regulation it's tuesday, december 11, 2018. "squawk box" begins right now. ♪ live from new york where business never sleeps, this is "squawk box. good morning, everybody. welcome to "squawk box" on cnbc. we're live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. our guest host this morning is mike santoli good to see you. good to have you here as we talk about what happened yesterday, maybe set things up for this morning. stocks yesterday erased a 500-point drop in the dow to close 34 points higher it was something to watch throughout the course of the session. i asked what happened. what is the answer >> i don't think we missed any key headline, any one specific thing. i think you have to -- in these high stress markets, you have to

relieve yourself of the idea that it's pricing in new information. in the morning, the s&p broke through 2600 it touched just about the closing low for the year about 15 points or 18 points lower. it seemed to be just about that. you had to touch the hot stove to see if it was hot and it was then europe closed the news about apple people are itchy to see if this bottom range will hold >> it's been down there four times, right >> just about four times yesterday there were two stocks down for every one up. the banks looked ugly. the transports were bad. it's not as if everybody said there's great stuff going on >> bank stocks did okay. one of them was up 3%. >> when we were at lows

yesterday, was it similar to the lows when we were down 800 last week >> in what way >> it was below. >> below where we were down. >> 2602 was the low from october 29th we got a few points below that yeah >> oil at 50 bucks transports were crushed. >> you can make the case >> you can't argue it's just supply it has to be concerns about things other than that >> european markets close at 11:30. that seems to be a source of the pressure >> because of the situation with brexit >> situation with brexit european banks >> more to talk about. let's take a look at u.s. equity futures. right now things are maintaining. we're not seeing a selloff after we're continuing to build on the momentum we had going into the close yesterday. s&p futures indicated to open by 15 points.

the nasdaq to open by 53 points. the nikkei was down by a third of a percentage point. stocks were flat for the hang seng the shanghai was up by a third of a percentage point. looking at europe, as mike was mentioning, taking cues from europe right now, what's happening with the ftse. ftse up by 1.1%. bigger gains for the cac and the dax. they're each up by more than 1.5% finally look at the ten-year yield. yesterday closed at 2.85%. this morning 2.886%. just keeping an eye across the entire yield curve. google's ceo will take the hot seat this morning. he will testify before the house judiciary committee about privacy, transparency and the company's handling of a search engine in china.

we'll talk more about this story this morning at 6:30 with ed lee from the "new york times." some trade news to bring you. the u.s. and china are kicking off a new round of talks steve mnuchin and u.s. trade rep robert lighthizer held a phone call with the chinese vice premare lapr premiere last night. no news about whether they spoke about the arrest of the huawei cfo. this latest round of talks comes after president trump and president xi agreed to a 90-day tariff cease-fire. apple filed to overturn an ifsh iphone sales ban in china two injunctions were requested by the court after a request by qualcomm apple says the patents in

question do not cover the latest operating system installed on all new iphones. >> a bit in the detail, the reason it's not covered is because this court case was brought before those phones were on the market. it's not that the technology is different in those phones. but this ruling doesn't cover this because, again, those newer phones came after the court case >> were you surprised apple stock did not get hit harder on this news? you would think potentially that a court might try to include the new operating service in the future right now everybody is sort of waving it off as politics. >> all morning i said the fact it's only down 2%, 3%, shows you that the stock was sold out. it was down 30% or so -- >> 780 billion >> we were waiting for that day when one of these downgrades or cuts to am, people look the other way and say it's cheap

enough then it did turn around in the middle of the day when apple said their interpretation differed >> it was the most beloved stock in the history of the planet things have changed a little but people were buying it at a trillion dollars >> if you liked it there. >> the black friday deal at -- under 8. wouldn't you think if i liked it then, it's still -- it hasn't totally changed? i will buy it here >> of course it hasn't totally changed. >> that's what i think about the market keon, what was the market? it was like 82 when you started, the dow. >> single digits >> yeah. but it went to 26,000, didn't it i remember 800 >> it will go much higher from here eventually. >> i know. if we don't have a ten-year period like the '70s, your kind of like -- if it gives you 10%

off, 12% off -- >> none of that keeps apple going to 150 in the interim. there's no say that this is where the line is drawn. >> does it let you buy it that cheap? >> maybe not >> probably not. >> tensions with trade talks, that's why it's a crazy thing. you can't figure out investor psychology, people don't know what the end game is with this stuff. that's why it's a crazy unknown factor. >> we use apple as a proxy for the overall market i don't know it seems like the overall market is cheaper than it was >> you know why it is a proxy for the overall market the buyback story is encapsulated in appleand the trade story. that's all chaptured there. you have warren buffett involved the highest valuation the stock has had in a long time >> here's the huawei news. a bail hearing for huawei's cfo,

that continues today the executive spent the weekend in a canadian jail and faces possible extradition to the united states. canadian jail doesn't sound quite as bad as a bolivian jail. >> or a japanese jail based on what we've been hearing. >> or turkish jail >> colombian jail. remember the fellow -- what was his name the guy whoextradited, he was stuck in a colombian jail for a year >> canadian jail doesn't have that -- could be okay. >> i don't know, it's jail >> turkish jail, like the one in "midnight express. >> the worst >> meng wanzhou was arrested back on december 1st she is accused of helping huawei dodge u.s. sanctions on iran the judge extended the bail hearing for a third day because he wanted to hear from both sides about who would take responsibility for meng's

actions if she were released wawa is hat's a weird name >> that's a pennsylvania company. who decided that was a good name >> i like it >> wawa? >> wawa. what's your problem with it? >> i don't know. sounds like someone asking for water. carlos ghosn, the oust the chairman of nissan filed a complaint against a japanese court decision to extend his detention. he was rearrested yesterday on new allegations of financial misconduct he was charged with understating his compensation held in tokyo jail tokyo jail about even with the canadian jail >> no, they haven't given him blankets >> no? >> tokyo jails don't sound that great. >> cases typically take months to go to trial in japan. bail is rarely granted to suspects who deny wrong doing.

let's talk about the issues facing the broader markets joining us for that is ed keon from qma seeing what's happened with the destruction of the markets, where we have come down, how we continue to face these lows, testing the lows again yesterday what do you do at this point do you jump in and buy or do you wait and see >> we sold in the rally we had back last monday we're trying to -- >> remind me of that rally >> right after the tariff truce. >> the one-day rally >> the head fake >> yeah. >> i think we're thinking about what will next year bring? i think the highest conviction i have is earnings growth may be poor next year, maybe even zero. >> zero earnings growth? >> potentially >> for the s&p >> yes what normally happens, estimates start high

80% they come down if you look at the average drop, 8% gets you around zero for the year might be slightly positive or negative, but right around zero. you probably will get a positive return next year, but not great. i think getting 2.5% without any risk if you get 5% of the stock market, that's not a compelling risk/reward proposition. for the first time in a long time we have come to an underweight position for stocks. >> what are we trading if you're looking at zero percent growth what are we trading? >> about 15times or so. >> that's if the consensus is met. >> that's correct. that's not expensive >> it's not. >> but it's not cheap either the average on a forward earnings basis is more like 12, 13 not terribly expensive not enough to worry about. but not so cheap that you say i have to buy stocks here. they're on a big sale like in

20 2009 >> what do you do? >> i would be more constructive. looking at where we are on interest rates, i think they are cheap. certainly we'll have less earnings growth than last year forget the 25%, 26% earnings growth focus on top line. we had 8%, 9% top line if that kgets cut in half, that earnings growth may be enough. i'm not sure we'll get a santa claus rally. those are usually driven by window dressing when markets are up >> not many winners to close out. >> exactly january comes around, rebalance, add back to equities, good idea. >> what do you do with the money? of all the stocks you just sold, where are you putting it >> i bought some bonds we bought treasury bonds >> treasuries? >> yeah. i'm not saying treasury bonds represent a tremendous value

>> would you represent the two-year >> we usually do duration match to the barclays aggregate. we are across the various materials. >> it's probably like seven? >> six and change. >> okay. one thing that i've been thinking about, in terms of the composition of earnings next year, if you get down to a low single digit, or 5%, it's not going to be the median earnings growth what sectors will look okay? energy will be good. >> energy is at 25%. >> yeah. >> if oil prices stay just more or less where they are, it will be hard to see you getting 25% growth you look across the market, i do think we'll get some positive sales growth margins are at an all-time high. we know wages are starting to rise more rapidly. we know economic growth is slowing a bit around the world not predicting disaster, but i don't think you'll get a lot of

earnings froth, and you're unlikely to get a lot of return. >> andrew had paul tutdor jones on yesterday he said it stocks went down another 10% from here, it would be a screaming buy would you agree with that? >> i think down another 10% we would be more likely to get back up to a neutral and overweight position one way to think about it is let's say the expected return for stocks is 5% just 2.5% over the risk-free rate is that high enough to bear the risk of the stock market how do you get the expected return up? prices go down a bit so the return goes higher or time goes by an earnings catch up. i don't think we're quite there yet. i suspect we'll have a rougher patch before we get to a more normal market. >> the other call that was interesting is the fed won't touch the lever at all next year >> zero rate increases >> the neutral rate for fed

funds, most people now think it's only 1% above inflation that's 3%, not 4%, which is what we might have thought 25 years ago. big deal so theylig slightly short of that people are calling for emerging markets to have resurgence if the fed is backing off the caveat to that, we're not the only central bank in the world. the ecb will cap purchases so it's not so clear there will be a backing off of tightening from other central banks, but still emerging markets and opportunity and maybe small caps in the u.s >> what does that mean for the dollar if we are are ahead of the curve, the dollar's run of strength may be waning we've seen that the last couple of weeks >> which would mean what in terms of investments >> it does mean there's perhaps more opportunities

internationally than there were in the past. we know the valuation is incredibly compelling both in developed andmerging markets. the geopolitical headwinds have been there, if there's a truce on trade wars and reasonable outcome of brexit there ought to be a rally there >> we did rotate money into emerging market equities part of the idea is that if the fed stops sooner rather than later, another one or two hikes, the biggest beneficiary might be emerging markets more than u.s. stocks i think there's better value there. there you are looking at levels that looked cheap by historical standards. so you get more bang for your buck now in emerging markets >> ed, thank you very much simeon, thank you. "deal or no deal" that's on at least wednesdays. >> it is >> but this is about theresa may. theresa may may be looking for a better offer for her brexit

divorce deal wilfred frost will tell us whether she is likely to get it. as we head to the break, here's a look at the biggest premarket winners and losers in the dow.

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♪ >> british prime minister theresa may pulled a vote yesterday on brexit, it was kind of embarrassing, you know why someone doesn't vote on something. she didn't have a chance she hoped for a better deal. the european commission president says there's no room for renegotiation. wilfred frost will join us now from london to talk about this you have an ifb in before we went to break? you can tell me if you went to

the wolseley after your report i assume you've been there already. >> i have not, joe i did have the ifb in, i heard you mention teasing to break "deal or no deal." we are slightly stuck as things stand. as you mentioned, yesterday theresa may pulled that vote, and rarely has parliament been so united against the prime minister left and right, leave and remain, a sense of them not believing they pulled the vote >> i've listened carefully to what has been said in this chamber and out of it. to what has been said in this chamber and out of it by members from all sides >> she is now in europe trying to get better terms for her deal it was all smiles with the dutch

prime minister in the hague this morning. but her task is likely to be incredibly difficult, judging by this tweet from the european commission, jean-claude juncker saying there is no room for renegotiation. he went on to say that he offered only clarifications, and that's unlikely enough to be enough for prime minister may's opponents. but she has bought herself a few weeks of breathing room. she has not had to face and lose a vote on her brexit deal, she has not seen a vote of no confidence triggered against her. sterling sill suffered heavily yesterday. more because of question marks over theresa may's future than the brexit deal itself because while the chances of a middle ground brexit deal have fallen dramatically, they have been offset not just by the rising chance of a no-deal disorderly brexit, which would be 9 the default from here, but also the rise of a secon

referendum and with it the possibility of a remain outcome. so we stand in sort of a brexit purgatory with big moves in the markets possible in either direction depending on how this situation gets resolved. howie mandel's help may be needed on that question. >> i like the shot a lot keep us updated. also keep me updated on your restaurant plans, things like that >> no time no time when i'm here for work, joe. >> you're not going to go anywhere at all ever while you're there, frost? >> he's working 24/7 >> i know. i know i know you want us to think that text me. how about that we won't do it on tv >> maybe >> i have seen him at every hour of our programming >> i know. i guarantee you -- he has to go to the wolseley at some point. whether it's lunch or dinner bring me back something, too, would you? >> that will travel well

>> i'll bring you a gift, joe. i promise. >> okay. >> can't imagine what that will be. when we return, google's ceo in the hot seat. he will be testifying about privacy, transparency and content bias we'll tell you what to expect. we'll do that after the break. as we head to the break, a look at yesterday's s&p 500 winners and losers most kids today will have jobs that don't exist yet. the engine management systems coordinate with autonomous vehicles. financial data, so now we can predict the future. our new flexible propeller design. by collaborating with public schools on a program called p-tech, ibm is helping students build the skills they'll need for tomorrow. revolutionizing.

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welcome back you're watching "squawk box" live from the nasdaq market site in times square. good morning among today's top corporate headlines, wpp is planning to spend 382 million to return itself to growth the ad agency says it plans to reduce the number of other agencies that it runs and will pyre more employees in new york. wpp also telling investors that it's going to maintain and prioritize its dividend over buybacks a pair of stocks moving on upgrades, first at&t was upgraded from neutral to buy at citigroup with a price target of 34 among the reasons, it is said at&t will benefit from the promotional environment in wireless. pfizer

the analyst likes the lkt stoonm story, but after the 20% move, the valuation is not attractive. futures at this hour, almost 200 on the dow after a good recovery yesterday. >> pretty good you're getting used to 500-point reversals? we had an 800-point reversal last week. >> you are getting used to it. i was doing "fast money," and i thought if there is another downturn, we have to do another hour yesterday i thought it will bounce it will bounce today looked like the 800 -- >> i don't want to work another hour >> no, i started thinking -- honestly, i started thinking

about everybody is worried abou being in the risk of a market going down if eventually it's not the '70s, and you're eventually going higher, it usually doesn't allow you to buy much more with a 10, 12, 15% discount >> eve only been in this two months a market that goes up 500 or 800 in a couple of hours for no particular reason is not more healthy than one that goes down that much it's still under stress. >> it is are we down for the year >> barely. >> do you think we'll end up for the year >> coin toss i think the odds are rounding out the last couple of weeks that we should have a lift >> if you look at the chart t looks like we'reheaded back to the 2,800 level. >> we'll take it >> and get through, turn back or fail before we get to the last highs, then it starts getting bad again. ed lee might know, i think maybe not. >> nervous laughter.

none of us know. all that new york sometimes stoc "new york times" stock >> let's talk about the shakeup at under armour. the "wall street journal" reports that two executives who are long-time associates of kevin plank were removed last week both men are from the sports marketing department one is the senior director, one the senior vice president. the company did not give a reason for the removals. under armour has been conducting an internal review on spending last month the journal reported that under armour stopped allowing employees to expense visits to strip clubs with college athletes google's ceo heading to capitol hill this morning. sundar pichai will testify on

regulation, privacy concerns and other matters. want to bring in ed lee, "new york times" media reporter to try to help us make sense of what he might say and whether it matters. the basic question, is this just going to be theater? these things always have an element of theater is there something on the other side of this we've seen so many of these -- very similar, whether it's mark zuckerberg, jack dorsey, everybody goes up to the hill. they do their thing. we all chatter, chatter, chatter about how regulation is coming, and what >> where is the regulation >> i'm not saying there should be or shouldn't be but what is this all about >> 90% of this definitely is political theater. it's also a way -- the things to try to glean from this is based on how the committee asks questions or which questions they're asking gives you an idea of what kind of regulations they would be going for so right now we're looking at

two main issues. privacy in terms of how your data is harvested and used that tends to be an issue that the democrats tend to want to dig into and look at then on the other side is for the gop, are you squelching voices are you censoring -- >> i think the issue you will hear more and more today is are you squelching voices? why aren't you dealing with the military why are you bidding on pentagon contracts? >> that's what we heard from kevin mccarthy yesterday >> you're not an american company. >> the ceo, who is very eloquent, articulate, he's unlike zuckerberg or dorsey, he's much more grounded, level-headed, every-day type person he won't come out with bizarre responses. >> are you doing business in china? >> that's the key thing. if you're doing business in china. two things based on those earlier points, if they're going to do business in china, it's

through a censored type of system the other side is security like, the way the chinese tend to view american companies coming to the market, we open our market to you, you give us access to your stuff, namely your technology and know ho-how what are you looking for him to slip up on the reason i ask this, i interviewed him at the deal book conference about a month and a half ago we asked these questions in fact somebody -- i won't say who, somebody said this was like practice for him to figure out he had not done a public appearance like this in a long time i don't know if there's some moment that somehow you'll get out of him where he's going to say something that you weren't expecting. >> he is very savvy.p probably r

silicon executives they have a way to pressure him more and demand an answer to are you going to do business in china. that's a key takeaway they want out of him from a bipartisan perspective both democrats and the gop want tochget. that's one thing they're aligned on if they keep chipping away at it, if they ask him in a pointed way, i think whether or not he confesses, whether he straight up says we will do business in china, this is what we're doing, or the degree to which dances around the topic gives you a sense of how serious they are. >> if he leaves it open, then what >> leaving it open tells you they want to do it if they can achieve it or not is the issue. >> do you think they have the same privacy krn concerns that facebook does? >> yes the common narrative is that facebook has more data than anyone else. >> they do >> they do but google is not

that far behind. a lot of apps people use on their phones are a map app it's a huge part of it e-mail >> google knows as much as god, because the queries you put in you would never say to anyone else there was an article looking at this idea of all this information they have about you but they can't identify is that true >> that's a term of art, so they say we don't know that becky went to short hills mall, but we know a woman aged 25 to 30, whatever, went on a particular day. who lives in the northeast >> paramus mall, i think >> short hills mall is yours >> have you been to the short hills mall >> i haven't >> that rolled off -- you've been there >> i've seen you there maybe >> you might have.

>> google knows you were there >> do you think in 2019, if you were to look into your crystal ball at all that there's a chance of regulation -- >> not in 2019 less than 50% chance of that happening. there's political grandstanding, but i also think it's one of the few issues of bipartisan support. it's one of the few things that could actually pass, some form of regulation or light legislation, everyone is like there's a win there. we're keeping an eye on the powerful silicon valley. >> can i switch topics on you? i know you were focused on cbs they had a board meeting yesterday. annual meeting today >> the board meeting is today, annual meeting is today. who will run this company? >> nothing will happen today they're still trying to decide there's a report that the law firms they hired putting together to see whether les moonves violated company policies including sexual harassment, if they find it,

they could fire him for cause. in which case he doesn't get the 120 million severance if they don't find it, he could still get it the main thing, if you're a cbs shareholder, what will happen to cbs and viacom, are they emergencying i merging or not merging >> there's a question of who will lead the company. >> and who will lead the company. >> you can solve both at one time with a deal >> the cbs board is also evaluating who do we hire as ceo.ianello is the interim >> is the idea that he's too tainted because he's close to les? >> that was part of the idea, but now he and sherry are cool now. >> so this is an audience of one? >> audience of one it's still up to the cbs board and the viacom board to decide whether they will merge. >> when you're the controllin s

shareholder, it doesn't matter what board thinks. >> that was part of the les moonves exit agreement shari redstone cannot initiate a merger -- >> you can do whatever you want. >> that's what's is spelled out. if you ask s hshgshari herself,e will say i can't do that they're evaluating ceo candidates through the lens of how would you do a cbs viacom merger should you do a merger, what would that look like? >> it's a valid question what are the relative valuations cbs has taken a bit of a hit in the markets, but it's the stronger company they have nfl football they are the most watched network on television. >> the stock trading on the actual -- objen the fueactual fundamentals of the company or a deal with via comse via come?

>> i think they're trading on v when we come back, robert greifeld will join us. and later anthony scaramucci will talk about the staffing changes inside the wtehi house stay tuned you're watching "squawk box" on cnbc so no matter what you trade, or where you trade, you'll only pay $4.95. fidelity. open an account today.

♪ welcome back u.s. equity futures have now passed the 200 level, up 200 221 now. the s&p is indicated up 22 the nasdaq led the markets higher yesterday turned positive before the others up more on a percentage basis. i did a quick calculation. it's two weeks until christmas >> yeah. >> you realize that? >> yeah. we have a countdown clock at home >> it's the 11th we have the wheel. you turn it every day and an

advent calendar. >> the actual santa claus rally is after christmas >> it's the last five days of the trading year plus the first two of the next year so this year christmas eve through january 3rd. >> why do you get the first two? >> it's essentially the back-tested thing that the stock traders alma knanac that showeds unusually strong stretch -- >> i understand if people are trying to close out books. i don't understand the two days. >> it's really a negative indicator. it says if you don't get that, maybe next year will have trouble. >> tariffs may -- we knew about brexit a couple years ago. there's snow in north carolina, it's not that hot down there yet. we're not all dying. aren't there some things okay? >> plenty of things are okay

>> i think if things quiet down -- what was davos davos in january we were all -- >> bullish >> then january -- >> generally bullish we were over the top people were going out of their brains bullish >> then february came. we're going back to davos to set the stone. >> or the counter. >> so you want things to fall apart before then so -- >> so everybody is dismal at davos. let's talk about the executive edge the results of the latest nfib small business optimism report are in let's get to kate rogers she has the details. >> good morning. optimism taking a slight dip of 2.6 points to 104.8. this is the third monthly decline in a row after hitting a high in august and it's one of the largest drops we've seen this year. this month's read is still well above the index's historical average of 98. this is how optimism has been tracking over the past year. the biggest drops were in those who expect the economy to

improve in the next six months and those who expected higher real sales, those who accounted for more than half of november's decline. there were no gains in segments this month as expected credit conditions and plans to create new jobs were flat labor quality is still in the number one spot yet again this month. it's the biggest bish issue at % followed by taxes and government regulations this has been the case for most of 2018. more than a third of business owners say they have job openings they can't fill compensation increases were higher and plans to raise wages hit the highest level since 1989 this matches data from our own cnbc survey monkey data showing optimism is fading for various reasons including economic concerns and concerns about hiring >> what was the biggest factor again? >> a drop in those who expect the economy to improve in the next six months.

>> or their own sales. >> their own real sales. >> if you see a trade deal that is struck, i guess that takes some concern off the table if you hear more about the fed potentially to the raising rates, that takes something off the table. how long does it usually take for an event to work its way back through the optimism readings that we get. >> we've been seeing varying things take this up a notch and down a notch trade has not been showing up as much a lot of these are main street retailers that are not doing doles over s deals overseas we had trade in our own cnbc survey monkey poll, and trade did have a negative impact on that it depends on what type of businesses you're polling. so that has not shown up in the nfib's data as much. >> kate, thank you if you have not picked out a christmas tree yet, base yourself, we have sticker shock for you. the price of trees is rising after a decade long slump that

began with the great recession, prices have increased 30 cents between -- >> 30 cents? >> i think it's 30% is what it is between 2016 and 2017 to an average of $75 prices are projected to increase as much as 5% to 10% this year blame the recession for the price increase growers couldn't afford to plant as many seedlings in the downturn, and those seedlings take 8 to 10 years to mature shorter supply means higher prices the sorkin family picking out a tree this weekend. new york city prices, it's like gouged double and triple the price. >> you're paying for the transportation >> the delivery. this and that. >> you're firing up the highlander >> no we walk over to the museum of natural history -- you either carry it back or if you're in new york city, what do you do? you pay the guy.

he helps you take it back. >> you're not getting one of those charlie brown -- >> no, we go high. six feet high. big and we like them really wide >> that's why he pays somebody else >> they wrap them up so they can get them in the elevator that's half the battle >> they feed it through that thing. >> yep the machine. >> the netting >> we got ours this weekend. >> you actually there or do your people -- do you describe the tree you wanted and they bring it >> no, you go. >> he goes with the family >> the kids come we pick out the tree a couple extra ornaments every year we do it >> there's a place in jersey called the great swamp that's where we go itchltgo it's fun not washington >> that's the other great swamp. >> for people who know i'm jewish, we're christmas loving goos because we talked about hanukkah on the air a week ago. >> you get all the holidays. >> we get all the gifts.

we're for all of it >> you can stay in the green there, but me and santoli are ready to go. >> just saying >> coming up, get ready for the trading day ahead. mike santoli has the key factors you should b you should be watching here's a quick check of what's happening in the european markets right now. and it's green across the board with some pretty nice gains. almost 2% in france and germany. at&t provides edge-to-edge intelligence, covering virtually every part of your retail business. so that if your customer needs shoes, & he's got wide feet. & with edge-to-edge intelligence you've got near real time inventory updates. & he'll find the same shoes in your store that he found online he'll be one happy, very forgetful wide footed customer. at&t provides edge to edge intelligence.

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futures indicating a nice gain for stocks. at least as far as point gains go not so much really percentagewise, but we'll take it this morning. let's get to mike santoli with some key factors to watch today. we're a long way from yesterday's lows >> we are. in fact, if you look at the chart for the year to date, we drew some lines on it to show the context of where we've been. that's 2,600 on the downside, 2,800 on the topside intraday yesterday s&p dipped below that bottom line briefly at least it shows maybe that

there's a reluctance to sell aggressively below that 2,600 line >> which do you think is the stronger line? the ceiling or the floor >> it seems right now, well, look you've got the equal number of trips almost but the ceiling is probably stronger on the next run it's very difficult to say though because it seems as if we're kind of ping-ponging between these levels i think the market is trading very technically right now it often does that in one of these areas. follow through is the one thing you haven't really gotten. we had an 800 point reversal last week. mostly when the market is trying to find a bottom but it's not always at the bottom i think that's something to keep in mind. banks mentioned yesterday they really have to stop going down even jpmorgan very vulnerable. if that stoppings, maybe the market can get a break

>> can you explain fedex to me since december 1st as we head into a big -- >> i think the market is suggesting that they bear the cost for getting everything to us or more than you would imagine that they bear the cost. >> meaning they got to get it there on time. if that means busting their margins -- >> of course and they look cheap. u.p.s. and fedex look cheaper now than they usually do >> okay. coming up, big show ahead. our guest host for the next two hours, robert greifeld later, sarah frier is going to be here. she's now taking the ceo role at social networking company nextdoor we're going to talk technology regulation, what might be said today in washington. two full hours ahead on "squawk" in a moment.

hold onto your hats. volatility is the name of the game on wall street right now. >> why washington matters from the next white house chief of staff to the mueller investigation and what investors need to know anthony scaramucci will be our special guest. plus with the corporate headlines and early market movers set to drive the trading day ahead, the second hour of "squawk box" begins right now. ♪ live from the beating heart of business, new york city, this is "squawk box."

>> good morning. welcome back to "squawk box" here on cnbc i'm andrew ross sorkin with becky quick and joe kernen our guest robert greifeld is here happily as joe would say, your best job, a cnbc contributor >> the best job. >> the upgrade >> we call it a pinnacle >> i'd say so. >> take a look at u.s. equity futures at this hour dow looks like it's going to open up big. we'll call it 238 points higher. nasdaq right here looking to open higher 77 points. and the s&p 500 looking to open up about 23 points higher. we are watching three big stories this morning one, british prime minister theresa may is meeting with other european leaders today looking to work on a better brexit deal. this comes after postponing a vote that had been scheduled for today. two, china and u.s. kicking off

trade talks. lighthizer held a phone call with the premier last night. and three, google ceo will be testifying before congress today about privacy, transparency, and content bias. >> now, i've got the headlines here how are these different from the three big stories? do you know? >> now you're going to drill down and provide detail. >> no, i'm not these are totally different. >> we can have more than three stories. >> but these don't qualify as the top three? but they're headlines? are they lesser headlines? i'm just wondering how the sausage is made. >> we have three anchors we all need to read something. tag were you're it >> all right good thanks here's what's making headlines at this hour the government going to be out with producer pricing index in about 30 minutes this could turn into one of the three big stories that was a big surprise because you never know the news is fluid. you'll get the hang of this, bob. >> i'm trying, joe >> okay. economists are looking for a

decline of 0.1% in the headline number compared to october's 0.6% jump. the ex-food and energy inflation rate expected to be up by 0.1% here's another headline here but not quite one of the big three stories. shares of wpp are higher this morning. the company is going to spend about $382 million over three years to revamp its operation. mark reed trying to stem a slide in sales and profits and a bail hearing for huawei cfo meng whanzhou continues today. a judge will decide whether she could be release on bail her arrest has sparked worries that it's going to derail some trade talks between china and the u.s. but we've had -- i don't know. i've seen lighthizer say it's unrelated. i've seen larry kudlow say it's unrelated. some other countries have

pointed out that there is some of the actions with iran definitely violates sanctions. so it really has nothing to do with that. >> it has to do with us enforcing the iranian sanctions. >> exactly but it definitely po'd a couple people in china. >> everything's related. as we knew with the talks with korea, north korea earlier this year everything is related to everything >> right meantime, check out some of the biggest auto stocks this morning. china is moving towards cutting its tariffs on u.s.-made cars. look at that you can see volkswagen actually looks like it would be the greatest beneficiary of that up 4%. tesla moving higher as well. >> saw that earlier on a zero hedge tweet. was that a headline, andrew? in your view was that breaking? >> it's a market flash that's how we described it >> all right let's get back to the -- >> are you mocking us?

>> what? are you nuts i would never. joining us now, the head of trading strategies at ubs global management and joe seidel from blackstone used to be cut your teeth with that bernstein character, right? >> that's right. with rich. >> but then onward and upward. >> it's been since january, yeah. >> how's it going? >> good, good. i think rich will tell you his firm is growing faster, so he's probably happy i left. he's probably wondering why i didn't leave earlier >> he was messaging me yesterday. i don't remember what it was oh, because i was on "fast money. >> yeah. that was a nice appearance >> i was boy, those guys love to -- they definitely like to talk. anyway, so -- >> like us >> exactly

>> grass is always greener >> yeah. bounce yesterday bounce last week a lot of churning around though. is there some methodto the madness? how's it finally going to work itself out up or down >> i think it works itself out higher i think we close the year higher than where we are today. i think 2019 ends up being a good year for equities as well i think the main issue is a sentiment problem, not a fundamental problem. when people look at equity markets, one of the mistakes they make is they think the equities must be signaling something about the economy. but stocks aren't very good on the economy. when you're investing in stocks, you're investing in future profits. as a result stocks become attuned to an economic cycle and they work at different speeds so when looking at an economics cycle, it's important to look at credit markets and what's been really unique about this pullback that started the end of september is that it was equities that led credit lower. it's sort of like the tail wagging the dog. that tells me it's more

sentiment related rather than fundamental. >> it can be sentiment which -- i don't know whether something did change in the fundamentals because you always worry that's what you're signaling as a discounting mechanism with the stock market. but sometimes it can be a complacency or bullishness you know, up at those really high levels of sentiment i mean, we used to watch percentage of investment services bearish or buggish. so it's weird that it may have nothing to do with the fundamentals the market needs a correction, needs to wring out some complacency. that makes it hard to decide what's happening doesn't it you got to tune out the noise. >> yeah. that's important and turn off emotion more than noise, emotion sentiment as you call it basically i agree with what's being said markets trade up i think what markets are trying to do is resolve two forces. one is pulling up valuation.

the forces pulling the market down and that also pull down sentiment are basically idiosyncratic opposed to systemic risks and the idiosyncratic risks that we faced since late last year have been a policy in the u.s., federal reserve policy across the pond, fiscal policy italy, france, residual risk of brexit and across asia, a chinese slowdown which has given the demographic. >> as far as data points with the tariffs or with sentiment or actual -- you know, a harming trade with the uk because of depending brexit are those real things that we can see data points on do we see some numbers being hurt by these extraneous factors? or is it still just worries about the unknown? >> it can be hurt. if you're going back 13, 14

years ago, you had 8% s&p margins. today you're at almost 12% >> so if we pull back on that, we go to below 12. >> exactly it's not the immediate impact of tariffs on $459 billion that we should be concerned about. it's the impact on margins and the impact on investment and what i say idiosyncratic risks, these are risks of choice policy choice. and just as one can choose to e be -- you can choose to agree. and i think the discussion we have this morning since the pain is being felt everywhere, people come back to the table >> god forbid we have more pain that 10%, 12%. markets go down to 20% and 25% you don't see that >> i don't see that. you know, what the markets are signaling is there's a recession coming up in 2019 or 2020.

but when you ask about data points, think about the data points we're looking at. you know, in september of this year before the markets pulled back, we were looking at earnings growth that's going to slow today we're looking at earnings growth that's still going to slow and a 10-year treasury at 2.85%. those values are good for valuation. 68% of the u.s. economy is the consumer and the consumer between, you know, record jobs markets, tax cuts, and now falling gas prices consumers actually ending up with a lot of money back in his or her pocket. fell from the may peak to today. that puts an average of $250 back in a person's wallet. >> i blame greifeld for a lot of this remember 1999? you let these stocks get totally out of hand. >> i personally did that i'm going to apologize right now for doing that >> do taxes not get way out ahead of themselves? >> certainly the vast majority

from that wreckage there were some great companies >> there were. but remember how long it took for us to get back to 5,000 on it we used to call our building built a beautiful facility, the nasdaq 5,000 building. >> wait. what's this thing? >> i'm not sure. this has got to portend something. >> this is a great home for cnbc just leave it at that. >> it is and we appreciate it even tom farley comes in here now. the former nyse guy. >> i know tom. >> and realizes the power of the nasdaq >> i don't think i heard him quite say that >> that's not exactly -- no. >> close >> close >> exactly >> reading between the lines >> we're going to get to you and talk about all kinds of interesting stuff in a second, but just in terms of -- i mean, i'm serious about the nasdaq sometimes you see the speculation get focused on that. >> i will say the last couple years, more speculation on

bitcoin. so you don't see what you saw back in 1999 the companies coming to market today are dramatically different than they were in the late '90s. i think to make any comparison -- >> i agree with that but if you look at the big drop in terms of the faang stocks and tech stocks based here, that's what you're seeing? >> with the faang stocks you look at it with a finer comb some of them traded with lower multiple earnings. and others did not >> i mean, what is apple's multiple right now it's never been high others have a higher multiple. thang grouping gives you a false sense of unity of the stocks >> all right thanks to rico suave over here let's continue the conversation. >> but i've got to say good-bye to you guys? >> how about you stay and we

continue the conversation? >> just watch what he says >> bob, let's talk about the volatility we're seeing. we're not used to it it's been a long time we've not seen moves we're seeing huge swings of 800 or even 1100 points in the course of one session. this is a return to the norm, though, right? >> it's the new normal but it's the old normal we had central banks basically suppressing volatility in the market with that support coming away, you will see increased volatility in markets certainly good for nasdaq and with respect to trading activity. but this will be the normal. >> there's a story in "the wall street journal" today, though, that just talks about how some of this trading, these wild swings we're seeing is really straini ining what they call the plumbing of the markets. you're seeing moves of 17%, 18%. for things like the treasuries or s&p futures or different things and it's a bigger swing than the

money that's been put up in terms of margin limits so the moves exceed the margin limits that are there. what does that mean? are we outdated? how do you fix that problem? >> i say one word dated. coming out of the credit crisis, a lot of time was spent on the plumbing with respect to clearing, it's mutualizing risk and before that in the over the counter market, you were strong as the weakest link in the chain. now you have a community supporting what happens in the clearinghouses and there's a water fall of risk what i like about the world today, everything is proscribed. you don't have to invent a play book and in that playbook you have every member of a clearinghouse having responsibility. >> i'm curious about the ipo market for 2019 and what you would tell an uber or a lyft or

whomever is now filing expecting to go public in what seems like a crazy environment right now. whether you think those things get off -- get off the tarmac, if you will. how important that's going to be for the market >> so i would say, one, it's not a crazy environment. and i think we're getting back to normalcy where you will see volatility and 2% swings in the marketplace to me are not extreme. and i think that will be part of life going forward 1%, 2%, 3% swings. >> you don't think that's going to prevent anybody like an uber and delay what they're doing >> i think even in the worst of times going back in 2001, 2002, 2003, we had a clear diminishment of ipos but the compelling business case is always able to go public. so those business models and i haven't seen the numbers but assuming those business models make sense, they can go public right? the window for those type of

companies is always open >> that's critical to the retail investor to create excitement about what's going on in the marketplace. but that's hard to do in a volatile market. >> the ipo market becomes more selective. this was a great year for ipos, great year for nasdaq with respect of the ipos they won but definitely if you have strong fundamentals, you have a compelling business case and that was certainly more difficult times than i would predict we'll see in 2019. >> some of the companies bob took public will include google and facebook we're going to talk to him about those companies as he's with us for the remainder of the show. bob greifeld former chairman and ceo of the nasdaq. also joe and vinay, thank you.

>> oh that joe i have to be here. coming up when we return, access to capital. carla harris joins us on set after the break. her firm is out with a new report today on so-called missed economic opportunity you're going to be surprised by the results aof study they did. we'll talk to her right after the break. you don't want to miss it. ♪ there's no place like home ♪

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yippiekiyay. ♪ mom. ♪ welcome back to "squawk box. morgan stanley out with a report on uneven access it finds investors may be missing out on trillions of dollars in revenue joining us is carla harris, mofr morgan stanley this study is actually very fascinating. it does get at this idea of bias in a way that i thought was

surprising you say nearly 80% of people think that minorities and women and business owners get either appropriate amount of capital or more meaning so they think everything is good and yet when you look at the median investment by equity investment, it's nearly a million dollars. but it's $185,000. when you did the reveal, if you will, to those who thought everything was cool, what was the reaction >> people were surprised we were surprised when we saw this there's lots of data out there that talks about the fact that only 4% of the dollars go to women. it was clear to hear investors say that about themselves. that's part of the reason we did this report so people could really see what the reality was relative to the perception if we can marry the two at the end of the day, then we can start to see change. >> the idea, of course, is to

get investors to say we have to re-look at this space, right >> that's absolutely right we made it very statistic heavy because those who don't get it will hug the data. so we have the data here the second thing is to say, listen you're assigning way more risk to women and people of color than is warranted. if you don't know anything about this space and see how little capital goes into this space, you would conclude that the market thinks there's disproportionate risk. we're trying to debunk that. >> do you want pension funds and other investors toactually bucket, create specific buckets for women and minority-led funds? is that the trick? or is it just to change the overall thought process about this issue >> it's to change the process. we very specifically say we're not talking about quotas we're talking about targets. because you can manage what you measure.

so if you are intentional about saying we were going to make sure that we see "x" number of companies that are founded by women or that are founded by people of color and you are intentional about it, eventually you will find yourself doing it as a matter of course. and that's really what we advocate >> can i ask you to weigh in on a debate there's been a lot of writing about sheryl sandberg and her role as a female in the business world to some degree put up on a pedestal and perhaps over the past couple of weeks knocked off that pedestal. and whether that is fair and the reason i ask it is because you have a lot of women, especially female investors and executives who say, you know, we had this person who was sort of -- i don't know sort of a leader in this space and that it would almost create an expectation that was almost too high about what was

possible not that she didn't deserve that role, but that somehow if you have women in these roles, somehow everything's going to go so much better than it would than if a man was in that role. >> i think sheryl has done a phenomenal job and every leader has his or her challenges so i don't think that it's unfair nor do i think she's been, quote, knocked off the pedestal this has been a challenging time for the organization, but all companies go through their challenging times. i don't think there's anything off of the marks i think it would be unfair to judge her in a way that is different than any other leader that's at the top of an organization >> but the reason i guess i ask it is there's a big issue about causation and correlation between outperformance right? one of the things that's happened the past couple years, you see study after study after study saying if you have more women at the table it's going to have a very different outcome. right? and then there are people now that point to the sheryl sandberg situation and say, actually, it's the same outcome. and the question is whether the

causation and correlation -- whether it's causation or correlation. >> i think it's actually -- or whoever would say that is confusing the macro with the micro. the data that says having more women on your board and c-suite lead to better decisions that's day by day by day by day. we're now talking about an incident that's why i say macro versus micro. i wholeheartedly believe the more diversity at the addition making table, the you can account for all of the potential gaps if you have a homogenous way of thn thinking, you're going to miss something. >> okay. >> i would say with respect to sheryl, she's first and foremost an incredibly talented executive. >> absolutely. >> but she was certainly responsible in a major way for building facebook. that engenders a certain set of behaviors and she's acting as a very successful executive defending the company

organization she helped build in a major way. so i'm not surprised at all. i think her actions are indicative of the successful person she is. >> i only raise it because there's been a backlash and a backlash to the backlash it's very interesting. look, i'm a man in my 40s. so it's hard to talk about but specifically among women even more so i think to some degree than men in terms of the writing and the commentary you've heard about this issue. given i know you're so focused on women-led businesses, women leaders. that was really the genesis of the question >> no. i hear your point. as i said, i think she's done a phenomenal job and i think people have to look at the long haul as opposed to one moment in time >> okay. morgan stanley's carla harris, thank you. congratulations. >> thank you. >> see you soon. coming up on stocks to watch, u.s. equity futures now up 300 there's the actual report that we'll see whether it's really true whether china goes from 40%

tariffs to 15% which is being bandied about in some reports this morning and we went from about 150 or 160 maybe up to almost 300 now based on that. maybe the detained executive in vancouver won't ruin everything. stay tuned u' wchg quk box" on cnbc what if numbers tell only half the story? at t. rowe price, hundreds of our experts go beyond the numbers to examine investment opportunities firsthand. like a biotech firm that engineers a patient's own cells to fight cancer. this is strategic investing. because your investments deserve the full story.

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good morning everybody. welcome back to "squawk box" here on cnbc we are live from the nasdaq market site in times square. among the stories front and center today, a spokesman for british prime minister theresa may says there will be a brexit vote in parliament before the 21st it had been scheduled for today when it became clear the current brexit deal did not have enough support. may is now talking with key officials. but you're talking about potentially six more weeks of negotiations before that vote is brought. one of this morning's stock winners is shoe retailer dsw the company reported profit of 70 cents a share for the quarter. that was well above the consensus estimate of 51 cents same store sales includesing more than expected too and dsw raising its full year

forecast google ceo will be telling congress today he sees the importance -- in his written testimony he says he support this efforts to develop federal data privacy laws. he is set to appear before the house judiciary committee. all right. some other stocks to watch, shares of stitch fix dropping sharply this morning the personal shopping company plunged on weaker forecast of user growth. two under armour executives were removed last week. the company didn't give reasons but has been conducting an internal review of that department spending including how money was spent on events, gifts to athletes, and nights

out. why are you laughing because you know, maybe. >> i know what i read. >> okay. and you were at the nasdaq for a long time. you were around times square >> i just know what i read. >> you read about it >> times square is a different place than it used to be >> that's for sure >> i learned that from the deuce. did you watch that, sorkin >> i watched part of the first season >> santoli started laughing. all right. speaking of the deuce, dom chu is at the -- i don't know why. i don't. i just -- it was a strange segue, dom good morning >> and you made it stranger and more awkward well done. >> can i just say, folks, that i have no idea what any of you guys are talking about right now with regards of what happened at -- yeah i'm just saying. >> okay. >> because my wife is probably watching right now with my

daughter who probably doesn't understand anything. >> she probably isn't watching right now. but go ahead >> anyway, let's take that turn from joe and talk about some of these market movers this morning. because you heard from becky and joe about some of them let's look at some of the other ones we're going to keep a close eye on industrials tied to china. caterpillar and boeing in particular you can see a bit of a discrepancy in those two both stocks moving higher on the heels of those headlines about maybe some developments coming out in terms of tariffs and autos and whatwhatnot. that's playing out very much more so in the automobile related stocks, in the premarket trade. they are catching a bit of a bid. you can see ford, fiat, chrysler, all moving to the upside i want to show you guys one stock that has been sitting out this particular rally. and that is shares of general electric which right now if you take a look on a longer term basis, we are currently up about

a percent in the quarter in the premarket. but that's a seven handle you're seeing here. $7.01 in premarket trading you've got to go back to chrysler era levels before seeing a handle there on shares. you wonder whether or not there is a bottom in sight but that's certainly a stock we're going to watch to see if you can catch any kind of a bounce in any market move to the upside >> thank you very much dom chu. let's get back to our guest host bob greifeld who is virtu financial's chairman he's also a cnbc contributor bob, what are your thoughts about ge just watching that stock over a long period of time >> i would say this. when oxley was passed and every quarter i had to sign the documents saying these numbers are correct and if they're incorrect, i could go to jail, that would wake your mind up i would say not too long ago ge

was reporting $2 per share now they're at 10% of that number so that to me means one of those numbers has been fundamentally wrong. so people were signing statements at $2 a share which could not have been correct. the industrial businesses that they have do not decline in that kind of rapid fashion. so i think there's a story to come in terms of what their real numbers were three, four, five, six years ago. >> that's a pretty big charge. there have been questions raised about this was this stupid thety or outright fraud you're saying they should have absolutely known about potential charges that were going to be coming and about liabilities they had on the books. >> that's for sure but also the core operations right? the businesses they're in which are industrial-type businesses should not and i don't think can decline that dramatically in that short a period of time. so to me on a core operating

basis, there's no way that $2 per share could have been correct. >> that's an even bigger charge than i was thinking. >> possibly. i'm on the outside looking in. so i have no special information. but it boggles my mind i don't understand how that kind of company could decline that rapidly. and i don't think it can >> for a bank or insurance company, a lot of times the earnings is what we think now if all goes well, right i think a lot of the focus now is on the underreserving for insurance liabilities, things like that. but fair point also this awful power deal they made this acquisition, these long-term contracts. how do you account for that? that's one of the sources of the writeoff >> at the least, there's a story to be told in terms of what the share was about. and that story will come out >> bob greifeld is our guest host for the rest of the program. we'll have more from him coming up when we return, how investors can profit from

policy coming out of washington. s skybridge cofounder anthony scaramucci will join us. he's got a big idea. we'll talk to him about it after the break. a

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welcome back to "squawk box. coca-cola cementing management changes. so has coke's portfolio. slow growth with millennial consumers. want to get over to sara eisen who joins us with that story good morning >> good morning. this is not the coca-cola that you and i grew up with and under new leadership comes big changes. the company just announced that ceo james quincey who took over last year will become chairman taking over for muhtar kent. we came to atlanta to see how the 132-year-old coke is transforming itself into what it's now calling a total beverage company trip down the beverage aisle tells the story. they've diversified into new brands like body armor simply light juices. new categories like fairlife

milk soda was a small part of the tour and most of that shelf was the mini cans. now under quincey who's been ceo for little over a year, the pace of innovation and new product launches has really picked up. >> it is different i think since i've been at coke, we've seen i think a continued movement into more variety of beverages that meets those consumer needs we picked it up in the last couple of years. >> 400 product launches in 2016. 500 in 2017. and coca-cola is on track to beat that number this year quincey has also written the book on deal making. that's basically what the company did in four years before that combined. the bottom line, guys, is it sounds pretty obvious to diversify away from soda, but this is a huge cultural and business change for what was once primarily a carbonated soft

drink company. and it's not hard to see why the trends have worked against them soda consumption in the u.s. has been declining since 2002. the pace has picked up now that has come at the expense of other growth areas like bottled water consumption. i know you guys talk about sparkling water all the time that has shot up pepsi recently buying sodastream for a few billion dollars. launching innovations like bubbly that's where the growth is water, coffee. categories that aren't necessarily carbonated drinks. guys, i'll talk to james quincey incoming chairman and current ceo of coca-cola at 10:00 a.m. eastern for an exclusive on that suggest. and last time i was with you from mondelez i tried the wasabi oreos. >> yeah. what disgusting thing do you have to try today? >> it's not so disgusting. they don't have anything funky

so i've got the georgia peach in atlanta flavored coca-cola >> that sounds good. i'm into peaches and coke. that could be good >> it's delicious. it's a little sweet for my taste. yesterday i tried a raspberry ginger ale i tried >> what's the calorie count? >> a lot >> 140. >> actually, that's not terrible i like it when you try gross stuff, sara. that looks too yummy you got to come up with something nasty. >> i didn't think the wasabi oreos were gross i couldn't do that i'll see if they have products from other countries which i'm sure will be the answer. i'll try to tweet it for you becky. when we come back, anthony scaramucci will be our guest "squawk box" will be right back. the future of technology investing

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yippiekiyay. ♪ mom. ♪ skybridge capital envailing a new reit designed to take advantage of 2017. looking to raise $3 billion. joining us now anthony scaramucci, founder. and ejf capital ceo neil wilson who will be running the fund i don't think everyone knows about all the aspects of the tax reform act especially this one for opportunity zone can you start the beginning for

how this works for people who may have huge capital gains and would like to take advantage of that and also maybe help out those? >> the president will be speaking about this tomorrow he has an event in baltimore talking about this but a big component of the tax code, there's about 8700 areas as designated by the 2010 census that are opportunity zones if you have a high valued stock with low basis, you can sell that every transfer it into our fund and you get a 15% reduction on your capital gains that you don't have to pay for ten years. and then the appreciation over that ten-year period of time in our fund comes to you tax free this is an extraordinary -- >> so i have to keep the money in for ten years >> you have to keep the money in for ten years, but you have this huge opportunity i'll let neil talk about the development sites and the things we're already working on we probably have $2 billion worth of deals already in the pipeline and we decided to do it in a

real estate investment trust some of our investors are doing it in special limited projects, if you will. so they'll raise $500 million for a project. but we want to spread the money around if you remember, we're a mass affluent shop. so we have $100,000 minimum on our fund >> so it's not just bezos with those -- >> but those guys are big targets for us we've had two people sitting in san francisco going throughout silicon valley saying if you've got a low basis situation, high valued stock, chip off a piece of that. put it in our opportunities zone -- >> there's a number of big real estate companies that are looking at this kind of thing. but when i say they're real estate companies, they're typically not open to the rest of the public. we should all say by the way the kushner family spent money in a couple places with this. is there anybody doing it allowing the public, if you will, in this way?

>> i think we're the first mover. neil >> most of the projects today have been single project assets limited to very high net worth which kind of defeats the premise behind the legislation the idea was to really allow people to use their capital gains to both short-term as anthony mentioned like netflix stock or you have property that's low basis >> some came from shawn parker, right? he was one of the original movers on the idea behind this someone who had a huge amount of capital gains and wanted to find a way to put it to work. >> yeah. sort of a shawn parker, a little of jack kemp from the old days and cory booker. this is a bipartisan idea. you could unleash trillions of dollars of capital into areas of the country that need revitalization we're super excited about it >> all right i don't know how much time we have, but finish up on this and we will get to stuff i know.

>> he likes talking politics >> i want to know what's going to make this a good investment there's a lot of bad areas that may need investment but that's not necessary going to be a good investment. >> in the united states we have some real issues in terms of mismatched demand. we think on the -- in a number of areas like oakland, washington, d.c., where ejf capital is based look, workforce housing. there were 18 million jobs created since the great financial crisis 14 million households were formed the problem is there's only been 10 million units of housing that have been brought online there's a huge disconnect. most of that 10 million has been skewed towards luxury housing. instead of building projects in bethesda, we see the opportunity to invest over a ten-year period in areas like capitol hill, ward

8 in washington, d.c >> what's the fee structure on top of this? >> you can have a load you can also -- you can have a load or not have a load. >> it's 15 over a 5% hurdle. >> all right >> it's pretty cheap >> you'll be looking through your portfolio later to see what low value basis stocks you have. >> it's great a virtue signallers or you can just give that away if you make any. and just purely -- >> do any of your viewers know what virtue signaling is >> if they watch this, they do >> because i see it every day. >> yes you're giving a tutorial on virtue signaling every day >> but if i may, there's the other aspect -- >> paul tudor jones. you see that so you didn't really get along with john kelly, did you >> that's unfair to say.

i had a three-minute conversation with him. i never met the guy. i think i met him once >> in february you called for him to leave, right? more or less >> well, in february after -- see, i had no problem with him firing me. i was not in love with the way he fired me. i don't think you fire people like that. you don't want me to stay, say let's create a glide path to get you out of here. i gave a lot of time and energy to the campaign, countless hours of media advocacy. i did make a mistake it was a fireable offense which i apologized for, but you don't have to fire me like that. i was totally cool with the firing once he blocked me from getting in the white house when three or four staffers wanted my help, i thought okay this guy is now going into the zone where he doesn't really understand civilian teamwork, if you will so then i said okay. there's something wrong here and he doesn't have the right personality to handle the president or the right personality to handle civilian

culture. let me tell you something. i'm a super flawed guy, but i'm pretty good at reading a situation and evaluating talent. that's why i've been able to build two really successful companies. >> who do you think would be a -- and will they take the job? >> well, andrew's resume -- >> right here. he's next to you this guy right here. >> how happy would andrew be if you took that job? right? look at greifeld laughing at this situation if you took that job, andrew would be dancing in times square with minnie mouse and mickey out here. >> can you see me leaving our viewers, not being here with him here >> you're like the mt. rushmore of "squawk box." i see your phaface chiselled >> i will never leave. on a flat stretcher is when i leave here >> as they bring you to the white house. >> who do you think it would be? >> you know, my guess is that he'll probably hire somebody internally somebody that's already in the

government that knows a lot of the people >> like joe. >> and somebody that has a really good understanding of his personality. but here's the thing there's a misnomer about the president. that he wants sycophants around. that's not true. he wants strong people that do recognize that he's the boss one of the problems is when you're hiring people and people in corporate america know this, you never hire a guy that thinks he has a better reputation than you. because the minute you hire that guy, that guy will cut and run at you in the worst possible moment and so you got a hire people that actually like you, they want your agenda, and they also know how to talk to you in a way where you're cross roughing the person and telling them you disagree with them. >> you got a name? seriously, who do you think? >> if you start naming the names, i'll tell you the qualifications >> what about meadows? >> i think meadows is talented chris is a personal friend i think he would do a great job. but i think meadows will stay in the congress because he's been so valuable to the president

inside the congress. and he's been super loyal to the president. he gets what the president is trying to do as it relates to the swamp. >> the yankees gm? >> levine supposedly >> randy's a great guy randy and the president are very close. you know, leaving the yankees. that's a big opportunity >> he worked for steinbrenner for a long time. >> but let me tell you something. randy is a guy that can handle the president in a way the president would like he's got that new york style, direct but polite, and let's get the job done >> why don't think he had this lined up >> all right we've got 15 hard. we got to go >> i don't know. >> we don't have time. for everything you want to say about trump, we've got to wait for the next hour. >> i'm looking through the portfolio in the commercial break and will try to find it. >> thank you i don't know if we have me ftior this coming up, futures pointing to a big open. stay with us

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market u-turn. after bouncing more than 500 points to start the week, they're pointing to a higher open at the bell we'll get you caught up. a new deal theresa may looking to change her deal with the eu to one that can pass in parliament >> i am altering the deal. >> may took a tongue lashing and pulled a key vote she was about to lose. and tech in your community the ceo of nextdoor joins us to

talk big tech and the lessons she learned from jack dorsey on running a company. as the final hour of "squawk box" begins right now. looifr from the most powerful city in the world, new york, this is "squawk box. >> good morning andwelcome bac to "squawk box" here on cnbc live from the nasdaq market site in times square. i'm joe kernen along with becky quick and andrew ross sorkin here with our guest host bob greifeld of virtu financial and the former chairman of the nasdaq where we're sitting. he's also a cnbc contributor the futures right now have been strong for most of the session now up 266 points on the dow nasdaq strong up nearly 90, 89

right now. and the s&p bouncing from some recent weakness up 26 this morning. treasury yields still below 2.9 on the 10-year and still inverted between the 2-year and 5-year we are watching three big stories. one, sundar pichai will be in congress after many were grilled by lawmakers this year number two, theresa may is' meeting other leaders today looking for changes to her brexit deal. may called off a vote yesterday on the divorce from the eu she has admitted she was going to lose. and we're not far from the key data release this morning.

headline ppi had been up 0.6% in october. couple stocks on the move this morning to tell you about dsw beating on the top and bottom lines dsw reported profit of 70 cents per share. above estimates at 51 cents. comp store sales up 7.3% that was above estimates of 4.6% dsw also raised its full-year guidance cvs health rated outperform at leerink. and sundar, he will be facing the house judiciary committee today. ylan mui joins us with more on this hearing i was just googling about the

hearing. >> you googled the google hearing. you probably found out this is pichai's first hearing this is really his chance to deliver a mea culpa to congress and ensure them his company has got things under control expect lawmakers to grill him on three topics political bias and search results, privacy protections, and anti-competitive practices this hearing will be before the house judiciary committee. and it's already released pichai's opening remarks he's going to talk about google's american roots saying it's no coincidence that a company dedicated to the free throw of information was founded right here in the u.s. and that google will work with the government to keep our country safe and secure. now, that sounds a lot like it was crafted to deflect questions about its operations in china and appeal to the gop's new focus on america first pichai will also address privacy

concerns calling them an essential part of our mission saying the company has invested heavily in providing choice, transparency, and control. pichai will also talk about the bias at google head on he will say point blank, quote, i lead this company without political bias and work to ensure that our products continue to operate that way guys, the danger for google and other big tech companies is that if they can't convince lawmakers that already proactively addressing these issues, they could be looking at tough new regulations or growing pressure to just break them all up. back over to you >> okay. thank you for that we're going to continue this conversation she's arguably one of the most influential voices in silicon valley these days. i want to bring in our guest to talk about google privacy, tech regulations. she is the new ceo of nextdoor, just a week in sara friar is here thank you for coming in. >> thank you >> we want to talk about

nextdoor but also what's going on this morning and what we may hear from sundar that a lot of the questions may very well be about whether there are efforts to either suppress voices that may be on the more conservative side relative to a more liberal view. that there are obviously the privacy issues what is the things you would watch for today? >> sure. i think it ultimately has to come back to trust i think all of us -- whatever industry you're in but particularly in tech, we need to make sure we're building trust with customers and our case for nextdoor with our members. that's the thing that sundar needs to hit on. how do we ensure there's maximum trust and we don't get off on a discussion about how are they using the data >> what you say you don't get off on a discussion. because the data ultimately is the -- you know, data is the new oil, right so the question is if you cut that off, does the business make sense? does the business model make

sense? >> it has to come back to your customer if you're providing your customer with relevant content and high utility, then your customer will give you the information that you need to do that you need to do that well so i think that's the tone that sundar needs to hit. i think he's a very approachable ceo. i think he's very deep in the weeds of what his customers want and i think he wants to do right by them. something we think a lot about at nextdoor. >> is there a distinction between what facebook does and google >> i think it has to come back to how they feel about their customer and, you know, that has to be your north star of anyone leading any company out there. >> what if they consider their company to be the advertisers? who actually pays them >> i think that's where you get off. you always have to come back to what's your customer's struggle? what are you trying to solve for them and if you do that, your

business will thrive. >> it's not just how you feel about your customers it's how they feel about you >> if they can see you're putting them first, they'll come with you on that journey >> this goes back to the age old argument of who the customer actually is. >> that's your north star. and every time you're in a leadership position, you have to pull whether it's your team, whoever it is that's out there back to what's the north star, how do you do right by your customer >> the question is who is the customer i love the family line is if you are not paying for the product, you are the product. so in this situation, you've got to blend between the customer and the product. what we think of as the customer is really the product. that's where i think we get into certain situations >> but you lose your north star. we're going to talk nextdoor, but the way we start the atomic unit is you come in as a neighbor we verify you. we know you live in that hood, and that's the beginning of the trust that we build across the neighborhood >> what do you think the chances

are -- when you were at square and sit around the friends with dinner, what do you think are the chances that washington enacts meaningful decisions when it comes to data privacy >> clearly we've seen the beginnings of that with what's gone on in the eu. i think everyone has stepped up and said we will comply, but it's not just about compliance it's the right thing to do >> when you say comply and we've talked about this on the air, you hit a website. now it asks you a handful of questions and everybody says, okay, and they never think about it again is that what complying really is about? >> no. it's not about hitting in terms of service it's about believing going back to you're putting your customer first. and in the u.s., the thing i would like to make sure we see is that we do it at a federal level. i think the worst thing that could happen is that we don't grab it at a federal level

then then turn it into customer experience where it slows everything down. i think we need to be careful of that which the u.s. has been amazing at balanced against doing right by the customer and that's the kind of tone for, i think, d.c. to strike. how do we do that well >> we had a guest in earlier that said he thinks it's less than 50% odds that the u.s. federal government actually sets any regulation that this is a lot of talk and a lot of fury. and that it probablydoesn't go anywhere but it sounds like you are almost advocating for having some sort of federal law so you don't have local amenities >> if we're going regulate, it has to be done at that level state by state i think would be a really bad outcome i've seen this at square lending licenses are state by state. you end up with this -- >> okay. since you're from the inside, what is the thing you look at and go, that's just terrible that's just terrible that the industry does this

what is the thing that is the thing that make yous cringe? by the way, big article in "the new york times" yesterday just about how much data is being collected wherever we go which actually surprised me. even though i sort of conceptually knew it, seeing it in black and white made me cringe >> what makes me cringe is when people lose sight of who their customer is and the trust they need to build with that customer and get off on maybe losing sight of how they're monetizing it again, i think bezos has said it well in the past i sit on the board of wl mart. i think sam got it right in the beginning. if you have the north star of what your customer will always want and when you're in commerce, most relevant prices and content, highest yutility, that will build hundreds-of-years-type companies. what makes me cringe is when we see companies or teams flipping and doing things for the revenue model. >> talking about the revenue

model, and this is true by the way of google. it's probably true to amazon to some degree. that they compete with their own customers. because that's the other piece of this. i don't know how much that's going to come up in the conversation today but you have a situation where obviously google has a business, but then also is a platform for other businesses they are then competing against some of their own customers. amazon increasingly has created a marketplace and yet is competing against its own marketpla marketplace. sometimes not clear it's doing the best job for the consumer itself, doing the best job for amazon, or for google. how do you think all that plays into this? >> that is definitely a difficult one. i am a firm believer of first party and third party that you can build a product yourself but you can also bring in third party partners and there is healthy competition. i think it's better for the competition internally in your company because it puts them on notice it's not i can only build things from my member base. i'm going to have to skpeet with

someone who is only focused -- >> then it becomes which one you're going to prioritize on the screen >> but if your north star is what's best for my customer, the best thing will win out in the end. platforms have suffered from we're going to sell this but we're also going to somehow help this local business. i am a huge believer in local bit, right this is what is driving me to next door. i think no one has done local well in a way that is trusted by local business >> why do you think facebook never did local well they seemed like they should have been the obvious one. >> because they're not about local in the end when i'm joining facebook, i'm joining to connect to friends across the globe i grew up in northern ireland. that's where my friends are coming from. when i join nextdoor, i'm connecting to hyperlocal neighborhoods. facebook doesn't have the ability to do that well. >> we're going to talk more about this after the short

break. thank you. when we come back, we'll have more with former square cfo sara friar and talk about nextdoor right now you can see the dow futures are indicated up by 234 points this comes after a reversal of more than 500 points with the markets really making up some ground to end in positive territory after being down significantly all through the course of the day. s&p up by 24 and "squa b" lle ghbackwkox what do you look for when you trade? i want free access to research. yep, td ameritrade's got that. free access to every platform. yeah, that too. i don't want any trade minimums. yeah, i totally agree, they don't have any of those. i want to know what i'm paying upfront. yes, absolutely. do you just say yes to everything? hm. well i say no to kale. mm. yeah, they say if you blanch it it's better, but that seems like a lot of work. no hidden fees. no platform fees. no trade minimums. and yes, it's all at one low price. td ameritrade.

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♪ mom. ♪ all right. we're back let's check out the futures right now. it looks like 244 points now on the dow indicated for the open this morning the nasdaq, greifeld no longer controls these numbers but up 85 today. and then the s&p indicated up just under 26. we are speaking this morning to one of silicon valley's most influential voices sara friar jumped from being

jack dorsey's lieutenant to leading her own company. she's now the ceo of nextdoor. great to have you here today >> thanks, becky >> i've gotten e-mails from people complaining about you not being at square. they loved you there jack dorsey himself was saddened to see you go. you'd been there a long time the stock was down 8% on the announcement you were leaving. why did you decide to leave? >> it's the greatest fin tech company out there. but the opportunity at nextdoor, i think it is the hottest thing right now in consumer internet i think it's a global opportunity. there is not a community in the world that doesn't want to drive stronger community, drive better, more active conversations in that community. i think there's a moment, people are missing that place if you think of just americans used to go to have conversations

whether it was the local rotary club, might have been your local school, local church that area has gone and i think that's part of why the level of discourse is so toxic. then beyond that, i have loved local business it's been my passion for the last, you know, seven-plus years at square. i see a huge opportunity with the nextdoor platform to unleash how local businesses and our members come together. >> we live in a small town and there's a mothers club list. i rely on it just to find out if i need to get a great place for a kid's hair cut or if somebody knows when school's getting out today. any number of things you rely on for that does this replace something like what i'm dealing with. >> sure. so i think that's exactly what will happen over time. so there's so much that goes on in your local neighborhood if you think about examples of i want to find the best dentist. i want a dentist that's great for my kids.

so what you'll see on nextdoor is not just here's the best dentist, but a lot of color and context. it is hyperlocal at scale. i think we can bring things together but i think with can go beyond that and start to bring commerce into the equation. but always coming back to how do we unlock discourse. >> how do you do that without me feeling like you're pitching me commercially when si ask for a recommendation on the mothers club list, i rely on that. >> the first thing they want is relevant content if you look at nextdoor, what we've built in the last seven years is that exact sort of feed that feels very local, very relevant and it's happening across eight countries. it's happening, you know, what we see internationally country by country all the same hallmarks come through. there is local utility i want.

when you think about who's the best plumber, tree cutter, nanny for my kid you can't do a google search for that that would be an awful return. you have to trust and what better way to form trust than my neighborhood recommends this person >> is that, though, different than facebook? i mean, if someone is my friend, i may trust them more than my neighbor >> but where facebook begins is i link to people i already know who don't live around me where nextdoor begins is we start in your neighborhood and it's literally the hundred houses, 200 houses around you. >> is there a zip code you look at within your subset and say this is where it's really working? this is the example of what n t nextdoor can and will become >> we're in 110,000 neighborhoods across the country. >> do you think there's a robust discussion that's at a next level relative to everywhere else >> there are so many already like that. i'll take my own neighborhood. because i'm a lead in my neighborhood

so almost 90% of the houses are on nextdoor. so that means everyone because 10% are probably in sale at the moment. and what i see going on in that neighborhood is everything from talking about how we make our neighborhood better, a great conversation now about how do we take clothing up to the fire victims that happened really close to us. and public agencies is another great way for nextdoor to connect to a community hurricane harvey is where people came together. and fire departments can't get to a hood on facebook. only on something like nextdoor. >> you have some big investors a lot of big names is there an ipo in your near future >> so i don't want to focus the company on an ipo. it's a milestone on a journey. right now what we can do is continue to build impactful companies. we can get funding to do that. so we don't need to access liquidity from a public market i think there's a lot more

iterati iteration. but ultimately, yes. we want to show we can stand as a public company but it's not something i want to goal towards rather i want to goal towards the important things like maximum members, maximum neighborhoods. >> thanks for your time today. >> appreciate it >> sarah friar is the ceo of nextdoor president trump just tweeting moments ago maybe going to the china story about the tariffs that definitely helped the market today very productive conversations going on with china. watch for some important announcements. >> didn't he just do one like this a couple days ago though? >> so anyway >> one day yes, one day no also some other news to tell you about, verizon has announced billions of dollars of new charges in earnings. they will take a fourth quarter charge of $2.1 billion related to yesterday's announcement it had accepted 410,000 workers

verizon is also taking a good will charge related to its oath division it says oath is experiencing increased competition and market pressures throughout this year affecting its digital ad business and shares now up by 3 cents. coming up, we've got a milestone for sndiey we'll talk about that when "squawk" returns in a moment so they say that ai will put the future in the palm of our hands. that's great. but right now you've got your hands full with your global supply chain. okay, france wants 50,000 front fenders by friday. that's why you work with watson. i analyzed thousands of contracts and detected a discrepancy. it works with procurement systems you already use to help speed up distribution without slowing down your team. frank, tell fred full force on those french fenders.

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welcome back to "squawk box. the futures, 265 now yesterday we were a little weaker early on. next thing you knew, we were down over 500 points but today we're up 265 we'll see how the session plays outz got some news about china with tariffs. possible news. word is it could go to 15% from currently 40%. there's the nasdaq now almost

100 points definitely greifeld -- >> making it happen. >> yeah. and the s&p indicated up 28 or so when we come back, november producer price data. it's due at the bottom of the hour we'll have that key number right after this

welcome back to "squawk. we are seconds away from november ppi data. let's show you the futures ahead of those numbers dow up about 269 points. nasdaq up 28 points. rick santelli is standing by in chicago. rick, the numbers? >> november read on producer price index up 0.1% on headline. many were looking for unchanged. strip out the all important food and energy, we're definitely above expectations at up 0.3%. and if you look in the rearview mirror, the up 0.6% and up 0.5% respectively of october are unrevised. look at the trade number month over month, that's up 0.3% better than expected although 0.4% less than the 2.9% from october

and if we look at year over year, ex-food and energy, up 2.7% this is interesting. this is 0.2% hotter than we were looking for. and it's 0.1% hotter than our last look. ex-food and energy trade year over year also on the bit of a warm side. although it is equal to the 2.8% in the rearview mirror so the ppi data is warmer than expected maybe not as warm as it was last time all things considered and we know how that turned out. the cpi is really the consumer price tomorrow maybe more important but these are the last glimpse into the world of what the fomc committee will be dealing with next week when they decide most likely to raise a quarter point. many believe 2019 and 2020 changes and market perceptions have been rather robust. 2020 you could argue is pricing in maybe an easy 2019 virtually nothing

we'll have to see. joe, it's all yours. >> i was going to bring something up >> oh, bring it up, joe. come on. >> former fed chair yellen can says excessive corporate debt could produce a downturn and then years later they prove this could be a problem. i'm with you, joe. >> the arsonist is concerned about how to put this fire out what are we going to do? >> the arsonist arrived in its big red truck with hoses all over it. i understand >> why are you looking at steve? >> that's the only reason i brought it up. thanks steve liesman -- >> the president wants to keep interest rates down.

>> good morning, joe >> what do you think >> i think that's an issue and i think it's something the fed thought about. i don't know if rick is still there, but the idea was that they would address it through the macro credential you remember that? >> it was a dumb term. they bit off more than they can chew let's hope the new ones in place will chew smaller morsels. >> also so you know, yellen was also saying last night that the fed lacked some of the tools that address the next financial crisis >> that's what geithner said to him last week. >> i think the fed is full of tools. >> you could argue that, joe you know, folks, i make the mistake of taking joe seriously. and it's like i'm charlie brown here because i whack him with the football >> are you going talk about it with rick?

will you argue with rick >> rick and i don't have an argument >> all right >> let me just do this quick mike was arguing earlier today about the transport stocks and joe, for many, many years you've been using transports as your leading indicate for. i learned that from you. >> my biggest worry is when the transports go down at 50, that makes me wonder. >> let me give you some information here which is transportation warehousing costs went up by 1.2%. which dove tails with santoli's idea >> it fits it's a high friction area of the economy right now. the burden of getting everything to everyone is immediately falling on u.p.s >> they make the promise to get you the present and they have to deliver it no matter what. somehow for some reason, 6.2% year over year and i don't know which part of that is the transportation part or the warehousing part.

i thought these were great stocks because they were going to deliver every present in america. >> or maybe inventory loading as well >> also, 1.3% pop in food prices and i am looking for but not always able to find because i'm not sure how to find it whether or not there's any tariff costs in this ppi. it's a place where it would show up on the boox or the prices paid by wholesalers. it's not entirely clear for me looking at this. i will tell you energy is down 5% goods are up -- down 1.1%. so i don't know if it's there, but we know we have a hotter ppi. we have to look at it later to see if it's there. pivot real quickly to talk briefly about the fed of who are the hawks and who are the doves. and does powell have the votes to hike if that's what he wanted to do? there's one fact you may not be aware, but he has five members of the board of governors.

the president has done a pretty admirable job of getting good people on the board that the market seems to have accepted. and i think they'll vote with him. almost certainly the president of the new york fed votes with him. that's six votes then look at the other things folks have said where i tried to place them into a hawk/dove scenario okay zoom into the left there let's look at the doves. and there's daley saying too soon to know i put her on the dovish side and bostic from atlanta wanted to proceed cautiously. just below the range of neutral. i put those guys in the middle that's the center of the board they're kind of the middle let's move over to the right if you can.

there's bray national guard and midwester all the way to the right. >> it's amazing to me we're even disgusting this. the idea that it's questionable at this point. >> and so what i did was go back and look at the percentage of the possibility for all of the next meetings. this is the lowest we've ever been this close to the meeting we went to the other three hikes this year at 100%, 90% here we are now at 76%. >> where were we a week ago? >> a week ago -- >> maybe a week and a half ago >> we were up in the 90 percentile range be clear here. this chart has changed with a change in the market we're now talking about for the 2019 hikes the probability of a first hike all right? we originally had the percentages for two on there >> what did you think of the paul tudor jones comment

yesterday? >> which one >> that there will be no hikes one and done he says there's a good chance something like that happens. >> if you don't mind, i want to try out my new thought this morning on you guys live on television here. i think the fed is puzzling between two historical analogies here the first one is 2008 and the second one is the taper tantrums the distinction between those two. 2008 was the wrong policy at the wrong time where it kept rates up and it should have been cutting 2013 was the right policy at the wrong time okay so what they did is the market had a big flare up you remember this, right and then they came back to that policy later i think what the fed is seeing is seeing this as a taper tantrum right now. they're going to let the market settle down, let the market get caught up to where it is on the forecast which is that it's a slowdown but not a catastrophic slowdown and there will be, you know, 2%

inflation. a still declining unemployment rate and when they move, it'll be clear to the market it's time to move they might have been a little bit ahead of the market on this. >> by the way, paul tudor jones makes the point to look at commodities. >> larry kudlow has been saying that for decades. >> can i just point out that the ecb hike in 2011 because they were worried about oil prices, you actually had a vote on the fed to hike in june of 2008 because of oil prices. one vote, if i'm not mistaken. >> right i think oil prices are -- >> so i don't think it's the focus necessarily. >> does that make sense, andrew? and i think it's the taper tantrum. so i think the market might feel like it's all clear, but i don't feel like it's as all clear as the market thinks it is. >> i need to think more about that we will re-litigate the past, perhaps, next time you're on when we return, coming up investors might have lost the opportunity to buy the dips on monday as the dow came back from

500 points down. but should you be buying these dips when they happen? we'll dig into that as we apprchhe ooa tpening bell after the break. "squawk" returns in a moment i know you want to leave me for schwab, but before you do that, you should meet our newest team member, tecky. i'm tecky. i can do it all. go ahead, ask it a question. tecky, can you offer low costs and award-winning wealth management with a satisfaction guarantee, like schwab? sorry. tecky can't do that. schwabbb! calling schwab. we don't have a satisfaction guarantee, but we do have tecky! i'm tecky. i ca... are you getting low costs and award-winning wealth management? if not, talk to schwab.

welcome back to "squawk box," everybody. we've been watching the futures this morning and we have seen some pretty strong movement to the upside. dow futures now indicated up by almost 350 points or just over that s&p futures indicated up about

36 remember this gain of 350 points for the dow comes after we saw the dow close in positive territory after being down 500 points earlier in the session. and a big milestone for disney to tell you about published reports say the company crossed $7 billion in global ticket sales for the year earlier this week. that's only the second time any studio has done that the first time was also disney back in 2016 disney held the two top spots for ticket sales worldwide this year box office amojo says "avengers: infinity war" took in over a billion dollars. we are now under an hour until the markets open mike santoli has been with us all morning and joins us with

what he has been seeing. >> we've been talking about this upgrade at morgan stanley of at&t i think it's a pure value call they didn't change the price target, but that's high above the price of at&t. used to be these were interchangeable stocks you have verizon up there. time warner has made a huge bet on traditional content creation. has take an lot of debt to do that they can deleverage some of the debt and maybe they're going to be figuring out ways to monetize the content. verizon, people like the simplicity that oath was a smaller bet. big divergence just to watch it it's obviously not -- these aren't the stocks that drive the communication sector anymore

but definitely an interesting thing. i think you're seeing people say lock stocks moved around a lot that was an upgrade. you're very youthful, but that's a lot of responsibility let's start with something that the first point you make is things are peaking here. when things peak, do they go like this or do they go like that don't we need to know that to decide whether to stay in stocks here >> i think the market is really struggling with this shift towards slower growth. i think that's really why we've seen this volatility the numbers have gotten weaker in the u.s the numbers had gotten weaker

outside the u.s. so things are certainly weakening. markets are responding to that keep in mind that's a big shift. wasn't so long ago we were worried about is the economy too hot and is the fed going to move too aggressively and cut off this growth scenario now a couple months later we're there saying the economy is getting a bit slow so i think this shift is definitely what's created this volatility >> so at this point, valuations are still better >> very reasonable >> but growth is possibly peaking. in europe, valuations are cheaper. but the outlook over there, they wish they had ours but things are at a lower level. >> i think we're going to see some convergence and certainly into the first half of '18.

that's now going to get closer i think the relative valuation differentials are something they'll watch closely. if they go from 3%-plus to 2%-ish, it's not the end of the world but i think once you need to see confidence that you're getting that soft landing the fed is trying to engineer. i think to get that soft landing, you need a -- >> you delve into politics a little i was just thinking about things trying to pick the world leader in the strongest position right now. and i'm having trouble then i'm thinking macron used to be looking pretty good i'm not sure what to think of that i'm not sure what to think of germany. i'm not sure what to think of teresa may now >> president xi seems secure

>> but this is a tough time to be a world leader in the west. >> i think the political strife in europe, in the u.s. to a degree, other parts of the world is one of those factors that creates anxiety. i think the european situation will calm a bit. i think it will reach a deal i think brexit often politicians do the tough thing at the last possible moment so i'm expecting that that's going to be resolved in a reasonable way we'll see. but put aside the politics, you still have the underlying economics to focus on. and again, you're seeing that convergence of growth. one of the things you're looking at closely is china. china is stimulating very hard they've reduced rates. they have increased lending. they have cut taxes. there's probably another tax cut coming at some point and i think there's a multiple quarter lag to that. i think that's one of the reasons why we remained overweight even though this year that's been a painful allocation for

us >> how would you compare the ratios between the u.s which one is cheaper >> well i think so the indices are mislead k. while there are a couple of multiit'll points below the u.s. and emerging marketing or a couple of multiple points below that and the u.s. has a higher technology component if you look at growth sectors emerging markets, europe, u.s., they're not that far apart in terms of valuations. >> so one of your biggest risks was a stronger dollar and rising rates in the united states is that still a big risk that's less of a risk isn't it >> with our scenario of slowing growth converging a bit with non-u.s., china stimulating, that's a scenario where the dollar has peaked or is weaker

which will help non-u.s. markets. that's why we're still overweight em. >> all right would you say you favor europe more you talk about convergence. abo convergence or are you in both places >> if we look at allocations, we are still over weight equities and we are warming up to develop market outside of the u.s. because of emerging growth rates. thank you. when we return we'll go see our friend jim cramer, who's down live at the new york stock exchange we are in the green right now with the features, 361 points higher and 362 on the dow. we'll be back in just a moment

jim cramer joins us now. the story yesterday, the dips are not involved last week we had the 800 points move that was sort of erased in the session and yesterday of 500 points move. is it true or not, dibs being bought, yes or not >> all four of us came out for

apple and apple lev taitated i think what matters is trump's tweets all you have to do is get the call from jay powell, i don't know what he's going to be able to do. listen, i misjudged, i think the people feel he does not have to worry about it because he did not misjudge there is good sign on feds and trade. does give it some real hope. it is a different kind of dip. i think a lot of people are sitting back and taking a look away from apple and micron it is okay here. it is okay because of trump saying when he did about trade, otherwise, the market is down pretty badly, 330.

>> you can say that but i wonder whether the situation with huawei and vancouver, is that really separate and distinct it may be in lighthizer and larry kudlow's universe but is it separate and distinct in china? >> no, the communist party controls court systems and the court system rules for qualcomm. but then again everybody -- i mean if we had been more vocal about how what an outlier huawei really is, most of the country dwoo don't want them in i think we would have been able to put it in context canada does not really agree with us on a lot of things they found this one easy enough

and especially they won't let it out for bail she's got the $12 million house. i think the chinese are seeing the light that's not just united states that's something that they have to worry about maybe the chinese are coming to the table a little bit more or the president want as win or the president does not want the market to end badly because he cares a lot and his ratings. i think that tweet is so impactful that the short that ended the day, it is always right to be short at the end of the day. unless something goes wrong earnings wise, we don't have a lot of earnings this week. costco, marvin nelson is going to lay out a path. we got some good news this week, let's see what happens >> all right, jim, thanks, we'll see you on "squawk on the street" in a couple of minutes and make sure you join those guys we got an exclusive interview,

james quincy will comeour yway at 10:00 a.m. eastern, stay tuned, "squawk box" will be right back your muscles look good, but we should be seeing more range of motion. i'm fine. okay, well let's see you get up from the couch. i'm sorry, what? grandpa come. at cognizant, we're uniting doctors, insurers and patients on a collaborative care platform, making it easier to do what's best for everyone's health, every step of the way. you may need more physical therapy. ugh...am i covered for that? yep. look. grandpa catch! grandpa duck! woah! ha! there you go grandpa. keep doing that. get ready, because we're helping leading companies lead with digital. is it because so many go after it the same way, chasing after short-term returns? instead if getting caught up with the crowd, the investment managers at pgim take a long term view.

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i want to thank our guest host this morning, former chairman of ceo of nasdaq is

here mike santoli thank you. one thing with you, your partner likes bitcoin and things like that do you >> i don't dislike it. the prices you see changed is not the same thing as apple. the opportunity for mischief is infinite on the crypto currency changes. >> thank you so much for being with us. that does it for us today, make sure you join us tomorrow. right now it is "squawk on the street." ♪ good tuesday morning, welcome to "squawk on the street," i am carl quintanilla, david faber and jim cramer at the new york stock exchange. a productive phone call on trade on monday night. google may meets with the e.u., janet yellen is worried we could have another financial crisis.