years ago. it's thursday, december 6, 2018. "squawk box" begins right now. live from new york where business never sleeps, this is "squawk box. good morning welcome to "squawk box" this morning here on cnbc we're live at the nasdaq market site in times square i'm andrew ross sorkin with joe kernen kelly evans is here. becky will be on later >> what? welcome. >> i'm excited about the lance interview coming up, oprah i did not realize this is the first one since that one >> first u.s. tv interview >> why now why you? why? >> we'll show it there's a lot of stuff -- >> he didn't come here >> i went to aspen >> that's tough. >> it was when i disappeared earlier in the week.

>> were you able to have time -- >> to ski? no we were in and out >> really? >> it was fascinating conversation >> did you ride together >> no we walked. he's practicing for a marathon right now. he's not on the bike he's in his sneakers >> he ran that marathon the first time with a stress fracture, remember that? >> yes it's an emotional interview. he says a lot of interesting things >> he's emotional. >> he is there's a huge surprise about his own assets and how he got them, what's happened with the lawsuits we talk about steroids we talk about his sponsors about a-rod and others news is made you'll see all of that in a bit. >> did you get emotional >> mike santoli is here. i'm emotional to be here with

you. >> what emotion are you feeling? >> complicated one let's show you what's going on at this hour dow off almost 435 points. nasdaq down 155 points s&p down about 45 points we'll explain why all of this is happening in just one moment let's show you also what's happening overnight in asia. red arrows across the board with the hang seng taking the brunt of it down almost 2.5% european equities across the board, a similar situation germany and france down, the uk as well. finally treasury yields. the ten-year note at 2.894 kelly has the explanation. >> this is the big one it's within thing when it goes below 3% we were at 3.25six wee% six wee.

>> early november is when the yield started to get compressed. >> which is the tail waging the dog on the yield curve >> everything we're worried about gets boiled into it right now. that's the signal. are people worrying too much about it hard to say. every time you get relief, whether it's on oil or china policy, it kind of comes up empty. at least that's been the pattern. >> relief on oil means higher prices >> exactly >> the huawei stuff overnight, we'll have much more on that, a big deal that arrest oil prices are dropping again. the opec ministers trying to reach an agreement on a production cut saudi's minister proposed a smaller than expected cut of 1 million barrels per day, smaller than the 1.3 million barrels earlier mentioned. crude oil at 50.$50.45

brent around 58. it's my understanding, we'll have more at 6:30, but that all of the -- it's not even about opec, it's about the u.s., saudi and russia if we have to wait until tomorrow for the piece of this on russia, i can understand the anxiety. okay opec will only give us 1 million cut, there's a new hedge >> brian sullivan pointing out that canada already said they're taking off 300,000 so you can add that up it reveals what market psychology is now. we thought we would get something more, we thought it would be a more affirmative signal >> but qatar is leaving. they're all saying why should we have to cut? the u.s. is pumping. >> that's part of it >> i'm fine with any supply concerns go crazy i'm just worried if it's not supply >> yeah. i do think -- >> you think it's coincidence we break under 2.9 on the ten-year,

we're just above 50 and the market is coming down? if you can tell me it's just supply, i'm good >> but the problem is -- >> unless it's a global recession, that's bad. where is it today? >> it's been in freefall since january, bitcoin >> where is it today >> let me give it to you we're at $3,766. >> that's pretty bad >> a correlated asset. >> you think it's correlated i think it's uncorrelated. >> i think it's correlated to tech i think the tech community is piled into this thing. i think they're watching their own values it's trivial

>> they're nothing it's not like all this wealth is being dumped out of bitcoin. that's why it's not a big deal if they don't trade it >> they don't even want to talk about it >> the only thing i would say about that, if you say don't talk about bitcoin, the market cap of bitcoin is still higher than the market value of tesla if you don't want to talk about elon musk, good luck to you. dfrnlgt y >> did you ask lance armstrong about bitcoin? >> i did not >> short interview then. >> no, it was a long interview the big story this morning weighing on futures, canada arrested the cfo of huawei who happens to be the daughter of the company's founder. meng wanzhou faces extradition to the u.s. where she's wanted on violation of u.s. sanctions in iran. eunice yoon has more a lot of people talking about

this being a huge new problem for the u.s. and china >> absolutely. they're talking about it over here as well an expert who is known to be close to the commerce ministry said the arrest shows that china should not expect the u.s. to keep its word and should be fully prepared for a long-term confrontation. the timing of this is being widely questioned here canadian officials said meng was arrested on december 1st, the same day when president trump and xi were sitting down for dinner to work out their trade deal so the speculation here has been that this is a message from the united states, a warning shot, if you will, that china as well as chinese companies need to change what washington has long seen as unfair trade practices the u.s. has been on a campaign to curtail huawei's activities

in the u.s they also have been upset about it being a national security threat huawei put out a statement about meng saying the company has been provided very little information regarding the charges and is not aware of any wrong doing by ms. meng the chinese government has condemned the arrest the embassy in canada called it a serious violation of human rights, and the foreign ministry demanded her immediate release some american business executives who i speak to here are fearing the potential for retribution. because of her status, a lot of people think china will fight to get her back and president xi jinping is not seen as one who wants to appear to be weak there's a lot of business people i've been talking to who are concerned about tit-for-tat retaliation. >> eunice, i wonder going back to the tech sector and the trade

issues, back and forth between the u.s. and china, if there was already a concern in the u.s. about apple, about the supply chain, about the tech cold war between these two countries, how much more does this factor into it the timing is so interesting she's arrested on december 1st as the president is talking about how they came to this beautiful agreement at dinner. is the timing intentional? was it some kind of strange accident >> well, it's anyone's guess, but that's exactly the conversation that is going on over here. a lot of people have been saying the timing is suspicious that it looks as though the u.s. wanted to put extra pressure on china so when they went into the negotiations that the chinese would know that the u.s. is serious, that it wants china to make sure it sticks to certain timeframes this is not just a 90-day discussion that will be extended over and over and eventually lead to what the u.s. has long

argued is just china essentially talking them to death, but without actually coming up with real goods that's the message that a lot of people here are getting. and in terms of the overall fight, one of the questions that i've been asking people is do you think china is actually going to give in over an over basically no one i talked to thinks that president xi jinping will give up an economic agenda that he thinks is important for the country also we're seeing that reflected in the say the media today a lot of the articles have been about how this society as well as the government needs to rally around huawei, and talking up how important huawei is as a strategic asset for the technological program china has. >> is there a sense she could be used as a chess piece? >> absolutely. >> we've seen this movie before. >> yeah.

absolutely there's another article that came out just moments ago in the global times, a communist party paper, they were saying that huawei is being used as a hostage in this tit-for-tat trade war with the united states so we have seen this movie before when you're talking about that, i think a lot of people here have been wondering if huawei is going to become another zte. so zte, as you know, another telecoms gearmaker that is -- yeah and just that -- and the argument here has been that actually, no, huawei -- it's been interesting to watch in the state press. the argument has been that huawei is much more independent compared to zte. so that huawei won't be in the same situation because zte relied so much on u.s. components but that huawei hasn't so that's the argument that the state press has been making and that you're seeing different

experts being quoted over an over arguing that huawei will be much safer >> i can't figure out whether this is a bargaining chip to get things that we wanted accomplished in trade or whether we're really worried that once we took everything up to 5g that suddenly anything -- if push came to shove, they could -- >> access anything >> -- they could do scary stuff. it's like a trojan horse would be in every device i don't know it's frightening should we have that sort of paranoid view of what huawei really does to all the equipment it makes >> what i think is interesting it's not just a washington problem because we have been hearing similar complaints you could argue that maybe what washington is doing is emboldening other countries. but there's an interesting report in the ft recently that the uk is also talking about bte

in the uk, saying they'll take a lot of 4g equipment or huawei gear out of their equipment over the next two years australia and new zealand said they won't use huawei technology in their 5g plans. so you're seeing a push from the europeans. the europeans saying they're coming up with new investment rules that would target foreign investments which most people read as china. so you're seeing this frustration happening all over the world against china, but right now, again, was we're seeing in the state press is kind of this push back saying that the u.s. is leading this -- trying to create a certain standard and roping in allies and making it an international standard, but that it's unfair >> it couldn't have been planned. she was on a layover, just happened to be at an airport >> but she travels a lot >> what about canada

>> i could be ropg wrong. i had a meeting, and i believe she was in the meeting >> the "journal" says she has been at all these investor conferences. >> yeah. yeah she's even been at con friends wi conferences with us. she is the face for huawei a lot of people thought she became the deputy chairman for the company, so she's a cfo and deputy chairman. so a lot of people have been whispering that she's going to be the founder's -- the successor to the founder, who is her father she has been seen as a rising star she's very articulate. she's somebody who is not really -- she's not super flashy or anything like that. but a lot of people take her seriously. it was just such a shock to hear

that she was arrested in canada, and that her bail is set for friday apparently or bail hearing is set for friday. a lot of people are really surprised by what they saw >> they want to bring her to new york >> they do >> yeah. that's the report. >> what is china going to do now canada is delivering us a chinese national because we say the company she's involved in violated our sanctions on iran how severe is china's response going to be? how severe can it be >> that's what everybody is wondering. officially the foreign ministry has been demanding her immediate release. just because, like i said before, because of her high profile, the fact she's part of china's elite, there's a speculation that china will want her back but unofficially what the response is, that's what a lot of people are worried about

here immediately after, my phone was lighting up and people were saying should i get out? should i leave china early for christmas? american businessmen >> yeah. >> just because you don't know >> why do you think we did not hear about this until now? she's been in -- >> wasn't the g20 going on >> this happened several days ago. why do you think it didn't come out until just now >> i really don't know right now the only source that we have is the canadian officials. so the chinese wouldn't necessarily volunteer this information or be that forthcoming. for sure huawei, which is known to be quite a private company, it is private any way, but it's not known to be forthcoming with information. it wouldn't be offering up this information about its cfo. i'm sure they would want to keep it quiet i don't know why it didn't -- why the information didn't come out until now.

hopefully we'll get more information about her whereabouts. people are wondering what will happen next. >> has to be one of the most successful companies in china. eunice, thank you very much. huawei surpassed apple as the second largest handsetmaker in the world. it's the equivalent of ericsson an scisco and those companies. huawei is the big one. much more so than zte. >> this would be like if -- if tim cook happened to be on his way to china and they decided for whatever reason -- >> or the cfo. >> or they're relatives. she's the daughter of the founder. this is sending a lot of ripples through the global markets this morning. dom chu has a look at some of the big movers dom? >> i've been listening to this discussion

one of the other intended or unintended consequences with this huawei news, to joe's point, how many people are out there thinking they want to buy a zte or huawei phone at this point? this could put a damp on demand for huawei, maybe that's the reason for going after huawei in this particular way, because maybe there could be security risks, maybe they're not big players on the stable front that many think they are. with all of that in mind, we talk about these foreign companies. let's bring it back down to the u.s. markets and u.s. companies. many of the stocks and companies tied more closely to china, whether that's fair or unfair on a relative basis, companies with a good amount of exposure to china are taking it on the chin. boeing in the premarket trade, off by 3.10% caterpillar, another stock with exposure to china from a revenue basis, off by 3.33%.

apple, a lot of sales in the greater china region, they're off by 2.5% as well. we're watching those trades play out. also watching crude oil prices because of all of those reports and headlines coming out of opec wti crude off by 4% or so. all of this happening just around the early part of this morning on an intraday basis we're watching those key levels. we'll finish with a look at what's happening with the treasury markets we're seeing a bit of steepening of the yield curve it's nothing to write home about. a basis point or so, but still ten-year treasury note yields, 2.9% and then two-year treasury note yields, 2.77%. we were at 10 basis points in terms of spread between the ten-year and two-year, back up to about 13 basis points now back over to you >> okay. thank you. joining us now with more on the global market selloff is

gene goldman, director of research at cetera investment management, and on set is mike santoli. gene, when everyone else around you is losing their heads, you at this point still have a calm, sanguine outlook towards things based on, i guess, good fundamentals in the economy and corporate earnings won't fall off a cliff. you think we can stay in the market here and not put everything in cash >> we are cautiously optimistic. it's an ugly day today and an ugly day on tuesday. selling is overblown you look at the market, they sold off significantly you look at valuations, the forward pe on the s&p is 15. the pe ratio is down around 15% over the last year this is because the s&p has been flat earnings growth up about 25% good news there.

there's a laundry list of bad news out there, tariffs, the ceo of the company, the fed, but think about profits. profits growth is decelerating but profits overall are still growing. you look at short-term effects home builders, they were hit hard they're starting to bounce back a bit. semiconductor equipment manufacturers are bouncing back. you look at the yield spread everyone talked about the inverted yield curve, the two and ten, it's widening somewhat. it's good news we think the selling was overblown, but we remain cautiously optimistic for the balance of the year. >> santoli, oil we can say supply, technical factors. the yield curve, some weird things going on in supply. we're doing this none of it means anything. is it possible it's all -- that the stock market needed a 10%

correction, this is all normal you can explain it all away. are you just whistling past the graveyard? >> i don't know about that, but you have to go down a long laundry list of things >> including an arrest in vancouver which is rattling the world markets. >> when the market has already been under stress like this, there's often a one-off headline last night it looked like the futures with have a mild move, then we got this news. >> i thought it would be a rebound. we were all feeling good everybody is sitting in the front row. >> one-day cooling off period. >> is the reaction to this news telling us why it's important? i've been a bit skeptical of this the trade stuff, yes, the trade. maybe what the market is telling us is we're much more concerned about a tech cold war type of thing between the u.s. and china. if that's the case, this is a major salvo in that front.

>> i think it reflects both that possibility and how much stress the market has been under. the market is reaching for new excuses to go down if f.a.n.g. was still going up every day over the last three months a lot of this would seem less severe. if oil didn't go into freefall on october 3rd, things would seem less significant. i think it's too much at once. i would broaden out the chart a bit. it looks like 2015/2016 in terms of separated by months you had these two nasty corrections. in 2015 the fed got that december rate hike in that was it for a year. who knows what it means. we had brexit headlines. senators taking the other side on the saudi investigation a lot of stuff was thrown at this market in the last week or so >> gene, we don't know which part of the yield curve to trust now, if the -- i heard how attractive cash is

it's getting -- on the short end it may be more attractive, but i'm not ready to sell -- not that i have any, if i own stocks i would not be willing to sell for 2% would you? doesn't seem like it's that great to -- cash doesn't seem that attractive to me. more attractive, but i don't know maybe i'm with you did you say cautiously optimistic or optimistically cautious >> cautiously optimistic >> is that like bearly bullish that's his thing >> the two-year is at 2.77 you think about that, you're looking at maybe one or two rate hikes next year. that's good news a few months ago we were thinking three or four one to two is pretty good >> yeah. unless the economy can't handle 2.75%, which i don't know what

that says at this point. we built up so much debt that the slightest increase in our costs we can't handle. i don't know where we are. which was it, where he goes forward and gets the -- >> is this a movie don't ask me >> "back to the future?" he gets all the bookie results, comes back and bets on them. >> mcfly sorry. >> that was the donald trump character. biff >> i didn't say that. >> the write has said that's what it was based on >> now that you know it, you will say it. thank you gene goldman too serious of a day to play chicago. we usually do for him. what a pleasure. >> thank you, even though i don't know movies? >> that's true

you're a millennial. have you heard of the first bush you only think there's one bush? >> very funny. coming up, hank paulson and tim geithner speak out about lessons from the financial crisis in an interview last night with becky quick we'll show you what they said about breaking up the big banks xtne place, the xfinity xfi gateway.

and it's strengthened by xfi pods, which plug in to extend the wifi even farther,

past anything that stands in its way. ...well almost anything. leave no room behind with xfi pods. simple. easy. awesome. click or visit a retail store today. last night at the economic club of new york, becky quick interviewed hank paulson and tim the guy nea geithn geithner >> i think we focus on where the last war was fought. everybody is looking at the big banks, why are we not breaking them up and tougher on the banks? the banks are better regulated to the extent we're tougher on them, we drive the risk out to other places the risk doesn't necessarily

have to be in the big banks to bring a system down. that's one thing to be careful of >> and tim geithner raising also a red flag on the fed's ability to combat future crises. >> the idea that people have, they hope, in the extreme moment if the fed lowers interest rates and lends against collateral that would be sufficient if you needed a better example of the reality against that, just remember what '07 and '08 were like. >> you can see more of that interview throughout the show. it's also available on cnbc.com. becky has a big lineup later today on this network. the business roundtable ceo innovation summit is taking place in d.c she will sit down with dennis muilenburger, jamie dimon, randall stevenson, ginni rometty

and doug mcmillon. coming up, andrew's interview with lance armstrong they talk about his reputation, his new venture fund and whether investors should trust him first brian sullivan has more from opec. >> we have this coming up, we will tie together the markets and the price of oil just upstairs the ministers are meeting. we're expecting a production cut decision if they don't cut production, watch out for oil and the markets. if oil turns around, mar the markma maybe the markets do as well that's ahead on "squawk box.

i'm ray and i quit smoking with chantix. i tried to quit smoking for years on my own.

i couldn't do it. i needed help. for me, chantix worked. it did. chantix, along with support, helps you quit smoking. chantix, without a doubt, reduced my urge to smoke. when you try to quit smoking, with or without chantix, you may have nicotine withdrawal symptoms. some people had changes in behavior or thinking, aggression, hostility, agitation, depressed mood, or suicidal thoughts or actions with chantix. serious side effects may include seizures, new or worse heart or blood vessel problems, sleepwalking or allergic and skin reactions which can be life-threatening. stop chantix and get help right away if you have any of these. tell your healthcare provider if you've had depression or other mental health problems. decrease alcohol use while taking chantix. use caution when driving or operating machinery. the most common side effect is nausea. i don't think about cigarettes anymore. talk to your doctor about chantix.

welcome back you're watching "squawk box" live from the nasdaq market site in times square.

good morning welcome back to "squawk box. among the stories front and center, beyond the global selloff, stocks in asia plunging overnight. europe down across the board the dow off 408 points nasdaq off by 142 points s&p 500 looking to open down about 43 points. all of this coming as huawei's global cfo has bee taken into police custody in canada she's also the daughter of the founder of that tech giant this arrest is reportedly related to violations of u.s. sanctions. she's facing extradition to the united states. china is calling for her release. we'll continue to follow this major developing story and talk about the global implications for trade at the top of the hour apple suppliers in asia are plunging today after taiwan's largan precision reported a more than 25% drop in revenue last month. largan makes camera lenses for smartphones. other suppliers like pegatron

and hoh hai are falling sharply. you're looking at carnage across the board. apple stock down about 2.5%. crude prices are plunging this morning after the saudi oil minister reported a smaller than expected cut brian sullivan has an update i wish you had a shot set up instead of -- you could be anywhere maybe later. maybe we'll get you out at one of those beautiful sites what's going on? >> stuck here in this room, joe. this is not where we want to be but we have to be, because at any moment they could have a decision on if they cut and by how much the market now worried about a smaller than expected cut. this is journalists, those are oil and gas traders. you talk to these women and men, the consensus is this, if we don't get a cut above 1 million

barrels per day, look out below. crude oil prices are 5% of the market energy stocks are not the powerhouse they used to be, but they matter a lot. opec not the powerhouse it used to be, still matters a lot if opec disappoints and oil prices slide, oil stocks will continue to slide and the market will continue to slide not saying opec has the power to turn around the stock market, but if we can put a floor under the price of oil, maybe stop the slide or raise it up, maybe a 1.5 million barrel cut, that would bring the price up in a matter of minutes that could help the overall market. opec, game on. >> exactly you have to stay there, brian, you're right let us know. if anything changes from what we'll hear -- i know you're over there. we're just so fixated on this huawei story i can't figure it out.

usually we talk about everything what i don't understand f she was arrested december 1st, they went through the whole g20 and had all this happy talk, all these smiles, all of this. how great everything is. they had to know both sides had to know what's the back story? you are halfway there -- >> i actually have something to add on that, believe it or not randomly at one of the hotels here in town last night where everybody meets, talks, has meetings, i mean cocktails, huawei had a giant event there last night i'm not kidding. there was a lot of urgent moving around people looked sour i wasn't going into it, but there was a giant huawei event at the hotel i with tell you from observing it, talking and looking at it, the mood was dire. now we know why. >> one more thing before we let you go i'm curious how this russia angle is playing out there

if you think back to vienna a couple years back, it was all about what's happening in that room, chasing down the saudi oil minister that was the whole game. now how much is this about those bilateral talks between saudi and russia any agreement -- and i keep thinking about it in the context of geopolitics again is this putin asserting himself again? now he's in there with opec. everywhere you turn around this guy is involved. >> i will say something, kelly, that i should not say on television because, you know, we're here tomorrow matters more than today. so tomorrow -- this is the opec meeting, this is the decision. i get it, it's important tomorrow the saudis meet with the russians you can call it ropec or opec plus, whatever you want. the saudis and the russians have formed that alliance it gives opec the juice and the muscle that they had back in the '70s and '80s because russia is

at 11 million barrels per day, opec at 33 million, global supply at 98 so they're not quite half the market >> i was going to say, you're right. here's my question you're saying it gives opec -- is opec irrelevant qatar left i know that's over a relationship with saudi. is opec relevant or is it just russia and saudi >> i will ask helima croft, she has forgotten more about opec than i've ever known how much does the russia/saudi relationship mean to the market? >> it's incredibly important the question today is will the russians show up russia signaled they didn't want to cut, now they are >> thank you for this impromptu interview. we like to put people on the spot here. that's what happens.

that's the beauty of coming here the alliance, kelly, matters a whole lot. tomorrow they'll have their meeting. that could mean more overall than today if you don't have russia on, if they don't cut and if the u.s. keeps pumping at 11.5million barrels per day, it may not matter that's why oil is down 5%. you have this fine line, the saudis have to walk it given the political pressure you know this, guys? i'll give you a stat the president has tweeted about opec, he put opec in one of his tweets nine or ten times this year you know how many times he tweeted about opec in the last four years zero none nothing last year when he was president. not the years before opec is in trump's cross hairs >> that's for sure trying to figure out the future of that organization, even as you are standing there to your point, much to follow tomorrow, too. brian, thank you very much >> thank you coming up in just a moment, my exclusive interview with lance armstrong.

his first u.s. interview since speaking with oprah winfrey nearly six years ago he talked about doping, his reputation and whether investors should truss him to handle their money in a new venture fund. the beginning of that interview comes up after this short break. oh good, you're awake! finally. you're still here? come on, denise. we're voya! we stay with you to and through retirement... with solutions to help provide income throughout. i get that voya is with me through retirement, i'm just surprised it means in my kitchen. oh. so, that means no breakfast? i said there might be breakfast. i was really looking forward to breakfast.

i know... voya. helping you to and through retirement. from capital one.nd i switched to the spark cash card i earn unlimited 2% cash back on everything i buy. and last year, i earned $36,000 in cash back. which i used to offer health insurance to my employees. what's in your wallet?

welcome back u.s. equity futures indicated

down 425, 422. the s&p down 45. nasdaq indicated down 146 points we had an okay day yesterday because it was closed. tuesday was bad, though. >> exactly no repreeievreprieve >> monday was the biggest head fake around. you could have called it the week before. >> jim was saying i don't like the fact we're up 400 points >> now we're down going into the open >> maybe that's better. earlier this week i sat down with lance armstrong at his home for his first u.s. interview on television since oprah six years ago. i asked lance whether he was sorry and whether he thought it was his doping or how vicious his lies were that were ultimately his undoing >> i think if you polled the world, the first issue, doping

and the sport of cycling at this generation most people now have enough history and knowledge to know, gosh, looked like everybody. everybody did it that isn't the issue for people. the issue is how i so aggressively defended myself, going after people >> lying >> well, yeah. we all lied. at no point were you just going to say, eh, i'm sick of lying. i'll tell you the truth. of course there were lies. but even then people -- this notion of this -- this idea of bullying is a terrible -- look, i say it all the time. if i saw my -- when i watch old clips, because i get to watch them either through lawsuits or whatever, the way i acted -- if i saw one of my children act that way, it would be a very

rough conversation >> we talked about everything that happened since he admitted doping on oprah winfrey and all the blow back that came after. i mentioned one of those reactions to him >> donald trump before he was president, the night after or the morning after wrote lance armstrong did himself great harm last night lawsuits and failure will follow him. did you see that >> i did >> what did you think when you saw that >> well, you have to remember, this was six years ago donald trump was just a loud mouth out trying to get attention. that was in a sea of -- there were -- i don't think millions of those, but tens of thousands of those he was just another person now he's our president somehow and -- whatever. he's right he's half right. he's going to cost himself a lot

of money we know that happened. he got -- in a lifetime failure. well, i don't know who judges peoples lifetimes, whether or not they're failures, successes, just okay. i don't feel like a failure. i've never felt like a failure since then so -- yes, i read that at the time he's half right. he got a 50. >> lance now has a new media business and is also launching a venture fund called next ventures, which will invest in sports, fitness and other nutrition and wellness markets i asked him if investors should trust him. >> there's been people that we ask for a meeting and they just don't answer you have to assume that's what they're thinking i don't want this association. i can't trust this guy by the way, fair play. i understand i'm not going to be upset or

bitter about that. you have every right quite frankly maybe you should feel that way. >> was do you think you now need to do to prove yourself as an investor >> look, i believe that we're uniquely positioned because we get early looks at things. we will not be fooled on the product side i just don't believe that anybody at next havenventures we fooled this is our world. it's not as if we have to guess. if it's any product, we test it. we make sure it works. to us there's three things the product side, which we think we'll bat a thousand on. there's the people side which we think we can pick good people and people who can lead good companies and the story. how they tell their story, whether through their own marketing, their own branding, their own packaging. that can easily be fixed the people tougher to fix.

the product, if it sucks, we can't start. >> is there any product you think you missed a business where you looked at it in your space and thought, i don't think that will work then ayear or two later said, man, that worked way better than expected >> if the founder of peloton came to me five years ago with that idea, i would have said you're crazy >> peloton >> yeah. >> you didn't think that would work >> i never thought about it. but five years ago in that position, i would have said i don't know partly because i can't see myself doing that. i can't see myself -- i don't think i'm their target consumer or customer, but i probably would have passed. >> in the next hour we'll show you more from that interview it gets very interesting we'll talk about his own economics of the family of lance armstrong. we'll talk also about steroid use, and what he thinks about

a-rod and other athletes his relationships with nike. then he has some startling words about one of his biggest financial backers. then in the 8:00 hour, some fascinating comments about final backers. and then the next hour, his connection with him and uber >> to go back to this, he does own what he considers his successes, right >> one of his best investments you have to hear what he has to say but also travis kalinic. >> he might be right about peloton. it reminds me of the spinning craze. >> i have one. it's hard to get on because it's over in the corner no, it's in the corner, because no one has ever used it since -- >> actually, the part about lance armstrong, quite whatever you think about him, people are sending him pros constantly.

it's very interesting. >> so, he needs to come on "squawk box. >> yep >> there's a guy that's not with us anymore i don't need to talk about who it was so, during one of the interviews, he had the un34 unmitigated awe d ed audacity at doping later, armstrong saw him at one of the restaurants wanted to kill our guy for having the audacity for asking about something. >> that was before or after he was -- >> no, this was when he was still -- no, wait, there were people with horrific diseases that looked at him as a role model and would say, i believe him. he had cancer. there's no way he could have that and be -- >> right >> -- you know, bringing himself, or to make it look like this hero of cancer. there's no way he could be lying. and he used that to get people -- >> i was one of those people

i defended him >> that's what i mean. >> i went to paris and watched him win in the champs-elysees in 2000 i used to walk around wearing the live strong yellow band. >> would you -- we talked about that it different in your mind? >> you know what, i hope so. >> i'm afraid now i'll run into him somewhere and he'll have that same -- >> no, no, it's funny, i think he is -- to the people he attacked like that, i think he's sorry. i 100% think he's sorry. the other side of it is, i think there's some degree on the doping front itself where he still feels like a victim. but we're going to talk a lot more about it. it gets much more interesting when we show you the interview >> i don't think he's changed much he's got the same attitude straight ahead, a pair of ceos departures to tell you

about. as we head to break, a quick check of what's happening in the markets. a lot of red dow down, germany down 2.5%. we'll be right back. uses a technology lens to identify long-term winners. from energy... to real estate... to retail. finding such opportunities for alpha is the true value of active investing. and around the world, you have a partner in that pursuit. pgim: the global investment management businesses of prudential. ♪ ♪ move to the enterprise-grade cloud that's built to handle all your apps.

♪ ♪ the ibm cloud. the cloud for smarter business.

out of ride-sharing company lyft this morning the company had a confidential registration for proposed ipo, the number of shares to be offered. and the price range hasn't been determined the ipo will be determined after the fed conducts its review process. a very important moment because of uber which was expected to go public in 2019 the question is, who goes first. and what that's going to do to set the investigation into multiple ride-sharing companies. it's going to be interesting to watch. >> how close are we to the actual ipo >> that's the question we do not know the answer. >> it could be a couple months

it doesn't happen that quick >> we want to thank mike santoli for joining us in the hour you can watch him like 15 hours grom now, he'll still be on. owing markets, up stocks across the board we'll be back. at&t provides edge-to-edge intelligence, covering virtually every part of your healthcare business. so that if she has a heart problem & the staff needs to know, they will & they'll drop everything can you take a look at her vitals? & share the data with other specialists yeah, i'm looking at them now. & they'll drop everything hey. & take care of this baby yeah, that procedure seems right. & that one too. at&t provides edge to edge intelligence. it can do so much for your business, the list goes on and on. that's the power of &. & when your patient's tests come back...

>> announcer: live from the beating heart of business, new york, this is "squawk box. good morning, welcome back to "squawk box" right here on cs in we're live at nasdaq market site, andrew ross sorkin along

with joe kernin. we're in the red in a very big way. the dow will open up now about 415 points down. nasdaq looking to open about 140 points off the s&p 500 looking to open off about 43 points down there's a lot of rationalizations this morning about what exactly has led the market down. we should say, by the way, overnight in china and asia across the board things up 2.5%. the hang seng leading that i don't know if it's the arrest in china >> i'm sure. >> i don't know if it's the oil. you can put it in multiple buckets. let's get to dom chu he's got more on the market selloff. whether it's the huawei headlines. >> there's so many things. you put them in a bucket and mix them all together. let's look at what's going to move the dow jones industrials, that's the larger charts in that

weight boeing, off by 33.2% cater pill off by 2.5% and apple by 2.25% as well remember, with these three components, oftentimes, the conversation turned towards just how much business, how much revenue folks like these get from china so the china trade store and the escalating tensions play a part. and also as andrew pointed out, the oil story, and kelly, the idea of crude bouncing off the lows, still down about 3% overall. after the headlines that maybe saudi arabia looks to cut production by a lesser amount than some folks have expected. a lot of attention turns to russia and saudi and opec. one other one we're looking at, the treasury right now we're seeing it ever so slight

ticking higher and that's going to be the one to watch two-year note yields, 2.76, andrew, back to you, guys. and the other story with huge implications to the united states and china, canada arresting the ceo of hu huawei also happens to be the daughter of the founder >> authorities in vancouver have arrested the daughter of huaw huawei's founder meng wanzhou authorities apparently want her to appear in court, on whether or not huawei has violated their

sanctions. and the timing is widely questioned here because it turns out, according to canadian officials that she was arrested on december 1st which is the exact same day that president trump and president xi were sitting down to dinner and working out their trade deal so because of that, there are a lot of people speculating that the u.s. was aware of this, and that this is a message to the chinese, as well as chinese companies that they need to abide by certain standards and to change practices which washington has long seen as unfair whuawei was targeted by the u.s for about a year so huawei has reacted putting on a statement about meng, saying the company has been provided very little information regarding the charges and is not

aware of any wrongdoing ms. meng the embassy of canada called it a gross violation of human rights the foreign ministry saying they are demanding for her immediate release. the arrest is expected to harm relations. there is an expert who is very closely connected with the ministry of commerce who put his thoughts and his take on social media. he said the arrest shows that china shouldn't expect the u.s. to keep its word instead, be fully prepared for a long-term confrontation. also on social media today, this huawei arrest was one of the most talked about topics and on the social media account of the u.s. embassy, there was just a flood of all of these calls to release meng.

guys >> all right, eunice we've got a great guest. a couple of great guests to talk about this among other things. for reaction on this story and the latest on this and much more, we're joined by josh bolten later this morning, the ceo roundtable is going to host a summit our own becky quick will be live at the summit with jamie dimon, randall stephenson and also with us, david novak, the co-founder of former yum brands chairman and ceo and he continues to climb the ladder of success. he's now a cnbc contributor. it's just one thing after another. you just keep exceeding every expectation. >> it's a key experience to be

on the show here >> thanks for being here >> josh, where do start, i don't think i can start with -- you know 43 so well, i think all of us did you have dry eyes yesterday when he broke down towards the end of his eulogy? and then we'll get to the substantive issues but that was an an unbelievable day for everyone who either watched or part of it, i would imagine. >> it's been an unbelievable couple of days, joe. and, i was in cathedral yesterday in the service for 41, and there were no dry eyes in there. but it was also kind of a celebration mood because we were celebrating demeanor and public service attitude is something we need a whole lot more of in this country today. >> i've been at services,

whether it's a funeral or churches, and 45 minutes seems like it's a lifetime i didn't feel that at all yesterday. i wasn't there, but watching it, 2 1/2 hours, and i never felt i need to stop watching. it was really something. my kids, i made them watch later in the day and everything else >> yeah. >> it was something. josh, you got some expertise here, not only, obviously, in the government sector, but private sector as well just overall, i don't know whether you looked around the last six weeks or two months, but i don't know if the world's on fire, but there's a lot going on what's the mood of these business leaders with the fed, the tariff and trade issue, the selloff in the market? what's the general feeling are we okay? >> i think so. the mood of our -- the business roundtable is 200 ceos of some of the country's biggest companies. you mentioned five of them at the outset who are participating

in our innovation summit this afternoon. and i'd say, overall, for those ceos, they remain upbeat they're still planning more investment more hiring. they're looking for good growth in the economy so, they're seeing a world that's pretty turbulent. they're still able to do pretty good business, especially in the united states. and one of the things that's obviously causing the turbulence right now is trade policy, trade tension. and our ceos have been in mourning about that for two years. so, they're not in surprise mode they're certainly not surprised by what the fed is up to right now. they've been expecting that for a long time. so, i wouldn't consider our business leaders to be back on their heals with surprise. but they're concerned about the turbulence in the international

environment, especially on trade. >> josh, you were chief of staff. i mean, everybody in the administration had to know what was happening in vancouver during the whole meeting over the weekend, the g20 that would have been orchestrated by people that were also involved in the trade talks. i mean, what do you make of that >> yeah, joe, i was chief of staff during episodes like that. and the truth is, no, not everybody in the white house knows that kind of thing there's a pretty strong membrane that operates between the law enforcement elements of our government and the political elements of our government and in the white house that i was in which was bush 43's white house, the counsel to the president probably would have been alerted to a law enforcement matter, but probably

would have been pretty careful about spreading that word to everybody else i wouldn't read too much into it. >> josh, help us -- read what you want to read into it i'm seeing this headline across the tape this morning and you're thinking what? you're thinking when everybody was in argentina together, they knew this, they didn't know this and what are the implications in your mind? >> i'm thinking, yes, maybe some of the people around that table knew it. but they also knew it was a law enforcement matter and the political elements of our government should not be interfering in law enforcement matters. so, that was a thought i had, but to step back -- >> josh, one second on that. >> yeah. >> because i don't quite follow. so, if the u.s. is saying we're going after huawei, because it violated our sanctions on iran, you don't believe it had any

other purpose to it? >> no, there was definitely political decisionmaking involved in how we're going to enforce the foreign policy and once you ask the business department to enforce a policy, you got to let them do their job. and then you step back and you don't -- from the white house, you don't micromanage one individual >> the cte story turned into its own chess piece in the trade game, if you will, in a way that traditionally, perhaps, when you were in the white house, it may not have been? >> yeah, i'm not sure every administration would have handled that one exactly the same way but, joe, to step back to the bigger story here, yeah, there's a lot of tension between the u.s. and china it's been building for a long time most of our ceos, you know, stepping back from the turbulence of the law few days, most of our ceos were encouraged

by the results in buenos aires, because it means that u.s. and china are finally sitting down to have a serious negotiation about some very difficult problems involving reforms of the chinese system that are really complicated and most of our folks are glad to see that getting under way. because even while a lot of our folks don't support some of the tactics the administration had been using, they support the objectives >> right >> it's time for reform in a lot of chinese international trade practices. >> well, that brings us into what the roundtable is focused on, and that's an innovation summit and we know how important innovation is across the board so, for everything we try to accomplish in it, it's sort of the heartbeat of why the united states has been so successful. but we don't like our innovation to be either, you know, where we're mandated to share it with someone. or it's actually stolen from us.

so, i can imagine that while these guys don't like tariffs, they're probably glad that finally, you know, we're looking this issue straight in the face. and trying to protect things that we develop here that can protect our country. and we don't want to take a b k backseat by 2030 and be the third country in the world >> that's exactly right. in some cases it's outright theft which the chinese have indicated their willingness to crack down on. in other instances it's forced on other economies that's the thing that needs negotiated there's a lot more to the innovation of it but that's one of the elements we're discussing at this conference this afternoon. >> you know, josh, with huawei

going on right now, how much do you think that's literally -- you know, the gloves have taken off. what kind of climate do you think it's going to put around the negotiations that will take place in the next 90 days? and how much of this, just the communication of what went on in buenos aires, is that creating more uncertainty >> let me take the second question first, yeah, normally, a communique would have been negotiated, and you'd be working on the fine points of an agreed read-out of what happened at the meeting two weeks before the meeting but president trump is much more improvisational. and you get more out of the meeting but that's how the president operates generally on issues like huawei,

on all of the issues we have with china don't necessarily touch on international trade, yeah, we are in a very turbulent period but it is where we are with china, and it's been building up for a long time. and hopefully, the two governments will use the next 90 days to resolve as much of that as possible. and, you know, get some results in the 90 days and then agree to keep talking on the other things. that's the right way to handle this and the huawei situation ought to be on the table as well. >> yes. >> but i think the chinese government and everybody needs to understand that those are the laws the united states and everybody in -- certainly, in our portion of the business community says enforce the laws. and operate from there >> we're running out of time, josh

i'm trying to -- there's so many issues we'd like to get to, but business investment, people see that as kind of a disappointing aspect of what we're hoping for from tax reform and deregulation it disappointing is there still uncertainty from ceos that you feel with other issues, or are we expecting too much too soon from the change somewhere. >> well, boy, unanimously, our ceos think that the tax reform and regulatory reform that's ongoing as an unmixed positive and we have seen investment go up about 7% year on year and that's long-term investment. you know -- sometimes, the tax reform gets described as a sugar high, and that's not it. it's a fundamental change in the way we do taxation in this country. it makes the united states competitive. and i think it's going to be promoting investment for many

years to come. so from the standpoint of tax policy regulatory policy, all good from the standpoint of our businesses now, there are partially offsetting that tailwind there's some pretty strong headwinds and the biggest one is in fact trade policy and that's what we're going to be talking about for months to come, certainly. >> yep >> but there's a lot of other stuff on the agenda, too workforce policy immigration policy data privacy, all of those things need to be part of the agenda and in my view, there's good reason for optimism looking out to the next year >> well, if you live long enough, josh, you see anything >> i've lived long enough. >> you've lived long enough to

see 41 and 43 embrace. >> we have the latest throughout the show including the latest op-ed. coming up, my exclusive interview with lance armstrong i asked himabout the doping controversy, the investment funds. "squawk" returns in just a moment

will it feel like the wheend of a journey?p working, or the beginning of something even better? when you prepare for retirement with pacific life, you can create a lifelong income... so you have the freedom to keep doing whatever is most meaningful to you. a reliable income that lets you retire, without retiring from life. that's the power of pacific. ask your financial professional

unstopand it's strengthenedting place, the by xfi pods,gateway. which plug in to extend the wifi even farther, past anything that stands in its way. ...well almost anything. leave no room behind with xfi pods. simple. easy. awesome. click or visit a retail store today. welcome back to "squawk. more of my exclusive interview with lance armstrong who started an investment fund earlier this week, i sat down with him at his home in aspen. the seven-time tour de france

winner was stripped of those titles >> whether or not i would do it all over again what i'd rather do is win seven in a row against everybody else drinking water and eating bread, that's what i would want and i believe that would happen. and, so, that isn't what -- that isn't what got me to this place. i mean, even if i did all of that and i was a gentleman and i had class and i had dignity and i treated people with respect, they would have let me off nobody would have come after me. it was easy. >> you know, in your book, you talk about how epo saved your life i was always curious if you ever thought about the irony that epo saved your life but also was your undoing >> i insist the way i acted, that was my undoing. >> do you think there's a standard between the way you've been treated and the way other athletes have been treated and

accepted back into their sport and society? i'm thinking of a-rod, for example. >> i know who you're thinking about. i think about it all the time. i do think there's a double standard, but i'm okay with it a-rod didn't raise a half a billion dollars and try to save a bunch of people's lives. a-rod is a baseball player this story, what i'm getting at, this story meant so much more to society, right look, it's great when somebody hits home runs, you know, maybe doesn't have here and there for the boys and girls club. but this story had a place in people's hearts and minds that was way beyond those guys. >> what about the sponsors so, one of the things i've been fascinated by is nike stood by tiger woods through his own problems different problems nike did not stand by you.

>> right because i had a lifetime band. if what happened to tiger, the next day, they said, hey, buddy, we're sorry, but we're taking all of the golf clubs, you can never hit a ball again on tv in a tournament, ever, they would not have survived, i promise you. >> philip knight, founder of nike, was a great defender of lance armstrong. did you ever have a conversation with him after all of this happened >> so phil's been interesting. he's been a great friend and i have no association with nike i don't wear the product ever. but phil has maintained -- he's continued to be a great friend i see him every year we have lunch when i see him we don't necessarily talk about this i mean, i think he has his views on it. and at that point, it didn't really matter what -- phil was the founder of nike and really

the spirit behind it but mark parker, the ceo and all the board says he's out, doesn't matter what phil thinks. >> and the conversation, however, took a decidedly different turn, when i mentioned one of his other backers, the famed silicon valley banker thom weisel >> i'm not here to throw him under the bus thom wasn't honest he wasn't honest with the press. he wasn't honestest with his deposition in the postal case. he's just not honest >> how many people do youput i that category? >> very view, very view. he's got the yellow jersey when had comes to this. >> old words from lance armstrong given his history.

i reached out to thom last night. he said i have no comment. the courts have looked at this every way and they have spoken thom was one of his original backers, backed the team, perhaps more than any single individual and clearly lance's views of him and perhaps his view of lance -- >> there was an odd mix in there of remorse >> yes >> and yet insistence. he said if i could have raced against everybody drinking water and eating bread implying he still could have won because they were all behaving the same way then. >> it's funny, as i said in the last hour, i do believe he is sorry to those that he really went after in many ways. but there's an element of him where he continues to still believe he is a victim when it comes specifically to the doping issue. you've spent a lot of time as a ceo who has had celebrity endorsements and others. what is your take? >> first of all, i would agree,

he has a severe case of victimitis, and it comes through so clear it's unbelievable i think that somebody that is a sche shepard of a brand, you would dump him in a nanosecond he lied, he cheated. >> i didn't get the tiger woods comparison at all, did you could you get -- how did you think that tiger was comparable to lance armstrong >> no, not on the doping -- >> but, clearly, what did he do? >> there was a scandal that involved him, no question. but not a doping one but separately, let me ask you this. >> it was personal scandal >> it was a personal scandal by the way, the entire public turned on him for years. >> speak for yourself. >> separately, as an investor, would you give lance armstrong money? because there are people now investing with him, there are

companies that want to do business with him. >> well, there's a lot of places you could put your money, and the last place i would put my money would be lance armstrong i think you have to back somebody's overall record, what they stand for, their integrity. i'm sure, you know, people can have reform. i'm not going to say he doesn't have any chance to come back when i'm looking at my money, i want to go with people i know i can bank on. there's enough uncertainty without having to take a risk on somebody who is now trying to develop a new track record >> just quickly on that point, it's interesting when he drew contrast between himself and alex rodriguez, by saying in a way it was worse for me because i tried to do so much good >> i know, there was a knock on a-rod. there was a lot in there >> victimitis. >> yeah. >> and saying you know, i know i did wrong, the way i behaved he's owning it, but still saying

if only, if only, if only, so many things hadn't gone the way they did >> i'm frankly disappointed to see what i just saw. i haven't seen him i was looking forward to your interview. you know, i was hoping for just a different attitude that can make me like him more. i've never met him -- >> you brought the worse out in him, sorkin. >> i don't know how. >> you send that guy to pr school he would have gotten an "f." >> why do you think he wanted to do the interview >> well, you know, he has his podcast. he's actually out there more than some people realize he hasn't been on tv in the u.s. in any major way he has this new investment fund he's working on. there are lots of companies talking to him it's funny, life is relative i think i first got to know him about six years ago. on a relative basis of where his head is from six years ago to where it is today, it's actually

come quite far it doesn't appear that way >> come far in what sense? >> oh, i thought when he sat with oprah the first time, he wasn't sorry about any of this at all and, look, i'm not going to defend him here, but he has had his own journey in terms of what he's done relative to those people that he did attack. and, you know, and has tried to make amends with many of them. not all of them, by the way, have accepted. >> right >> we're going to have a lot more with that interview when you hear about his economics and connected to uber. lyft, by the way, announcing that it's pursuing an ipo. we're also going to have more on the market selloff another bleak morning. what should you do with your money? we're going to ask plus, oil prices sliding as the saudi foreign minister is expecting a slightly lower oil cut. we'll get to those prices right

after this time now for today's aflac trivia question. what is the best-selling cicom book of all time worldwide the answer when cnbc "squawk on the street" continues. no-good. i'm so sorry we can't make your barbecue. i'm just sick about it. aflac!? different kind of sick. if i can't work after surgery, how am i gonna pay my rent? all these bills? aflac! oh, aflac! and they pay you cash in just one day. see how aflac helps cover everyday expenses at aflac.com.

it's the first day of school. yeah, he's so nervous. tom is letting him know it will be alright. i know, it's a big day. i'm so proud of him. gotta go. ♪ good luck on your first day. just as we help companies advance in the digital era, cognizant is helping people do the same,

by investing in skills training in communities nationwide. ♪ now, the answer to today's aflac trivia question. what is the best-selling comic book all time worldwide? the answer, superman, at 600 million units sold

your brain changes as you get older. but prevagen helps your brain with an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. healthier brain. better life. you should be mad at leaf blowers. [beep] you should be mad your neighbor always wants to hang out. and you should be mad your smart fridge is unnecessarily complicated. but you're not mad, because you have e*trade which isn't complicated. their tools make trading quicker and simpler. so you can take on the markets with confidence. don't get mad. get e*trade and start trading today. don't get mad. i still can't believe how incredible the screen is on the new iphone xs.

and our unlimited plan really takes things to the next level with your choice of the best in tv, movies, or music. it's the perfect holiday upgrade. i know what i'm asking santa for this year. you still write letters to santa? no. please. i send him emails. can i get his email address? oh... i don't feel comfortable sharing it. get the iphone 10 s and our unlimited plan with your choice of the best in tv, movies, or music. more for your thing. that's our thing.

good morning welcome back to"squawk box" here on cnbc we're live at the nasdaq market site in times square among the stories front and center this morning, ride-sharing company lyfthas filed for an initial public offering the confidential filing doesn't specify how many shares might be sold lyft also says the timing are subject to market conditions which this morning aren't looking so great adp will release its report

that was due yesterday economists are looking for 200,000 new sector jobs. and deere raised quarterly divide dividend the new dividend is paid on february 1 and the shareholders of record of december 31 the stock is higher earlier this morning, now lower by 2.5%, given the carnage, joe, and weakness in global markets >> so, the year on deere was 1.2%, just to fill in the blanks >> the shares have done better >> exactly time now for "market flash." i would pickdom chu to dom chu. >> and i'm happy to do it for you. >> and it's true, you are. >> i'm happy to be here. >> i'm sure you are.

maybe we can talk about tiger. no, no >> kelly talked about that deere dividend raise that's getting caught up in that broader china trade story because of the huawei cfo arrest many of these companies like boeing down 3% caterpillar down 2.5 heavy equipment. apple down 2.5% down, with the undertones in the huawei story remember, these three big dow components are some of the ones that are going to weigh the most on the index and also the positive stories we want to accentuate those cisco shares still an outperforming stock at jpmorgan. and they call it their best idea in computer networking equipment. citing product development and other things cisco systems is one stock to watch on the tech side and two other ones to watch, twitter and alphabet

both of those stocked of bi-rated those folks believe for twitter, those shares move in lower here, entry point here that's attractive also with alphabet shares, that moved lower, that's attractive because it's got deep intellectual property and talent and good financial help. and twitter shares because the company has such a big user base and because twitter, overall, is trying to make efforts in improving its platform so, kelly, a lot of those are in focus. back to you. >> a surprising year-to-date, 33%. joining us the chief inquestion officer for americans business group welcome to you both. thomas, to start with you, obviously, we're looking at the ten-year yield it was below 2.9% a moment ago are you surprised by that? how serious is the flatter yield curve? dom pointed out it's not necessarily flatter this

morning. but you look at the shrewd yields on the engineer and wonder what's going on with global growth? >> i'm not surprised to be honest with you. it's a dire warning sign of the fed. the message is clear, within the fed, it's an indication that the clock is now ticking it stays every day in partial inversion and goes into deeper inversion. >> but only on the three to five-year range do we see that >> that's true and we could make an argument that there maybe a technical going on there but that technical itself is a good indicator there's a demand for the five-year bond why that is probably has something to do with the demand to hedge risk. inverted curves are always a sign of a policy mistake with the fed, you tighten in december, you got to pull back and pause. >> david, do you agree with that we're talkingabout one more rate hike in a couple weeks.

a lot of people saying they only have capacity for two or three more hearings the thing, jobs report is probably going to be pretty strong there's no real inflation. should everyone be so spooked that the fed is going to hold off because things are so great? wouldn't it be worse if we were talking a slowdown >> i agree with thomas that the yield curve is sending a very real message to the fed that they're very close to neutral and should slow down the pace with hiking and that should begin with no hike in march. but i also want to remind people that the yield curve is not a definitive indicator it's gone flat or inverted which it is not inverted there's usually only a one or two-year period, unless you have a recession. there are oftentimes, where it inverted and economic growth improved i want to point out 1966, 1985, 1995, the curve won't inverted then it went back to positive. >> and i heard people draw

parallels to '95 tom, people said even though it reversed, stocks could go 30%. should investors jump out of the stew >> we're back to the fed in those cases where you saw an inversion but a long lag between inversion and recess was the fed pulled back. the fed tightens too much and continues to invert because the fed tightens into a signal >> it's the topic du jour, thank you both all right. new and improved, david millback you're on today. i'm going to be following. you do you have a twitter? >> yeah. >> see, he was a ceo, the ultimate canary in the coal mine, they're always, uh-oh, you got customers on both sides. you're retired now, so you're

speaking up. coming up, oil moving lower and the saudi arabia foreign minister said it would be a live cut. plus out of adtre this market turbulence we'll have much more on the market selloff in just a bit

today, there are more sensors on our planet than people. we're putting ai into everything, and everything into the cloud. it's all so... smart. but how do you work with it? ask this farmer. he's using satellite data to help increase crop yields. that's smart for the food we eat. at this port, supply chains are becoming more transparent with blockchain. that's smart for millions of shipments. in this lab, researchers are working with watson to help them find new treatments. that's smart for medicine. at this bank, the world's most encrypted mainframe is helping prevent cybercrime. that's smart for everyone. and in africa, iot sensors and the ibm cloud are protecting endangered animals. that's smart for rhinos. yeah. rhinos.

because smart only really matters, when we put it to work- not just for a few of us, but for all of us. let's put smart to work. something is transforming and our world.. it's the longevity economy - americans 50+ driving 7.6 trillion dollars... of economic activity every year. right before our eyes, aging is unleashing exponential growth... ...in every industry. are you ready? we are. a-a-r-p is teaming up with business leaders and innovators... ...sparking new ideas and real solutions. so, what are you waiting for? opec leaders meeting today

in vienna, our brian sullivan is there. and joins us now with the latest hello again, brian >> reporter: hey, joe, yeah, the question here is very simple are we going to get a production deal or are we not the odds are we're going to get one, the consensus, 1.2, 1.4 billion barrels. basically saying well, there's a rick of no deal or perhaps the deal is smaller than expected. a lot can happen they're all meeting upstairs remember, it's about 2:00 local time in the afternoon, the more jittery people might get we're already seeing oil down about 3%, guys we are expecting some kind of a deal the problem is simple. there are countries who don't want to cut. and venezuela probably can't cut because their production keeps going down because of the rolling economic catastrophe

that country is facing the challenge for the foreign minister upstairs, to come up with a deal that won't disrupt too much, maybe put a floor with prices if they make a deal, you know who is not going to be happy about that deal? president donald trump he's tweeted at opec nine times this year, zero times last year, guys, if we get that production deal, i guarantee you the president is going to be on the phone with the saudis saying what exactly are you doing and they're also facing the backlash over the killing of jamal khashoggi. there's a lot of sensitive issues taking place. i'll tell you this, though, if they don't get a deal and walk out of that room and say we can't figure it out, no production cut the men and women who actually trade oil in this room thing that the oil will fall to 40 something dollars a barrel if there is no deal we're waiting here at opec in vienna, in the basement as soon as we get something, i'll bring it to cnbc, because that's the network i work for.

>> yes, you do let me know what you've been doing while you're over there, since i love that place. >> reporter: i've been hanging out in a basement. >> yeah, that's the only problem. all right, brian here to discuss the meeting and the price of crude, gina mayer, global sector head and u.s. national sector leader of energy and natural resources at kpmg. reading your pre-enter view notes, it's interesting, gina, because you say they'll do at least 1 million. and it would be great if they came out for plans for a million and a half not everyone thinks that higher prices will be good, but in this world where we're such a big oil producer, we do feel for our oil producer e producers, and we're not sure if

we want slow or add least medium we don't want it to go into the 30s, right >> that's exactly right. what the industry really needs is prices in the 50 to 60 range to continue to be profitable and robust and drive the supply that we need. i think there's three things i would offer for your consideration. number one, i really believe that the media and analysts are overplaying the u.s. influence in this conversation yes, the u.s. wants lower prices you mentioned the president tweeting about it, but i don't think that's a big factor in the decisionmaking today the second is, the short-term opportunism that's taking place. the runups do not support what happened with the iran situation. and the third is, i do think opec is going to take decisive action because they don't want to lose their relevance in the

market >> it's just a coincidence that you're in houston. that's not why you're talking about this >> i'm a fossil fuel friendly kind of gal from houston, texas, what can i say >> fossil fuel, i can't imagine the world without it >> gina, that leads me to the question, how are the new forms of energy, you know, the electric cars, how are the new forms of energy going to change the dynamics, in your opinion? >> they are going to change the dynam dynamics here's the key fact that i think is important analysts predict that peak demand will happen in 2025 to 2026 a barrel of oil is required for petrol chemicals and all kinds of other things where petroleum

products are found the electric vehicles, hydrogen, the changes in the mix, we're able to do that for carbon reduction, but it's not going to have that fantastic an impact on crude oil production as some would predict. >> that's pretty amazing you don't think of it that way, do you you think we're going down from here we're not going down from here we're going back up. >> that's right. there are a lot of people on the planet that don't have access to electricity. >> david, the ceo -- i want to see you take a hot air balloon across the atlantic when you're visiting clients there >> i just asked a long-term question >> on some electric plane >> just comment on what you know, joe. >> all right gina, thank you. let's get back to the big story weighing on futures with big implications with u.s./china

trade truths and relationship, canada has arrested the cfo of huawei bill bishop is with us bill, right away, what do you think is going to be china's response to this >> thanks for having he ing me i think that this won't actually derail the ongoing trade talks because the u.s. has a lot of leverage over this but the real implications i think are yet another confirmation in the chinese leadership that the u.s. is looking -- they're going to see this as part of the broader conspiracy to keep china down. so this just fuels what i think is an already exciting technological race >> bill, what do you think about the timing this arrest apparently happened on december 1, even as trump and xi were having this meeting to produce this 90-day agreement.

is that all of that in yjeopardy or does china buckle i don't see them accepting this on the national stage. what do you think? >> well, there's a lot of reasons that they need a trade deal with the u.s. i don't think they'll let it blow it up but we have we're able to make an appeal to president trump and get him reverse the commerce band on selling u.s. technology components of cte. the chinese are hoping there are ways to work through this. we also have a situation where it has to run through the process in canada. there's no guarantee that she's not going to be released >> bill bishop, thank you. dow futures still pointing to a lower open coming up, the thoughts on the op-ed after the break.

i'm ken jacobus and i switched to the spark cash card from capital one. i earn unlimited 2% cash back on everything i buy. and last year, i earned $36,000 in cash back. which i used to offer health insurance to my employees. what's in your wallet? unstopand it's strengthenedting place, the by xfi pods,gateway. which plug in to extend the wifi even farther,

past anything that stands in its way. ...well almost anything. leave no room behind with xfi pods. simple. easy. awesome. click or visit a retail store today. welcome back let's get back to our guest host david novak. he has an op-ed called ceo challenge to elected officials rethink your leadership skills i thought about that at george h.w. bush's service yesterday. >> well, i think america enjoyed sitting back and seeing the civility that we saw this past week and i think that's been very refreshing. i think the fact of the matter is, though, now we're on to the future

basically, america is fed up with our politicians and their ability to make, really, you know, the kind of dramatic change that we need. i think everybody did agree we've got some major problems we need to solve right now, you know, the debt, immigration, health care. but the problem is i don't think we have the kind of skillful leadership skills you need to have to solve those problems >> this is something that somebody came up with something, bush has said, read my lips, no new taxes. but when told this is the right thing to fix the deficit he said, fine, i'll take the hit. and he didn't get a second term. that taking the courage for someone to say i'm not going to shoot myself in the foot >> well, that's the problem. we need a change in attitude there's way too much confirmation bias. politicians tear each other down there's so much mistrust they're not getting input.

so, what i want to do, i'm offering to all elected officials the opportunity to take my essentials in leadership training program, because i really think we can teach people how to step back, take a look at themselves get the right self-awareness, mitigate confirmation bias learn how to do productive conflict and get people engaged. even your adversaries. that's the way forward and i think the only way to do that is leadership is there a website for that? >> yes the dow is off 400 points after tuesday's drop later, more of andrew's exclusive interview with lance armstrong. "squawk box" will be right back. you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today. fidelity.

hey, what are you guys doing here? we're voya. we stay with you to and through retirement. so you'll still be here to help me make smart choices? well, with your finances that is. we had nothing to do with that tie. voya. helping you to and through retirement. your but as you get older,hing. it naturally begins to change, causing a lack of sharpness, or even trouble with recall. thankfully, the breakthrough in prevagen helps your brain and actually improves memory. the secret is an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. healthier brain. better life.

wall street slides futures lower across the board as stocks get set to resume trading after yesterday's day off. an avalanche of market data coming this hour and we'll talk you through all of it. a key executive of huawei under arrest the daughter of its founder detained in canada and facing sanctions in the u.s and part three of my exclusive interview with lance armstrong, his first on u.s. tv in six years we're going to hear from lance

on his new sports-focused investment fund getting sued for $100 million and his lucrative investment in uber the final hour of "squawk box" begins right now >> announcer: live from the most powerful city in the world, new york this is "squawk box. good morning, and welcome back to "squawk box" here at cnbc live from the nasdaq market site in times square, i'm joe kernin along with andrew ross sorkin. and with us is david novak futures are down, but maybe not out. down about 400 400, after -- well, yesterday it was okay because it didn't trade. but the day before was a little dicey. 799, wasn't it not 800. but anyway, 800 plus 400 is

1200, which is about what we got last week. i think, around there, anyway. oil prices are dropping this morning as opec ministers trying to reach an agreement on a production cut, people think from 1 million to 1.5 million is what is in the cards but so far, even though that seems to be the consensus, still down about 3.5% on wti >> it's actually come back a little bit. as you heard brian sullivan saying no agreement. a big story for implications for trade and relationship between u.s. and china canada has arrested the cfo of huawei who happens to be the daughter of the founder. meng wanzhou is wanted here for implications as it pertains to iran eunice yoon has the latest >> reporter: thanks a lot.

many chinese see this arrest as political. meng was detained on the same day as the president talks between president trump and president xi because of that there's speculation that the trump administration knowing how important meng is and the fact that she is the founder's daughter, did this on purpose, in order to try to pressure china as the two sides head into negotiations there was an expert known to be close to the commerce ministry who just posted on social media that china should be fully prepared for a long-term confrontation. the chinese government has expressed outrage over the arrest the foreign ministry is demanding for her release. and they put out a statement saying the company has been provided very little information

and is not of any wrong together by ms. meng. it could back fire because president xi jinping is likely to not to appear weak and where the negotiates go. >> eunice, just discussing this, the concern about huawei in this country and some of our allies, for lack of a better word, is that huawei equipment is tapable by the chinese state at any point. so, as joe mentioned earlier, it's one thing if they're involved in the infrastructure as they are now. if we're rolling out 5g and suddenly everyone's car and house and you name it -- >> right, pacemakers >> -- pacemaker, good point, there's a good chance they don't want that vulnerability. >> there are suspicions.chi, th

chinese founder was a member of the pla, the military there. and huawei has said they don't have anything to do with the state. and that they are a private company. however, this is a problem that a lot of chinese companies face because at the end of the day, if they're private or state, they still do operate in china and since the chinese communist party has a lot of power and influence in the country at the end of the day, if the chinese government does knock on your door and ask you to give something up, the big question is whether or not chinese private companies or any companies feel they're in a position to say no >> eunice yoon, thank you. by the way, one side note, and it's a very interesting connection, a lot of people in the united states have been worried about the connection between huawei and softbank. with a controlling interest in sprint trying to merge with t-mobile >> it's japanese >> yes, acce shg, except that s

don't know it's exclusive, much of the infrastructure has been with huawei. >> but that's -- >> there's been all sorts of national security concerns around softbank, it's been raised in concerns in washington >> it's not as if the chinese and japanese have been friendly over the last years anyway >> yes, but softbank often gets mixed into the huawei story. so keep an eye on that because of the branches of the softbank. separately, we're now two months away from the federal reserve's policy decision. the odds of a rate hike looking lower compared to even monday. steve liesman joins us now >> i wanted to explain that chart. 76% probability of a december rate hike. we were up to 90% on the december rate hike and that follows the base from yesterday, and especially saying optimism is weighing

we can't get to 50% on the first rate hike -- you're shaking your head, joe. >> i can't believe it. i'm shocked about december everybody says it's won and done do you know what i was thinking, i still think stock market traders spoiled brats. when we used to try to get out of qe? remember what they used to try to do? >> right >> they don't want to eat their broccoli, but they want dessert. >> can they actually get the december one off the table >> let's think we've got a guy here who's the guy. dallas fed president robert caplin joins us. tell us about the message you're getting from markets here. the recent selloff and

especially the 0.2 spread, i'm saying it's up a little bit this morning. but crazy saying it's up ten basis points between the two >> let me start with the 0.2 spread you've heard me said and i'd emphasize what i've been saying the short end of the curve has been acting to what the fed is saying the longer end of the curve tells me that expectations of future growth are sluggish and what i see in the stock market, and i'm obviously a student and have worked with companies my entire career and student of earnings reports, i'm seeing input costs are rising. tariffs are a part of it, but it's not the only part of it and companies -- many of them are struggling to pass on those cost increases to their customers. you're seeing margin erosion and we're also seeing deceleration of expectations for next year's earnings growth which are off a high base.

so, when you put all of that together, i just think there's a lot more uncertainty and very consistent with what i hear from companies and surveys. i think the implications for me and my job as a central banker, i think getting to 2, to 2.25, i've had a lot of confidence that we should be moving along i think at this stage, you're going to hear me be much more cautious and counsel patience. i think there's more uncertainty, probably growth decelerating i'm seeing interest rates showing some weakness. it's too soon to say what to make of it but i think one of the key tools we have with central bank is patience, and i think we ought to be using that tool. >> robert, i want to give you some credit because you were talking back in mid-october about getting to range of neutral, before the leadership at the board was talking about the range of neutral are we at neutral now possibly

or how far below it? are you still thinking we need to get there >> so, neutral is by its nature imprecise and uncertain. i think the range at the fmoc and the longer run rate is somewhere at 2.5 to 3.5. i'm at the lower end of that range. my guess is we're probably a little below neutral, but we're approaching it we'll know in hindsight where neutral was. i think normalizing policy was always going to be challenging but i think we're in the stage of the process where you're going to hear me shorten up on the prognostications and be much more vigilant as to what's going on in the economy. and particularly, not just the data, but what the outlook is, and what the markets are saying about the outlook and what companies are saying right now, i'm just seeing a

high level of uncertainty. and i think it's a factor in my thinking >> robert, i've got to be direct about this, only because we're coming up quick on the meeting, and you guys are going to enter a blackout period where you won't talk at all. >> right >> and i know one thing you don't want to happen is for the market to be mispriced going into the meeting but here we are with a 76% probability of a rate hike in december is that who titoo high >> you've talked to me enough that you know i'm not going to comment on the market probabilities. >> i know, robert. >> and i would just say my comment would be i think we ought to be very gradual and patient here inflation, in my judgment isn't running away from us the dallas trim which we just published shows muted levels our reading of it so i think we have the luxury of patience.

and i'm not going to judge or predict what we're going to do in the december meeting. obvious obviously, i'll have a strong minute of view going into that meeting. but i think we ought to be patient. there's a good possibility, and i'm very attune to the possibility, if not the probability that the economy is going to look very different in the first half of 2019 as it does today because fiscal stimulus is waning and we've raised rates over the last 2 1/2 to 3 years i think all of that means we ought to shorten up on our assessments and be willing to be very patient >> robert, we're all trying to make sense, especially this morning of the relationship that the u.s. has with china. what's happening, whether the relationship is devolving, whether it's coming back obviously, you've seen swings in the past week. take us inside the rumor or at least inside your own thinking how that's going to impact rates in the u.s. and how the fed

thinks tab . >> so, there's two things i'd comment on trade growth. i can tell you first hand, companies are widely affected by the trade tensions either steel, aluminum, or the retaliation back from the steel/aluminum tariff. and two thirds of the companies we survey, and we've got a very corporate base in the state of texas tell us that either their input costs are already up because of it or they're uncertain and it's having some chilling effect on their business relationship. so this relationship with china is part of that. of the second part, china is a big percentage of global growth and they're using more leverage to meet their 6.5% gdp target. so far, the u.s. economy has been outperforming the rest of the world. but we got to keep in mind, eventually, if global growth

slows, we're not going to be immune to that and 45 of s&p 500 companiescom from outside of the united states so it's not affected gdp growth here yet but i think there's a decent chance you'll see it spill over >> robert, can you hang on one second i want to tell people what the adp payroll numbers are, 1 179,000, these are a day late because of the funeral yesterday. this is ahead of 180,000 october numbers are revised. that strong number remains goods sectors up 16,000. services 163,000 and the nonfarm payroll estimates. i wouldn't expect any changes out there, guys, just skip to the industry graphic here, and we'll just look at that real quick, if you could get there. the education services always a

leader there 49,000, leisure/hospitality, 26. good growth across construction, lighter than it has been but on the positive side is still good. can i get guidance, do we have time to go back to robert for one final question >> yeah, go ahead. >> joe gave me -- who is running the show here. >> he knows. >> robert, first of all, the jobs outlook is pretty good. the eco there date is pretty good is the worry to use a craps metaphor, on the come here, or is the real worry in the data you're looking at it can we get back to that and it all of a sudden rozier at 3% growth >> well, our own forecast at the dallas fed, you'll see growth

move down from 2 to 2.5 next year we're not predicting we're just saying that the fiscal stimulus will fade. back to the job growth numbers job growth numbers are very strong which tells us more women are entering the workforce and i think the data shows high school and less. people are coming off of disability but the demographic trends in this country suggests workforce growth is going to slow. the big one for next year is the productivity growth is going to jump more than we expect, but i'm a little skeptical about that >> okay. >> i don't think it's a bad year in 2019. but i think growth will be slower >> right >> and i think these uncertainties we've talked about, we have to watch very carefully. and that's why i'm counseling patience, as we assess all of this information >> robert, it's a credit to the dallas economists at the dallas fed there that you knew months

ago when we planned this we were going to need you on for the market down 400, and questions about the outlook for the reserve. thank you for joining us >> thank you, steve. when i come back, the final installment of my interview with lance armstrong. we're going to hear about his investment in uber it's paid off big time and his getting sued for nine figures. "squawk box" will be back after this dex, help me meet a client's need. is the fund built to sell or built to last? etfs are only part of a portfolio. so make it easy to explain. give me a quality fund that helps me get clients closer to their goals. flexshares etfs are designed and managed around investor objectives. so you can advise with confidence. before investing, consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully.

welcome back to "squawk box. earlier this week, i sat down with lance armstrong at his home in aspen for his first interview since oprah wintry sfrewinfrey,s ago, we discussed a lot of

things including a lawsuit he settled for $5 million i asked him whether he thought he got off easy. >> i didn't think i got off scot-free, because the settlement with them for 5 was probably the tenth settlement. you know, there were all of these cases. and it became unannounced to me, i'd insured most of my pays, one of my balances i knew of the insurance companies. and then they started coming in, i'm like, who are you? this is going to shock you, but once you total up all of it, the loss of guaranteed income, legal fees and settlements, it came to 111 million bucks. so, you know, i didn't feel like i got off easy >> what most of the public doesn't know about armstrong is that he's made tens of millions of dollars in investment with uber it all started with a meeting

with venture capitalist chris soka >> when i met chris, he was at google or twitter. you know, his personality, larger than life we were having fun and we kept in touch some years later, probably around '88 or '89, he left to start his own capital fund called lower case capital. he called me looking for investors, would you invest i'm thinking to myself, this guy has a huge personality, but he's also very smart, very connected. why not? i invested in chris. i didn't know he did uber. i thought he was buying up twitter shares from employees or former employees the biggest investment in lower case firm one was uber $3.7 million >> how much money did you give him? >> 100,000 bucks >> how much is that worth?

>> it's a lot more >> what are we talking, ba ballpark >> it's too good to be true. >> 10, 20, 30, 40, $50 million >> it's one of those it's a lot it's saved our family. >> today, how much do you follow the travails or success depending on uber? >> very closely. very closely >> do you know travis kalanick >> a little bit. actually, chris brought him to one of the tours >> what did you think when he was ousted >> it's easy to say, because in hindsight, i think dara's done a great job. what they're positioned to do is pretty impressive. i can't like that, you know, i was that guy travis and uber is lance

it's not that, time-out, again, in hindsight, they haven't missed a beat. i actually worry about travis. i'll e-mail him sometimes, i'm like, dude, i've seen this movie. it's got a real [ bleep ] ending and so, of course, his ending has a lot of zeros on it but, no, you can't question their decision now >> so, you saw yourself in him >> yes and in the sense that he was -- and i get it man, i get that this is your baby, and you want to fight for it and you want to protect it you want to do anything, say anything, go anywhere, confront anywhere and in this day and age, in 2018, you can't. >> you can see a lot more of that exclusive interview with lance armstrong right now on cnbc.com

and fighting words it's interesting to see both his evolution, i know you don't think the evolution has come far enough but even to hear about the economics of his own family. at one point, he said, we wouldn't be in this house without the investment in uber uber is clearly a huge part of his entire net worth >> well, it was kind of a little rich to say it saved our family what made him $30 million, whatever the number is probably would have done fine for themselves. >> he also has been an investor in docusign. >> if you were saying that, would you say what are you investing in >> the investments he's investing is very different than what chris was doing in 2009 the kind of stuff, sports

nutrition. there's a ring, actually, this aura ring which is a sweet tracker that has a stake into it that michael delvis but an interest into. there's sports products. we'll see. >> that segment, he's more reflective he was more reflective, i liked it better than the previous thing. the interesting thing to me is how he invested in the person. >> yep >> people who really, really do well in my opinion, they find the person that's who you invest in he didn't know anything about uber i've heard that story time and time again that's why it's always fascinating, who's running the place, you know, you get the right people, you invest in them, they'll make money for you over the long term i've seen that time and time again. >> thank you coming up, key economic data a fresh read on productivity people have been watching very

closely the jobless claims we'll have that data point and more with "squawk box. we'll return, as we head to break, take a look at stocks, it's red across the board, not as bad it was. we'll be right back. place, the xfinity xfi gateway.

and it's strengthened by xfi pods, which plug in to extend the wifi even farther, past anything that stands in its way. ...well almost anything. leave no room behind with xfi pods. simple. easy. awesome. click or visit a retail store today.

from a fresh read on third quarter posts. along with the initial jobless claims and international futures. let's show you the numbers as they've been in the red all morning as fears with tensions with china continue to wear on the market the dow off 262 points nasdaq off 102 let's get to rick. >> reporter: all right in the october trade balance, we're looking for a number around 55 billion. that's a minus sign, a deficit and darn close, 55.5 billion on the deficit, that is, of course, for the month of october on trade. and sequentially followed 54 minus 54.6 third quarterfinal, nonfarm productivity, up 2.3, exactly as expected sequentially. labor costs up 0.9 darn close the expectations up 1% jen sequentially following the look at 1.2

jobless claims, subtract 4,000, minus 4,231. and on continuing claims we move to the number number, a pretty good drop of 3.61 million. indeed a big drop there. and as we look up to the board, we see more data points coming interest rates have moved into the 2.80s. remember the exchange a couple days ago if you look at the 2.41 and 2.44 from last year, right in the middle is 2.82. 2.82, 2.82 is very good support. many surprised we're coming so close to testing it. back to you. >> rick, thank you we were just saying here on set, if you're starting to get concerned about the cycle and the economy, well, there's one indicator you can take to your desert island. the jobless claims every week, very sensitive to

the market how the economy is doing, it is really low. >> it went down. rick, are you still there? how long has it been that could be the early sign of trouble? i wonder what you think -- i know it's not in the number tomorrow, but what do you think about tomorrow >> reporter: well, my own feeling is i think the economy is really not a whole lot different than it was a month or two months or three months ago what is different is that fairy dust we all underestimate how confidence in the marketplace, i'm not talking consumer confidence or mission, but just the confidence, policy, dynamics, the fed, trade, how it pieces together. we've lost a little of that. but let's not lose sight if you asked any of your guests where the number would be, for the trade, it would be significantly higher there is a big movement also

pushing rates down but let's not forget the biggest thing, beginning of the year, we were just sweating over the fact how equity is going to deal with interest rates now interest rates are going down you can paint it any way you like i think the cornerstone of the economy is good. i think market logistics are getting in the way of it i think there's a year-end going on here as well. listen, the fed isn't directly for this directly but all central banks are responsible very directly. we're go be throuing through an experiment i still say don't underestimate how balance sheets and the rest of the world can shade the parity between the global world and the rest of the world. that's the process we're going through. >> and we have kids at home watching, there is a santa claus, rick, right you can confirm that that could mean between now and end of the year something

better, since we know he's real, right? >> well, i think he's as real as anything sometimes we discuss here on the morning show >> yeah, that's right. yeah >> i will tell you this, that the economy and the markets aren't synonymous. of course, they have a huge rhyming, the correlation together but i think what we're doing we're calibrating a number of issues and i really do think that the rest of the globe is exporting us a lot of this uneasiness, whether it's brexit, we underestimate the global impact there. and on the trade issues. listen, i don't ever suspect they're going into a trade war but there is very little doubt that there's big swaths of the supply chain that aren't investing or spending the capital until these things get worked out and all of this is eroding and i think it's at a time where people have let their market confidence guard down. and i don't suspect it's going to disappear quickly, but i will

still go on record saying i don't think it's the big one >> all right, rick thank you. >> and david novak is with us. david, people are starting to draw the analogy for 1995 again for the environment we're currently in saying, look, there was uncertainty about the bond scare that happened. but you had a rally that marketed big time. and a fed that kind of backed off when greenspan thought he had to and a period of year that cycle continued before things went belly up anything you draw between now and then >> listen, i think the underlying business we have going on in particularly the united states is strong. the economy is still good. jobs are good. i think we could have a much better year next year than people think >> in terms of the economy or -- >> both, both. i think the stimulus can slow down a little bit. but i think the ceos at the

roundtable are optimistic for a reason they're investing in this business they feel good about it and there are concerns the big thing, john weinberg sr. on our board, he said trees don't grow to the sky. it's ten years past the recession. >> right >> all of a sudden, we have uncertainty that we didn't have. anytime you have uncertainty, you have a problem when we had uncertainty, our stock took a hit those things got to shake out. we've deputy to get clarity on where we're going. we've got to get clarity on china and the trade. but i think the biggest wildcard we have for next year is the non-u.s. growth. it's still a global growth >> the beige book yesterday which they still didn't release from yesterday, they were talking about the shortage and wage growth is still good. do you think that gives our administration to say, look, we know the tariffs will hit the consumer, this is a place we want to make a stand

ironically, we do this and that leaves the markets with things to worry about >> i think with the administration, you need to focus on leading with your strength so the stronger that is, i think the more the administration will feel empowered to make the tougher calls but i think what we really have to have, if we've got to have somebody step up to clarify the sign you know, we just whip the economies and market it's aroun around people are worrying how many wheelchairs do i order but i'm not ordering any even if it's going to be bad, people need to know what it is >> even if it's 25%, tell them, you know what, it's only 25% >> right we will not deal with wondering what is going on that's my view >> we'll have more, david. stick around there >> it was a bean stalk, it was

not a tree that grew all the way. >> jack. >> it was not a tree you're right, they typically do not grow coming up, futures deep in the red this morning and when we come back, activist investor keith meister is here

welcome back to "squawk box. oil prices dropping this morning as opec ministers trying to reach an agreement on production cut. we'll get to brian sullivan with more on the big meeting in vienna this morning. brian. >> reporter: andrew, thank you very much. quickly here, three things, number one, if they do not reach any kind of a deal, start the opec over course it's got to be strongly worded

and convice. with qatar leaving there's a lot of questions that's number one. and if they do cut, that's the only thing that's going to move markets. oil is down in the premarket, as you guys know. oil stocks are down. i just ran the matters before we came in here, 88% of all u.s. oil and gas stocks are in bear market many of them down 40%, 50% the worst performing sector. if they open where they are, chevron and exxon will add two points to the dow's decline. not a lot. but, guys, waiting on opec, anything less than 1.3 million barrels a day, you might want to watch out on oil oil could slide back even more back to you. >> hopefully, that's not a proxy for the global economy, brian. hopefully, it's supply related like once again. maybe the next guest may have interesting insight here as we look at the recent

volatility impact on investors we welcome in keith meister, founder of corvex management group. that's not the only one down, keith. the overall don't reflect the movers in the sector is that worrisome for you? >> i think that's the key point. and i think that's reflective of the cost of owning risk assets just being substantially higher today than anytime in the past years. >> which we should have known. >> we went from a period of no volatility, to a period of real volatility >> we went to a period of the punchbowl to taking away the punchbowl. >> 100%. when you take away that punchbowl, that has to increase. >> it seems it should be at the margin, it shouldn't be killing us at 2, 2.5%. especially with tax reform and deregulation it just the slight change in

change in liquidity or the bank's position, that really affects us that much >> i don't think it affects businesses as much as it affects stocks i think today's businesses are doing great. there's very few businesses that aren't going to make a short-term investment with 200 basis points if you think about the flattening of the yield curve, most can borrow money at really attractive rates of returns. so businesses are doing better than stocks right now. and it makes sense, because as you pull the central bank's stimulus away, owners degross, they sell assets, liquidity. so one has to find assets that i think have either real growth or valuations out of it >> you're explaining why multiples contract. >> exactly >> as rates go up. >> what do you see the big growth drivers being in the future >> i think the economy overall is good. there's a shift where profits

are. labor costs are going up there was inflation that caused concern on things like freight and past-due goods and costs so there's a shift of where it is in the economy. but there's real growth that's doing great. and i think those trends have to change for a wild. you want high-gross margin businesses where you have real pricing power. so if there is inflation in goods, you can pass that on so business is tied to enterprise software businesses are spending money n digitizing their businesses. they're spending money on payment technology there's money being spent on the economy. so in an economy that may grow at 2%, 3%, there's going to be real winners and losers and a shift that's going to occur. so there's real winners and losers >> do you think moving into a

new, i don't want to call it a peak activist, but there's more opportunity for activist. >> and i want ask you a question, what do we miss when i think of activist? >> i think the world of activism is here to say what i think active investing is people acting like business owners in the 3public markets that's really, really good if i could define activism as private equity in public markets. we didn't ininvesvest in the br because it was a bad ceo he had a great culture, great board. and our idea as activists we had a great idea to make the business together. we signed a confidentiality agreement with david after we invested we all wanted to do the same thing. we thought we could say we can help do you better as yum was going through a

change, they benefited in having a 5% owner who was locked up for a few years. the media wants to show it was good guys and batd guys fightin, if it transitions like i think it will in the public markets, it's not good guys and bad guys. >> i think they've got it nastier, when you think of athena health or elliott by the way, companies are different, but qualcomm had hired definers the organization that facebook was using. it just seems like the sort of political tactics that used to be off-limits for business have now worked their way in. >> in a way, it was qualcomm trying to fend off the investors. >> absolutely. >> i think you get all of the above, the media is going to try to focus on the fight situations think of private equity guys,

the silverlakes of the world putting money on msg and on the board. not because they want to kick out management, but because they think they can help out value. i think you're seeing it on all different sides. you're going to have quanti quantitative funds and multiples that trade equities. there's a whole in the market that people actually buy stocks. >> by the way, can i ask you, if that is becoming too common, lately, people have noted even with the stone-type conferences, not a lot of short ideas you had over the week the founder of value investing thinking about the concerns that the vanguards of the world are going to own all of these. even now the activists that we rely on saying we're going to partner with economiy companiee long run

so, who's watching the shop? >> there may not be ideas for everyone to shore up i think if you accept that, if you're going to invest in the pib mark public market and make an outside return, it might actually help if you make the companies better if you think of being able to invest in a great business, yum brands yum brands would never be for sale a private equity fund could never buy yum brands >> are you saying to jack vo vol people like you have that concerns? >> you need owners so, if i said how do you balance that the greatest thing in the world for me would be if fidelity took over the index because they'd at least know how to vote. >> and when you hear him saying that he wants to be more active, do you believe that? >> i think he's got to be,

because ultimately, he becomes the capital market it's the point kelly was making. he's managing $2 trillion. it's in his interest to have a healthy functioning market >> i discounted him. >> you know, from my perspective, ceo of activist, you have the good, the bad and the ugly one thing i can say about keith, he did take a longer term perspective about the business we were aligned. and we would not have been able to execute our spin-off with the china business without his help. i think there's a lot of trepidation. we had other people come in, i've got to tell you, i wasn't nearly as happy about. >> right talk about china, the take with the larger tariff story here >> i think the administration is tackling a problem that needs to be tackled people should be appreciative. and we probably kicked the can way too long it's a complicated problem and

each day we're going to have swings from hope to fear as to whether this gets resolved i think ultimately it does get resolved but i think it's very hard for the public market to watch the forward, we are the two largest economies. we needed to have the tariffs if we said we would reset this. no one likes a work stoppage. it never made sense. sometimes you have to have it. no one likes tariffs. we had to have them because we have a legacy trade relationship, legacy state-owned intervention that needs to be reset. to the trump administration's credit they were willing to take on a tough fight. i think the most important thing in all of this is powell being mindful of a dual mandate of both inflation as well as full employment and not trying to end the expansion. >> why do you just have to

tighten just because things are going well can we return to that? so the inflection point from easing to tightening that we are going through, that doesn't have to be failed. the stocks react to this. can we work our way through this or is it doom to end the cycle >> i wish i could tell you i know the answer. it is a big experiment that we are unwinding. whether it is rates coming up which is what people focus on or balance sheet shrinking which is probably equally as important, no one has seen us go from where we were to where we need to go. that will be a drain. fundamentals are really, really good. how all that plays out i think the answer is increased volatility and there is going to be some winners and some companies that aren't as well positioned that don't make the right strategic positions. instead of markets going up because there is capital chasing

everything, markets probably will be more even with some stocks really winning because they are well positioned and some really losing. in the short term when you have china good one day and one day bad it will settle out. >> would you say to investors in a way do what i do. you can find places to be in the market and avoid what is going on with u.s. and china what do you say to someone in apple or quaalcomm with 5% to 6% revenue exposure or elsewhere in the supply chain these are names journal is recommending. can you say side step it for a while? >> i think investors have to do what they do well. everyone has different skill sets. there are people who make a lot of money trading the market or having duration. we will make money partnering with companies like yum and making them better. do what you do really well. the only thing that doesn't make sense to me, the first time there is volatility if you sell if that is your model that makes

sense. you have to have a model that plays to your competency. i generally believe if you don't have an edge in the public markets recollect somethi s markets, something you can do better you are probably replaced by a computer at some point. there is more done by quantitative players and there should be a place for people who have duration of capital to buy businesses in the form of public stocks. >> keith, thank you. please come back. thanks for bringing the might s say -- meister along. jim, good to see you, as always. it happened december 1, the same day that they were all smiling afterwards in argentina. they knew, everybody knew and they went back and still said that there is progress, even china said there is progress. why is this like a ton of bricks

today? >> i think there are two factions. there is the faction to doing more business with china and the faction that wants to starve china because china has an initiative that is the new plan to take over a lot of countries. i think that the hard liners are winning. you wouldn't have a -- this is really just not an economic war. it's a war over himmengeny for the globe. i think it is far bigger than that. it is really much more serious. those who think chinese would play the long game. there is no long game. you squeeze these guys hard enough, a new government comes in. they have other forms of changing leadership. i think i'm tired of hearing the elites come on our show and say

they play the long game and we play the short game. we have been at it since 1776. we are pretty good. >> if i let my full paranoia out which is substantial, it doesn't mean people are out to get me anyway. if they had like a little trip switch in every g-5 device, they would never have to -- >> you mean you think that they might be committing espionage? there is no espionage allowed in this establishment. i think it is time people pulled the gloves off. there are two camps. and then there is the camp that says i hope they buy a lot of boeing planes. the president clearly sides with the camp that he didn't talk about when he came out of the communique with his good friend

xi. >> this is why you buy the stock of yum. he is going to hit the hole and execute and get the job done. and that's the kind of company i'm looking for just like keith and like what david did. we don't have to give up. >> you still have stock. >> i got him on tonight. >> thanks, jim. we will see you for more in a few minutes. it's a preview of what to expect. more with guest host david novak.

i still can't believe how incredible the screen is on the new iphone xs. and our unlimited plan really takes things to the next level with your choice of the best in tv, movies, or music. it's the perfect holiday upgrade. i know what i'm asking santa for this year. you still write letters to santa? no. please. i send him emails. can i get his email address? oh... i don't feel comfortable sharing it. get the iphone 10 s and our unlimited plan with your choice of the best in tv, movies, or music. more for your thing. that's our thing.

weveryone, looknk isn'tat your phones. the design thinking, the digital engineering, security, blockchain, and we will be first to market! yes. when we do we launch? unfortunately, in 2 or 3, hours. why the delay? cognizant is helping banks use digital technologies at scale to advance speed to market.

i want to thank our guest host this morning, david novak. very quick, facebook. you mentioned ceos. what would you be telling mark zuckerburg >> he is a rock star. they tripled their revenues in the last few years. he knows the business. he is a guru now. what they have to do is get civility and grow up as a company. facebook is really interesting because if anybody knows that things happen and the message can get out there, they ought to know it. they are very slow to react to the problems that they have. they get behind and are constantly playing catch up.

they have to get a level playing field, move forward with more continuity of thought and purpose. >> we are going to leave it there. very special. special thanks to kelly evans. make sure you join us tomorrow. becky has great interviews coming up throughout the day. "squawk on the street" begins right now. ♪ good thursday morning. welcome to "squawk on the street." stocks are set to re-test critical levels, futures down more than 400 points as adp says job growth has likely peaked. attention on china trade as canadian authorities arrest the ceo of waway. we have an opec decision on deck. our road map begins with the stock nose dive. u.s. markets set t