shared with advertisers, how this works today relative to what they might have been thinking about it's possible unwhat thder what were talking about, they could have provided the data right now it's unclear from the e-mails what they would have been providing. it's more a demonstration that you want a caompany to be carefl with your data >> four years ago this is a decision technology companies had to make. are we going down this road or not. some did, some didn't. the ones who didn't are the ones saying these guys need to be regulated now. saying we decided not to build these databases or have this access to this information or decide to even think about

selling it it was a decision that companies everywhere had to make >> so if we had -- if there was a way to -- you can bet on everything now >> yep >> with bezos' comments in mind about all companies eventually fail, given what facebook is looking at facing right now, you saw the high, 220. >> yep >> it will exceed that high at some point in the future or it will not exceed that high? you make money on the of aver a under. does it go back above that >> i don't think i would bet against mark zuckerberg at this point. >> what do you think >> i think it may go back. >> what was the market cap >> there's two issues. >> you think people five years from now are going to be -- >> that's the bigger point the trend lines on facebook classic -- because instagram is a different story, facebook

classic, the trend lines are a separate story than this larger conversation about the european -- >> the european model, if that comes here >> that is hard to weigh, hard to weigh how people use instagram. >> it's not over for instagram because i'm not on it yet. >> you're not on facebook eithe either >> i can't talk to anyone on myspace anymore. >> there's a new space called tick tock. did you know about that? >> no. >> love it love it >> it's a mash up between stories on instagram and a little bit of snap it's all videoish. people are putting songs to stuff. >> it's constantly chasing to be the coolest. >> maybe facebook will buy tick tock i don't know i don't know how this will go

down >> i don't either. ge is not going back to 600 bill kwan markbillion market cap, is? >> bold. what was that thing worth, facebook it was worth more than boeing, walmart and mcdonald's combined for people looking at vacation pictures you have to make something to advertise to sell, don't you >> i've been purposely asking so many retailers in the past couple of days how they are using -- cost of acquisition that's the whole game. >> i hear you. >> not many options for better or worse the holiday christmas decorations may cost you more this year because the latest round of tariffs on chinese goods includes a 10% tax on

holiday lights 85% of the light strands sold in the u.s. come from china if the trade war continues, next christmas could be more expensive. president trump threatened to raise that tariff from 10% to 25%. joe, when are we going to bed bath & beyond to get our lights. >> if we do go, it's the west side of town >> there's one on 8th avenue >> no, because of this demarcation now. >> you're talking about traffic. >> yes >> last night was actually the 86th annual lighting of the tree at rockefeller center featuring 50,000 lights on the 72-foot tall norway spruce it was a star-studded event including all kinds of luminaries out there, including howie mandel, he's the host of "deal or no deal" which is

returning next week on cnbc. today is howie's birthday. i think he's 56? >> he may be one of those guys, if he tries to grow his hair back, he may be bald remember the seinfeld -- i'm not sure he looks good. >> he's been looking like this for a long time. >> he has. >> "deal or no deal" premieres on cnbc wednesday at 8:00 p.m. howie will join us that morning in the 7:00 hour >> in studio >> i believe >> can we play a little "deal or no deal? >> we could somehow adapt that >> we have to figure out how to do that. >> liesman has done studies, economists use it as behavioral perspectives, because human nature, when you decide to push and go for it, when you think it's too much. >> can i do the opposite of what liesman is recommending? kidding. kidding. kidding. >> do you know there's a "deal or no deal" arcade game?

>> yes i've played it >> so have i. the meeting between president trump and china's president xi would result in a tariff cease-fire or an escal a escalation or trade war. as we head to break a look at yesterday's s&p 500 winners also the losers.

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♪ welcome back you're watching "squawk box" live from the nasdaq market site in times square. ♪ good morning among the stories we're watching today, german prosecutors raiding deutsche bank's headquarters in frankfurt today. the shares are moving lower on that news. we'll get a live report from frankfurt in the next hour. and apple giving a demand update on its newest iphone. the tech giant says the iphone xr has been the best selling modelhitting the market last month. and altria is reportedly in talks to take a minority stake in juul labs juul has overtake the e-something ke-si

e-cigarette market just in the past year sales have jumped 800% but the industry has been targeted by the fda over the popularity of the products among teens. you can see altria is up by 30 cents. yesterday the dow was up by 617 points nasdaq up by 3%. this morning a bit of a pullback dow futures down by 106 points s&p futures off by 13. the nasdaq down by 46. this weekend is critical president trump headed to argentina for the g20 summit a key meeting on trade with china's president xi let's welcome in craig allen craig, good morning to you >> good morning. thank you for having me. >> thank you for being with us help us understand what you think will happen when president

xi and president trump meet. >> i think that we need to keep this in perspective. they're going to be having a dinner, my understanding is at the very end of this summit. so they will have both been through a long series of meetings prior to the dinner they'll both probably be very tired. so i think we should have -- keep expectations in check >> let's ask you about how you think this dinner goes down. which is to say the president -- president trump will have been briefed by his team about what he can or cannot offer, i imagine. president xi, i imagine, has also been briefed with various options about what they can or cannot offer is it possible that either one of them pulls an audible in the middle of dinner and somehow offers something big there's some big deal to be had during dessert

>> let's hope so one important factor would be who is attending the dinner. how many people are there. my understanding is that today those decisions will be made the participants are important i think president trump will have in mind this is the 40th anniversary of reform in china and the president will be returning to china to celebrate the great speech to open up china. and xi jinping will probably be announcing in the near-term to the chinese people new market access, new reforms. and hopefully that will lead the president to postpone the imposition of new tariffs on the chinese and begin a process of

dialogue, negotiation and that will lead to real talks. >> how much of this is theater how much of this is back-channelled, preorgani-orgad it's hard to believe they will walk into this dinner and there will be nothing more than a staged and choreographed plan, no >> i wish this was theater, but there are 2.6 million americans who work on china trade either exports for chinese investors here or in other capacities along with china their jobs are at risk here. this is not theater. the president has said he will move on january 1st to expand tariffs and begin a process to potentially put tariffs on all chinese imports that could create a very big economic shock. if that does happen a lot of people will be affected. the outcome is not certain

what would happen if president xi pulls an audible and says we'll go to zero you go to zero who wins then? >> i think that everyone would win if we are able to get into a position where we hold off on further tariffs. better yet, remove the tariffs that are in place associated with the 301 activitactivity the 232 associated with steel and aluminum, that's not a china-specific or a bilateral issue. the 301 tariffs are china specific what would be success is getting rid of those tariffs or at least postponing the imposition of additional tariffs >> craig allen, china business council president, appreciate your time. >> great pleasure. thank you. president trump just

tweeting, general motors is very counter to what other auto and other companies are doing. big steel is opening and renovating plants all over the country. auto companies are pouring into the u.s. including bmw, which just announced a major new plant. the u.s. is booming. >> new plant may be related to potential for auto tariffs >> right >> make up for those cars. people will buy those. i don't know i'm not talking to you about that what is your thing your minivan >> toyota highlander built and bred in the u.s. >> but you store it basically. >> i store it for the most part except for the weekends. but by the way on this, did you see the tweet that the president retweeted yesterday that mnuchin then retweeted and claimed he didn't retweet

he said an unauthorized person retweeted. >> what was it >> basically said mary barra and gm should pay back 11$11.2 billion. there's a debate on whether the taxpayers got their money back >> i leave my thing on if you ever see a tweet that looks like it's from andrew, it's from andrew >> you think i'm going -- >> i have no idea. just don't assume it's coming from me. >> faber would walk away, and people would hop on his account. >> it was always in the yellow it used to be funny. not anymore. now it gets you fired. when was the last time you got a package from dhl the company transformed itself to take advantage of the boom in e-commerce by conceding the last mile fed chair powell's speech delivered on all the hype triggering a 600-point rally for

stocks we'll tell you what it means for your portfolio stay tuned for more "squawk box" on cnbc. i didn't catch that. i said ask how soon they can be here right now? what's now? he says they're surveying our property now they're probably at the wrong house i don't see any hovering his name is hovering? look up? by automating claims with machine learning and analytics, cognizant is helping insurance companies advance how they serve even hard to reach customers. cool ♪

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welcome back to "squawk. 'tis the season for shipping one well known package carrier transformed itself over the last ten years. frank holland has the story behind dhl >> good morning. behind me you're looking at the house that e-commerce built for

dhl. this facility is part of their strategy to capitalize on the growing e-commerce business and also handle -- and build the capability to handle our growing desires for faster and faster shipping from retailers. this facility focuses on mid size retailers according to dhl and mostly the books thxes theyr about 3 pounds this facility can process 60% more than the nearby facility in newark due to the automation you're looking alt-rigt right n. that's about 40,000 packages per hour, anything from a sweat tore a video game system. dhl says this is a niche business they're not trying to compete with the post office, fedex or u.p.s. those three are about 95% of the e-commerce market, they say they're focusing on retailers getting the packages to the post offices and then letting the

post offices do the final mile delivery they say they're trying to compete in that area about ten years ago this same unit, 90% of what they did was flats, magazines and catalogs coming to your house now more than 90% of the parcels you're seeing here on this conveyor belt, so the business is changing and they're trying to adapt with the changing times. andrew >> frank holland, thank you. by the way, the thing i'm trying to figure out whether dhl, fedex or u.p.s. can get you the package right before christmas there's a competition among them always fascinatfascinating. when we come back, signs of life in the real estate sector, but will they continue the new forecast for 2019 from the mortgage bankers association. as we head to break, a quick check of the european markets. the dax is flat, the cac and the ftse both indicated higher the cac up by 0.34%.

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all right. welcome back, everybody. the mortgage bankers association out this morning with its housing forecast for fwheen2019 joining us, the ceo. thanks for being here. what going into a forecast like this >> sure. what we're finding that millennials there are some worries that they might stay in their parents' basement forever. but they do want to be homeowners and we're seeing that push and demand. >> probably not -- >> i want to be a professional tennis player. but i don't think that's going

to happen for me they need a job to move out of the house. is that happening? >> sure, with unemployment the lowest in 50 years >> it going to be doable for them the experience of owning a house or maybe even renting might be something demographically that millennials will start doing yes? >> yes, absolutely and there are programs through the mortgage banking association that make that possible where the down payments aren't so onerous. and how much you can pay for a mortgage are rising. >> the numbers you're expecting are a 4% increase next year. we were just talking this morning with the idea of rates going hi ing higher, that's act been a freeze because people think maybe i need to wait >> right, the 4% is on the purchase side.

refinances tend to be slow, given that so many people already have locked in low interest rates but the interest rates creeping up are doing so against a back job of a decade very low interest rates so in a real sense, over the long cycle, even with these increases rates are affordable >> fair to say that the fed is the most important factor when it comes to whether people are buying more houses next year the jobs picture, too? >> yes and no. of course, the fed controls the short end the curve and the ten-year is what we watch when corresponding to mortgage rates. given chairman powell's comments yesterday, really, the ten-year is what we watch and if the fed were to go up a few more times next year or not, we expect modest increase next year in the ten-year and in the mortgage rates >> bob, we were talking off camera about the idea that all forecasts are pretty tricky.

and things that have really thrown a wrench in it. what kind of predictions did you have, let's say, in 2007 before the crash? >> i can't come here and tell you that the bankers predicted what was happening in 2007, because it was unprecedented this is pretty modest and it's driven by the household information very full employment picture and the demand continuing there is a supply constraint which has raised prices but we look for that to moderate as the supply goes up real realtors say we're up on inventory. bob brooks is the ceo of the mortgage financing organization. finally, my squawk booze

news pabst relies on millers/coors to brew, pack and ship all of its brews. but millercoors saying they don't have the capacity. pabst accused them about lying about that capacity. it comes from yesterday as jurors were ending their second day of deliberation. but they're calling it amicable. >> are they still making it? >> it a pabst recipe that millercoors follows, do you think? >> probably. >> you see in "the simpsons" there's one big pipe coming down and splits off. >> it's marketing. we always fall for the marketing. >> but like wine where i don't really care about what year, more interested in the alcohol content. like there are beers, like 12%

or 13% >> like what kind? >> there are craft beers that are like that. and it's fine as long as you know as long as you know beforehand >> you've had an incident. >> i have had an incident where you've got to try this it was one bottle. and whoa -- yeah, that was -- >> i remember hearing about that >> i don't remember anything after that >> that's the whoa part. talking about the whoa, the dow surging up after the fed comments yesterday we'll tell what you it means for your portfolio next. as we head to a break take a look at crude prices wti under $50. $49.95 "squawk" returns after this.

not long ago, ronda started here. and then, more jobs began to appear. what started with one job spread all around. because each job in energy creates many more in this town. oh, there weren't enough intehours in the day to maintain are old data center. so we made a twelve a fifteen. three extra hours. but that really doesn't add hours to the day. yeah it does, look. i'm not sure it works that way, but at cdw we get that time is precious. so we'd access your needs then design a nutanix enterprise cloud. to give you more time to grow your business. yeah that's better. hey we still on for lunch at 15 o'clock? you bet. for private cloud solutions you need nutanix and it orchestration by cdw.

the dow's second best day of the year we'll run you through what's moving the markets and why the g-20 summit to matter to your money. oil alert. crude falling below $50 for the first time since october 2017. what's moving black gold lower we will get an update. plus, you may be paying a little more for christmas lights this year. the last round of tariffs on chinese goods includes a tax on holiday lights >> clark >> honey, i think i know what's wrong. ♪ everybody come out quick look at the lights >> that story and your corporate headlines as the second hour of

"squawk box" begins right now. jingle bell jingle bell rock ♪ ♪ jingle bell swing >> announcer: live from the beating heart of business, new york this is "squawk box. >> welcome ba ck to "squawk box. live at the nasdaq market site on times square. a look at the u.s. equity futures after jay powell's comments the dow looking to open down, about 88 points down nasdaq would open up about 45 points and s&p 500 about 12 points wti crude breaking below $50 earlier this morning now trading -- we're at $50.01 this morning literally before the break it was at $49.95. we're going to keep an eye on that with a huge impact on where

things go. >> as joe mentioned earlier, watching the ten-year. >> and, yeah, interesting things we weren't expecting a month ago, that's for sure some other headlines we're following, the market is having the second best day of the year after chairman powell's speech sparked the rally. we'll get more on the comments in just a moment backlash to cut production is all of the buzz at the auto show and apple giving a demand update on its newest iphone. the tech giant said the xr is the best-selling model since it hit the market last month. apple stock took a beating amid slowing demand stocks on the move this morning. facebook considered charging companies for access to its user data according to some court

documents. facebook's ceo mark zuckerberg emphatically told congress earlier this year in his words, we don't sell data and altria may take a significant stake in juul market recently taking over the market for e-cigarettes recently valued at $16 billion >> wow i didn't realize >> in the past six years, the stock jumped 800%. >> and a new delivery system for a drug you absolutely don't need >> juul has been under extreme scrutiny from the fda because of sales to teenagers they are now taking steps to try to rein that back in >> and it will be very interesting to see whether that growth will hold up, that you can't sell to the kids >> right which takes away from the whole

idea that you're helping other people quit something that is even worse finally, mcdonald's is being upgraded from overweight to equalweight. saying that store modification should pay dofoff. let's get you caught up on.markets now joining us, darrell cronk, chris lamani of oppenheimer funds. i want the day to come when it's about earnings and the underlying economy today is about the fed again do you think december hike, three more, still in your view, next year. given yesterday's comments, why are you still at three >> we still think the data justifies it again, dual mandate.

unemployment economy grows above trend next year, probably 2.7, 2.8% for u.s. gdp the dollar comes down. >> why would the dollar come downy. >> because you're going to have a narrowing of the interest rate differential between where the u.s. is at and the ecb and doj that's a dollar negative >> it seems like growth like that would keep the dollar high. you're also saying no inflation. so, if it's a dual mandate that really should be based mostly on dollar stability and inflation concerns >> the dollar is not -- it's unemployment and inflation >> what? >> unemployment and inflation drove that >> yeah, i know. but the inflation part -- that's -- inflation is just a code word for it >> powell went out of his way yesterday to say market stability is not something -- >> not market. dollar >> but dollar -- >> that's just the word for inflation. >> i get it.

>> so, inflation you think is very low next year why raise rates because the economy is growing >> well, i think you've got inflation at the fed's target at 2% >> or below. >> pcb or core rates or whatever you want for inflation i think they have the ammunition to slow that path, joe you have three things came out that was dovish. you have the rate below. and the fed acknowledging that there's -- >> if inflation is going to be below where the fed's target is, would you still think -- >> but i think you could slow down >> then you're not expecting inflation to stay low? you're expecting inflation to come back. or are you saying that 2.8% growth will translate into wage growth which will have concerns? >> yeah. you've got upward concerns on

inflation but also upward pressure now on prices coming from tariffs, right? >> would you say darrell, you ignorant -- do you remember that from "saturday night live" do you disagree with that? >> absolutely. two tightenings the most in 2019, and then it stops. the reason for that, because the economy is going to slow down. it's not where it is today but in the first half of next year when the stimulus fades and the tightening that they've already done kind of manifests itself in the real economy things are going fob from a growth standpoint. as long as that's the case, the fed needs to stop. we're very close that's what powell was talking about yesterday. and in that environment, once we are beyond the expectation that the fed will continue to tighten, that is very market

positive >> both of you don't think this is a correction with new highs to come in the future? >> absolutely. again, as we have talked about before, our core theme remains, five more years. that is going to be still significant amount of growth in the cycle for quite some time. >> that sounds like an election -- >> well, maybe five more years, as opposed to four more years for it not to be a campaign. but the point is there's not enough inflation for it to force the central bank to come down hard on the economy. as long as that's the case, growth continues and the market cycle continues. >> i think we're a long ways away from any economic troubles and recession. but from a market standpoint what i would like to see and we agree this is a correction, not a new bear market, you've got to see some widening of the breadth of the leadership, right with powell's comment, it came

through in the past cycle. you need to see it spread out into industrials, into financials, in a place where you can get a broader move to make that next leg higher we think that will happen, but that's important to watch in the coming months, joe >> but having said that, the tech sector still is going to be the leader as this cycle continues. but these are the companies that are executing the best they are delivering the results in a growth-short world, if you can grow at a very rapid clip. both from a revenue and eps standpoint, i think that's what people want. >> you favor financials over tech >> yeah. we like tech but we like our highest commit ideas are industrials and financials right now the valuations are about as cheap as you've got in an entire cycle. if you've got any walk-back on

the trade escalation, tre industrials will light on fire >> i think the trend point is very important if you look at the market, there are two issues, rates and trade. if we resolve the trade issue, it's getting some word positive on the tariff front, if we get that, it's looking really good >> we'll see something this weekend. >> yeah, we'll see whether that happens, even if it doesn't happen this time, the economy slows down, it's pressure on the administration to arrive at some resolution is important. >> where are you at gdp for 2019 >> slight by above 2%. 2.3% or something like >> 2020? >> probably 2%. >> and you >> 2.7% for 'then. 2.4%, 2.5% again, that's trend. >> oh, i know. >> if i get out even with a

muted i'm happy with that on an extended rally i think you're getting the cheapest valuations you're getting in years, quite frankly. and the reality is, we had the worst start to the fourth quarter in seven years think about what happened in '87 and 2008 >> the third worst of the fourth quarters what did we have yesterday -- section revision on the fourth quarter? >> yeah. >> thank you krishna memani of oppenheimer funds. you've got a lot of money, right? 240? >> 250 >> relax you got a lot in zero risk, right? >> yeah. >> darrell cronk from wells fargo. as can you see from your little -- can you bring me one of those >> i'll bring it next time you got to wear it, though

we're following a developing story out of germany, deutsche bank's headquarters in frankfurt raided and searched. and joining us from outside of deutsche bank headquarters what can you tell us >> reporter: actually, the raid was triggered by the so-called offshore leaks in which apparently two employees were thought in active in funneling funds into an offshore haven jurisdiction and those funds reportedly or allegedly came from criminal activities and that's why we have the massive raids here at deutsche bank headquarters and five other offices in that region where are loads of police cars in front of budeutsche bank. right now, deutsche bank is saying they'll cooperate, of course, with the authorities and they'll update us when we

get new information in how the investigation is unfolding for now, that's all from here. back to you. >> thank you for that report we're going to keep an eye on this one because it's a fascinating story. in the meantime, coming up when we return, the ceo of europe's third largest insurance company is going to join us. and we'll talk about deutsche bank, too. and later, a lot of buzz from the l.a. auto show about the general motors cutting jobs. we'll have that straight ahead "squawk box" returns in just a moment obvious. sometimes, they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities.

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...well almost anything. leave no room behind with xfi pods. simple. easy. awesome. click or visit a retail store today. welcome back to "squawk box. fed chairman jay powell spoke about monetary policy and corporate leverage at the economic club of new york yesterday. >> there are, however, reasons for concern. information on individual firms, relegals over the past year, firms with high leverage and interest burdens have been increasing their debt loads the motion in addition, other measuring of under rating quality have deteriorated >> joining us here to talk about interest rates, and so much

more, philippe donnier from generale thank you for being here we want to talk about what jay powell that actually moved the market but on a corporate issue that he's raised concern about how much of a concern is that for you? >> for us, it's not a great concern, as you know, we are the leading company in europe. we're used to working with low interest rates environment we've been working hard to cope with this kind of environment. i spent many years managing life insurance companies with zero interest rate environment. and i'm used to and trained to work in this kind of thing i see no reason in the future to see interest rates going up. >> you see no reason for interest rates to be going up? >> no. no reasons -- >> because you think the economy is not as strong as others may

think? >> well, the economy is doing well especially in kleichina. especially in the u.s. it's a bit weaker in europe. >> so, when you say about no interest rates going im, are io talking about the u.s., where? >> the economy is slowing down it's slowing down in the u.s it's also slowing down, a bit weaker in europe no reason to see short term interest rates going up. i see stable interest rates for the next few months, maybe the next few years >> in the g-20 meeting that's going to take place this weekend, how do you see the tariff debate and the trade war with u.s. and china, and the extent that is having an impact elsewhere? >> i think it's a tough war. and i think at the end, you know, i'm also looking at this from the european standpoint >> right >> because for us, europe is

really important and i think in this tough environment, europe has to be strong there is a real trade war. i would say unfortunately. i don't think this is good for global growth. and i think that europe has to prepare itself to be strong in this framework and for europe being strong means being united >> philippe, do you have long-term care insurance at generale for employees >> this is a business that we are growing. >> are you aware of general electric's issues that they're shopping that around, and not getting anyone interested. they're shopping it around and it's very difficult, apparently. it's something looming, it's not a good position for ge to be in. someone else might be able to

buy that business and manage it better would you look at it and have you looked at it >> we're leading company of employee benefits. we would like to have it as a part of this business. but as you know, we are not especially on the u.s. market. we're more on the european market where the population is edging >> it makes it much harder supposedly, they were hot to trot to off-load it. now, i don't know what's going to happen to it. >> right this is good news for our business, i would say, because populati population has searched long-term care more health conditions because of the ageing population >> we're not ageing quite as well here, according to, if you saw on the front page of the "journal," our life expectancy actually dramaeopped.

>> this is interesting it's probably way of life. >> opioids and suicide >> there's news, i don't know if you saw in germany and frankfurt and deutsche bank and this raid of offices there how worried are you about the future of deutsche bank? is that a real concern for you we have another activist here last week. if you're a betting man, you're actually in the odds business, what do you think is going to happen to this comment >> i'm not going to comment on deutsche bank, because frankly speaking, as we are in the insurance business, we are very far awayfrom the banking business it's quite different deutsche bank is a great bank, it's a great financial institution, under pressure. but i'm not going to comment on this >> let me ask you very quickly, though you mentioned that europeans being united is a very important part of competition, when you

start looking around the globe there have been a lot of signs of praying for that. where would you judge things are right now from a united europe front? >> i think that the brexit has to be an opportunity for europe to change and become more united, okay we will have to manage the brexit in the best possible way. brexit is not good news. it's not good news for the uk. it's not good news for europe. but we have to manage it the best way having said that, it has to be an opportunity the uk will probably be out of europe, to make the continent of europe much more united. this is the only way to keep europe as an entity. and we need it i think that no single country can compete in this worldwide

competition. and i think the responsibility of the politicians is to make people earn understand this familiarity. not to serve on the anger of the people >> speaking ofpoliticians, jus quickly, president macron, the fuel tax, he's done a lot of things for private sector that were hard to do in france. now this, bridge too far can he be re-elected he's below 25%, i think, at this point. do you support him >> yes, he's not finished. we are still far from the end of his mandate. i think he's doing basically the right things >> even with the fuel tax? >> well, the problem of the tax in france, in particular, and in europe in general, is they are too high the tax is too high. my view is if the growth of the

economy in europe is lower than u.s., is because we have too high tax so, this is something that we need to address. and we need to address in france and we need to address public spending >> your people have a lot of benefits from the taxes that they pay, don't they >> some benefits are too important. and some public sectors should have more money to spend it's not this is a public management that definitely can be improved, but people are paying too much tax. this is true having said that, president macron is on the right way, because he's managing the right wing faction of the country. >> if this comes down pre-davos, but i don't want any trouble, philippe, will it be okay in january? >> it will be -- france will be okay >> thank you, great to see you

appreciate it. when we come back, why you could be paying a little more to light up the holidays this year. that story right after the break. check out the futures at this hour after a 617-point gain for the dow yesterday. we're looking at a little pullback the nasdaq is down by about 30 points "squawk box" will be right back. alpha seems more elusive today.

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♪ silver bells silver bells ♪ it's christmastime in the city ♪ welcome back to "squawk box" this morning the rockefeller center christmas tree was lit in new york city with the help of new york's mayor bill deblasio. it features a newly designed 900-pound crystal star it's lit and it was lit. star-studded event we can tell you howie mandel was there, host of "deal or no deal." today is howie's birthday.

we're wishing him a happy birthday we're going to see him next wednesday. it premieres, we should say, "deal or no deal" at 8:00 p.m. eastern time we will see him in the 7:00 hour that very day. >>le going to be a very long day. might be taped the president's trade war with china has a new casualty, christmas lights president trump's $200 billion in tariffs on imported chinese products include a new tax on all holiday lights sold in the united states. according to an advocacy group campaigning against the tariffs. the vast mortgaajority of those lights if one is out non-work. like from the movie "christmas vacation" remember what happens to them? 80% come from china. which means christmas shoppers might be paying more for those in january

a whopping 25% tariff goes into effect on top of the tariff. meaning next christmas will be even more expensive if president trump is still waging his trade war. >> cousin eddie. >> that's what i was talking about, they think they're looking up at the aurora borealis, at the north lights. because cousin eddie has emptied his entire rv sewer. >> into the sewer system >> into the sewer system >> and the uncle comes out with his cigar. >> or maybe it's cousin eddie himself. >> the older uncle comes out with the cigar and tosses it outside. >> and margaux, it's classic because the icicle comes through on the system and it melts, and they have no idea how it happens. i'm going to watch that movie.

>> it's on loop this year. >> it? >> the best, cousin eddie. the white shoes. >> and the shirt on top, with the sweater over the top just a collar. >> like the sweater of the month club just keeps on giving, clark. coming up, the fallout has the auto industry buzzing. we're going to talk about that as we head to break, take a look the u.s. equities. they've improved s&p and dow down we'll be right back. ♪ each day, brings new possibilities. that's why you need a partner dedicated to helping your company reach its goals. u.s. bank -- the power of possible.

welcome back to "squawk box" here on cnbc we are live from the nasdaq market site in times square. and among the stories front and center today, we're going to be getting october personal data and spending data in an hour's time both of those numbers are expected to show a rise of 0.4%. at the same time, the labor report will be out

following jay powell's rallying and inspiring speech yesterday, investors will see plenty more from the fed today the minutes of the november policy meeting will be released today. and cleveland fed president and chicago president charles evans. dow disney has increased its dividend the payout will be 88 cents a share. that dividend will be paid january 10th to disney shareholders of record >> the backlash of gm's decision to cut jobs and close plants and the carlos ghosn fall adding more fuel to the auto show phil lebeau just returns from the show and he joins us more with conversations behind the scenes. phil lebeau, how are you >> hey, andrew, a lot of chatter. let's talk first about general motors it's interesting when you saw the market start to rally the

last 2, 2 1/2 hour s after comments of the fed chair, we saw that things are improving in terms of interest rates, general motors shares did come back from where they were. when you look at the stock just under $37, it's pretty much given back most of the gains that it got on monday when they announced the cuts in terms of three plants, final assembly plants, five overall here in north america. and it also shined a light on capacity utilization and what you look at this industry, a lot of people have not been focused on the fact that overall there's still too much capacity. worldwide there's way too much capacity the ability to build more vehicles than are actually being bought around the world. here in north america, there's about 3.2 million vehicles worth of overcapacity out there. and general motors has the line's share olin lion's share of it

far too inefficient. and that's why you see a decision to close a plant, or idle the plant in lordstown, ohio also take a look at shares of ford yesterday, ford announced that it is shifting some of its capacity involving three plants. the kentucky truck plant, as well as louisville plant and also some production out of flatrock, michigan, because sales are slowing down so, you'll see this from a number of competitors but primarily this is an issue of the big three. shares of nissan, there was some issue yesterday regarding carlos ghosn. we can tell you it's been ten days since he was retained in japan when he arrived for a meeting. well, they have decided they're going to retain him another ten days they are allowed to do that under japanese law and remember, he's yet to face formal charges this coming as leaders from renault, midtsubisi

holding their first meeting since seeing carlos ghosn booted out of leadership role finally, guys, i don't know if you saw this yesterday afternoon. i know you guys wrap up around 11:00 or so. that's when jeep unveiled the gladiator pickup truck it's coming out earlier next year it's a polarizing look, guys i'm not sure what you guys think about it but there's plenty of chatter about how successful this vehicle will be. you got a red hot brand and a red hot market when you talk about pickup trucks. jeep is hoping to tap into that. >> i think it's cool i like boxy. i think it's cool. i wish they would bring back the commander that had the third-row seat if you're going boxy and big, why not? >> you want a third row -- >> i liked my commander.

>> you're getting into the rv category like cousin eddie, i think. the escalade makes a weird looking thing, too, right? you've seen those, they're like half pickup. >> i have, yeah. but that's not technically a pickup truck >> i know. >> it looks like -- i'm not used to it. >> but i like the way he described, too like a mullet with business in the front, party in the back >> mullet, those never go out of style. >> i actually like boxy stuff. >> phil, i would have jumped on this trump tweet, because i'm watching the markets but, you know, some of it, the most important line i'll read to you. president trump tweeting billions of dollars are pouring into the coffers of the usa because of the tariffs being charged to china and it's this little phrase right here, and there is a long way to go. this is false like a fantasy i didn't want to get into it

the only reason i'm mentioning it, it says, there's a long way to go. i don't know if that's posturing for the meeting we're going to if companies don't want to pay tariff built in the usa, otherwise just make our country richer than ever before. >> i do understand it punishes the econocompanies because if y prices go up by 25%. >> but now he's not published two tweets in the past 24 hours which are, you know, the opposite of reality. i mean, he had that other tweet about general motors -- >> so, in your view, that's below average for him? we know that anyway, thanks, phil lebeau, thank you. for more on the auto industry right now, gm and the fate of nissan renault without carlos ghosn, editor of revs institute for automotive

research what phil was talk about the overcapacity to the tune of 2.3 million cars being produced more than we need obviously, you understand where mary barajas to act right now or else we're in trouble. what do you think happens? >> well, she did the right thing. obviously, it's a tricky environment. but, becky, they tried keeping plants open and building cars for which there was no demand a decade and the result was bankruptcy. they've been there, they've done that, it doesn't work, okay? so, it's just a really bad idea. i think the other thing that getting overlooked in this whole thing honestly, the president said, well, unless gm reverses this decision, we're going to cut off gm subsidies well, the more fundamental issue, why on earth are we

paying spay paying subsidies to any company? >> no question not to mention there had been a movement afoot for all of the auto companies to push for extensions of them we heard from the bmw ceo yesterday. do do you need to try to continue to stoke this? >> we're subsidizing profitable automobile companies it's really kind of silly. but back to the factory closings, you know, phil said that perhaps 1 million vehicles a year of overcapacity belongs to general motors. you know, that's four assembly plants reuters laid that out in an interesting story yesterday that talking about thi s about this so it really makes sense for gm to adjust the size of its shoes to fit its feet. >> understood.

but in this political environment. it obviously makes business sense. he's trying to do what's right for the business in this environment where you have the president potentially leading a campaign for who know lasts how long and you had rob portman talking with the senator there saying we want to make sure we find something that brings jobs back. is there something that mary barra and gm can do to appease those critics, not to mention the unions? >> well, there's something the country can do we talked a lot about it, and president trump ran on his campaign on improving the road'ses, the bridges. maybe even new jersey transit for that matter. now is a good time, i think, basically to get serious about that, and put people to work doing things that are productive as opposed to building cars for which there's no market. >> president trump did tweet

saying general motors is very talented big steel is open renovating other plants in the country. and other companies are pouring into the u.s., including bmw which was announced. the usa is booming is that accurate >> well, every company has to make a decision based on things. gm has been the largest producer in this country for decades and decades. when they look at their demand situation -- you know, if you have four factories operating at 50% of capacity, they're all losing money so, you've got to do something about that >> but to the larger question about the usa booming and this idea that other automakers are -- that gm is at outlier or will be an outlier, you look at the next 12 months, and you think what's going to happen >> well, certainly, look, the automobile market has been in a sustained bull run ever since the bailout in 2009.

you know, back then, i think about 10.5 million vehicles were sold that year the last few years it's been right around 17 million, give or take a little bit. it's a cyclical industry that's not going on forever. certainly, there's a sign of a slowdown interest rates are going up. i do give general motors credit for getting ahead of the curve >> the president tweeted as did steve mnuchin who then deleted the tweet, a tweet suggesting effectively that he was going to go after general motors and get them to repay $11.2 billion of the bailout. there's been some debate about, a, who may have been deleted steve mnuchin's tweet or whether he was hacked or an unauthorized person on his staff did it but to that point, when you look at the bailouts ten years later,

does gm still owe us $11 become? >> well, you know, first of all, it cost us $11 billion whether general motors owes us is really a political question but the truth is what we wanted general motors to do after that bailout was get back in business stay healthy, improve its profitability. and they've done that. so, you know, to basically say that now because they're making a business decision to maintain their profitability, as opposed to go back and do a loss-making position, we're going to penalize them doesn't make sense. >> paul, it's been ten days since carlos ghosn was first detained and placed in custody in japan we now know he's not been charged with anything, and he's going to be held for another ten days today is the first official meeting with nissan-renault-mitsubishi. i don't think i know any more

about these accusations than day one, do you? >> you nailed it, becky. first of all, we don't know exactly what carlos ghosn did. maybe now there are illegalities maybe it was just figgy, other than being illegal clearly, we know there was an agenda on nissan's part to reduce the control over renault and nissan and the influence it has on nissan. where those things intersect and which was the primary motive, at this point, we just don't know this there's far more questions than answers here >> right, i agree. something in "the wall street journal" raised a lot of questions just pointing out the differences in culture and business and raising the question whether it's a palace coup >> it could be both.

it could be there's some malfeasance or unwarranted greed or a palace coup, we just don't know >> paul, thank you we'll see you again soon coming up when we return, oil in focus this morning after dropping below $50 this morning. right now at $58 we'll see what's driving the market in stocks associated with crude. plus, apple giving a demand update on the new iphone something is that investors have been cceedonrn about we're going to talk tech stocks after the break. see where they're headed "squawk box" returns in a moment

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see what a raymond james financial advisor can do for you. all right. welcome back, everybody. let's get todom chu back at headquarters good morning >> let's take a look at the broader markets overall, with the dow jones, we're seeing at least a pause over yesterday over the course of the last week or so, we dropped by around 1100-plus points and now we gained about over 1,000 of them over the course of three trading days so, that's something to watch. also, with regard to what's happening with crude oil, we did see weaknesses, again, on concerns of supply and possibly demand in places around the world. however, reuters headlines earlier this morning sent crude back up by 1.3% this year. we have fallen by 33% since the

peaks we saw in early october. now, according to reuters, russia may be looking to consider whether production cuts are in its best interests as well december 6th is that opec big plus meeting that includes russia and other partners. i will finish it off with treasury note yields we did see them pull back this morning. they did drop below 3% the expectation that you could see oil prices coming down, energy prices, taking pressure off the inflation market remember, it was around 3.25% at its highs back in early october. well off those highs at this point, andrew. back over to you >> hey, dom, thank you for that. we're going to talk apple after the break. "squawk" returns after this. place, the xfinity xfi gateway.

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...well almost anything. leave no room behind with xfi pods. simple. easy. awesome. click or visit a retail store today. welcome back to "squawk box," apple shares sliding almost 15% in the last month but the stock played a big part in the dow rally here to talk to us about apple in the tech sector is dan morgan >> hi, andrew. >> real quick, we don't have much time. i want to talk briefly about what apple came out and said about its xr phone and the fact that we have not -- or they said they were not going to put out numbers did this give you any better expectation of what we're going to actually see from them? >> well, as you know, andrew, it came at a critical time because everyone has been doubting what holiday sales were going to be

you know, you have the giveback program. they'll give back $200 on anyone who will turn in an iphone 6 it's great to hear that, you know, things are going well so far, in terms of selling the iphone xr. they say it's the best-selling phone ever we don't know what it's going to be like. >> going into the big debate of tariffs and china, people have long looked to apple as perhaps a bellwether in this this one for you >> in terms of apple switching over to that service anyway, the tariffs, in terms of issues going forward, everyone is very concerned about it but if you look at the long-term fundamentals of apple, the story is going into services anyway.

i'm not as concerned about the tariffs as everybody else is we'll have to wait and see >> what's your price target? >> i'm not an analyst, andrew. we own the stock in the single digits, so, it's done absolutely fabulous for us. one of our biggest gainers i wouldn't be surprised the stock gets back to 200 it's trading at 12 times earnings right now which is very, very low it's the lowest of the all of the faang stocks based on valuation. >> right >> eventually, people come in and say these things have value here >> dan morgan, thank you, sir. when we come back, we're going to get a preview of the g-20 summit and talk china, trade and the economy with peter kraus. he's the ceo of apperture.

market surge, the dow and s&p 500 posting their best days in months. after jay powell soothes with comment about interest rates and the countdown to the g-20 summit. with the u.s./china face-off expected how much does america need its allies breaking news at this moment authorities raiding deutsche bank offices in germany. it's related to the giant document release known as the panama papers. the final hour of "squawk box" begins right now ♪

>> announcer: 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 kernin along with becky quick and andrew ross sorkin and futures right now are down, kind of in the middle of where they've been they were down 50. they were down 100 now down 80. we're down 42 on the nasdaq which had a good day obviously, the tech did rebound. a little fullback on the opening it looks like. s&p down 12. treasury yields, on the ten-year, anyway, right at 3%. the 3.012. and oil is weak again. interesting cross-currents it's not only about the equity markets. there are interesting things happening across the board >> we're watching three big

stories this morning one, midweek rally the dow and s&p 500 turning in their best day since march after jay powell said they thinks the interest rate level is near a neutral level. we will learn more today from the fed. we'll get the minutes of its last meeting which are due out at 2:00 p.m. number two, a raid at deutsche bank offices in germany this morning sending shares of the bank lower reports say that the surge was directed towards two staff members who were accused of helping clients set up offshore businesses deutsche bank confirming the case is related to the panama papers that was a huge leak of documents that revealed how some wealthy people used offshore companies to evade taxes and number three, key data on consumer spending. the bottom of the hour bringing us a fresh look at jobless claims 220,000 claims from the week

boeing stocks has been named the best for 2019 as the sweet spot and cash flow as the reason for its call take a look at shares of abercrombie. the retail reported 33 cents per share. 13 cents above estimates comparable stored jumped 3%. twice what analysts are anticipating you know, you walk near the stores, there's a waft, a cesce and perfume. >> and count disskount counter r tree issues a weaker than expected outlook the market is hoping for some cooling tensions perhaps between the u.s. and china, but america's allies, they have

their own wish lists and eamon javers joins us now. wow, look at you, with more. hi, eamon. >> reporter: that's quite an intro, joe welcome to beautiful buenos aires. it's a fabulous spring day here. we're expecting all of the world leaders to arrive sometime this afternoon. some are here already. it's the first time in south america. it's the first time that president trump as president has come to south america. already, the president is tweeting about tariffs and china. that's the centerpiece of this entire meeting the president tweeting billions of dollars are pouring into the coffers of the usa because of the tariffs being charged to china and there's a long way to go if companies don't want to pay tariffs, build in the usa. otherwise, let's just make our country richer than ever before. the president suggesting those

tariffs built by companies imported into the united states are making the countries wealthier. and if they want to avoid that, they can build all of their goods in the united states that is the tone that the president is setting as he gets set to travel to buenos aires. all of the focus is on the trump/xi jinping dinner saturday night. there are two narratives on this one would have you believe that the president is desperate to cut a deal bog of the stock market weakness he's seen over the year he'd like to cut a deal and see a boost from the stock market. the other narrative, though, this president is not likely to cut a deal because the chinese are intransigent and he's not going to walk away from buenos aires. we have to wait to see what happens with that. of course, so many story lines to talk about including the europeans worried about auto

tariffs from the united states also, we've got justin trudeau from canada. will we have a signing ceremony for the new u.s./mexico trade ceremony who will attend? and mohammed bin salman is here, the crown prince of saudi arabia arrived yesterday. we're expecting that he will not have a direct meeting but he might cross paths with the president. and that could be awkward in the wake of the murder of jamal khashoggi. a lot here they're cramming a lot in the president's schedule eight bilateral meetings that we think the president is going to have in 24 hours, 48 hours' time it's a very busy morning here. >> eamon javers in buenos aires. meanwhile joining us with what may or may not happen on the markets, pete kraus, the ceo of aperture. good morning

help us understand, we had a push on the market with jay powell >> yeah. >> we then have china. the president said that the fed is a bigger challenge to him than challenge i don't know how you feel about that >> he's actually not doing very well controlling either one. >> but if you're an investor sitting around and watching this, what are you supposed to do >> yeah. i think the last time we talked about this, i think i said the market has been more volatile, which it has the volatility has increased both on the upside and the downside i think that powell as certainly, or clearly, sigeled th signaled that he thinked the economy is slowing not necessarily going south, but slowing. and growth rates are flat to stable to perhaps decline. he's not going to reduce interest rates as much as he had planned. even though the dot diagram says three dots, or three raises. so, i think we're going to continue to see the volatility and that's not going to change

until there's a clear vision where we head out of this cycle. and all of this geopolitical discussion that we're having in argentina and other places is going to lead to that volatility as well? >> long-term, though, is this a negotiation? or is this a real change in how we're dealing with our trading partners >> that's a good question. i think this is -- i think for this president and this administration, this is the way in which they're going to deal with the trading partners. so, i think that is a long-term prospect at least for the next two years. >> do you think it's a successful one we have seen deals come at the last moment when we thought it wasn't possible? >> i think that success is measured on the economic impact of these negotiations. so far, it hasn't been successful the market's down 10% since tariffs, you know, became more obvious. now, that doesn't mean over the long run it isn't going to work. i think there's ever reason to believe that there are issues

with trade with china. there are issues with the use of intellectual capital there's issues with openness in china. there's issues with convertibility to currency there are serious issues they don't have to be associated with tariffs but those have to be resolved. >> i think part of the question though is over the long term, you know, the president will either be in office for two years or another six years but companies are going to have to make decisions that are going to have an impact over the next decade if not longer businesses like apple that made decisions a decade if not longer ago to affect the decision in china. and others are saying, okay, maybe we shouldn't be here anymore because it's going to become too expensive >> i think that's absolutely happening. i think it's at the margin today because we're early in this phase. but if this continues to be as volatile as it has been, i think

companies are looking at our alternatives i don't think they can reasonably say to their shareholders, it's business as usual. we're going to continue. >> the shareholder calls you, 9:03, and somebody calls you and says, peter, i've got a little cash i'm thinking i should do something with it, i should not do something with it i'm going to do something. i'm going to do what what do you tell that person >> i would say i would not put cash on the market today you can participate in the market, but you should do that with options that's not easy for everybody. you know, larger investors -- >> explain that, though, why that's true. >> really what i'm saying, if you put cash in the market you're exposing your capital to any increase or decrease that the market incurs. >> that's every day. >> correct >> that's a reality of the stock market >> but if you have extra cash

and you expose some of that by buying a premium, i.e., owning an option, and that option goes up or down, then you're not betting all of your cash you're get something of the benefits of the market or you're protecting yourself that you actual by buy a put on the way the market goes down >> why not put some of it in stocks? >> because the financial is more attractive than those options. >> i've been looking at this and talking about how forward looking pe is now 15 times which it's come down pretty significantly. that's not a terrible price of valuation, particularly if you think the economy is going to be okay over the next year. >> yeah, it's not, but i still think that you're going to incur significant volatility and again, if i had cash -- i'm already in the market. i'm short in the market and increasing my position, so i think i would not buy the market today in cash. >> because you think the

risk/reward -- >> i think the risk. >> reporter: risk/reward is not as attractive. >> would you actually put cash in faang stocks, facebook, is that -- >> if you're convinced you want to have market exposure, clearly, the value stocks are more attractive places to volaty and they're likely better places to hide when the market goes down you may not be up 6% like netflix and amazon was yesterday. >> right >> but you might be up 2%, 3%, and if the market goes down another 10%, you're not going to be down 10%. >> do you think the market has another 10% or more to go? because you're not putting in cash >> european markets are down almost 20% the chinese market is down 27%

and this market is down 7% from its peak i'm not suggesting it has to go down another 20% but could it go down >> are all of these still caused by the tariffs? >> no. >> you said ours was 10% because of the tariffs >> well, i think the tariffs are a catalyst >> we look for correction. we always say, that correction is normal. >> you're. >> i can give you as many reasons why we're down to 10%. i'd have to take my shoes off to count on my toes i just wanted to clarify because correlation is not causation. >> that's correct. that's correct but we always look back and say what caused the selloff. or what caused the rise. >> fed, the global slowdown, bass wa it oil was it the 40% move? i could go on. >> joe just mentioned the oil.

how do you think the price of crude either impacts positively or negatively. and there's a weird trigger. sometimes, we think it's a tax on it's consumer sometimes, we think it's a discount on the consumer and it's very hard to tell sometimes. >> yeah. that's a good question i think oil at a low price is probably stimulative to the economy. i think that's something that has been positive. on the other hand, it's also a bit of a measure about what people think economic activity is going to look like. if there's high demand for fuel, that generally drives prices up. now, of course, you have the supply and demand effect of the suppliers of oil, too. and if they're pumping, then, obviously, that drops the price. if they cut production, that obviously increases the price. but i think with oil at $50, you have -- that's a positive signal for inflation. that's a positive signal for cost of production it's a negative signal for cost

of demand. >> and finally, i want to ask you just on the phenomena of buybacks which i personally have a view that's actually supporting the stock market that i think is not fully appreciated, given how much the markets have actually been to the companies itself so much of that, as i have seen it, has been a function of the tax cuts and the question is what that looks like in 2019 >> so, joe mentioned the 40% increase in the markets from the tax cuts. >> i didn't say tax cuts i said since the election. >> well, if you look at the tax cuts -- >> there's another thing i'm not sure we want to do causation and correlation here >> we might disagree on that pun. >> why >> i think when you take earnings of $121 $100. and all of a sudden, those earnings are $138 because you've

changed the tax, that to andrew's effect has that and even the math will drive the stock market up. that's over with stock buybacks will continue although balance sheets are getting full of debt so how much of that can actually happen. and i think you add that to you at other things we're talking about, that's why i think the markets are more volatile and they're likely to stay that way until they resolve >> we'll have a lot more thank you. when we come back, jay powell, the fed chair, virtually lighting the markets on fire yesterday. we're going to talk to the head of the financial sector on the impact

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past anything that stands in its way. ...well almost anything. leave no room behind with xfi pods. simple. easy. awesome. click or visit a retail store today. stocks surging after jay powell singled >> we know moving too slowly keeps rates too low for too long can risk other issues. our path of gradual increases has been designed to balance these two risks, both of which we must take seriously >> let's ger motht another persv on powell's speech

joining us is tim adams. tim, thank you for being here. >> it's great to be here >> i think the key phrase that powell used yesterday is we're just below normalized interest rates. >> right >> that's something that the markets kind of keyed off of just a couple months ago, we heard him say we were well below and a while before we got there. >> i think the markets connected the dots he said maybe the fed is not in a rush to raise rates. jay powell is different from the previous chairman. he's not an economist. he's not a slave to models he's a pragmatist and he's going to look at it as it comes in, which he should, actually. >> which means what? the market was seen as aggressive >> sure, the economy is quite robust although we're seeing weaknesses in housing and autos. and you have to ask what does

capx look like he's a pragmatist, very flexible >> he had another huge piece that he talked about where he said this report that they're putting out yesterday about the health of the economy that they're going to continue to be doing. he said i'm a baby boomer. this is sort of what he would expect to be a good report from a doctor when they say we have a lot of things we're watching very closely but all in all you're in decent shape >> i think the bulk of his comments was about the financial resiliency that the fed issued he used the medical analogy, you got to maybe skip your dessert and eat your vegetables. he listed a number of items as well >> and that means what you combine that from what we've heard from several big bank ceos who said they don't see a recession on the next 18-month horizon. that means that economic cycle

could continue >> i do think so it's resilient enough that it won't amplify the downturn he doesn't see the amplification. or those factors >> do you think the fed is right to have taken off on his comments yesterday >> well, maybe a little aggressive but i think the comments combined with rich's earlier in the week and his is a signal this is a very pragmatic fed. they're not married to the models i think that's the key approach. >> what are the key data points that you're watching that we should be watching? >> the cycle, anything that is interest rate sensitive. how do we watch capx the energy sector has been a big driver of expansion. if oil prices are below 50, that has to have an deleterious

effect >> and it takes about three months before the oil companies will cut into their expenditures based on oil prices. we do have maybe five more weeks before that cuts into it >> sure. and opec meeting as well so we could see volatility price and we'll see what opec is actually doing obviously the president continues to put pressure on saudi to pump. but the screen producer in this whole global oil market is the united states. we continue to have record levels of production that's one great story >> tim, capx is more than just the oil companies. we anticipated a big boom in spending because of the tax cuts this year. is that going to materialize >> you know, we live in a different economy than 40 or 50 years ago. we live in a tangible, knowledge-based economy. capx in the service sector is very different than what we would have seen in the '60s and '70s

so i'm not sure it's going to materialize as it would have in previous cycles and has yet to show up. i think we're looking for the wrong thing. >> is that or confidence still historically at high level? >> still at high level moat of the ceos are pretty optimistic they're trying to cut through the noise with the trade tensions most of them are pretty optimistic >> tim, i want to thank you very much for your time today good to see you. tim adams from the institute of international finance. >> okay. when we come back, we've got a lot more to talk about the market technicals. what are they talking jab we'll talk about the market surge. stay tuned to cnbc

still to come this morning, a fresh read on key data points including jobless claims, personal income and consumer spending that's just nus miteaway we'll have those numbers when

"squawk on the street" returns

welcome back to "squawk box. we're just about 30 seconds away from new data on initial jobless claims and personal income we're going to take a quick look at the futures ahead of those numbers which could move things around just a little bit the dow looks to open off 50

points nasdaq, 34 points. and the s&p 500 looks like it will open off we'll call it 9 points from now. let's look at the ten-year note. incredibly with the three handle on it. 3.013. jim is in chicago this morning as he is ever morning. jim, the numbers, please >> reporter: yeah, the numbers are coming out now yesterday, we were told they were more data-dependent these numbers are more important. personal income is up 1.5. personal spending is plus .6, hire than the expected plus .4 is this a big deal yesterday, you told us it was kind of on a pausing path. the last thing the stock market is going to want is to think he's going to tighten because he has to now on to initial jobless claims, we're expecting 220. we got 224 we're a little higher than

expected everybody knows that the labor market is pretty strong. the pe month over month, 2.2 year over year a little below what we're expecting, 2.1 the market coming in a little under pressure in the stocks i think there's a little bit of what we saw by a spike in libor. that many people say is related to the deutsche bank story the 3.01 back to you, becky >> jim, thank you. jim, very quickly, comments on the ten-year note? with powell's comments yesterday, we've already seen this kind of playing out but where would you think things are heading next, below 3% or above? >> it's funny, the initial reaction is lower term rates but in the end if this signals a risk on and the stock markets

are buoyant and get out of the funk they've been in, eventually, that's a curve-steepening because people wouldn't want to the buy ten-year i think the initial reaction to have lower rates is fine but in the end could be higher rates. >> thank you steve liesmanjoins more right now from washington. steves yo steve, your take on this data? >> i think it's good data. i know the fed is focused on the inflation data let's look at personal income data 0.5% after 0.2 in september. wages and salary, up 0.3%. consumption up 0.6%. these are good numbers not exactly sure what's dialed into the gdp forecast in the rapid update the inflation data right on target, via the fed's preferred inflation indicator. at the core index at 1.8 right around in there in line with what powell said yesterday.

and just i think you've got megan green coming up in a second but i just wanted to show you, the fed's views on neutral remember that the fed chairman said we're just below the broad range of estimates so, here are the actual estimates of the fed participants okay each one of these represents an interest rate of where they think the long-run rating ought to be. three members at 2.5%. six at 3%, and one at 1.5% each one of these bars would represent a rating hike in ne neutral. we're five below in the top range. there's a lot of chatters out there among economists and i don't want to pour cold water on this. but the market took powell too

far. i believe goldman sachs is doing the same, i'm told from my colleague, though i haven't seen the report both of those guys are a little too hawkish. but in any event, the economists with regard to the markets, not quite as dovish. >> although, i guess the people we've been talking to today say it's data dependent. >> right >> that's the message that powell was pushing yesterday and that depends where you think the data is going to be. but the market beforehand was certainly looking at this as hawkish. maybe we overshot it on the hawkishness based on the comment he made about two months ago look, this is why words matter >> yeah. >> if the treasury secretary says we're in favor of a weaker dollar, we see the same kind of panic. >> i like your attitude, becky you got to pick a forecast and go with it both consistent in and of itself

but represent the market dilemma saying we think the economy is going to 3%. another one, the editorial board saying the fed ought to go slowly we may have a big boost in productivity if we get 3% growth of declining unemployment rate, i don't think you're going to have quite the dovish fed that you expect to. >> steve liesman, thank you. >> more on it, megan green chief economist. you're sort of downplaying the comments, megan, saying that some of the powell reaction yesterday may have been an overreaction, because he was just trying to walk back the october comments now, did the market misinterpret the october comments or was that a rookie mistake, as jim cramer would say because they certainly were trading based on something he said in october. >> yeah. so, i think the markets were overdoing it in october. >> he didn't try to say what --

he wasn't as hawkish as he sounded in that? it sounded hawkish. >> it sound hawkish but it was pretty ambiguous, right? he said we're a long way from neutral in terms of rate hikes and time we would get there slowly. i think powell was trying to walk that back with his comments yesterday. but i also think there's a number of reasons that the fed is going to have roll back its normalization pace one is housing housing is slowly down pretty significantly. rates are going up supply shortage. tax changes. all of those things that created a perfect storm for housing. it doesn't mean there's a crash. that's the biggest piece of the cpi baskets. and the second biggest piece is costs. one of the thing that the fed could agree on is drug pricing if you get softness in housing and drugs -- >> $40 million oil

we just heard steve talking about that, eye know, both can't happen at the same time with the editorials are we sure that growth always causes inflation especially in a world that isn't -- that has trouble engendering any inflation. >> yeah. >> yes, disenflation is still the worry. if we get to 3%, even though unemployment is very low, does the fed, just by looking at the growth rate do they just extrapolate wage increases into inflation, if they don't see any near term if it's not really there. why do they have to raise? >> right >> why does it cause them to feel they have to raise? >> i don't think we're gets 3% growth to start with but if we did, the fed might actually go ahead and hike into that >> could it be different this time >> i think it is different this time we've got a totally different structure to our labor force this time.

and we're consuming mostly services >> are they rookie >> they are. but they're used to relationships that yeed to brelp s that need to be evolved and updated. >> megan, coming back to housing, are you concerned with the softness you see in housing? >> i don't think we'll have a crash in the market by any stretch of the imagination but i think it will continue to grow because of the softening. i don't think we'll have a reprise of 2008, not at all. rates are only going in one direction, up. and there is a huge shortage of supply people are having trouble finds lots there are tax changes. >> and does that have an effect in consumer spending on correspoconsumer perception at work >> it could be a month ago, equities took over for housing for the first time but housing is obviously still up there so that could himpinge on

consumption. rents could go up. >> megan greene, mobile life and chief economist. coming up when we return, the dow and s&p have seen their second best days of the year that happened wednesday. on the other side of the break, though, you got to look at what the technical gns sialare actually saying. back with that i think we should do that meeting tomorrow.

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welcome back to "squawk box. let's take a look at the futures. right now, anywhere from down 50 or so, down 100. now down 39. sm those are some of the best levels the nasdaq indicated down about 6, the s&p, about 8. let's check in with our guest host, peter kraus, ceo of aperture and peter, let's talk about what we were talking about off the air here the idea of modernizing and getting into auto bots in a lot different services that benefits a lot of big players but what does it mean for some of the smaller ones? >> yeah, look, i think the smaller players are going to have to be or move defensively to actually create relationships with existing providers of robo services because they can't do them themselves. if they don't do that, then they're at risk of actually

losing their client base so, i think you'll see adoption in regional banks and smaller players in alignment with existing services that allow them to provide to their client on a white label basis that service. >> but is the robo a commodity business >> i think the front end is basically a commodity service. >> front end being the interface? >> the interface, yeah >> automatbut what about other algorithms that make the buy and sell decisions >> i think there's some uniqueness to the algorithmic guts to the business what we're trying to do is provide advice to people who are now getting advice or getting very basic advice. and there's lots and lots of people in the world that applies to and people want to know what to do with their $100,000 or $200,000 and, look, young people just getting into the savings market. the most important thing that a young person can start to do is

start to save. that is the key thing. they're 25 years old they're making whatever they're making and spending most of what they're moaking, but just to saf for the 25 years means a lot that person should invest in the market because you're going to be in the market for 40 years. >> so it doesn't matter what happens -- >> it doesn't matter what happens on a day-to-day basis. having that vehicle that allows them to do that successfully is valuable to them and the society. i think you'll see this adoption >> and young people that feel comfortable? >> well, young people from what i have learned generally feel comfortable on the machine and talking back and forth one interesting thing that we found actually in this process is people feel more comfortable actually confiding, you know, with the robo interface, than they do with an actual person. >> that's the google effect for you. >> yeah. >> peter, stay with us our next guest on technical

indicator s on the s&p, our frequent guest katie stockton, founding and managing partner of fairleads strategies i got some grief, katie, in the selloff. you know, you sing this person's praises all the time she said 2690 would not be broken like so many technicians you never say it's not going to be broken you just say if it is broken, it could indicate more work on the downside what were you feeling about your somewhat calming and maybe bullish calls that you made two weeks ago? as it happened last week and we broke through some of those numbers, what were you thinking? >> last week was obviously very tenuous for the s&p 500. it finished the week there the level i was watching was

2640 and this week, it's essential related to seeing it immediately come above and thankfully, it has done that i always look for breakdowns below levels to be confirmed not just by day, not by week, but by two weeks below a level. and that helps me avoid shakeout for false breakdowns i believe that's what we saw last week which actually looks like a successful retest of the october move even though the s&p 500 did get back there, we did see other indices get below the october lows and at the same time tracking divergences assuming that we do close strongly this week, we have seasonal influences in play here and, now, of course, we do have that widespread oversold condition. and with the improved momentum we've seen this week it leads to the upturns and indicators that are really promising in my work. >> you know, as a real

technician, me as well, actually, i'm not, but i'm smart enough to see that looked like some type of positive pattern on the far right side of that chart. but there are other head and shoulder patterns that didn't turn out so positively doesn't that look pretty good there? >> i think, sure head and shoulders still valid for the s&p 500. we didn't see it until a breakout in resistance at 2828 on the upside. if you do see that level cleared, you see that pile-in or that chase start because send attemtiment is so contrarian >> and you're at 2812 if we get through there? >> right

i think as we see a rally in year end, we'll see outperformance of the stocks that have been the most beleaguered or beaten up the most because those are very oversold, for one. but also have the most room to resistance, so while they're not the best charts in the world at longer term. they have actually have more upside in the term than, say, stocks that have momentum. >> underneath those increases and decreases she's shown on the chart, how about volatility? what's your view of the level of volatility in the market and what's going to happen there >> when i look at volatility, i was thinking of sentiment as a technician so the vix certainly could have gone higher what we looked at is this fear that we track and it was a bearish condition for many, many years. taken together, i think we're strong enough to say we have an

intermediate term low being established by the major indic s indices. now, of course, it's just a matter of support levels being held and so far, so good. >> you've been with us every step of the way over the most recent correction hold in my hands.ecdotally that we went from all markets correct, an all garden variety, a month and a half ago we when we went back and tested the lows, we really did go to where people said the stock market is over in the cycles market, in the economy. and then, gosh, could it get any better than this with interest ratings and inflation and then it went wrong. and you saw it happen in metrics that you follow to confirm that, i guess. >> well, we did see a gap down last week and that's unusual given the holiday week

it's reminiscent that people want to refer back to early july, there was a very similar setup. and really, the market didn't look back after that at least for several weeks. i think that's the kind of setup that we have right now and like you said, the watch band, when it tends to more pastel colors -- can you show that that is indicative of -- >> like the hem line indicator. >> because he used to wear different watch bands. he figured out if i'm going to have an apple watch i have to work with the bands. katie stockton, i would say you only come on when you are right, but it looks like now i'm thinking like last week, you are right again because we are well above -- >> i like being on when the market is up. >> we don't have that -- we are

unable to do that unfortunately. thank you. when we return we will go head down to the new york stock exchange to hang out with jim cramer and see what he is thinking about all of this. dow off about 25 points. s&p 500 off by seven points. we are back in a moment. but before you do that, you should meet our newest team member, tecky. i'm tecky. i can do it all. go ahead, ask it a question. tecky, can you offer low costs and award-winning wealth management with a satisfaction guarantee, like schwab? sorry. tecky can't do that. schwabbb! calling schwab. we don't have a satisfaction guarantee, but we do have tecky! i'm tecky. i ca... are you getting low costs and award-winning wealth management? if not, talk to schwab. and award-winning wealth management? sometimes, they just drop in. obvious.

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let's get down to the new york stock exchange. jim cramer joins us now. what was that yesterday? >> was i supposed to say i got it wrong he does exactly what you should do. maybe we are closer to neutral than we thought. obviously, the economy is not as good as we thought. inflation happens to be lower than we thought. claims are going up. the claims were 234,000. the fact is employment may not be as strong. he is doing the sensible thing. he was being -- i think he was being a little rash when he started. you don't go and say things are really good. these were things you don't do

as a fed chief, but he is new. he did everything that was prudent yesterday. he started with interbank lending. he is worried. >> you are the second person that mentioned -- someone else mentioned to me that that is one of the best indicators of future growth and it is clearly broken a down trend. >> it's that way since '79. maybe it because i'm older than commentators in the show. he is a little concerned so therefore he realized maybe you ought to do one and then wait. that's fine. there will be christmas sales that are stronger. there are always numbers that are stronger. he is saying the data is mixed. he was saying before the data wasn't mixed. this is black and white. >> we have to go. is this remove one of your big

bear market -- >> absolutely. i think the president says we will go to 25% because xi isn't somebody to deal with. i think the market may think that is okay. we are not fighting the fed anymore. i wish someone would say what the fed said as opposed to what they think the fed said. >> i don't know who you are talking about. >> we'll see you in a couple minutes. more with our guest host when we are back.

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only with td ameritrade. the health care index jumped about five percent in the past month. after similar moves the sector tends to outperform. i want to thank our guest host this morning peter krauss. leave us with final words of wisdom as we get ready for like a three-day weekend that may have a huge impact on the markets. >> i think the g-20 and the outcome is interesting and the markets are watching for that. i think volatility is still elevated. we need to be concerned about it. we didn't talk about credit, but the credit markets are a little bit tender right now. we should be careful about the credit markets, as well, and watching to see where buying

opportunities -- >> what is baked in right now? what is already baked in >> i think the whole fed discussion is baked in. i think that is in the market. i don't think we are going to see more increase on that. i think the market rise yesterday probably took a little of the g-20 impact out. >> thank you. >> great to see you. that does it for us today. it's time for squawk on the street. ♪ >> good morning and welcome to squawk on the street. we are live from the new york stock exchange. let's give you a look at futures as we set up a half hour from now. you can see -- what do you make of that? i guess that is down market a little bit. >> very big rally yesterday on the two words, jus