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, just below. let's look at how we are fairing

overseas. you can see green across the board with the u.k. doing the best so far. ten year note yields, you ask and we answer. we are hanging right in there at just above three percent. let's get to our road map. wti fell below 50. power rally, stocks soar after the fed chair says we are close to neutral. futures look to be taking a breather at least at the open. the apple slide tumbling 20% in the last two months. a new comment from the company that the iphone 10 r is the company's best selling phone ever. and trump re-ups his criticism of gm's plant closure. and new tariffs on auto imparts, really a possibility

stocks are set to open lower. it is the best for the s&p and the dow in eight months. both indexes jumped more than two percent after fed president announced we are close to neutral. president trump is attending the g-20 summit where he will engage in key trade talks. they will have dinner, he and the chinese president xi. so there they are, our two stories we have been following and vin responsible to a certain extent for the increase in volatility and what was a particular swoon in october, china and fed. did we get one resolved? >> you ever been to dunkin' donuts two bear claws, we have the fed and xi/trump. one bear was pretty much de-fanged yesterday. you have to change with it.

things looked good on the surface. you realize that perhaps that was the peak. and i don't want to use the terms walk it back. i'm just saying he changed his mind because it was prudent. >> he corrected the record based on at least the famous interview that was referenced so many times, not dissimilar from what yellen did when she said six months until we start raising and then she said we would be data dependent. >> i thought yellen was a distinguished fed chief who came up with a good way to measure things at a time when we were coming out of a very bad great recession. people are missing what powell was saying at the beginning which was very troubling. >> the beginning of the speech yesterday. >> he starts talking about non-bank lenders. there are 1.6 trillion in mortgages. you know that 50% of mortgages are made by non-bank lenders. when you speak to the major banks they tell you we don't

know about these guys. what happens if housing goes down more than the three percent yesterday? what if you start hearing what red fin zillow are saying? >> the mortgage crisis 10/12 years ago. i did a documentary. irvine, california is where so many of them were based whether it was new century or countrywide. they took the lending standards down and that did contribute to what ended up being a worldwide problem when all of that got secureatized and triple secureatized backwards and forwards. >> we have to go back to 5.2 that they start enforcing it on banks. the banks that i deal with keep saying why aren't the fed enforcing this why aren't they going after the guys that are low and dno dock?

powell flagged right at the top. i'm hoping he will call all the different fed presidents, all the people, the enforcers, regulators and say that's it. the non-banks, i want them to have the same standards as jp morgan and bank of america. if he does that we can avoid not a crisis. the price of housing in many areas of the country is falling double digits. people don't want to talk about it because people don't like to talk about the fact that their house is losing value. you can't sell your house right now. if you are in one of the areas where you don't get the state and local tax deduction. you have somebody who has 2.5% of the mortgage and you bought the house with one of the low dock loans. >> am i going to have to brush up on all my -- i find it hard

to imagine a coming crisis would be the last one. they never are. >> i have done a lot of work -- >> i have had conversations with greenspan with it not being the place. >> that's completely untrue. you go to jamie dimon and he will say we have high standards and they are all over us. why are they not all over the lower standards? the answer is there is an inconsistency. thooing y a lot of people come on air and they think what the government does is right. that's not necessarily the case. it is okay to criticize leaders of our country who are unelected who don't seem to understand that they control the situation. >> now let's get to what everybody cares about which is just below. did he correct the record? is he setting a new stage or are those in the analysis that follows today and late yesterday

say really >> he changed his word. before he was talking about overshooting in order to calm inflation. it went from 80 to 40 and now to 49. christmas, by the way, can we point out that high end christmas sales were lousy over the black friday weekend. they were lousy. we know gm doesn't layoff 15,000 people. ford announces reorganization. we have most of the commodities coming down. housing had the slowest numbers in a very long time. what is good we have unemployment. this morning everybody is talking about all the good news about consumer spending and what the consumer has their balance sheet. i'm looking at the claims. you see the claims let's get them up for a second. these claims are 234,000. i thought this is supposed to be the season of hiring.

i think all powell is saying is i have to -- maybe we ought to check it out. that is just prudence. there are so many people who think they wanted to take an inprudent strategy of putting it on auto pilot. let's say he was not artful in the way he spoke. he is proven to be the statesman that i knew before. fed chief, why not he knows who favored rash rate hikes. we suddenly find out that there is a 700 to 8$800 billion to loans that jamie dimon say should never be made. bryant is actually good. they have been through hell and back. they don't want to see another cohort of jokers, perhaps they

are, using different standards. >> all of which are down today as we await the open of the banks. >> sometimes we try to interpret the fed chief. you don't have to interpret it. >> he said what he said. >> if you are somebody who is bullish or wants to be on the overall market you have one check mark and that is coming into buenes aires and the other bear claw. as we head into this, what do you look for with xi and trump is it enough if we go to what exists and push back tariffs >> i think that is kind of bad. >> if we don't go to 25, is that good >> i think the president is too far down the road on the 10 to 25. i think he stays the rest, take a look and see what happens. it's a really big message in terms of inflation, in terms of

consumer, the tax on the consumer. is he playing with fire? i don't know. >> he seems to somehow think that the money from the tariffs goes into coffers. >> that is ill-advised. >> it's not the border adjustment tax which would have done some of the key things they are trying to do with tariffs. would it had the ability to raise enormous amounts of revenue? >> he did say he was going to raise interest rates on china which i felt was curious. >> pouring into the cough e cou- coffers. >> it's fine. it's a tv show. david, you're fired. here is what i think. eamon javers said something this morning -- he is fabulous.

he said if navarreo is on the plate, that is just a great analysis. the president i think it is unlikely to get the following action from xi which is i'm really worried our stock market is down a lot and starting to layoff a lot of people. let's make a deal. >> journal has a piece worth a read if you care about the back and forth and misreading on both sides, how the chinese has misread us, as well. >> pence who is speaking for the white house, i presume he is the vice president. we realized we had to contain the soviet union. i'm waiting for iron curtain. i'm waiting for that. >> wasn't that like the -- >> and what i'm concerned about is that -- as a stock person i'm

concerned that this is an economic war. as a person who has not favored the way the prc trades, good work. >> we'll talk about gm in a little bit, as well, and the president. >> you really have to kind of take the tweets as a box of works. coming up, another wall street firm cuts price targets on apple, but the iphone maker is pushing back. we will have an exclusive with larry merlo. how did you get that >> what is next, of course, for the company now that it has completed its acquisition of aetna. we set you up for a thursday of trading here.

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you can see it right there on the premarket. it does lower the price target to $225 a share. it had been at $250. it is citing softer smart phone demand overall including disappointing initial sales of the iphone r. an executive telling reuters that it has been the company's best selling iphone model ever since it went on sale last month. i thought we had kind of done it all yesterday on apple, our back and forth in terms of how some see the company now and your response. >> i think we have to try to figure out and parse what it means. the c-net story said it is the best seller of the current iterations of the iphone. since the earnings, three analysts have increased the price target. one of those lowered and then

raised. i think what matters here is that the street is so damn negative that any positive news even just that the new iteration of the phone is selling well, look what it has done. this is something that the analysts had to be careful of. when you have a stock that is going so far down, you can get a spark that really does ignite something. this one went too far. i think that the service revenue stream is barely mentioned in the price target cuts. is it perfect? absolutely not. i had your friend on last night. >> you did yet another guest. we had this back and forth that our viewers may be aware of where basically i get people in my fold and then you take them from me. >> diane sawyer and barbara

walters. >> which one am i? >> look, mollenkopf is talking about 5 g and when it is going to come out. it makes me feel like those selling now are not thinking about 5 g. 5 g is ten times faster. >> it is even faster than that. >> we were talking about cable. will cable be able to compete? >> that is a key question in terms of the home. the point i have been trying to make is that the edge of the network is going to have so much computing power because the latency goes away completely. meaning -- you can't compete in your mind. >> i talked to quaalcomm and verizon about it. >> that was with the previous ceo of verizon. he was very articulate about this.

i want to talk more about quaalcomm as it relates to apple. i'm sure you asked mollenkopf about the litigation. i think we have -- >> we need a resolution. >> let's listen to what he said. >> why don't we just do the work. >> we'll listen to mollenkopf on the apple litigation. >> i know you guys are talking or not talking. i want to by an apple 5 g phone and i want it to have quaalcomm in it. >> we do talk as companies. i think what you are seeing really are activities consistent with the fourth quarter of the game and not the first quarter. we have always talked about that this year, the second half of this year and into next year is when we are on the door step of finding a resolution. we are working hard on that, as well. >> we'll see. they head to court in april.

you did get a somewhat positive ruling in san diego in terms of the patents. >> when i spoke to him earlier he was talking about maybe we were in third quarter. it was news. people didn't interpret it as news. >> it has been going on so long. >> there was a story that they weren't talking. >> they are although they are -- >> they are in battle mode. it's a skirmish. >> i think that this 5 g could be behind a lot of change. >> we will spend a lot of time talking about 5 g in the years ahead. >> it is going to be -- >> think about what this last generation did. >> what i think is going to happen is there will be a

specular wave of spend that will be really strong if people decide it doesn't matter. this is a tech story. you have to admit at mollenkopf has a tremendous worldwide view of things. >> he does. he does. >> this is like -- can i say it? he is a really good guy. >> he is an engineer. >> that's what he is. he is an engineer by background. michigan. he is a wolverine. up next, it is this guy's mad dash. we are counting down to the opening bell. let's get one more look at futures. about nine minutes to go. we have so much more squawk on the street straight ahead. hey, what are you guys doing here? we've been helping you prepare and invest for retirement since day one. why would we leave now? because i'm retired now. so? we're voya. we stay with you to and through retirement...

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♪ time for mad dash, six minutes before the opening bell. the dollar stores, they are a bit of a feature this morning with dollar tree eps miss, people worrying about the family dollar deal. >> i got the first glimmer of light on family dollar. they are talking directly that when they renovate a family dollar it does do better which does bring up the comp store sales. i have felt the big issue was they are really sloppy. now they are really rolling. even though they missed the numbers and guided down, they gave you a path out of what i regard as being the sludge of

family dollar. it will be more like dollar general. we should sit down with the ceo of dollar tree and talk about it which is why i invited him on mad money and he will be there tonight talking about the terrific conversion. he has to talk about domestic freight and store wages. >> what about tariffs? >> i believe that there is a lot of stuff in dollar tree that is made in china. when i buy my sunglasses there which everybody thinks are ray bans -- i have people think i'm waying ray bans. what is the point of $170 ray bans when you can buy a dollar pair >> it may have something to do with u.v. rays. >> you let the facts get in the way of the story constantly. i don't know why. >> trade. buenes aires.

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the opening bell is sponsored by u.s. bank, the power of possible. you are watching "squawk on the street." we are live from the financial capital of the world. the opening bell will ring in a minute from now. we will ask mr. cramer what the key to this market is. >> i know this is a little surprise, but the key is tech data. >> tech data >> it's a company that is the supermarket to technology. it had been really falling on hard times. i think we have a chart of tech data. america's sales were up 13%. europe up nine. asia pacific up six. that's pretty strong. and that's a very good indicator that maybe tech issant going over which confirms what mark

told me the other day. it looks like we will open in the red. we will ask the bio tech group -- what are we watching here?

>> he got a little bit more aggressive. that's the school i want to be from because it is the school -- >> those changes will result in what december we get. >> then we won't be fighting the fed. >> it's a stronger story. the president -- i'm not saying he is off the rest. i'm saying he is consistent. we are trying to figure out whether it is about trade or worldwide hegemony. we want to project more power than they do. what they really want is what i

think our government thinks is the soviet union style of you are going to be in our orbit or in the united states' orbit. the countries that are taking money from china -- >> there are a lot of countries that have taken the aid in the form of debt and for huge infrastructure improvements in the countries. >> what do you think about that? do you think they are doing it from the goodness of their heart? >> no. bernie sanders wouldn't listen to henry kissinger because of the vietnam war. ckissinger has always talked about what countries -- cannot be worried about human rights. our country is not as concerned given the saudi situation.

i think you have two countries that are duking it out and twoei just don't think that dinner is going to be as dispositive as many people think. >> it will be interesting to see what comes out of it. and the president is nothing if not mercurial when it comes to these -- >> arbitrary, these are words that come to mind. >> who knows you could have him coming out of a dinner saying we got a lot done and then we find out we didn't. >> this is how -- he has a dinner and says he is going to play golf with him, the market goes up. >> he has to know that. >> otherwise it is discouraging. tax them all. lower the deficit. >> there are facts.

it's very discouraging as someone trying to deal with the facts. who are you to say it is not true? they had to correct it and say basically mr. president i think you are talking about tariffs and not interest rates. i think what i would have said is holy cow, man. does he have a problem let's move back to stocks. apple perhaps is a company that will seem as caught in that back

and forth. i do want to correct something we said earlier. as i was reading -- sometimes you are in the moment. the executive from apple did not say the xr was the best selling iphone ever. we were incorrect. i'm like ron burgundy. if you write it i'm going to read it. >> it is the best selling of the ones they have which is not as consequential as the media is making it out to be. it wasn't anything that should have driven the stock up that much. what were they supposed to say of the three ones we have out there, one is the best seller. >> back in '15 the numbers that they were doing. that was the point i was making yesterday where it was almost 67

billion. '15 was a huge year for them. it is the best selling of the current models. >> i think the most interesting thing that happened today so far is when i got up at 330 k 3:30 s 41.47. it is certainly one of the key features and has been. wti was below. >> putin said he likes his price. >> wti is now above that. >> it is important because one of the things that j. powell is looking at is the slow down in what had been the hottest region of the country. remember how capital intensive oil is. >> there were man camps. they don't know where to put

everybody. >> i remember when i went to the balken which is really revitalized, people worked at mcdonald's were getting $26 an hour. that was barely enough to cover their living costs. the ramifications of the food chain will lead to a slow down in our country. naturalgas at 0. the pipeline companies, why are we not building more pipe? many people are trying to figure it out given the fact that we have -- >> when is the last time we looked at kinder morgan? >> they switched to a c-corp. >> it is on its butt like you wouldn't believe. i think that you are going to see the forecast to come out and start making a little bit

easier. mplx is a good company. it's down today. that's a diverse financial company. the index is so bad and there are a lot of wealthy people who hide in them because they generate a lot of cash flow. it calls into question the strategy that those have been horrendous. >> it was $26. >> mid stream partners talked about how they are not going to keep building if they can't get more oil to come on the pipes. that shocked me. where i think that people don't get is that we have more oil than we know what to do with. we can't get it to market. the differential is so great that they are not making enough money. you are getting $35 for crude. this is all screwed up. i think that powell who has

gotten more granular recognizes that maybe the hottest in the country is cooler. >> something else the president should be told about when he tweets about wanting lower oil prices. as you have pointed out it is a benefit without a doubt to the consumer in terms of at the pump but at the same time is a growingly important part of our rural economy given we are the largest producer of oil in the world. >> federal energy regulatory commission is probably not on his side at all. if he would spend more time with them he would realize they have made it so it is no longer as advantage to build pipe. it's interesting, he talks about deregulation. i find it amazing that he has not gotten down to it. i don't know who is overlooking it but if you want oil where it needs to go you change over the

group. that's just kind of -- that is so granular. he is a top-down guy. someone should be working on that in order to get the oil to market. there are a lot of anomalies in the system. these are things we have to think about that are going awry. >> i'm glad we are talking about it. we don't talk enough in some ways about it, as well. >> we are ahead of the government. that's all right. i come back in my old age to say not everybody is doing homework. think about that. when we were back in grade school we knew that some guys had their dog ate the homework. a lot of the government the dog has eaten the homework. i have a dog from a kill shelter. i throw food at the dog. the dog is so stupid it is

incredible. some people go there like my new dog. >> before we do that, to come back to f.a.a.n.g. which had a nice bid although facebook could not get anywhere. if you noticed netflix has not been a participant. >> i think it is very interesting. it has gotten so negative about facebook that they are writing about things that they thought about that would be bad. that might be a signal -- >> they thought about selling data as a result of court filings. >> i find increasingly among the cohort of hedge fund managers i speak to they can't stay away from it because they get too cheap. >> 20% plus earnings growth and how can you stay away from it?

>> i think the story today may have been the low which is that they thought about something bad and got you. people think about things all the time and they don't come up and you're okay. >> it's true. speak for yourself. >> did you read the piece? >> i did. we will have jim stewart joining us from the next hour on squawk on the street. >> i believe david and i will say it at the speech that i'm about to give that i think that cvs has to be in disarray. it has to be. >> the board hired to investigate the culture of the

company. there is a lot to come. let's get to washington -- >> you think tony romo should run it >> he should have that little -- >> he anticipates everything. >> and he has the corona line. >> let's get to this news out of a federal court regarding the former lawyer to president trump, his name, of course, michael cohen. we have that news in washington. >> reporter: nbc news has confirmed that michael cohen, the president's former lawyer is pleading guilty in federal court to a new charge. we are still getting details about what exactly he is pleading guilty for. there are several reports that this is related to two instances of lying to congress about the president's real estate deals in russia. that's from the a.p. and from the "washington post."

abc saying that michael cohen has given 70 hours of testimony to the special counsel's office in relation to the russia investigation. the "new york times" saying that this charge is related to bob mueller's inquiry into what happened during the 2016 election. so the question here becomes, does this guilty plea indicate that michael cohen is working now with bob mueller's office? how much is he cooperating with that investigation this is a man who had been president trump's fix it man for many decades saying he wants to put family and country first. what does he know and what is he telling bob mueller's office this has clearly been on the president's mind, this investigation, over the past 24 hours. he has been tweeting frequently about it including saying that so much is happening now with this witch hunt, this total hoax will be studied for years. once we get more details on what is happening in the court we

will bring it to you. back over to you. >> thank you. bob pisani is right here on the floor of the new york stock exchange to bring us more on what is moving this morning. >> happy thursday. we have a few market leaders. take a look, retailers doing better. abercrombie had excellent numbers. energy is also doing a little bit better. banks still don't have a lot of energy. look at some of the banks today, flattish to slightly down. the ten-year dropped below three percent early this morning. that was widely noted. they have been looking for direction since we hit the bottom in late october. retailers are doing well. abercrombie was at a 52-week low yesterday. that is a 20% move here. modest moves up in some of the other apparel names like guess and american eagle. a lot of technical talk at the end of the day. are we in an uptrend or down

trend? this i would say is definitely not a down trend anymore but not quite an uptrend. what would it take to get an uptrend? maybe $27.50 or so. you have to break out on the orange line to say we are in any kind of uptrend. that is probably around $27.50. when you are not sure what to do in the fundamentals you talk technicals. i would say the s&p is improving but not really breaking out. only 50% of the stocks are above the 200-day moving average. if you look at short term stuff like what is above the 20-day highs, that is a short term indicator. health care has been doing really well and financials, not banks, but insurance companies have been doing pretty well in the last month or so. elsewhere, fomc minutes is what everybody is going to want to talk about today. we want to know what does growth look like in 2019? that is the only real issue

here. any impact on the winding down of fiscal stimulus and the question is on tariffs and whether it is a bigger worry. they didn't say it had a big impact. here is what they said on the tariffs. the projection for the medium term was not changed in part because the recently enacted actions were judged to have only a small net effect on u.s. real gdp growth over the next few years. what you want to look for here is whether it has changed, whether the preponderance of participants felt tariffs were having an increased impact. i bring this up because the next big move will be the meeting between president xi and president trump. a lot of people are putting hopes on that. other people down here are quite bearish saying chinese are well aware that this is about a longer term effort by the united states to stop the global growth of china and tariffs are only a

small part of that. it will be interesting to watch, right now the dow down 58 points. >> thank you. bob pisani on the floor for us. let's go a closer look at oil prices. we were talking about that, had dropped briefly below 50 when jim was up at 3:30 in the morning. >> i was sleeping, too. oil prices are certainly higher at the moment. that break under 50 this morning so key in this trade psych logically. the market has been testing that level. finally the break came together. wti hasn't seen that level since october of 2017, 4941 was the session so far. there is the stock market, momentum, demand story and then the fundamental supply story. they're in conflict at the moment. yesterday's equity bump influenced oil. today's equity session a little less of an influence. they are going in opposite directions. what is happening here oil is a little bit higher

because of fundamental story and that supports the under $50 a barrel story. u.s. production 11.7 million barrels a day. the saudis and the russians are pumping away. we have an opec meeting. do we get a cut off an inflated base some say yes. that is why oil is up today. the u.s. saudi relationships are complicated right now. there are reasons that the saudis may want to placate the president with a cut. the russians may not share the same interests. this is going to be an interesting week for oil coming up. >> thank you. coming up, jim stewart. you will want to hear what he has to say about former cbs ceo. they keep doing great reporting at the "new york times." we will give you a look at the move in the treasuries this morning. you can see we are hanging right

around three percent. >> 3.022. we are back after this.

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let's give you a look at the best-performing stocks on the s&p. dollar tree. >> i told you. they wouldn't come on, i think they have a good story my father and i went to almost every dollar tree there was because we like them so much. >> look at this. two of these names, qualcomm is up. >> well, david stone was my guest and nielsen holdings is continued stuff about -- >> remember katie spencer? >> great producer. >> she's booker with heather. >> we have to save time for stop trading. we have a good one

welcome back to "squawk on

the street." michael cohen walking out of federal court after pleading guilty to lying to congress ant what is said to be a real estate project in russia. but it's the lying to congress part that you don't want to do there is mr. cohen, former personal attorney for the trump organization to president trump and potentially an important person in terms of cooperating are we going to get comments from mr. cohen or his attorney no. >> why not take the fifth? >> again, this morning michael cohen pleading guilty to lying to congress. >> that's a very high crime. i hope people understand that who watch this show. >> any impact from all this on the broader markets? >> i don't know. you were talking about what

could happen with mueller, whether he's circling. they can't get to mueller. can't be bought. >> no. no mueller can't be bought. >> mueller can't be bought. >> they had the -- how about brendan burn the man the mob couldn't buy david boeing is the number one pick he's talking about $35 for -- capable of earning very quickly. $35 number 2816 for 2019. that's a very inexpensive stock if that's the case obviously this is a stock maybe to buy if the president and xi come to any understanding this weekend. >> as greg hayes said right here the number of planes bought by china. >> i disagree with greg on the tightening there's companies that have a

hard time finding workers. let's get to "mad. >> we have sofi. i get 2% on that account anthony noto manny chirico's stock has been decimated. and the turn in dollar tree is so exciting to me. >> what a great show you have. and none of them are people that used to be my regulars >> david, you know what? we are friends i want people to know that my father used to say are you fighting with david again? i said pop, i love david and i've loved him for years but on air we have collegial sparring which is the way everybody should do it >> i'll see you later. >> all right, bud. we got larry merlo from cbs coming up. t. free access to every platform. yeah, that too. i don't want any trade minimums. yeah, i totally agree, they don't have any of those. i want to know what i'm paying upfront. yes, absolutely. do you just say yes to everything? hm. well i say no to kale. mm. yeah, they say if you blanch it it's better,

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i'm diana olick with breaking news from realtors. pending home sales down 2.6% compared with september. the street was looking for a small gain sales were down a steeper 6.7% compared with october, 2017. that makes the 10th straight month of annual declines the number is a measured of signed contracts to buy existing holmes so people out shopping in october when interest rates were rising

realtors again are pointing squarely at the higher rates but you have to combine that with the huge run-up in home prices we've seen over the past two years. that's easing now but the damage has clearly been done. sales fell annually across all regions but worst in the west where prices are highest sales there fell 8.9% for the month and over 15% compared with a year ago the only monthly increase was in the northeast, up barely 1%. still down year over year. this follows another disappointing report on sales of newly built homes in october which also measures signed contracts. they fell 12% annually according to the u.s. census sara >> another drop for housing sales, diana, thank you. welcome back to "squawk on the street." i'm sara eisen with david faber and mike santoli live from post 9 at the new york stock exchange carl has the morning off. let's look at the markets. half hour into the trading session, things are lower, putting an end or pause to the three-day rally we saw that was

supercharge wd by fed chairman powell yesterday minor selloff for stocks our road map for the hour will start with the markets. the dough aw and s&p coming offr best day in eight months >> but stocks are edging lower a geopolitical event in focus could be a game changer for trade and possibly energy as well we'll take you live to the g20 summit in buenos aires. and a bombshell exposé alleging former cbs chief les moonves tried to silence one of his accusers jim stewart is with us this hour. stocks are edging lower after the dow and s&p 500 jumped more than 2% yesterday afternoon. this, of course, on the heels of those comments from fed chair jerome powell. he signalled to investors interest rates are close to neutral. fomc minutes also out today. steve liesman joins us now he has this whole thing wrapped

up steve? >> i'm going to unwrap it. a big and interesting debate has broken out between economists on the one hand and traders or the market on the other hand over how dovishly to interpret those comments from fed chairman jerome powell and what those comments mean for rate hikes in 2019 and beyond. the market has substantially reduced its outlook for rate hike after powell said the current funds rate is just below the broad range of estimates for neutral. they increased their probabilities for december but decreased it for first rate hike in 2019 in june to 53% and they can't get to 30%. they're at 25% for a second hike in october, 2019 this is simply not the way the fed-watching crowd is taking all this we did a survey this morning economists acknowledged a more dovish tone and some changed their outlooks but several stuck to their hawkish forecast for four hikes next year because they see strong growth, they see tight labor markets and inflationary pressures building. oxford economics, they went to

two from three, if you can go back to that chart, i'm sorry. j.p. morgan stuck at four. other folks stuck at four as well and oxford writing in light of recent fed communication and considering our inflation and gdp growth outlook for 2019, we now expect two so they were on the mortar dovish side. j.p. morgan wrote, we continue to expect the modest aggregate demand growth will outstrip disappointing aggregate supply growth, further tightening labor market and necessitating quarterly rate increases now let's look at the fed's own view of neutral. that broad range so some of the most dovish folks who are at 2.5%, the most hawkish at 3.5%. six folks are at 3% which is the median right there views on the outlook that we'll get in today's minutes at 2:00 from the november meeting might be a little stale after powell spoke. we'll have to wait for the december 18 meeting to see if fed officials actually bring down their 2019 forecast and

their long-run neutral forecast to justify the most dovish take that's been taken on powell's comments yesterday, sara. >> one question, steve it sounds like -- >> only one? there's a hundred. >> well, there's a hundred, but my main question is how many rate hikes will we get next year the market is pricing in, what, one? goldman sachs is at four and the fed is at three. it's all over the map. >> big debate. one and change from the market and three and four from the -- look, i think it's -- the best way to think about it is watch the data i think investors have to pick a forecast and go with it. do you forecast strong earnings? do you forecast strong growth? do you still see the unemployment rate going down if the answer is yes to all those three things, you want to side on the more hawkish side of the fed. if you see gdp getting back to 2%, coming down from the 3% of this year, if you think the unemployment rate will be stable or rising then you can side with

the more dovish idea of one hike next year and maybe being done after that >> next fed meeting will be fun, steve, as they always are. thank you. steve liesman. joining us now to break this down, what it means for the market, ally mccartney is here and we're also joined by the chief u.s. economist at natixis. was powell's speech a game changer or not >> definitely. we had the yield curve statement briefly. we had gold prices rally the dollar soften. as you know, equities up massively. the market is right, sara. the economists, as per usual, are wrong. this was a game changer. >> are you a buyer on this news? >> the way we're approaching this at ubs subpoena you just talked about, for example, the meeting that will happen later this month we're looking at what's going to happen as a result of the argentina meeting. if we're putting money to work

right now, we're putting it to work in a structured way in the u.s., specifically towards value and within value financials and energy or we're putting it in just pure optionality firm right now we're not a buyer of anything as you said, there are a couple events that will be very binary in the next month and, you know, people are looking, whether it's two rate hikes or four rate hikes, that's meaningful and the way the market has been reacting in the last nine months, i would say, since february, to news is the market is reacting to sort of news on the margin and the market is reacting to really meaningful news. so i think we have to be careful. we have overweight global equities, most of that is in the u.s. but we want to do in the a way where you can manage your down side risk as well right now. >> joe, how specifically are economists wrong right now wrong about 2019, for example? and how does it differ with what the fed is looking at? a slowdown from growth, maybe somewhere close to the targets on inflation and employment.

the data that the fed looks at still looks like a neutral rate is probably what they need to try to get to. >> so michael, first of all, the profession has been consistently overpredicting as monetary policymakers the path of rates and they've also consistently as a group overestimated inflation. inflation is likely to move lower. growth will remain solid there's no link that growth causes inflation or that tight labor markets cause inflation. that whole thesis has to be revised. the neutral rate is an absurd concept. it's a unicorn rate. it doesn't exist the housing market is telling us right now as i've argued for some time, we're already past neutral. so the fed needs to recalibrate its thought process when it watches. it needs to stop raising rates, let the balance sheet unwind and let there be some price discovery in financial markets to the extent that's possible. >> maybe just get rid of the

word neutral it's causing so much anxious nobody knows what it means, nobody knows where we're close or around. alli, oil is up but earlier fell below $50, first time in a year, the 10-year treasury note yield fell below 3%. what are the process, the correlations telling you as it relates to stocks? >> that's a great question and the good news is that we are finally seeing movement up in one market while we're seeing some movement down in the other market and that's what we look for when we think about how to invest and how to diversify so as opposed to the last couple months where you've seen the bond market moving down at the same time that the equity market seems to be correcting, we're happy to see that what happened yesterday, for example, that you're seeing bond yields come down as people feel comfortable moving back into risk assets i think oil is a really interesting temporary phenomenon right now. we at ubs see a sort of six-month and 12-month horizon at about $85 we think a lot of the things that are happening, whether it's iran, saudi arabia, russia production, are really sort of

very specific things happening now that are restricting supply in an artificial way that we are going to move beyond so, again, when we're putting risk on the table -- >> so you like energy stocks on that call? >> we love energy stocks i cannot fundamentally understand why financials aren't behaving better and when you look at what happens late cycle, you really look for a value rotation instead of growth and when you look at value indices, they are largely made up of financials and largely made up of oil the other thing you have when you go into those two markets that's interesting and meaningful is those are probably the two markets that in theory are least susceptible trade rhetoric and the actual implications of what happens so i would expect as we see movement from the g20 or not conversation this is week, as we go into january and do we go into, like, phase 2b in terms of raising the level of tariffs to 25%, that those are the markets where we'll see outperformance.

>> how does the credit situation filter in? if you're looking across asset class, we had a little mini panic corporate credit, maybe that's why financials haven't acted that well. >> that's very fair. and we -- jay powell's comments yesterday really highlighted exactly what we've been looking at, which is since 2009, since the end of the crisis, leverage on balance sheets has gone up twofold. there is a lot of refinancing that has to go on, most of that is in an area of the corporate credit structure where we are a little concerned so that is absolutely something we have to take a look at. but the good news from the financial perspective is those banks are going to be involved in those refinances. we're already seeing the cost of leverage, whether you're talking about the average mortgage rate and what that's doing to the housing cycle. we're seeing that play in and m&a activity as we see everyday on this show is going crazy. >> so looking forward to the g20 meeting this weekend, it sounds like you're pretty optimistic

about where we see the economy and you're happy about powell. i'm wondering how much you think trade friction with china is impacting the overall economy and what's at stake this weekend? >> yesterday showed this whole year has been about fed policy and the trade stuff, while not irrelevant, it's certainly important, but it's basically a sideshow to what monetary policy has been doing so to me, looking at g20, the bar is set very low in terms of what productively may come out of that so we might go into the next month with a risk-on mentality, given the fact that maybe anything that comes out of g20 is mildly positive my guess is that a lot of the bad news in markets has been priced in from oil to risk elsewhe elsewhere. >> we'll leave it there. thank you. when we come back, a done deal cbs and aetna closing their $69

billion merger we'll speak exclusively with larry merlo next plus, a new bombshell expoée unveiling how former cbs chief les moonves allegedly silenced an accuser pulitzer prize winning columnist, author of that piece stm stewart will be with us at po 9 dow is down 56 points. "squawk on the street" will be right back go after it the same way, chasing after short-term returns? instead if getting caught up with the crowd, the investment managers at pgim take a long term view. uncovering opportunities for alpha across public and private markets, while anticipating unforeseen risk, has powered our rise to a top ten global asset manager. partner with pgim. the global investment management businesses of prudential financial, inc. hi, kids! i'm carl and i'm a broker. do you offer $4.95 online equity trades? great question. see, for a full service brokerage like ours, that's tough to do.

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closed yet what is next for what is now a true health care and well-being giant. joining us exclusivelyfrom the forbes health care sum submit cbs health president and ceo larry merlo is with bertha cooperation. >> larry, congratulations on closing the deal almost a year to the day since you announced it you talked about creating what is a new kind of health system your front door to health care in your neighborhood as we are on day one, talk more about how you see that vision evolving. >> well, bertha, we see the challenges our health care system faces today it's confusing and difficult to navigate, there's a growing cost burden placed on consumers and often times care is fragmented and too expensive so we see an opportunity to create a new health care platform, one that is simpler, easier to use and

puts consumers at the center of their care so we're excited to get going. it's a special day and there's been hard work by our respective teams. >> you have been working together over the last few months as you've been preparing for this talk what about you do first what can we expect first how easy is it going to be to integrate aetna systems with cvs' systems to bring about some of the things you're talking about in terms of making it easier through technology, through ai, artificial intelligence, to figure out what's going on with people's health care? >> bertha, we see three imperatives to bring this vision to life. one is the opportunity to be local. and to be able to provide access for consumers in terms of where, when and how they want to access care, whether in the community, in their home or the palm of their hand with a digital dev e device

we see opportunities to create a more connected experience where consumers can more readily access resources, information, the services that they need and the third is to help people achieve their best health at a lower cost you look pat what at what is ren the aetna business today, they can identify what is the next best action for members they serve to help them on their path to better health where the system breaks down is how do they activate that? how do they engage with those health care consumers? >> so now cvs store and minute clinics will be the place where that happens >> exactly we have many community assets. we're in 10,000 communities across the country this combined entity will have more than 45,000 health care practitioners. so it's that connectivity that can make a meaningful difference in how care is provided across the country.

>> david, i believe, has a question for you david? >> larry, david faber. looking at the stock and speaking to some of your investors and/or those who might become investors, there seems to be a bit of a wait-and-see in terms of delivering on what are enormous cost synergies you've outlined here. what can you tell investors in terms of what they should be focused on and how you're executing laying out those synergies? >> david, great question and we've talked about synergies of more than $750 million in the second full year of operation and, you know, over the last several months, integration team with members from both companies have done a tremendous amount of work and we're very confident in the pathway to achieve those synergies. part two of that discussion is what we were just talking about with bertha in terms of the opportunity to bring meaningful change to health care and to be able to actually reduce medical costs when you look at the avoidable and wasteful spending

that if we just use the management of chronic disease. today we have about 60% of americans that have one or more chronic diseases that's accounting for 80% of health care costs and we know and we can do better. i think one of the things that investors are missing is the fact that the health care industry can and must be transformed from within and this conversation of cvs and aetna brings together the assets to, in fact, be able to do that. >> larry, do you think investors are having trouble understanding what your peer group might be and therefore how your stocks should be valued in terms of a multiple are you a retailer hmo? with all three of these important companies put together, do you even have a peer that you could say this is kind of what we expect or who we compete against? >> well, david, it's an interesting question and over the last several years as cvs

and caremark came together in 2007, we began to talk to the investor community about we managed the company at an enterprise level and i think that's enabled us to bring products and innovation into the marketplace that have improved access at that time to pharmacy care and at the same time to drive down the cost of care so the addition of aetna to the cvs family gives us another arm of capability and the opportunity to bring new products and services into the marketplace that can achieve the goals that we just talked about. a lot of the narrative -- it's sara eisen, good to have you. a lot of the narrative around the deal had to do with the fact that everybody, including you, were bracing for amazon to enter the sector then we saw amazon buy pill pack and i know you have a competing prime offering can you talk about whether you think that story is is overplayed or whether you expect amazon to enter your space and

be a top competitor? >> well, there's no question that amazon has been a formidable competitor across the marketplace. we have tremendous respect for o competitors and what is interesting around our particular thought process is that we're laser-focused on how do we satisfy the needs of the clients and the consumers, the members that we serve? and that's what -- we get up every morning and charge ourselves and our thousands of colleagues across the country to do that very thing and our belief being that if we're taking care of the needs of our customers then we'll be able to hold our own in terms of competing against existing competition or perhaps new competition that may enter the marketplace. >> you'll be launching concept stores to work this through over the next couple of months. how will you look at whether those are suck a sua success?

how will we know if it's a success integrating these pieces. >> bertha, great question. as you look at the role of cvs pharmacy today, people think of drug stores on corners all across the country we see an opportunity that we can become more than a drugstore. we can be more of a health care destination. when you think of the role of the pharmacy, the role of minute clinic. >> so explain to me what this concept store would look like. less products in the front of the store, more services in the front of the store >> the front store will evolve into a combination of products and services and we'll continue to have a focus on health, beauty, personal care, elements of convenience, but you'll see services in an expanded minute clinic where we can do remember in -- phlebotomy

think of a patient who is well enough to leave the hospital but needs convalescence in the home. if they can't drive, we could make transportation available or if they're not well you have no cook their own meals, how do we make food readily available for them so we're excited about creating the opportunities as being integrators of services that patients, consumers of health care need at any different point in time. >> s&p analysts call it an ambitious journey and it clearly is the more we hear you talk about it thank you so much, larry, congratulations on closing the deal. >> bertha, thanks. >> guys, back to you. >> and thanks to bertha and to mr. merlo as well. >> we're seeing health care names, by the way, jump to 52 week highs united health, walgreens, anthem, merck. up next, quote, how less moonves tried to silence an accuser. a new exposé unveiling an

alleged scheme that helped sink the long time head of cbs. will cbs pay him his $120 million exit package author of the bombshell piece jim starwi bhe wh nextlle reitus ♪ ♪ move to the enterprise-grade cloud that's built to handle all your apps. ♪ ♪ the ibm cloud. the cloud for smarter business.

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that 120 possible exit package for former cbs chief leslie moonves well, it may be less likely to actually happen this morning this after a "new york times" expose which details a sexual assault allegation and how moonves reportedly sought to keep the actress who claimed to have been assaulted quiet as the me too movement exploded joining us now, co-author of the story, pulitzer prize winning "new york times" columnist and ourregular jim stewart the reporting here just keeps getting better and better, jim amazing how much access you seem to have to all sorts of communication which is support, of course, this incredible story. >> it's an amazing saga and there are hundreds of text messages that have been produced that went back and forth between less moonves, the head of cbs at the time, and this hollywood talent manager who represented

the actress who he allegedly assaulted. and when i first saw these i kind of thought, i don't know, i mean, let's just print the texts because it's -- they're so vivid, they're so compelling, they really show, oh, my god, the pressure on moonves, his desperate effort to keep this quiet. it was very striking to me that we know there have been many allegations against moonves. this actress whose name had not previously been disclosed was the one person that he said many times if she talks i'm finished. and you can see why. it's a hair-raising story of sexual assault. >> and some of who had been around the story heard about it but it had never been produced in other reporting about mr. moonves' behavior. >> right i'm sure that -- it's intere

interesting when he manager first contacted him after the weinstein expose came out, they hadn't talked in years this is a struggling b-list old time hollywood manager les moonves, the head of cbs, didn't have time for him they hadn't talked in years. he called and left a message less than 10 seconds moonves is back on the phone with him wanting to know why are you calling. >> and importantly attends the man's 75th birthday party. >> shows up at his birthday part y party and sends gushing texts and he goes there with his wife julie chen i can only imagine julie chen is saying what are we doing here? >> the larger question from investors point of view is -- and you've been following the story closely for months, what about the exit package what is the actual role here for the board, for those who are investigating cultural issues at

the company. how does this go down, how does your story figure into that? >> i had actually there was a good chance that moonves might get the $120 million because he gets it if he's fired without cause and cause is defined so narrowly that you can do almost anything and it's not cause but one of the key things is he had to cooperate fully in any internal investigation and that's where i think this is devastating because from the get go this is not about a sexual assault in the distant past but about a coverup in the present that started a year ago and went on for months. he's willing to convert cbs corporate assets for purpose of protecting himself and then hiding that information. the board has information that he deleted most of these text messages now his lawyers say, oh, well, he did that routinely. even if he did, did he tell them

he had these and deleted them and they might be relevant i have seen no evidence to that effe effect the manager told me moonves called him and said delete those texts. he denies that but i found the manager very credible on this point and this points to the coverup and the coverup gets people into trouble over and over. >> you mentioned the deployment of cbs assets. so in this case it has stark back and forth about getting this actress auditions and essentially saying what levers can i pull and that's secondary the actual assault but it seems as if it shows you maybe the mode of operation. >> another thing that's so clear in the texts is it's obvious moonves doesn't want to do this. at one point he acknowledges to the lawyers he knew it was inappropriate. he didn't want to have to do

this but the manager keeps ratcheting up the pressure on the one hand, he's lavishing him with gifts and favors and invitations to parties and then he's constantly reminding him the reporters are calling me, the me too movement is in full tilt, look at "time" magazine, they just named women as the people of the year so there's these constant reminders. and as the pressure increases you can see the torture that moonves is going through but he tries to deliver with this ridiculous role that she's finally offered and is outraged and rejects. >> this reads like a movie script it reads like a cbs-made -- >> don't option it to cbs. >> the amount of self-delusion on the part of mr. moonves knowing his own history as he must have or the hubris thinking he could get through this. i always come back to. that we're talking about a guy who had a stellar career, who

was in many way ps at a point where he could have merged his company with viacom, potentially society long and chose instead not just not to allow that deal to occur but then to completely go after his controlling shareholder. it boggles my mind knowing what we know and what he had to know. >> i totally agree it's one of the most astonishing things someone as incredibly successful moonves was one of the most successful people in television history. that someone like that would launch this civil war knowing that that was going to ratchet up the scrutiny of him with the me too movement in full swing. he would do this and you see in this context of the text that when he decides to do this, this is right when the manager is starting to really turn up the heat under him and he at that moment decides to do something like that which is going to bring renewed scrutiny to his behavior?

the only thing i can think is that the -- he must have been in such tremendous denial and that it had gone on long enough that he thought he had the sort of -- sort of this thing down but he had no basis for that and, of course, as events unfolded it was a disaster. >> as you also reported, he had the support of his board along the way for quite some time. >> he did until they first started hearing something about this and once they realized he was trying to find a job to keep her quiet, that's what got him fired and ultimately is why i don't think he'll get the money. >> when do we find that out? what happens next? >> it's coming soon, right >> i expect it would be coming soon i mean, what more does the board need at this point i think they really should be acting forcefully quite soon and announce this publicly and this is good news for cbs shareholders it's going potentially save them $120 million. >> jim, thank you, and, of course, congrats to you and your colleagues on this reporting

jim stewart. >> good read as usual. time for a cnbc news update. let's get to sue herera. good morning, everyone here's what's happening at this hour michael cohen, president trump's former lawyer pleading guilty to lying to congress about work that he did on a trump real estate deal in russia. he made a surprise appearance at a new york city courtroom this morning. he admitted to making false statements to a senate committee in 2017 about a plan to build a trump tower in moscow. british prime minister theresa may telling lawmakers she will not rule out britain leaving the european union without a deal this after the bank of england warned that such a scenario could plunge the country into its deepest recession in decades. >> if parliament votes down the deal on the 11th of december, there is then a process, as you know, that is in the legislation for the length of time given for government to come back and make a statement about the next steps. china ordering a halt to work by a medical team that

claimed to have help make the world's first gene-edited babies china's vice minister of science and technology called the team's actions illegal and unacceptable there's been a lot of controversy about that that's our news update this hour i'll send it back downtown to you, air is ranchts ssara. when we come back, president trump is departing argentina, answering some questions as he departs about the new michael cohen charges and we'll bring you the headlines as soon as we get it w down 61 points. don't go away.

just getting headlines from president trump who is departing by helicopter. he's flying out to buenos aires for the g20 meeting. he says he's not offered pardons but is not taking anything off the table, probably responding to some of the new revelations from michael cohen he says former campaign manager

paul manafort was treated poorly the president said the president will bring up the issue of americans held in china at his meeting with xi jinping. haven't seen anything, mike, when it comes to the -- trump says close to doing something with china on trade but he doesn't know if he wants to do it that's a headline. that's hard to tradeoff. >> that's been the norm on that front. well, let's bring in eamon javers live in buenos aires already ahead of the summit. eamon? >> how has the news of the guilty plea shuffled the diplomatic deck for jooet in buenos aires is this going to task president's mood and deal making posture when he gets to town as you mentioned he's talked to reporters on the south line of the white house.

but this information -- investigation has been front and center in the president's mind he's tweeted three times about it here's a tweet he put out overnight. he said when will this illegal joseph mccarthy style witch-hunt, one that shattered so many innocent lives ever end or will it just go on forever. after wasting more than $40 million, is that possible, it's proven one thing -- there was no collusion with russia. so ridiculous. now what michael cohen is pleading guilty to today is lying to congress about the extent of his own involvement in a russia deal for a trump facility in moscow, presumably the president also involved in the negotiations for a trump facility in moscow the president said during the campaign and after that he had nothing to do with russia, no involvement financially with the russians the fact it appears the president was negotiating with the russians for some period of

time -- we have to pin down the timing on this -- through the campaign raises the question of whether the president was lying about his financial involvement with the russians. it's a 10 or 11 hour flight. the president doesn't have to fly commercial like the rest of souse he'll get quicker than the rest of the diplomats but as he gets here, the administration has been putting out very tough rhetoric on china. that's the focus is that meeting with xi jinping over dinner on saturday night robert lighthizer putting out a statement last night on china. very tough on china's automobiles and suggesting that he might explore new ways to have tariffs on chinese automobiles so that is some of the rhetoric we're getting going into this. all right expectations low for a deal between the united states and china and now the question that diplomats and heads of state in buenos aires are going

to be asking is how does the michael cohen plea change the possibility of a deal or a positive outcome in buenos aires. >> he's no stranger to scandals like this and russia investigations just trying to figure out the president's strategy when it comes to china and whether there's been a tone change or not ahead of this meeting with president xi. >> i've asked the president a couple times on the south lawn and elsewhere, is this a moment where he wants to have a deal? he's always said he's open to the idea of a deal with xi jinping but never been specific about what exactly he wants. white house officials talk generally but they've never said exactly what they'll take. that's the question. >> we see the president making those remarks. let's listen. >> the house as i understand it and the senate, he put out a statement talking about a project which was essentially i guess more or less of an option that we were looking at in

moscow everybody knew about it. it was written about in newspapers it was a well known project. it was during the early part of '16 and i guess even before that it lasted a short period of time i didn't do the project. i decided not to do the project so i didn't do it so we're talking about not doing a project. michael cohen what he's doing is he was convicted, i guess with a long-term sentence on things totally unrelated to the trump organization having to do with mortgages and cheating the irs perhaps. a lot of different things. he was convicted of various things unrelated to us he was given a fairly long jail sentence and he's a weak person and by being weak, unlike other people that you watch, he's a weak person and what he's trying

to do is get a reduced sentence so he's lying about a project that everybody knew about. i mean, we were very open with it we were thinking about building a building, i guess we had a form, it was an option, i don't know what you call it. we decided, i decided ultimately not to do it there would have been nothing wrong if i did do it if i did do it there would have been nothing wrong that was my business >> reporter: when did you decide not to do it >> he's lying very simply to get a reduced sentence, okay [ muted ]. >> sounds like we've lost -- oh, there we go. >> when i run for president, that doesn't mean i'm not allowed to do business after i won obviously i don't do business but more importantly which is a following year but i ran a business and i often joke about

the fact that i was the only person that campaigned and simultaneously ran a business but that was a project that we didn't do. i didn't do. that was a project that wasn't done for a lot of reasons. number one is that i was really -- not that i had to do it but i was focused on running for president. i wanted that to be my primary focus, not running or building a building >> reporter: [ inaudible question ] >> well, this was a deal that didn't happen. that was no deal this was an option i guess -- i don't know if i want to -- i want to be very specific to my way of thinking it was an option that i decided not to do so if you look we didn't have -- excuse me. excuse me. this was an option in a form but

here's very simple we had a position to possibly do a deal to build a building of some kind in moscow. i decided not to do it the primary reason -- there could have been other reasons, but the primary reason, it was very simple, i was focused on running for president. there would be nothing wrong if i did do it. i was running my business while i was campaigning. there was a good chance that i would haven't won in which case i would have gone back into the business and why should i lose lots of opportunities? so here's the story. go back and look at the paper that michael cohen wrote before he testified in the house and/or senate it tooked about his position what he's trying to do -- because he's a weak person and not a very smart person -- what he's trying to do is end -- and it's very simple he's got himself a big prison sentence and he's trying to get

a much lesser prison sentence by making up a story. now, here's the thing, even if he was right, it doesn't matter because i was allowed to do whatever i wanted during the campaign i was running my business, a lot of different things during the campaign so very simply. michael cohen is lying and he's trying to get a reduced sentence for things that have nothing to do with me let me go a step further i think you should go back to -- i think it was january it was just reported very well by catherine harris, she's a terrific reporter on fox she talks about a letter that he signed it specifically talks about this deal this deal was a very public deal everybody knows about this deal. i wasn't trying to hide anything >> reporter: [ inaudible question ] >> i cannot understand you

>> reporter: [ inaudible question ] when you see putin, what are we going to talk about. >> we have a lot of things to talk about >> reporter: you're going into a summit shortly what is your sense about a trade deal with china? what do you expect to say to mr. xi >> i think we're very close to doing something with china but i don't know that i want to do it because we have what we have right now is billions and billions of dollars coming into the united states in the form of tariffs or taxes so i really don't know but i will tell you that i think china wants to make a deal i'm open to making a deal but frankly i like the deal we have right now. >> reporter: are you going to meet with -- and if so what are you going to -- >> i probably will meet with president putin. we haven't terminated that meeting. >> reporter: what are you going to tell him? >> i think it's a good time to have the meeting i'm getting a full report on the plane as to what happened with respect to that and that will

determine what i'm going to be saying. >> reporter: you said you were getting a full report on tuesday. did you get that report and what did it say >> i have a couple of reports. we're getting a final -- are you talking about the russian situation with the ukraine and >> yes. >> i'll have it on the plane sometime today >> why are you meeting with the -- >> it just wasn't set up i would have met with him but we didn't set it up i'm meeting with president xi to do with trade and making three or four meetings we just didn't have time. >> if cohen is -- >> -- [ inaudible question ] >> i'll bring it up, yes >> i don't hear you. you see that. >> you have a helicopter [ inaudible question ] no, the question was asked

yesterday about pardons with respect to paul manafort, who it's sad what happened to paul i've never seen anybody treated so poorly, but the question was asked to me by "the new york post," i said i have not offered any pardons and i think they asked or whatever, would you i said i'm not taking anything off the table. that was done as a question from "the new york post." >> did you tell michael cohen -- did you tell michael cohen -- [ inaudible question ] >> go ahead. >> if cohen is such a bum, why did you hire him, have him on your payroll for 12 years and have him do so much of your dirty work -- >> because a long time ago he did me a favor a long time ago he did me a favor. [ inaudible question ] >> no. not at all not at all i'm not worried at all about him. you just take a look at his written document go back, take a look at what he

wrote and i think january, he has a written statement and that's the fact. yeah >> you said you had with russia -- [ inaudible question ] >> france, we don't want the european union to be -- what do you want to tell them -- >> you know you can't with the helicopter [ inaudible question ] >> a possible shutdown if we don't get the wall money we're in negotiation if we don't get border security, possible shutdown. see you all. >> president trump departing the white house for joint base andrews where he will take a flight to buenos aires for the g20 meeting in a lively heralded

meeting with president xi on saturday here's the headline from president trump at least for investors on trade i think we are very close to doing something with china but i don't know if i want to do it and then he said some other stuff about billions coming into the coffers and said frankly, i like the deal we have now. what does that mean, david he wants to keep the tariffs >> i'm not here to try to parse the words of the president take it for what he said it certainly doesn't sound as though and, again, much of this could be negotiating the parlance of a negotiator heading into a key negotiation, but i read it as not likely to come out with anything if he says i like the deal we have now. whatever deal he's talking about. >> follows on his -- >> the situation >> yeah. >> exchange of hostilities >> tweeted that billions are coming into the coffers of the u.s. from the tariffs or taxes and just to be clear, i mean, that's being paid by u.s. importers like ford or walmart

that -- >> there is nothing that is actually collecting in any coffer of any kind a border adjustment tax if you recall was part of the initial tax reform plan would have done that, would have had that effect because we would all be paying value added tax, border adjustment tax this is not the case >> so unclear, mike, whether this caused a leg lower in stocks but we have seen that in the last few moments or so. >> there was nothing in the comments that would lead you to be more optimistic about china necessarily. >> let's get to the president's comments on trade and some news he's just made on the white house lawn >> yes, i think that what this underscores in terms of trade is how much of this negotiation between the president and president xi is just going to come down to personal chemistry here the president has sort of been on again, off again on whether he wants to make a deal. how far away we are from making that deal. it will come down to do these

two leaders hit it off on saturday night i thought it was interesting he talks about bringing up the americans who are held in china as part of those discussions so what that tells me there is still not a defined framework for what the two will discuss over that dinner and have a set amount of time to cover. do they really have an understanding of sort of the outlines of whatthey're going to talk about? it sounds like this is still very much in flux here and i think that is going to be one of the key things to watch when we go forward into the g20. >> a lot of questions for investors. thank you. wrapping up some of the comments on trade from president trump. let's bring in former national economic council director for presidents clinton and obama, gene sperling. put this in perspective. how high are the stakes for this meeting? >> well, i think first thing i want to say is i think if you were talking about china or the fed you could say this is, you know, do we pause -- to pause or

not to pause moment and what i want to stress is that people keep saying is there going to be a deal the issue is whether there's going to be a pause in the hostilities, so i think what we're really looking for tomorrow is would there be some type of an agreement temporary where perhaps they buy a certain amount of soybeans or l & g, make a few concessions that lead to some type of negotiation and then what the united states would give is that we would keep the tariffs on the 200 -- we would keep the tariffs at 10% as opposed to them going up to 25%. for president trump, he could say, well, i still have the sword over their head but i'm taking a pause because they bought some soybeans, et cetera. i think, you know, it's good to negotiate from strength but he often negotiates more from

bluster and without strategy and i think it gets him in trouble so right now, for example, they've had really no strategy on how to protect tern agriculture and you're seeing bankruptcies among farmers doubling and soybean prices falling, exports dropping off the cliff so i think he has a lot of incentive to try to get some type of pause not major deal, but a pause that shows that he's going to try to let negotiates work. whether that will happen or not, i cannot tell you because every hour there is a signal that goes in the opposite direction. >> gene, do you get it i mean, listen, i know -- i would assume you're not speaking to anybody in this administration anything from the chinese amongst the people you may have known in terms of how they view this >> oh, no, you know, i'm not talking with the chinese what i hear from the administration a bit is that it's very hard for them to -- i mean, what you hear too.

they're very divided between those who want to try to work out some type of agreement i think those who want to try to work out some type of agreement are playing to trump on the economy and the market they're saying, mr. president, if you have the combination of the withdrawal of the diminishment of economic stimulus at the end of the year and trade issues and the fed going up and housing prices starting to decline, some global growth starting to fall, you're taking a very big risk so i think they're trying to play to his fear that as he comes into 2019 with the democratic congress, he could face a declining economy and the other side is saying, you know, be tough. this is where you have them. that's why i think a pause is the opportunity. it doesn't mean you have a major deal and have taken the pressure off. you just say we're not going to go to 25% for awhile they make an agreement to do something symbolic, buy some soybeans so he gets something to

announce i think that would make sense for him politically but, again, think, you know, there's so much happening with the gm layoffs and the threatening of going to 40% auto tariffs today so the question is, is this a lot of bluster to kind of make it easier to get some more concessions for agreement but there's not going to be a big deal this is only an issue of whether there is a temporary pause that allows them to negotiate and where he can claim some temporary wins in getting that. >> i'm not sure. if you listen to the president's rhetoric and has been fairly consistent he talks about much bigger issues like intellectual property theft and long-term planning by the chinese government around technology and artificial intelligence and, you know, stealing of u.s. technology secrets it seems like there is a potential here for progress if the president continues to apply

pressure on the chinese and as much as you talk about farmer bankruptcies, no doubt the chinese have to be feeling it worse. there's still an export-driven economic model so i am wondering if it's all working and bringing china to their knees where they're actually going to have to compromise on some major issues important long term for u.s. business. >> so, let me explain and first of all let me also say there is one area i agree with president trump on i do think we have to be tough on them. i do think we have to be willing to break some eggs because you're right, there are structuralissues on technology transfers and other issues where we need to make major progress, so i actually do believe -- i do actually support a strong view on china i'm not in the piece at all cost view at all and actually support doing that what i'm saying by a pause, you decide to have a more serious negotiation on those issues and you give yourself some time to