straight ahead it's friday, november 30th "squawk box" begins right now. ♪ live from new york where business never sleeps, this is "squawk box. good morning, everybody. welcome to "squawk box" on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. let's look at u.s. equity futures at this hour it is the last trading day of november check it out you'll see right now the dow futures are down about 60 points s&p futures are down by 5 points the nasdaq off by close to 16 points right now believe it or not we're in this final trading session, and if things don't go south with any major market disrupting news you might get from the g20 meeting, we may just end for the dow, the s&p

finishing november with some small gains. we ended down slightly yesterday. the first three trading days of the week wiped out most of the losses we had seen the previous week we'll see what happens on this friday as we head into the weekend especially with this g20 meeting. let's look at what happened overnight in asia. you will see right now, the nikkei was up by 0.40% hang seng was up by 0.20%. the shanghai was up by 0.81% in the early trading taking place now in europe, you can see red arrows across the board. not massive losses the ftse is down by 0.70%. the dax is off by 0.60%. look at treasury yields. yesterday we ended with the ten-year yielding 3.033% this morning the yield is more compressed 3.015. >> want to get to argentina.

much of the focus of the g20 summit has been between president trump and president xi in about an hour he is set to meet with the leaders of mexico and canada eamon javers joins us now. >> things are in full swing here in buenos aires. within the past half hour the president of the united states met with the president of argentina, the pink house, which is famous for its balcony. they used an ornate greeting room today the two leaders had a handshake and a photo-op they were expected to get on with the course of business here the president is expected within the hour to sign that new trade deal between the united states, canada and mexico. there's been rumbling heres that

the prime minister of canada may not show up for the meeting and may protest in retaliation for some of the steel tariffs put in place. the expectation is that trudeau will arrive and sign but that could be a moment o controversy. the president also announced that he is canceling his meeting with vladimir putin in protest of the activity going on in the ukraine. the president announcing that while he was flying down to argentina yesterday. the kremlin responding with a statement. putting out this statement saying that they regret the u.s. administration's decision here ultimately they say the discussion is important and that they regret it's been postponed indefinitely so the kremlin responding to the president's cancellation what is not cancelled is that dinner tomorrow with xi jinping in buenos aires. that's the focal point of this

summit the question is can the united states and china find some way to back out of the trade difficulties they've seen over the past year. that's an unknown at this point. what experts have been saying is that the best case scenario here in terms of a trade deal is a trade truce in which the two sides would simply agree to stop raising tariffs on one another, and then work it all out over the next coming months no indication that that is in the offing we'll monitor developments here throughout the next 24 hours >> reports are out that peter navarro who had not been on the guest list for dinner on saturday is apparently back on it does that change anything? >> i think it does peter navarro confiis attending dinner with xi jinping tomorrow night. he is seen as the most hawkish of the china hawks in this administration the chinese view him as somebody

who is not working in their best interest though feel they could work better with other members of the administration, so it sends a signal, now whether the signal is the president wants all his people to join in or whether the hawks are in ascendance. it's a fascinating development and we'll have to see what they agree to tomorrow. the president is extremely frustrated he was about a half hour late this morning he was tweeting his frustration about the mueller investigation after the michael cohen guilty plea yesterday the president saying he had done nothing wrong exploring a real estate deal in russia during the presidential campaign. so that's clearly weighing on the president. the president has to handle all of these different topics at the same time. all of these complicated global trade matters, and now the complication of the mueller investigation weighing on him.

>> how much is that investigation related at all to the canceling of the meeting with putin >> look, the optics of the president meeting with vladimir putin after it was reported that he was negotiating with russians during the campaign to open up a trump tower in moscow, those optics would have been bad the president said that the reason he canceled this event was in protest of the russian naval action in the ukraine. take that for what it is he gets po boto both register o those optics at the same time. >> eamon javers, thank you very much >> let's get more perspective on the markets. join us -- joining us now are our two guests you mentioned it, stephanie t

works well because of the words, powell put do we have a powell put? we have bernanke puts, are we seeing something akin to that? >> i do think that what's interesting is there is such a change in tone from powell what's really changed since october 3rd when he said we are far away from the neutral rate then he comes back on wednesday and says, you know, we don't think that we're going to -- we have a much more dovish tone going forward. if you look at the data, there have been some data points that say, yes, the economy is softening. whether it's -- if it's the interest rates and so forth, but what is really interesting is

that what the market has done is sold off 10% and you can't deny that the fed is looking at this and really i think what he invoked on wednesday is what you said, a powell put >> doug, you had similar comments you say he used the dark room analogy a few times, you start bumping into furniture we heard that one time and didn't pay much attention. you don't know where you're headed until you feel your way around does that indicate to you we have no idea about next year? one, two, three, zero? what do we know? >> in my outlook i call it the storm before the calm. think about what the fed has achieved he had seven rate increases. we're at 2.25% fed funds rate. think about that when the president got elected two years

ago. we were at zero rate we had the first rate increase historically speaking everybody was afraid of how we would unwind this unconventional policy he's achieved it that's somewhat miraculous i think the market is missing that he's taken a lot of excesses out, bitcoin dropping, oil prices dropping, the tech wreck. but he is setting the stage for the calm that i'm seeing out in the future, and his indications that we're close to neutral is part of that calm that you should be focused on >> in the past we've seen, you know, we've watched it we watched what we've referred to as crack addicts, they need to get on methadone, over ten years, you know, when qe looked like it was winding down, the market would have trepidations people want zero interest -- any interest rate increase initially

by traders is not going to be taken positively, even if it's for a good reason. it is hard to raise seven times in a year and a half that's like ripping a band-aid off, but he did it. >> right ripping the band-aid off so he did it, and what the market is down this year no, wait, it's up slightly all all-time record highs. traders and speculators, i don't think it's over. i think they'll get whacked. but investors, long-term investors, retired -- they look through this because we have the best economic back drop that i've seen in 30 years >> again, stephanie, claims number yesterday, there's been a couple of -- i don't know how many bad -- not bad numbers, but historically low the trend has reversed unemployment, housing, people are wondering about that

autos. i don't know people don't like it on the face of it, rising interest rates, but it almost looks like there's some evidence that it is having an effect on the economy or not. >> i think the u.s. economy is still in decent shape. there has been some sectors that you mentioned, such as housing and autos, you saw spreads blow out a little bit more recently going into 2019 there will be tough earnings expectations. i think the global backdrop is concerning there's quite a bit of slowing abroad you saw germany have negative gdp growth in the third quarter as well as japan it's our concern that some of the global slowdown can move over to the u.s. but at this point with earning expectations close to 10% next year, we think that's enough to be supportive of the market. there are a number of risks out there. trade, brexit, we saw plummeting

oil prices so there are -- there is some expectations for a lot of volatility we think the economic back drdrp at this point is intact if we see slowing momentum or actually a recession risk coming, we're ready to change our equity allocation >> all right thank you, stephanie doug and stephanie, thank you both before we go, let us -- what do you want >> big breaking news >> do that >> marriott just revealing a massive data breach involving guest reservation databases at its starwood brand marriott said there was unauthorized access since 2014, including up to 500 million guests >> wow >> since 2014 for probably 327 million of these guests the information that was exposed includes a combination of name,

mailing address, phone number, e-mail address, passport number. >> passport number >> starwood preferred guests, account information, date of birth, gender, departure information. >> why did the hotel have all of that information >> as you know, when you go to a hotel, especially internationally, they take your passport >> and they keep that in a database >> they take a copy of your passport this will be very big news for marriott. real question, of course, whoever got access to this information what have they done with it. >> why wouldn't you know the 327 million number or the 500 million number, do a low percentage of where something wrong -- some people did something with that information, 2014, it's four years later. was there anything done with that information. >> we don't know a lot of that stuff lives on the

dark web for a long time >> and not be used >> or sold and you wouldn't know to put more context around this the company saying on september 8th of 2018, just several months ago marriott received an alert for the first time from a security tool. they went back and looked like they discovered there was somebody trying to take the information off their system and encrypt it so this was a calculated decision that somebody had been making it looks like it was one or possibly several parties we should say arnie sorensen saying we deeply regret this incident happened. we fell short of what our guests deserve. >> when did they close on that acquisition? >> starwood? >> yeah. >> that would have closed -- >> three years ago >> yeah, i was going to say two. >> this sounds like it predates marriott and sorensen.

>> i know you hand your passport over when you go to an international hotel. i never thought about them storing that information and keeping it it used to be they would hold your passport, make a paper copy and keep it. it never occurred to me they would keep that information and leave it around forever. it was 2016 when they completed the acquisition. >> so -- the process began -- it was exposed since 2014 is what they're saying but lots of questions. you can see that stock has not moved. >> we don't know if it's traded yet. >> we will keep an eye and bring you more on this developing story. >> why are we -- we're not going to chairs today. >> we are? >> we will after the break >> i'm worried about this. >> what's this >> becky has been following it >> they want to do it now. cnbc did a piece >> on the lettuce contamination? >> not on the contamination. iceberg lettuce prices, up 180%.

so it went from $18 a carton to $39 a carton >> i saw that story last night >> number one, a carton is like a lot of lettuce why am i paying $7 for one thing? the margins are good number two the guys -- have you ever heard of produce business magazine did you ever write for them? i di >> i did not >> they think they're funny. "let us try not to panic." will this topple caesar and lead to the decline of the romaine empire what do you think? >> i don't think this is an overreaction >> you freaked out everyone in my family. >> i didn't do it. it was chef james writing about

not having porta-potties in any of the places where they pick the lettuce. we have never really found a way to track down where you are getting all this food. so what the fda did was to ban all romaine lettuce. they were not able to track it down the industry responded saying, yes, we should do a better job finding out where these outbreaks are coming from. we should be marking our food better i have no problem with that. i want to know if it's fish from china. >> let us tuceabsorbent, too. >> it's early in the morning >> this is a groundbreaking piece from 13 hours ago. this is what i do. >> let me encourage viewers to go to cnbc.com when we come back -- >> have you been eating lettuce. >> i have not. when we return, facebook

under fire another big story. time to discuss that report that sheryl sandberg ordered the company to investigate george soros after he made disparaging comments in davos. you'll recall when this first came out she said she knew nothing about it as we head to break, a look at the premarket winners and losers in the dow

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facebook and google during a speech in davos. sandberg wanted to know if soros stood to gain financially from the attacks. a facebook spokesperson tells cnbc that the company was already beginning researching soros' finances as a prominent investor before sandberg's inquiry. >> there's a distinction, this all gets muddied with these different stories. >> i agree with you. >> oftentimes when anybody comes out publicly against a company, people inside the company, especially when it involves a publicly traded company says what is their motive and incentive. i don't know if they look into their finances in the classic way. >> they look to see if there's a short position in the stock. >> find out what that is about that, i think, is probably fair game it's probably what most companies would do in that kind of circumstance. >> agree >> there's a distinction here

between what later took place with the company hiring this public relations agency. >> lobbying group in washington. >> that then started doing other work to try to effectively malign george soros and connect this to anti-semitic approaches -- >> agree we have not discussed this at all. i agree with you 100%. i was just reading this story this morning before the show started. i was trying to find what the fine details are on it that's the difference. however she has had to backtrack saying she didn't know about this some of that paperwork came across my desk maybe i said this. i agree with you there's a distinction between what's happening and that. >> there's more than what was dribbled out, and in the very beginning i know nothing about nothing. it may be she didn't appreciate what this team was doing now there was evidence she herself was interested in george soros when it sounded like in

the beginning she -- >> that's the problem. not having this information up front and not knowing what happened with it i agree, trying to find out whether somebody who is trashing your company is a short seller is commonplace >> i hope these three entities can get back together. >> which entities? >> watching soros, facebook, the "new york times" all at each other's throats. >> oh. oh >> it's trouble in paradise. i'm hoping everybody is get along. that would be like breitbart, drudge and fox arguing such a vonstrong, solid alignme. >> who is reporting this stuff >> you're eating your own. >> it's not your own when you're trying to report -- >> i can't believe you turned on facebook like this i'm hopings this a favorable

outcome eventually >> i will say this, by the way, you said the "new york times." i think that facebook has -- one of the reasons it has the animosity or the confrontational approach that the journalism community has taken to facebook -- i hate to say this -- not just because of this incident, but it's made worse by the relationship that facebook has had with the media >> as a competitor >> as a competitor, as a potential media partner. if you understand the dynamic -- the dynamic between facebook and -- this is true of google, too the media at large >> like a frenemy. like a frenemy that's created more friction for these things >> facebook has an advantage >> as you color any reporting -- i'm not suggesting in this case it is with the times and these stories, but overall it's made it harder.

>> facebook has an advantage, they can just publish anything they just recently started hiring people to make sure it's not totally made up. think if the times didn't have to verify anything for a while, facebook had a better business model. >> not investigating anything. >> right it's not our stuff someone published it now how many people have they e. >> thousands of people >> thousands of people to see whether what they're printing is factual. i don't know you know how i am. i look at the periphery of it. i couldn't help but think it pains me >> i know you think facebook is the bastion of liberal -- >> i do. >> you know the most popular stories shared and things is

breitbart, drudge -- >> all my peeps. that's the irony coming up, more on this data bridge we're saying starwood now. it may have been before marriott bought starwood. we'll delve into that. i want to know, if it's 500 million people, someone's identify must have been stolen and used for something that stock is trading lower. the showdown between president trump and president xi is scheduled for tomorrow night. we'll talked about the potential outcome and the impact on trade and markets. at the top of the hour, our special guest will be minneapolis fed president, neel kashka kashkari he's been dovish for a while he will probably be animated he'll tell us why he wants the fed to hold off on more rate increases. each day our planet awakens with signs of opportunity.

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welcome back. you're watching squk sq"squawk " live from the nasdaq market site in times square. good morning marriott has revealed a data breach involving the guest reservation database at its starwood brand marriott says there was unauthorized access since 2014 with hackers getting access to personal information that in some cases included payment information, marriott bought starwood two years ago up to 500 million guests may have been affected i was thinking, wow, that's a

lot of guests. law enforcement is still investigating. that's over a period of years, repeats. that's a big number. german police raids of deutsche bank's headquarters in frankfurt and other offices continuedt for a second day. authorities are investigating money laundering allegations linked to the panama papers. two employees are alleged to have helped clients set up offshore firms to launder money. and china's manufacturing sector stalled for the first time in two years. the analysts expected an unchanged reading. that's probably not helping sentiment. overall, u.s. equity futures at this hour, the dow opening down about 74 nasdaq down 17 s&p indicated down by 6. as the long-awaited g20 meeting gets under way today, we

turn to the hottest topic on the ayend dgend agenda leland miller joins us, and michael sizas. everybody opining and trying to handicap what will happen saturday night the addition now of peter navarro to the guest list. does that change the dynamic there seems to be two or three different versions of what people are expecting i think i know what he is going to say so you get to go first, michael what do you think will happen? >> i would say we're not terribly optimistic, from the perspective of investors we frame it like this, will you get something coming out of this meeting that tells you you are going to -- meaningfully closer to something that will deescalate trade tensions in a year where going into 2019 we already expect that there will be a meaningful growth slowdown because of fiscal stimulus rolling off and trade tensions, if you believe the imf, could

take another one percentage point off of gdp, and 1.5% off of net income. whether there's atemporary pause here is less important than did something come out of the communication that tells you there was tangible, credible progress on the key sticking points around s.o.e.s and industrial policy. we're not optimistic that will happen these are big issues that take a long time to sort out. so therefore the gravitational pull, whether or not there's a pause, it's towards further escalation the eu is a good analog where you didn't address those sticking points, even though trump and juncker shoot hands on it, now we're back to talking about auto tariffs again >> i assume that both of these guys, meaning president xi and trump have briefing books, there's a plan, if he offers this, i can offer this there's an agenda here can either of them effectively pull an audible during one of these dinners and actually -- or

is this whole thing so scripted in advance >> no, that's the major risk the problem here for investors is president trump may call an audible. we think there's a good chance for a cease-fire they're meeting under a premis s of a deal already structured it's up to president trump to say yes or no at the dinner. i think the chances are he moves forward on it, we see a cease-fire and i nthink it is a big deal none of these issues will be settled in the short-term. if you have a cease-fire, that's a major pivot point. >> a cease-fire and an agreement that you won't raise tariffs to 25% in january or no more -- >> exactly no more tariff escalation during the framework negotiation. the deal that would come would simply be a down payment from xi in return for a halt on tariffs.

the reason it's such a big deal, if it doesn't happen f we keep going forforward, this is a biny event. you will have a cascade of terrible news. you will have a tariff cliff on january 1st and then the next tranche implemented before lunar new year this is terrible news for investors. so this is a maker investor thing. >> if this is substanceless, how does the market really react i could see a quick pop and then sort of this moment where people say, okay there will be remarkable uncertainty still because we don't know what they'll do >> if you remove two major blocks in the same week with jay powell's peach earlier this week and not looking at additional tariffs, those are two big issues >> except i think they'll go to

the end degree on what the tariffs ultimately look like right? >> okay. so there's a lot of noise. so the look through is do you make any real tangible progress, not just did you have a cease-fire if you didn't make tangible progress, then investors have to continue to worry about that escalation going forward i don't disagree with the idea that having a cease-fire is an important signal it tells you both sides are still talking and are committed to talking, but it doesn't tell you they're closer on those substantial sticking points. in some ways there's a fundamental issue at play here that is deep, which is is there a way for very different economic systems to trade with each other in a way that they both perceive as fair. so it's good that they'll keep talking about it but until that is addressed, i think you'll not get this lingering risk of further escalation >> if apple is a proxy for all of this, do you want to own it

now? >> you're asking the wrong guy >> not on a fundamental basis or value basis, but on the basis of here is a company that made a huge investment in supply chain and future in a country where we have goon from a cooperative stance to a con front tangsfrone >> there's a supply chain at the core of that, which is not just an apple-specific story. companies have learned supply chains need to be more diverse even if we get a pause in escalation here. there's costs that have been embedded that won't come off soon so the cost of moving supply chains, the costs have been embedded by current tariffs, those eroded earnings and supports the thesis that morgan stanley has that we will dip to single digit earnings growth last year. >> final word. >> i would buy apple if you think there's a cease-fire, your stock will get juiced 3% in two days.

there's no medium-term solution or long-term solution to these big china issues there's a short-term deal. if it happens, markets will like this for the short-term. >> days, not weeks >> maybe weeks if they have a deal, this would forestall tariff expectations. >> he's a beige book buy and you came up with 3%. that's your call on apple? >> don't quote me on that. it wasn't 2.5% or 4% apple was 230 went to 172. now back to 179.55 down from 230, all the way to 172. i don't know if it's only regained about 7 or 8 points if you like apple long-term, if you think that there's some noise around it, it's not too late really. >> leland says 3%. >> if the call is right, tweet it out next week say this is the best call i've

seen >> this guy follows china and beige book that's awesome >> we'll see >> leland miller, thank you. thank you both when we come back at the top of the hour, minneapolis fed president neel kashkari will be our special guest. he'll join us to talk about his objection to more interest rate hikes. at 7:00 a.m., president trump is expected to join the presidents of mexico and the prime minister of canada to sign a trade deal replacing nafta we'll bring you that event live from the in argentina stay tuned.

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welcome back. time for the executive endge. bitcoin volatility is returning. it plunged as low as $3,400. it rebounded, but now is down again. under 4,000. last night i spoke with jay clayton about the challenges he's having trying to regulate the world of cryptocurrencies. >> we tried to get the word out

though the trading looks like the trading you would see on nasdaq or on the new york stock exchange, these markets do not have the same kind of safeguards for you. we worked for 50, 60, 70 years to try to prevent manipulation in those markets, try to prevent people from taking advantage of the small player it's what we do. the markets that these things originally trade on, they didn't have those safeguards. i made it also clear to people that if you're sending your money offshore, and something goes wrong, there's very little we can do to get it back as a practical matter >> so let me ask you about that. >> i hope people heeded that i hope they didn't use their credit card to buy some kind of offshore token without really, really thinking about it >> you know, i have to tell you, i had always thought that the next inflection point for crypto would be a form of positive

regulation from the government, that something would be coming after that conversation i was less inclined to believe that actually -- at least on the s.e.c. side, there's something coming that actually what has to happen is not that the government or the law has to shift to work with crypto, but that effectively what he was saying is that crypto will have to change technology to work with the law >> you don't think that's an oxymoron >> what do you mean? >> positive regulation >> some crypto guys have wanted it >> just to prevent the worst case scenario. where the hell was that? what is that >> it was the "new york times," times talks. >> your other job. did you get paid for that? what time was that we did it between 6:30 and 7:30. >> you were conducting a panel did you get paid for being the moderator of that? >> no, but i -- >> would you say yes to something ton?

>> no jt you kn >> you know what's trending? >> #fryaya. >> wfriday >> we have to go coming up, the amazon effect a new report from bane shows customers who signed up for prime spent 16% more per year their firstyears of enrollment let's look at another shot there of marriott. that stock down over 5%, closing in off of 6% this is after a big disclosure this morning that there was a breach in starwood reservation systems going back to 2014, as many as 500 million customers were involved and information

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welcome back, everybody. amazon typically extends its dominance during the holiday season converging browsers

triple the rate of other retailers. let's see how this season is shaping up for the e-commerce giant. joining us now is a retail expert and partner at bayne and company. thank you for being here >> happy to be here. >> let's talk a little bit about what the amazon effect is. that's one the numbers jumped out at us. the conversion rate they're able to do, what happens when you buy at prime membership. is this retail giant moving towards greater domination >> well, you know, amazon started this year with 43% share of e-commerce. and our belief is by the end of the year, half of all e-commerce sales will be owned by amazon. to us, it's a striking number. if you sort of step back and get some perspective on amazon, their focus on the last two months of the year is truly maniacal if you think about the conversion rate that they have during the holiday season on top gifting items, it's 14% to 18%

that's a 5% step-up from the rest of the year compare that to traditional retailers who have only a one-point stepup that gives you a sense of how laser focused amazon is during this season. >> why is that why do you think they're able to convert so many more purchases what do they do? >> yaeah. we believe there are four elements to the amazon value proposition that makes them stand out in holiday they have set the standard for all retailers when it comes to speed. this holiday they've added 3 million skews that will be available same day they are giving non-prime members the ability to get two-day ship that's become the expectation for consumers. and it's very hard for other retailers to economically match that the second thing -- >> that's got to be huge when i go online and start shopping around, a lot of other places tell me it'll be there in

five to seven days and allow for three business days before this even gets processed. that makes you not trust it's going to get there in time for the holiday. >> that's right. and for the holiday, time is everything as you point out. that's really something people at amazon built confidence that they'll get something to you on time in holiday season, that's critical the other thing that amazon has done -- and they've done this throughout the year is really double down on private label so they've added 130 brands. and their private label products, part of it is price. it's compelling price. it's high quality. and importantly, you can only get it at amazon so from a consumer standpoint, that's also quite compelling >> let's talk really quickly about everybody else, though, too. mall traffic was down by some basis points i know what you saw it was up at the a-level malls. but if you look around, some others found there weren't as many people in the stores at

large. what does that mean for traditional retail >> as you pointed out, the data we look at does show about a 4% stepup in traffic in the first three quarters of the year i think there's a lot of variation by quality of real estate and type of retailer. if we think about if we step back and see how holiday is going to look for the rest of the market, we have reasons to be optimistic. the macroeconomic environment is strong you've got robust wage growth. you've got pretty stable and strong consumer confidence the traffic data would say that as well. if you look at e-commerce sales in total, amazon and the rest of the world between cyber monday and black friday, what we're seeing -- we're seeing sales up 20%. yes, amazon is a big part of that but i think others are also going to benefit >> thank you very much we really appreciate your time today. >> thanks. all right. coming up, our special guest at

the top of the hour, neel kashkari he is minneapolis fed president. he's making his way to the set to talk about his objection to the fed's rate path, the u.s. economy, and president trump's criticism of his boss jay powell we're awaiting president trump and the leaders of mexico and canada set to sign the new trade deal at the top of this hour on this friday. we'll be right back. comcast business built the nation's largest gig-speed network. then went beyond. beyond chasing down network problems. to knowing when and where there's an issue. beyond network complexity. to a zero-touch, one-box world. optimizing performance and budget. beyond having questions. to getting answers. "activecore, how's my network?" "all sites are green." all of which helps you do more than your customers thought possible. comcast business.

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trade is in focus as the g20 kicks off. the latest from buenos aires is

coming up. >> minneapolis fed president neel kashkari is joining us for what's to be a news making interview. plus marriott said its starwood database was breached details straight ahead as the second hour of "squawk box" begins right now live from the beating heart of business, new york, this is "squawk box. >> good morning. welcome back to "squawk box" here on cnbc i'm andrew ross sorkin along with becky quick and joe kernen. take a look at u.s. equity futures at this hour see how things are setting themselves up for the morning and perhaps ahead of what may turn into a fascinating weekend. dinner between president xi and president trump. but right now it looks the dow

would open off 87 points and the naz back looking to open off 20 points. trade in focus this morning. the stage is set for negotiations with china and others we are expecting the president, in fact, to sign a new trade agreement with mexico and canada at any moment. and we will bring you that live as it happens. sticking with trade, the ceo of calvin klein parent company pvh sending a warning to consumers and investors expect a price hike if tariffs go to 25%. and game over for gamestop will the push to digital games make the store the next blockbuster video? breaking news this morning that's making a lot of headlines and maybe a little bit of panic as well. marriott has revealed the data breach at its starwood marriott brand said there was unauthorized access since 2014 with hackers getting personal

information, not only payment information but also your passport information many hotels, of course, internationally. especially when you go internationally, they take your passport marriott bought starwood two years ago. law enforcement is still investigating. the company has apologized, says they're working to remedy the situation. of course big questions about liability and everything else. all right. let's get to our "squawk" news maker of the morning neel kashkari. given the events of the past week or so and going back to october to chairman powell's comments, all of it in light of your comments that go back -- i'm trying to think how far back it goes where i think there was a time where we -- your comments or your analysis was met here with some skepticism >> i can't imagine that. >> it was. i wouldn't go so far as to say eye rolls. but you have been more dovish

than, perhaps, any of your colleagues at the fed at this point right? >> i think jim bullard and i -- >> you and jim >> you were before bullard, even >> is it 18 months is it a year what is it for you >> i've been in the fed now for three years. three years since i've been at the fed, we have been surprised by the labor market. we keep thinking we're at maximum employment and then wage growth is tepid. and then headline unemployment rate drops further inflation has been well under control. and 200,000 jobs a month like clock work are being created by the u.s. economy my basic message is if the u.s. economy is creating 200,000 jobs month after month, we're not at maximum employment that's the continued surprise that's been leading me to take my policy position >> so it that we all bought into the baby boomer -- that that's why the people that are out of the workforce -- everyone uses that and says it's not that

they're -- it was a 40-year low. >> right the aging workforce -- >> that was the excuse, but there were a lot of 25 to 54-year-old people that were in there that you can't write off as baby boomers. is that where we got the 200,000 every month? >> that's part of it but the 3.7%, that's the headline unemployment rate, that's been a good proxy but the great recession was so devastating, it pushed a lot of people out of the job market and they are only slowly coming back in so we don't know if wage growth comes back in, i don't know how many more are coming back in we've seen wage growth pick up until we see inflation pick up, let's let the job market continue >> we got to get ready for the next time and build up some dry powder so we can cut rates

but if all you have in the strong economy, and for some reason there's not the fear or the prospect of higher inflation, i don't see why you just arbitrarily have to raise rates just to do it if you're not seeing any inflation >> exactly then absolutely. raise rates. >> how many of these increases would you not have done? >> i think we should be normalizing rates. >> we don't know what normal is now. jay powell changes his mind based on -- >> there's a lot of uncertainty. i think we're close to neutral not there yet, but close that's what i said in my op-ed >> that's what he said after he said we're far, far, far, far, far, far away from -- >> that's not what he said. >> there are huge ranges of uncertainty around these things. look at data, inflation, wage growth, and job growth

all of that says there's still slack. >> neel, the problem with that is critics say every time the fed has gone to raise rates or stop inflation, they've waited too long if you wait until you see the whites of inflation's eyes, it's too late in the game the fed misses it. what do you say back to those critics? >> inflation expectations are so anchored because of the political independence of the fed. because the fed has done a good job over the last 20 or 30 years, that to me is something that's enabling this economy to continue to strengthen enabling the job market to continue to strengthen without inflation taking off and so, you know, let's let it continue >> is historically what has caused us the most problems? being behind the curve on inflation or going too far and strangling the economy what's more likely what are you worried about >> i'm more worried about we raise rates prematurely when the job market still has slack and wage growth hasn't picked up

yet. >> that's been the historical precedent recently >> we know -- i believe certainly that if the fed were to raise rates dramatically, we could cause a recession. nobody wants to do that. >> have you seen anything yet? do the unemployment claims, did that catch your attention lately or housing >> housing is catching my attention. autos is catching my attention we know interest rates affect these sectors of the economy it is already affecting the economy. >> when you hear the president say the fed and the move on rates is a bigger problem than china -- by the way, do you -- does china enter your calculation? >> china's the big uncertainty it's hard for us to game out what does a trade war look like? how does it manifest itself in the stock market or in investment with businesses that's the thing that's very hard for us. >> do you guys talk about that >> we do we talk about it a lot what we're hearing from our contacts, you know, in my district we're seeing a lot of ag sectors under pressure. the tariffs are making it worse for many of the farmers. that's something i hear realtime

in my district >> just in terms of the viewpoints we get on the economy depending on who you talk to, depending where the pain points are, you'll hear there's a lot of concern when you look at housing, agriculture, car sales. or you'll hear the flip of it which is this is an economy that's in rip roaring condition. things are going great is there a way to take those two views and say they're right? >> overall the economy is doing well 3% real gdp growth, that's pretty healthy given our demographics and population growth levels. but there are sectors of weakness and it's what you'd expect in a rising rate environment. >> so you're mad at trump. he criticized powell you don't like that. but you're saying the same stuff. again, it's style not substance with him that you have a problem with he was saying exactly what you were saying and you don't want him to say that to powell?

you were saying the same thing he was saying about raising rates. >> hold on i haven't said anything -- i never commented -- >> do you think he ought to be trashing powell in public like that >> i think fa if the american people want low interest rates -- think about this for a second today we have three times as muc much debt and the 10-year is at 3% the difference is fed independence if the people want low interest rate, double down on fed independence >> although people say the reason we're there is because of interest rates in europe if you look at the german bunds and what's been happening. >> central bank independence has been one of the hallmarks in advanced economies around the world. >> it definitely builds confidence from business leaders. if you looked at the real reason we're seeing rates so low with a great economy, you have to say

it's coming from the comparison. like, where's your money going to go? >> i don't agree i think that real rates around the world have declined for a lot of reasons they've declined for technological reasons, demographic reasons, productivity but also i would say the biggest factor all around the world in advanced economies, it is that politicians have said we need to keep monetary policy separate. >> so should the -- okay so he's in a different position. he's a president of the united states but different people on the fed go out if someone has a divergent opinion, you're -- it's welcomed at the fed for them to go out and share it like you or bullard. jim cramer has jawboned or made comments about fed moves that he thought might not be proper. but when the president does, does that threaten the independence of the fed? no one thinks he's going to come

in >> politicians on both sides make comments about what they would like the fed to do. >> so you don't have a big problem with that? >> no. >> i thought you did it said in the notes you had a problem. >> all of our colleagues are focused on the data. >> people say he wasn't quite as focused on the data. >> jay is very focused. >> so you're going to do how many next year if you had to guess? >> i never make predictions. >> if you say it right now, if you tell us how many, i will watch it come up right here on the reuters wire >> that's why i never say it. >> smart man >> do you think between zero and ten could be good? >> it could be between zero and a higher number than zero. >> okay. so it could be zero and it could be one, two, three, something like that. i mean, knowing you, you'd maybe do december and stop, right? >> i wrote an op-ed six weeks ago saying we should pause right

now. >> really? you still feel that way? you just said it >> jay powell on wednesday talked about his anxiety around corporate debt leverage levels you've talked about leverage before you talked about the grand risk behind all of this and whether keeping rates there -- >> it's a poor tool for these risks. i'll give you an example if the fed had raised rates in '96 to stop the market from going up further, it would have been much more costly than when the tech bubble burst in 2001. >> so that's like a chuck prince, while the music is playing you've got to dance. >> no. you've got to make sure you have enough capital it's using the right tool for the right job. monetary policy is not the right tool to deal with that >> neel, jim cramer said the

same thing a couple nights ago on "mad money. he said what the fed should do is regulate these areas and use that tool in the tool box. if you look at the non-bank areas. >> we have it set to limited regulatory powers. the fed has a lot of regulatory powers over the non-banks it's a lot murkier on what tools we have or the s.e.c. has, et cetera so that's something we do analyze, we pay a lot of attention to but we do have limited tools on what we can do about it. >> does that concern you >> it does absolutely >> do you think either the rate increases that we've seen or the october judy woodruff interview had anything to do with the selloff in thinks like bitcoin or oil or the stock market do you think there's sort of -- do you -- when you stay at zero for so long, are asset bubbles forming? and when it goes the other way, is this to be expected you see these things come back to earth?

>> i think whenever you see liquidity coming out of the market, you are going to see -- it's expected you would see some market response. the thing that's unclear is think of quantitative easing once we lay out our road map versus how much actually effects -- how many affects over time i think janet yellen and jay powell have done a great job of saying this is how the balance sheet is going to wind down to minimize uncertainty but has all of that been priced in i'm not sure >> do you think that for years when we were at zero that that sort of boost really did mask weakness in the overall economy. say it was 50% zero, 50% real economy. if you take that away now, it's real economy is that part of the problem now?

>> well, long-term economic growth does not come from central banks. it comes from population growth and productivity growth. that's where the fact of the matter is our demographics are what they are. our workforce isn't growing very quickly just because of demographics and slowing immigration. we can model that out. and then there's the productivity piece >> are you pessimistic about both of those components and that's why you think we should stay low >> no. i'm saying we should stay low -- this is a cyclical story cyclicly i'm focused on how much slack is in the labor market i think there's still slack. >> where are we in the cycle then >> well, we don't know i mean, we don't know how long these cycles can go on >> do you think productivity can make up for the population growth you don't. so you don't think the run rate is 2%? >> probably. i don't see any everyday that longer term unless we do something about our population growth rate, i don't see any evidence of why the u.s. economy

will grow higher than 2% over the long-term. >> it grew 2% when we had a lot more regulation. now we've had the corporate tax cut and the deregulation and you still think the best we get is 2% was that aided by 0% rates >> it was. correct. >> that's why it happened. so that would be a win to do 2% without 0% interest rates would be a win >> i think it's too early to know if it's leading to product investments. i think it's too early to know that we know there's a keynesian effect of putting more dollars into the economy, more fiscal spending but is it going to lead to a higher long-term growth rate i think it's unclear so far. >> we go back to the balance sheet for a moment there was the story earlier this week that said the treasury secretary steven mnuchin had been feeling people out about the idea of tightening monetary supply by tightening the balance sheet, getting rid of the --

liquidating faster rather than raising rates. what do you think about that entire argument? because it's one that's been put out there by other people too. >> i think quantitative easing and expanding the balance sheet was a big move i think it was the right thing to do but a lot of uncertainty my view is we want to minimize the uncertainty on the way down. that's what janet yellen and jay powell have done so i would be low to change those plans we've communicated to the market. we have a lot more confidence and experience in using the federal funds rate to manage the economic cycle than to use the balance sheet to do so it's not something i would be in favor of >> what does happen when you tighten up the balance sheet, when you roll that down a little faster only because we know that raising rates hits main street pretty hard if you're bringing up mortgage rates, bringing up auto loans those are the types of things felt in other places who feels it when you tighten the balance? >> i think the exact same people

we move the federal fund rates up and down. it affects mortgages and auto loans. if we just manipulated the balance sheet and long rates directly, it would also affect auto loans and mortgage rates directly >> it's just a less clear way of doing it >> is there anything to the notion that the fed missed opportunities at some point in the past when it would have been easier to extricate itself i have people tell me that all the time we shouldn't be raising now, but we should have raised a couple years ago. is there anything to that? >> no. it's we don't like low rates >> is there anything to the notion that the roach motel notion that the reason we're having problems now and suddenly we can strangle an economy at 2.5% is because somehow we stayed too long? >> no. >> and we didn't let prices go where they should have gone. so we're not having trouble -- we checked into the qe roach motel and can't get out. there's none of that >> it's the earlier conversation

we had why are interest rates around the world and advanced economies low? it's not because of banks. it's because of the demographic factors -- >> nothing to do with staying too long >> all central banks are doing are managing interest rates around this neutral concept. but the neutral rate has been dropping for 30 years. that's not because of short-term movements. >> you're definitive about that. >> i am. >> i'm upset at 2%. >> i know. >> no, i think that's going to create a real problem. >> wait. what do you mean >> that your gdp expectation is long-term 2% >> i'm not disagreeing with you -- >> inflation at 2% -- >> no, but we built our entire tax program and everything else around a number that's significantly higher than that if you don't hit those numbers, you have a larger problem. >> we need our workforce to grow we need population growth and we got to figure out how to do that >> that's an argument for immigration reform

>> you didn't worry about the $10 trillion from the last guy >> i think they were two totally different circumstances. >> really? >> one in the middle of a financial crisis >> he might agree with you on that, but i don't. you agree with him there >> that we should be upset at the debt today when we took out ten in the middle of the financial crisis >> he rammed through obamacare without a single -- you weren't even doing -- talking about cash for clunkers again >> let's go back to immigration reform this is an argument for immigration reform, that you want to build productivity numbers. >> if you want to grow the economy in the long-term -- look at japan japan is trying to subsidize fertility to grow their population the u.s. has a huge advantage because people want to come here so i actually think immigration

programs that feeds our economy, that meets the needs of our economy is the single best thing we could do to boost our growth rate over the long-term. >> i've got a question on a totally different topic. last night i was talking to jay clayton. we were talking actually about christine le guaagarde that made comments recently that central banks should consider digital currency this was the first time i heard someone of her stature say what the fed and others around the world should be doing is issuing their own cryptocurrencies what do you think of that? >> i don't even know what that means. i don't even know what a fed virtual currency means i mean, what is a -- how is that different than the $10 in your paypal account is the $10 in your paypal account, isn't that a fed cryptocurrency that's already in your account or in your online checking account >> that's an interesting perspective. >> or she's saying we should

have a -- this ledger, open ledger system for the federal reserve. but what is the actual problem we're trying to solve? and how does a fed virtual currency solve it? >> do you have conversations about cryptocurrency and bitcoin and things like that >> we do we pay attention to it i get asked about it a lot when i give town halls. especially young people want to talk about it. >> do you, jay powell, and the rest of the group, you know, when jim bullard's around you say there's this thing going on, what do we think of this >> it's over coffee. it's not been a topic at the fomc i've been part of >> you're sad. >> no. it's fascinating to know they're not having that conversation. >> you're not talking nearly as much about it as you used to >> we're talking about bitcoin like crazy >> he's been at two conferences this week. >> conferences but lately it's come down to $4,000 -- >> a i'm fascinated by the volatility of it >> nice way to put it.

>> thank you for all your time i think i'm very clear on a lot of things now. which is good. that's what we look for. >> i appreciate that >> clarity you know what i mean breaking news now from orch tee that the president is about to sign a trade deal with mexico and canada let's bring in eamon javers. you don't get to listen to everything we say, eamon, but bringing you in on this fri-yay. that's a new one for you, javers instead of week-end. but i don't know if -- the weekend's not really coming for you this weekend, is it? >> no. we're working this weekend but that's all right it's still the weekend >> still the weekend what's the timeline? we're just looking at some flags there. they're not -- >> yeah, we're waiting for the official signing ceremony here for the new trade deal between the united states, canada, and

mexico we expect to see the three leaders take to the podium there any moment to do the signing we'll hear some remarks from all three men. one of the things to watch for here, joe, is justin trudeau there'd been some scuttlebutt he might not even show up for this signing as a protest of the tariffs the united states put in place. we expect that justin trudeau will step up to that podium there in a moment. and we will see him, but watch for a potential no show. if he sends other official instead to do the signing, that could be a dramatic rebuff to president trump who is, of course, not entirely popular in canada and also enrique pena nieto was award eing an award to jared kushner in the trade deal.

pinning the order of the aztec eagle onto jared kushner that is a very high honor, indeed the previous winners of that order include nelson mandela and the queen of england awarding kushner that order has been controversial back home in mexico been reading some press coverage of that in mexico. one pundit called it a kick in the crotch for mexicans for pooen pena nieto to give that to kushner. it's an unpopular gesture among some in mexico for the outgoing president to do that this morning. we just saw that ceremony of pena nieto and kushner saying nice things about each other and the way they worked together to get this deal. kushner saying pena nieto was always willing to put the interest of mexico first so pena nieto leaving office now on this note where he's very

much doubling down on this trade deal there are dramatic politics involved for all three leaders here as we watch this ceremony unfold this morning. >> yeah. and it is unfolding. because they have now entered the room, eamon. you have a monitor here we go >> justin trudeau is there. >> he is let's listen in. >> thank you very much we're gathered together this afternoon for a very historic occasion the signing ceremony for a brand new trade deal the united states, mexico, canada agreement so important i'm honored to be here with president enrique pena nieto become a great friend of mexico and prime minister justin trudeau who's also become a great friend it's been a battle and battles sometimes make great friendships. so it's really terrific.

with our signatures today, we will formally declare the intention of our three countries to eplace nafta with the usmca a truly ground breaking achievement, modern day agreement. i want to thank u.s. trade representative boblig lighthize and his team for their tremendous effort and the efforts they've made throughout all the last almost two-year period thank you as well to jared kushner, mike pompeo, steve mnuchin, and larry kudlow for their hard work and untiring devotion throughout the negotiation process. peter navarrnavarro, thank you h for the work you put in. and so many others the usmca is the largest, most modern and balanced trade agreement in history

all of our countries will benefit greatly. it is probably the largest trade deal ever made also. in the united states, the new trade pact will support high paying manufacturing jobs and promote greater access for american exports across the range of sectors including our farming, manufacturing, and service industries as part of our agreement, the united states will be able to mark in the access to canada and mexico and greatly expand our agricultural exports something we've been wanting to do for many years. this is an amazing deal for our farmers and also allows them to use cutting edge biotechnology and eliminate nbarriers also new measures to ensure fair competition and promote high wages and hire wages

the u.s. autoworkers are a beneficiary. at least 75% of our automobiles' content must be manufactured in north america. and 40% to 45% of automobile content must be manufactured by north american high wage labor in order to gain preferential access to our markets. this should help stop auto jobs from going overseas and bring back auto jobs that have many left many, many jobs are already planning to come back. many companies are coming back and we're very excited about that this landmark agreement includes intellectual property. also contains robust new provisions on digital trade and financial services and most ambitious labor protections ever placed into a major trade agreement anywhere at any time

we have dramatically raised standards for combatting unfair trade practices. confronting massive subsidies for state-owned enterprises. and currently if you look at it, currency manipulation that hurt workers in all three of our countries. the currency manipulation from some countries is so intense, s bad it would hurt mexico, can a canada, and the united states badly. these new provisions will benefit labor technology and development in each of our nations. leading to much greater growth and opportunity throughout our countries and across north america. in short this is a model agreement. and this is an agreement that fist and foremost benefits working people something of great importance to all three of us here today

i must say pena nieto and prime minister trudeau, we've worked hard on this agreement it's been long and hard. we've taken a lot of barbs and a little abuse we got there it's great for all of our countries. thank you for your partnership throughout this process, this new agreement will ensure a future of prosperity and innovation for mexico, canada, and the united states. i look forward to working with members of congress and the usmca partners it's been so well reviewed, i don't expect to have much of a problem. to ensure the complete implementation of our agreement. enrique, i want to thank you on a personal note and wish you the very best. this will be your last day in office so that's a very auspicious day when you can sign something so important. but we really do appreciate it

i think i can speak for justin when i say that. [ applause ] we both agree he's a special man. he's done a good job appreciate it very much. so i just want to congratulate you on ending your term in office with this incredible milestone. it is an incredible way to end a presidency you don't see that happen very often. i look forward to working with president-elect for many years to come. our relationship, i know, will be a very good one we've had great conversations. i think we're going to have a great, great relationship. and i would now like to invite the president and the prime minister to say a few words and perhaps we can start with justin we appreciate it very much thank you. justin, please

[ applause ] >> good morning. thank you all for being here thank you to presidents trump and pena nieto thank you for pulling this event together enriq enrique, this as donald said on your last day in office, it's a wonderful pleasure to see you and to be here on this historic moment [ speaking french ] >> we are going to continue to monitor the president and

trudeau's speech right now meantime, we want to welcome ambassador kemet under president george w. bush we've of course been listening to the president but this is just a precursor to what is confidence a main event in terms of the conversation the president is going to have during dinner with president xi of china what is your expectation on what's going o happen during that dinner? >> i don't think anybody knows i think the president needs to address those concerns most important to the u.s forced technology transfers, ip. president trump tends to make

his decisions at the last moment i'm not sure he yet knows what he is going to decide. but the fundamental fact is i think we're at the point that the only two people who can make the decision on where this is going to go will be meeting tomorrow night >> because you have been inside meetings like this before and maybe this is a different circumstance, there's an -- to do what we've been describing as calling an audible to try to make a deal. my question has actually been around whether we think that president xi could, quote, unquote call an audible given just how structurally scripted these meetings are and all the preparations that go into them >> you're right, there's a lot of structure whether it be the g20 or the important bilateral meetings on the margins of the g20 really quite structured. they have a whole system of sherpas who take you to that point. at the same time, you've got in

the end leaders who make decisions. i do think xi could call an audible. i think he is powerful enough in their system he could come in with a very well-prepared, very well-structured agenda depending what he hears from the president, he could also call an audible. >> what would be a surprise for you? >> i think the surprise would be if the chinese were willing to move on those and perhaps some others we've seen indications on around united express, allianz that suggests they've gotten the message they need to open their economy a bit more what would be a surprise is if he comes across those areas. in the position of having at the very least to delay the imposition of higher tariffs on the existing products and maybe even delay the new tariffs >> we talk about intellectual property all the time. it feels like on that particular

issue, deals have been struck before attempts have been made on that issue. and even if a, quote, unquote, new deal is struck whether it just turns into lip service. >> andrew, that's a very, very good point i've dealt with the chinese and intellectual property issues all the way back to reagan i think intellectual property has become an even more important issue. and i would say that intellectual property theft is one of the few things that unites republicans and democrats, congress and white house. and the chinese have got to get the message they're not going to be able to continue with their ip theft if they want any kind of nor central trade relationship with the u.s. and interestingly, you're seeing the same concerns in europe, australia, and elsewhere >> ambassador, there's a theory out there that i've heard rep t repeatrepea repeated several times that maybe intellectual property is an area the chinese are will be to see more eye to eye on us because they finally have their

own intellectual property they want to protect as well. do you think that's a legitimate theory >> i hope they start to see it being in their interest to live up to the global rules on intellectual property protection i don't think they're there quite yet. if you take a look at the 2025 plan that they've laid out, they're looking for leap aheads in the intellectual property unfortunately right now i think part of that game plan includes indigenous development, forced tech transfer, but also ip theft. i think they're moving but not quickly enough >> ambassador, again just going back to the sort of scripted nature of these things and just the practicality of what happens when you're in the room, there is a sense in the market place right now that you could get some kind of hand shake deal it's possible the markets could move on that unless you think it's already baked into the way the stock market is indicated thus far but then once people sort of look at it all, they'll say

there are still details that need to get worked out how many details can actually get worked out and signed off on in the moment? >> in the moment, i think a relatively small number. what you hope leaders will do is give you strategic direction that allows you to move quickly to implementation. people sitting around the table with the president people back benching these meetings as i have many times will be taking very careful notes on what the two leaders have agreed to and if they're smart, they'll be putting their checklist together on how to move quickly on implementation including with their counterparts immediately after dinner >> are you of the view that we have moved from a cooperative to confrontational stance on a long-term basis with china or is this just a temporary situation? >> i'm not sure that the suggestion that we were ever cooperative with them is exactly correct. i also think confrontational is too strong

i think we're moving into a broad global competitive environment with china not just on economic and financial issues, but also political military we are good at competing they should be good at competing. particularly if they play by the rules. so i would say neither cooperative nor confrontational, but i think competitive on a going forward basis. >> what do you think of the phrase trade war >> i think that's overstated at this point we've talked about trade wars with europe, with mexico, canada, china. it's an easy phrase to put out there. i would look underneath it the bottom line is it is a competition. and actually the global economy works well on the basis of competition. but it also works well when people play by the rules right now the chinese are not playing by the rules >> also wanted to get your view on the president canceling the trip with russia

after this new situation with mueller and cohen just yesterday. but he has taken what appears to be at least a diplomatic rationale involving the ukraine for not having that meeting. what do you think? >> i think the actions the russians took with regard to ukraine crossed the line once again. just as their annexation of crimea and invasion of ukraine did years ago. i think a strong signal needed to be sent and that has led to additional sanctions and other steps in european i think it was very appropriate for the president not to have a formal sit-down meeting with putin. but they're going to be in that g20 room for probably six to eight hours together don't be surprised to see a picture of the two of them talking right on the margins but i think the idea of not having a formal meeting was the right decision. >> the idea of putting it off indefinitely, what does that mean to you? >> i think it signals to the

russians that there are elements of their behavior that are unacceptable and will lead there to be consequences including at the head of state, head of government level now, we have an ambassador jon huntsman in moscow they have their diplomatic representation in washington contact will continue between the two governments. but to meet at the head of government level should be something moving towards results, to get to results you've got to have a better foundation than we have with russia >> all right ambassador, want to thank you for your time and perspective on this important day we will see, of course, how things play out over the weekend. i'm sure we'll continue this conversation with you very soon. >> thank you, andrew we have been watching mexican president pena nieto making his speech at this gathering between the three leaders of mexico, the united states, and canada that signage, that agreement

between the three of them is about to take place. and we bring in eamon javers ahead of that. eamon, what have you been hearing in the features -- speeches coming from them? >> as we've been monitoring this, reporters in the room are noting that justin trudeau did not refer to this trade agreement as the usmca he's calling it the new north american free trade agreement. there's disagreement about what to call this thing the president very much wants to get away from that branding of nafta. he views it as a big political win to have scrapped the old nafta and replaced it with the new usmca. so that's one thing to watch the other thing, though, i'm struck by as we watch this moment, becky, is the warmth in the rhetoric between these leaders. remember the president called

trudeau last year dishonest and weak today he's referring to him as a friend they're all three making kind remarks about each other and getting ready to sign this deal. so it looks like most of, if not all of the bickering is over with and they're ready to sign now the big question becomes will the president be able to get congress to sign onto this particularly new democratic house of representatives what will he have to trade in order to get the democrats in the house to agree to this deal next year? this is not over with today as we watch this ceremony >> you think that really becomes a problem? because when the talk of nafta going down was really at its height, it seemed to me that both democrats and republicans were signing on saying this will be very bad for our districts. i have a hard time thinking that they would then turn around and say we're not going to sign this deal >> yeah. it's very likely to pass but that is the leverage the president has. if he doesn't get this, he'll scrap nafta as it is and that

would be an economic disaster. they can't open up the language of the trade deal to renegotiation, the democrats can't. because this was done on a fast track basis. they'd have to renegotiate with mex karns and canadians. that's not possible. but what democrats on the hill could do is pass legislation tweaking the enforcement mechanisms on the side of this as we watch the signing here, bear in mind the democrats will still have -- >> that signing is taking place right now. we're watching president trump along with mexican president pena nieto and the french prime minister justin trudeau all putting their signatures on their copies of what is being called depending who you listen to the new north american free trade agreement or the u.s. mexico canada tree trade agreement. a lot of people finding it hard to get away from the term of

nafta. because it is no matter what you call it officially it's something built into our heads over the last 20-some years. but again, those signatures taking place right now in this historic signing this is pena nieto's last day in office we heard before this he awarded the highest honor in mexico to jared kushner before coming to this room. as eamon mentioned, there were a lot of niceties between these leaders. a lot of people wondered if this would actually happen. >> andrew at this point, he's got three names. so used so signing things. >> just become one line. >> basically just a line >> i've seen you do that >> yeah. >> it's brevity.

we are going to take a quick pause and come back in a minute. there's a lot more to talk about this morning come coing up, trade in focus as we head to break take a look at u.s. equity futures we'll also be talking about that big data breach at marriott that's making a lot of headlines this morning dow off about 81 points. ba ia me ckn mont each day our planet awakens with signs of opportunity. but with opportunity comes risk. and to manage this risk, the world turns to cme group. we help farmers lock in future prices, banks manage interest rate changes and airlines hedge fuel costs. all so they can manage their risks and move forward. it's simply a matter of following the signs. they all lead here. cme group - how the world advances.

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a busy morning watching what's happening in buenos aires. dom chu joining us now >> we have individual stock movers to talk about now first look at shares of goldman sachs. lower this morning after an analyst downgrade this morning those analysts citing the idea we could see this tied to the scandal over there as we look at other stocks on the move swooes as well, look at general electric deutsche bank lowering the price on the stock down to 7 bucks a share. they're citing concerns over free cash flow on the industrial side of the business as well also we got a report from "the

wall street journal" earlier this morning talking about the s.e.c. looking into potential employees who have knowledge of some of the insurance risks that may have been ignored at some of the legacy parts of ge's business so those shares down by about 2% right now in trading then let's finish it up with wells fargo doing a bit of a nice upgrade at under armour they also cite some issues with regard to their inventory levels getting a little bit more clearclear ed up. back over to you >> okay. thank you for that, dom. when we come back, some stocks to watch. at the top of the hour, barry nap is our guest host. his reaction to our interview with neel kashkari straight ahead. as we head to break, take a look at the dow premarket winners and losers back in a moment

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we're watching this fall in the premarket. what is your take on this news and what is the liability for the company? >> look, i think one of the most important questions we asked is what did we know and when did we know it? i think they're still measuring, you know, what the hard costs will be. last point i would make that's important is the soft cost marriott's accuracquisition of starwood was large to to capture the younger, more affluent, more global this is certainly not helpful. but, you know, in time whether it's hurtful remains to be seen. >> sothere's two pieces to this >> one is, does this negative headline effectively say to travelers who historically have

loved using their, you know, starwood points and amex and all of is ththat, do they say next go on a trip i'm going to a different hotel chain? >> it'd be hard to argue that that won't enter into the thought process. but, you know, suffice it to say, marriott has bent over backwards to, you know, connect with that membership base so far. you know, they probably will continue to do so and even ramp up those efforts marriott's been defined by superb execution over the years. and so, you know, this is unusual. >> so as an analyst covering this stock, how do you map out what this means to the company, the stock as i said off about 4% this morning does that make sense to you? >> it -- well, i do think that there should be ultimately some modest impact to numbers i think we've had other cases of

large scale mergers where this sort of thing has happened befo before that i'm sure you're familiar with and in the end the financial impact was not very large. my sense is stocks may overreact in the moment and then work their way back, frankly. >> okay. david katz of jeffries, we appreciate you jumping on the phone with us in the midst of this breaking news story and helping us make some sense of it >> thank you very much my pleasure. >> 4%. it's worse it's actually bounced. looked down down 5% at one point. when we come back, our guest host barry knapp joining us to talk he will join us after the break for the remainder of the show. check out the futures at this hour you're going to see right now futures down for the dow about 82 points. s&p futures indicated down 6.5, nasdaq off by 15 "squawk box" will be right back.

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the g20 is underway in argentina. president trump praising the presidents of canada and -- the prime minister of canada and the president of mexico. as they sign a deal trump fought hard to win. breaking news on marriott. a new data breach at starwood with hundreds of millions affected over a period of years. and more bad news for facebook sheryl sandberg under fire for reportedly telling employees to look into george soros'

finances the final hour of "squawk box" begins right now live from the most powerful city in new york, this is "squawk box. >> good morning and welcome back to "squawk box" on cnbc. i'm joe ternen along with becky quick and andrew ross sorkin the futures have been in the red all day long, but we had a big week those first three days. then it looked like a pullback was in the cards for yesterday right into the close we lost a few points but it had turned around it was up 40 or 50 then finally did close down a little bit but as far as the week goes, it made up a lot last week -- recovered a lot of last week's losses and puts us up for the month of november. 3.01% on the 10-year now

we could still get to two there. the big news of the morning concerns our friend eamon javers because president trump signed the usmca in buenos aires. i think marine corps, i think ymca i like it. it's not as easy to say as nafta, but there's a lot more to work with, eamon and it's done. oh i'm told he is not going to miss that great intro we've been practicing it the "s" is the hardest thing >> to make figuratively this way. >> we'll get to eamon in a second but first, at least we have a sound bite that i think will work for you so let's see it. it has the president actually

signing nafta 2.0. >> under the usmca, at least 75% of our automobiles' content must be manufactured in north america. and 40% to 45% of automobile content must be manufactured by north american high wage labor in order to gain preferential treatment in our markets this will help bring back auto jobs that have already left. many, many jobs are already planning to come back. >> joining us right now to talk trade and the markets is our guest host for the hour. barry knapp. also commentator mike santoli. >> mike santoli! >> yes >> good to see you, sir. >> mike santoli. big news do you hear that >> i hair ear it >> that's applause i called that up for you >> totally uncalled for. >> what do you mean?

you're our big anchor between 3:00 and 5:00. >> yes big news i retained my role i've had for three years. >> making it official. >> i'll be available for 3:00 to 4:00 >> you didn't call home to your parents? >> no, i didn't. it was nothing >> making official what has been happening for a long time. >> why don't they just play that applause >> congratulations >> yeah. come on, man >> thanks. >> and by they we, barry, congratulations on the new firm. >> had you on with a couple of millennials. >> i know them well. >> okay, good. all right. >> let's talk about what's happening. the two big issues in the market this week we could see some solutions to both of them. potentially. we'll see what happens but already we've heard from fed chairman powell walking back his

earlier comments from a couple months ago now we have the potential for sort of a framework between china and the united states this weekend. what happens if we get that? what happens if we don't >> i think that broadly the markets are fine with an outcome where trade continues to be a bit of a struggle. but in the near term, for sure, we need some sort of a detente and a minimum. you need to exceed expectations of a three-month or six-month period of negotiation. >> no. but if you walk out and there's acrimony what's does that mean >> the immediate reaction would clearly be lower i think where i'm going with this, globalization is already in reverse some of the things kashkari talked about earlier about real rates being pressured by demographics and these things,

this whole business going to china to explore cheap labor, that cheap labor supply is gone. so the whole corporate america was already moving towards not on-sourcing or on-shoring. but for excess capacity developing it here and so i in essence am arguing that trade and politics are lagging the core economics and that the model where businesses produce in the u.s. to sell in the u.s. was already well under way and so i think that trade deals themselves really overstate -- are overstated in terms of investor expectations. and i don't view it as wildly disruptive to the economy. >> you don't think tariffs being raised to 25% on chinese goods and extended to the entire $550 billion worth of goods would have an impact here on the u.s. economy? >> it'll have an impact, but i think it'll be a fairly small impact you know and it is not going to be as

interruptive as youds -- you'd be led to believe by market reaction >> mike, what do you think >> i agree that expectations are low for anything substantive necessarily coming out of this i do think the reaction next week is going to be a bit of a rorschach test right? the market -- they will almost certainly unless -- maybe it says more about where the market's at. i think powell was the same thing. a relatively subtle change by powell that showed you the market wanted to kind of get there. >> it also shows you the worst case scenarios moved off the table. i think also, tell me what's going to happen to the dollar, if any it raises or lowers the chances of having a hard landing. that's what's going to matter to

the markets here not so much are we going to have to move down >> if you remove these two kind of head winds, i feel it gives a chance to focus on earnings again. and watching what's happened over the last two months, maybe that gives you -- >> that's the question, right? because the market is marginally higher year to date when earnings went up 20% so you're looking ahead to that decelerating to some number below 10%. and that's the game we're at apple can't get out of its own way. but goldman sachs and apple hold the market captive for a couple hours at a time. whatever is going to happen, positioning enough yesterday we kind of held that one-day rally which is interesting, but we had two 2% one-day gains in the last two months that fell apart in the next two weeks >> that's true

apple, technology, faang stocks, what do you think there? >> there's a broader move away from the companies take most the fed sort of rang on this about how these companies were making monetary policy more difficult to implement you can already seeing it starting to erode. this year, target's comps were 3% a year ago, everyone was writing off bricks and mortar. they've come up with their own internet strategy. they're fighting back. i think this dominance of the big companies is starting to erode a little bit and the markets sniff that out >> because you're considering target a small company at this point? >> my point would be amazon completely dominating retail or google completely dominating advertising. >> the problem is it's not going to be an easy path

>> where i was going more broadly with that, though, in greenspan's latest book, he talked about creative destruction. and how, you know, we've had this dynamism that seems to be ebbing this business cycle a lot of what's happened this year is showing much greater dynamism there's much more turnover in the labor market i talked about that last time i was on small business sector is creating more. some of these winner take most dominant companies are starting to give way to companies, smaller companies coming up and challenging them that's a good thing. more competition means more pricing power, greater wage gains. all sorts of benefits from that. so i think the market sniffed that out a little bit. a point i'd also like to make with respect to the underlying fundamentals that's underappreciated and this speaks to the discussion you had with

john taylor and rick rieder the other day. the mix of growth matters a lot. right? so housing has slowed. capital investment is still booming. i know andrew likes to take the government at their word but i was in last time and said, no, it didn't slow much in the third quarter. it was revised up in the gdp but the bottoms up capital investment numbers, s&p 500 were up 16% in the third quarter. they're going to -- government's going to revise up their numbers further. capital investment is booming. that makes productivity go higher clarida talked about that this week that is a much better mix of growth than just driving up growth through residential investment or consumption. >> john taylor was on the other day? >> yeah, it was wednesday. >> wednesday >> remember, you were debating. >> no, no, i'm kidding things do run together

and you messaged me that day i actually told our friend andrew what you told me to tell him which was before 1913 tariffs were one of the main sources of income for the u.s. government at that point it was only 3% spending of gdp so you didn't need as much but the 1913 amendment, what was it the 16th? >> 16th amendment. >> was the income tax. so it wasn't until then -- i mean, that probably -- one of your most favorite years in history. >> it was a different world. >> no safety net there >> yeah. >> there wasn't much of an army either >> exactly >> so, mike, if you're trying to figure all this out and say this is a friday, short-term thinking again. friday as we head into this g20, what are the warnings and potential highlights >> it's also the end of the month. i don't know if that matters today. i think over the last few days we've gotten this kind of let's try out this idea that it's going to be dovish fed, lower yields again

and kind of this low and slow environment for financials i don't know if that's going to carry through to the rest of the year i think today will be a lot of just kind of, you know, you make the first move kind of trading >> to get to one of mike's points about the technical setup is i spent a decade of the '90s in equity derivatives at lehman brothers one of the things we always watched was how much are people willing to pay for downside puts that is very inexpensive right now. this is also what happened in the fall of '10, '11, '12. investors are in cash. they don't need this portfolio insurance. so there's a lot of risk reduction and any further impulse. you know, it's the end of the year >> cautious positioning is definitely a benefit for the market >> don't mess this up. right. mike, thank you very coming in

barry, he's with us for the rest of the hour. stocks to tell you about now. ge legacy insurance business risks were ignored relating to some of the insurance policies in question the story there with ge keeps getting worse. you're looking at that stock down about 12% >> this is really interesting. the idea of the risks being known but being ignored. you're going to have to read very closely into this story because that's been the big question did they know about this did they decide not to get -- >> it creates real lienability,b the way, beyond the civil penalties that could come with this >> an interesting dynamic with ge, if they were to be downgraded, it would be very reminiscent of when the auto companies were downgraded in the spring of 2005 because the movement of all those bonds from the investment grade indices to the high yield

indices -- >> right how much it would balloon. >> it was a big shock to the markets for about a month or so. >> i think ge's debt would be part of the entire junk bond market >> there's much more where it would be a bigger market event were that to occur coming up, minneapolis fed president neel kashkari tells us it's time for the central bank to stop raising rates. we will talk to a top fixed income strategist next we're going to get barry to do some general patton imitations when we return

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politicians have said we need to keep monetary policy separate. >> that was minneapolis fed president neel kashkari who joined us in the last hour here on "squawk box." joining us for reaction on this is head of fixed income at raymond james. kevin, what did you think was the most important point he made today? >> i thought there were two of them one, he's a little more in the neutral rate current boat than others and then his comments about the productivity and where it's from i'm totally aligned with his term of stopping where the aid is and where the forward markets miegts take us >> stopping raising rates, he said if it were up to him, h would like to see them pause and get a rate hike in december. >> i think you'll see an increase in december, but may see a dove song come out from the fed which would be beneficial to the market

but there's little to stop in any opinion the december 19th increase. >> what is it that concerns you? because the credit markets we've been pointing out kind of figured out what powell was going to say this past week before hearing it and before the equity markets did >> yeah. the long end of the curve and those that play them have been less concerned about what the fed has. some of these numbers are starting to improve themselves out. takes us all the way back to the middle of the year so i think, you know, obviously we're going to pay close attention to the g20 this weekend. mostly that's going to be about the trump/xi meeting the rest has some dramatic aspects to it, but that's really where bonds are. then we're just looking at data of the fed's three mandates. inflation's not an issue employment is not an issue it's the growth of the economy and as that is slowing, global economies are slowing themselves as the u.s. economy slows, there's little reasons to raise rates further. i still think they go. >> one of the other stories we

were talking about is what's happening with general electric with those bonds what does is that mean for the broader bond market? is it an issue >> it's certainly an issue all of these forced liquidations and things like that that occurred, the same would happen with ge. there's multiple maturities that would create for sales if they dipped below investment grade and further. >> but is this a -- how does the market prepare for this? we've been talking about it. we've been wondering we've been watching. what would it mean in reality this time around >> it's what we'reseeing now and you saw it in high yield first and emerging markets now in investment grade spaces it's just spread widening. so if 220 is where it took to clear the market, it's 250 or 260. we're seeing spread widening in corporate credit now and ge would make it worse >> we looked like we were on our way to 3.5% for the 10-year. we now look like we could fall

below 3% how does that change your world and what you tell investors to do >> well, my january forecast was at 2.85% so it fits perfectly into my scenario >> january of this past year that was your -- >> yeah. >> wow >> me and lacey hunter probably the last bond bulls left >> that's a rare view on the street everybody else thought it was going up >> i think we peaked though. i think we'll move our way down. we'll test and fight through 3%. and we might even see 2.75% depending what the fed says after the meeting. >> great to see you. thanks for sticking around today. coming up, facebook coo sheryl sandberg taking heat for telling employees to investigate george soros' finances t have a look at what's nex for sandberg and her company "squawk box" will be right back. why are you so good at this? had a coach in high school.

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welcome back to "squawk box" this morning take a quick look at futures interesting day shaping up right now. dow now down just about 24 points it was a little bit worse earlier this morning nasdaq has turned into the green just marginally. the s&p 500 also now we'll call it almost unch at this point ge shares, they are moving lower. "the wall street journal" reporting that ex-staffers have

now told federal investigators that ge's risks were ignored ge later reported a shortfall related to some of the insurance policies in question and now probably perhaps even some individuals inside the company will be looked at about what they knew and did or did not do about it. >> here's a good quote from this story. a former employee at the company's finance arm, ge capital, left in 2016 said i wouldn't say what i saw was smoke, but there was enough concern that i decided to leave because i didn't want to be there when there was smoke >> i'd say that's fire >> well, it shows, if anything -- if nothing else, it shows the rigor investigators are looking into this right now. we'll hear more about this for sure when we come back, president trump kicking off the g20 this weekend by praising the new trade deal with the presidents of -- with the president of mexico and the prime minister of canada after the break, what trump's big meeting with china's president tomorrow means for world trade.

we'll be right back. ♪

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good morning, everybody. welcome back to "squawk box" on cnbc we are live from the nasdaq market site in times square. we're going to take another look at shares of marriott. those shares slumping on news of a data breach at its starwood brand extending back to 2014 and affecting as many as 500 million customers. the breach pre-dates marriott's acquisition of starwood. a deal struck in 2016 and closed last year. you can see the concern this is causing because it was information not just names, phone numbers, e-mails, even passport numbers in some situations, birth dates. that key information and that is what's causing concern. we'll hear more about this, but right now the stock down about 4% j.crew is discontinuing its

line amerimercantile they did a deal with amazon struck by the former ceo you may remember brett departed earlier this month with turnaround plans and a judge has raised the prospect of not approving the aetna deal says the government and the companies are treating him as a rubber stamp for this deal since it was closed earlier this week. however, aetna noted in a statement that it's common place for deals like this to close before the approvals are completed. licht hawa lighthizer said he would be surprised if the dinner between presidents trump and xi was not a success. and right there it's as clear -- >> you think that's what turned around the markets this morning? >> yes >> you can't see that? >> that's what -- i'm saying that --

>> so it was rhetorical. you're helping me. >> i was trying to, you know -- >> yes >> move it along >> yes let's get it back to -- >> explain why we would say that >> -- fri-yay. let's get back to the g20 in buenos aires we lost your ifb last time -- uh-oh. i'm worried. he's shaking his head. that's what happened last time anyway, yeah it certainly looks like it that that would be -- okay. lighthizer surprised if it wasn't a success which probably -- let's see what that means joining us is the head of analysis for the urasia group. and a name from the recent past. michelle caruso-cabrera here we'll get to you in just a moment, michelle and get your comments but let me get to michael first.

what does this mean in they take a -- they agree to disagree and maybe at this point they pause on any additional tariffs? is that the best that can come, do you think >> i do. >>st the going to happen >> it's an interesting remark from lighthizer who has been dead set against any kind of deal and wants to keep the pressure up on china you know, just last week lighthizer dron e-- dropped a report of keeping it high on a deal and probably to prevent some kind of deal. it's an interesting remark from him. clearly the momentum is for some kind of announcement the question is how durable is it there's still a wide gap between the two sides on the key issues. and it's important to remember, this is not the end of a process of negotiating this is the beginning. there's been very little substance discussed between the trade negotiators on the two sides.

so what happens now is you're going to enter some kind of limited negotiation period then it's going to get down to the substance and it's going to be very difficult and you'll have hard-liners telling the president, look. this is not a good deal. you're going to have democrats, telling trump not to accept a weak deal. i think it's going to be important to look through any announcement and understand there's a substantial chance this ask not going to be durable and break down >> i've seen a lot of your comments but it was before this lighthizer thing how does that factor in? >> last night i said i refuse to predict -- this is impossible to predict. but clearly it's leaked to every single paper that there is a framework for a deal on the table. lighthizer saying he would be surprised if there's not a success. they're walking with an agreement in place

president trump goes to a dinner, he can be unpredictable. that's what we wait to see what he ultimately decides. >> my one question with this, what's the definition of success here >> absolutely. >> what does that mean >> well, i think mike raises a great point. which is no matter what happens today, our differences with china at least to me appear irreconcilable xi's vision of what he wants for china does not work with what we want out of them he cannot bring the two together we want them to stop stealing intellectual property. that is part of their business model. how are they going to solve that >> here's a question, though what if they say this is a deal with a long time frame where we say by the year 2025 we'll stop stealing intellectual property >> i don't think this administration will fall for that at all not with people like lighthizer here's something important to

understa understand the chinese are fl-- they say w poor country and need help >> doesn't it run deeper than that though? in as much as the political philosophy of the u.s. is individual liberty and property rights that doesn't exist in china. >> exactly >> eamon javers, i think we can get back to join this conversation i wanted to get his take eamon, are you with us >> i am with you sorry, we're having a little bit of technical communications difficulty here in argentina robert lighthizer speaking to

reporters just across town from where we're standing clearly intending to send an optimistic signal there whether that indicates that there is some prebaked deal behind the scenes. i'm not sure i don't have any indication of that maybe that is the case though. nonetheless, it's clear the administration is trying to send going into that dinner it's all going to depend on donald trump and the political calculus he makes and xi jingping as well trump might be eager to find out what they could agree to if anything, it could be this trade truce people are talking about which is simply hold off on new tariffs and negotiate over the next coming months. >> this goes to the definition of what success is success should just be a hand shake and a picture and we're going to continue having this conversation the markets might even continue that success >> i think the market would consider it a success if they announce a cease-fire on tariffs

today. >> except, yes, the market in the immediate aftermath will like that. then they're going to say you just created a whole new round of uncertainty and we have no idea what's going to happen. then that's going to -- you're going to hear the next earnings call for a handful of companies is going to say we don't know what to do we're still waiting. >> but to the degree you cover as an analyst, you know january 1 the price of "x" goods will not go up as much as we thought. that feeds directly into the bottom line of some companies, right? you'll see some direct impact there. you're right you'll talk about all the bigger issues we've been raising here how do you solve those >> andrew, you raise a good point. there's a low level for success here smiles, nods, pleasantries all around but nothing at all announced that's the only possibility you could be looking at today. a good dinner. everyone says we had a robust and strong engagement and they

don't announce anything specific that could be the very low bar for what a successful dinner might look like. >> i think it would be market negative >> you think just the picture is negative >> yeah. i mean, if all the bodies signaling is fine and happy, it's okay. but i think when you read all the papers today, there's clearly been leaks about possibilities of a truce on tariffs. right? >> market negative or market devastating? >> by the way, the other question is how much is built into the market already that something good has to happen this whole thing as we said, it's been this buildup you don't go into a dinner like this unless you script it out. >> i would just add in terms of leaks, there's also been a steady stream of leaks over the last decade or so about chinese theft of u.s. ip through cyber and other means. and that's just to say there's a lot going on in the relationship beyond tariffs there are a lot of hard-hitting

moves that this administration is planning across a broad range of areas you see a much higher level of rhetoric, different u.s. agencies going after china different ways so there's going to be -- even if we get to some kind of truce on tariffs, there's a lot of non-investment restrictions, export controls, law enforcement actions. these are going to have impact on companies, on u.s. companies, on chinese companies and they could really worsen the mood as negotiations go on so there's a lot that's happening beyond just the tariff discussions. >> if you consider the last two trade wars that we had, this speaks to michelle's point 1971 with japan primarily with germany. it's often said the japanese invented barriers and chinese prpted them. but those were settled with currency decisions agreed to a 17% currency revalue. that's how it was supposed to work but ultimately they just cut

domestic interest rates and drove things higher and the surplus never went away and they eventually did the same thing. and that eventually drove them into their bubbles so do they change? yeah, slowly over time but i would agree. there could be some big deal that looks like it's a win but it doesn't change behavior >> not in the long run >> thanks. michael hersen and cnbc contributor michelle caruso-cabrera i'm going to end there there's a few more i could throw in there, but i don't do that anymore. >> we don't mention them coming up when we return, facebook under fire again. this from a "new york times" piece that says sheryl sandberg told staff to look into george soros' finances after he bashed the company at davos we're going to talk to "the times" reporter who otwre the story and guru jeff sonnenfeld after the break.

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. welcome back to "squawk box," everybody. we've been watching the futures this morning they did pick up a little bit of ground when we first heard from lighthizer saying he'd be surprised if it wasn't a success between president trump xi and president trump this weekend that got us back to neutral ground with the dow but now down about 44 points. the nasdaq down by just under a point. okay facebook under fire again today.

"the new york times" reporting that coo sheryl sandberg instructed the team to investigate george soros' finances after he bashed facebook and google during a speech in davos. joining us now is the author of that piece, nicolas coffessore good morning to you. tell us what you learned you've been on this beat for some time and broke the earlier news about this. explain the significance >> this is important because it changes the story again of sheryl sandberg's involvement in this broader effort to fight back on facebook's critics in congress and public from other companies. and if you recall before thanksgiving on a wednesday in the afternoon, a statement was dropped on the facebook site from elliot shraig and sandberg. when shraig takes responsibility for looking into soros and sandberg' statement in the post, it's carefully written

it didn't deny she was involved. but it allows him to take the fall what this story shows is, in fact, she was intimately involved in these internal discussions about how to respond to soros and perhaps to other critics. she asked them to look into his finances to see if he was criticizing facebook publicly because he was short selling their stock. >> nick, let me ask if there's a distinction to be made here which i imagine the distinction that facebook itself is making which is it's one thing -- and almost perhaps a normal course thing for an executive if a famed or non-famed investor publicly bashing a company to say to someone on their staff, hey, are they shorting my company? what's going on here is there some kind of economic benefit? that's one piece of the puzzle and by the way, this is a muddled picture. i'm the first to suggest that's different than saying, hey, go out and hire these folks

and, you know, create a misinformation campaign effectively around george soros involving anti-semitism and everything else. >> yeah. it's probably true look this is the first thing we're learning about sheryl's direct involvement. i can't say there isn't more i think it is normal for an executive to shoot off questions to her staff, but the issue is that they're changing their story. and the second issue is that facebook is controlled by the ceo and founder. so it can't be a target in the other way other companies can. but look it's certainly normal to wonder in your company about attacks. >> nick -- >> but they designed this past thing in the past week to suggest she wasn't involved at all and she was. >> nick, to me, actually, the bigger story -- and i don't know if you will be willing to go there in all of this -- is actually how much support or lack of support there is

internally for sheryl sandberg as these stories have emerged. clearly you have terrific sources who've been -- i don't know if they've been happy to help, but they at some point have helped along the way. and to me that suggests that perhaps whatever support she has may be eroding can you speak to that? >> i can say this, andrew. i think there is a sense within the company that mark zuckerberg and sheryl sandberg have spent too much time on their own reputations and not enough time on the problems that afflicts the company. there is a lot of unhappiness with both top executives essentially throwing the policy staff in the way of the bus on this issue for blaming it on them for saying we weren't involved and not enough time in just fixing the problems. facebook is a company that has some big problems. the fact it can serve people the content they want is also the thing that makes us vulnerable

to deception and abuse they have to fix that problem. it's is a very hard problem to solve. there are people getting sick of the drip drip drip and maneuvers and not fixing the problem to andrew i'll say i think the people around sandberg are very cognizant. that by circulating the word she is in trouble, it actually protects her because there's a whole discussion publicly about how come all the blame is going on sandberg and how about the ceo and founder? so he can't be fired because he owns the company or most of it. and if she can't be fired because it's unfair, then there's no accountability. >> nick confessore, thank you. you've done great reporter on this we want to bring in jeff sonnenfeld right now senior associate dean at the yale school of management you have been quite negative on sheryl sandberg. does this story make it more so? >> yes i think nick's reporting is

excellent. and as you tease through what nick just told us, there are actually three layers of problems that she's responsible for. first was, of course, the original failed protections and the abuse of this data and the damage this led -- i mean, this is not an overstatement talking about the ethnic cleansing in miramar and other places that weren't addressed. rather than fix the problem. so that's the second issue she was part of a campaign to hide and derail the problem. then the third layer is trying to deflect by disparaging others and of course now we see the george soros evidence. and u.s. senators she was doing research on them she was conducting the research on the facebook use a.age of u. senators about to grill her. outrageous and then now she is deflecting as we see after all the other deflections have come up, they're now trying to suppress information and trying to throw

shraig under the bus at the scapegoat level. it's what communications people call an inoculation effect to say this poor victim she should be accountable. >> jeff, real quick because we're going to run out in kno--e >> real quick, we are running out of time. what is the board suppose to do at this point? >> i think i just lost you jeff. i apologize for that it was a robust conversation i imagine we'll continue to talk more on this i want to get down to the new york stock exchange. i will ask you the question, jim. i want to talk about china and where the market is headed on the facebook issue, does this report change your view of what should or should not happen there? >> i thought it was the most devastating stories i have read. some of the things that president trump do written about by the "times" makes it so it is

hard to get the positierspectiv who's doing crazy stuff. this is ill-advised. how does this person stay there? how did she stay >> i don't care whether he's thrown her under the bus but does not matter, how does she stay >> this has been a question mark there is clearly a board >> oh, there is no board >> that's the point, right >> if there is a board, how could she stay you read it. was it outrageous? >> i have tried to make -- i think there is a huge number of things that are outrageous in facebook and included sandberg over the past year and half. the question that i am raising, we know circumstances where a

ceo may say to somebody in the company hey, is so and so shorting the company because they made a negative comment and whether if tlas differenher difference between doing that than hiding somebody and mali maligning them through f >> i don't know. >> before we let you go go though -- >> i government a lot of these people let's get an outside counsel to come in and hire them. and let the chips fall they're in their own world this is what marc benioff said to me this week. they're truth and there are

ideas. what matters is truth. >> i read the article twice, i could not believe it >> jim, giver us your gut reaction of what may or may not happen and what's baked into the market and how do you think the market will react. >> 50% chance that ten goes to 25 but then they stay. it is like a sticking acarrot here is what you need to know, andrew guess who's hat the table? >> navarro >> i told you that >> yeah, i got that last night, i could not believer i got that story. >> david and i compete what does it toll yoell you? >> navorro is at the table >> that means there is no deal is that what you are trying say?

>> you got light hizer that he used the word success. >> that's what it is then we go back to the story refuted by people at the network that powell blinked. powell was just looking at the data i don't know -- am i really a rebel here >> jim cramer, you are always helping. >> is that good or bad >> i love you >> we'll see you at 9:00 >> you are the only person that my wife watches. i can't get her to watch me. >> i will take it. thank her for it we have more with our guest host

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navarro will be there, should we not ramp it up is that likely >> i think it is most likely again to go back to these prior trade deals. they did not resolve anything in 1971 or '85. they had a political gain and moved on if you think of the u.s. equity market this year, trade is a minor issues yeah, we got a specific event and it is a big deal for the day. a market will get beyond this unless it is a completely disaster >> it is pretty positive >> that dictates how much overall of what kind of shape the stocks or the economy are

in the bigger issue is what is the km economic outlook of 2019 the fed is pausing for the first of the year to see what's happening to the economy obviously the interest part of the economy has slowed a little bit. the mix of growth is really favorable right now. we are driving investments and yeah, consumption should soften a little i think earnings will be better next year than most expected >> that leaves you to your thought that the market is going to go up from here >> definitely favors the upside. >> the overall economy is in

good shape, too, the stock market and the economy stock market is coming down and as well as valuation we are not in cycle. >> you got 15 seconds. >> productivity is improving a lot this year. >> barry, thank you so much for being with us. always a pleasure. folks right now we have some breaking news from the feds. steve liesman joining us on "squawk. john williams will say a speech this morning, the federal reserve is not far from the neutral rate it is not far from the current level of the funds rate. he says that the neutral rate is due to demographics and productivity and demand. now you got all three on the federal reserve of the big three and the vice chair