live from new york where business never sleeps, this is "squawk box. good morning, everybody. welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. let's take a look at the u.s. equity futures right now you'll see things are relatively flat dow futures down by 7.5 points watching what happens here last week was a down week for the markets. dow was down another 1 point be point 2% nasdaq down by .8% maybe more concerning is hearing from the bank of international settlements that the global selloffs are not an isolated event. we'll talk more about that in a bit. in the meantime, take a look at what happened overnight in asia. the nikkei closed up by .6 of a percent. the hang seng was flat and

shanghai up slightly european equities, you will see there are red arrows across the board. biggest decliner is the cac. 2.88%. a developing story on dow component goldman sachs. malaysian authorities filing charges against the 1mdb scandal. they raised funds through bond offerings which is the subject of investigation for corruption and money laundering allegations. the specific charges are related to $2.7 billion for bonds underwritten by goldman. they were effectively which is one of the reasons everybody thinks there should have been

going on meanwhile, in other news not related but it's in the bad category french car maker renault calling on nissan to hold a board meeting asap top executives sent a letter that it creates a risk those two companies are locked in an agreement. ghosn. he could face up to ten years in jail you'll see the relationship he had with so many people in japan and what rubbed people the wrong way. how this may be a criminal situation but also seems to be a

personal one. >> the biggest question is what happens? how do you unravel that partnership? >> right >> renault owns 40 perfection percent. >> unclear >> this is all about a house in the best neighborhood in lebanon, did you read that >> part of it. the corporate houses that are there. >> corporate house there, corporate house in brazil. by the way, some of the homes didn't also -- there was a lavish home here and one that didn't seem so laf vick. >> no echos in the foyer >> i'm just saying some of them seemed like he went there -- >> we're talking about multiple houses. >> he's traveling the world. >> no, i know. >> stay in a hotel. >> see how it plays out. >> always better to stay in a hotel. >> start with that news and get worse news i didn't know about vine

it was all about an app. new york officials say coli colin kroll was found dead over the weekend. he died of a suspected drug overdose he was the ceo hq trivia app. he also worked for a short period at twitter after helping lawn c-- launched. there was enough found around to have a pretty good idea. tragic very young heroin or something? white powder i don't know >> right 34 years old let's talk about what's been happening in washington. president trump picking mick mulvaney to be his acting chief of staff

eamon javers joins us. >> good morning, becky former republican congressman from south carolina. that should help from the president's efforts to get him up on stage. now though the president announcing mick mulvaney will replace john kelly but with a catch. here's the president's tweet announcing this which came late on friday night. the president saying i am pleased to announce that mick mulvaney will be named acting white house chief of staff replacing general john kelly who has served our nation with distinction. mick has done an outstanding job in this capacity john will be staying until the end of the year. he is a great patriot and i want to personally thank him for his service. then to underscore the point the

president putting this on. >> the -- chris christie took his name out of the running, anything ayers removed his name. two high profile figures in washington deciding not to accept that job. mick mulvaney, however, will get the job on an acting basis, guys not sure whether or not the president has a time line to remove the acting threshold. >> eamon there was a report that suggested he campaigned for this job on the golf course with the president. is it the kind of thing where you go in with the acting role -- >> that's right.

>> do you really think it's just an acting capacity and then you try to solidify it mulvaney is somebody the president has leaned on in times when he needs a competent figure on the inside to run important office he ran the consumer financial protection bureau for the president. he ran omd which is a huge operation so this is somebody that the president has a track record of working with it's not clear why the president said there should be an acting position in the first place. we do know that mulvaney is not stepping down from the office of management and budge get while he takes on think. mulvaney will continue to wear many hats inside the administration. >> eamon, thank you very much.

>> you bet. just out of boeing this morning, a jet maker in brazil agreed on a strategic partnership. boeing will get 830. it needs to be approved by the brazilian government. let's get back to the markets and joining us now, the managing director and fixed income strategist at merrill lynch and rich steinberg, global asset manages. trying to figure out what you are saying here, matthew, about yield curves and inversions. it's not totally inverted yet. obviously it's flat which means nothing. >> absolutely yield curve is, as

we say, often doubted but rarely if ever wrong. pay attention to the inversion what's most important is going to be what's happening with the fed. we do expect a dovish hike the market is limiting the fed to less than one hike. 50% chance of one hike expect a dovish meeting this week expect the fed to move from three hikes to two expect the dots to drift lower >> rich, your take is that -- it really scares me you say this is one of the hardest markets in your career to get a handle on and that goes back a ways. this is -- >> 32 years, joe. >> that's saying something there's been a lot of scary markets over the last 32 years what's different about this one

that has you scared? >> i think it's a combination of the speed in which information travels and then how it's traded and i'm talking about both up and down when you have markets that are really cloudy like this, and you have news flow in the morning and then all of a sudden you have these enormous swings, it erodes confidence in both the public markets and it also makes people skiddish. our concern is that could lead to some self-fulfilling prove if he is sis. i think we have to let some of these data points get through so it becomes less. the fed news will come out we think we're one and done for a while, and i think any type of news that could be less worse could lead to some rally in this market

"the new york times" will unbelievably pessimistic stories and headlines. that's a positive data point for us is it the bis that came out and sads volatility is back. in 32 years i never heard them make a statement on this we're starting to collect the data points of pessimism that maybe will make it easier. i don't know whether you got a chance to read it this morning it's in the journal. we hear some of the comments and kevin's written a lot of op ed pieces in the past about raising rates, not staying at emergency levels for too long. their take at this point seems to be that the time was passed, in fact that by staying at the party for too long, staying at zero for too long it's made it much tougher at this point to start hiking they say it right here, central

banks should pause and then the markets will tell us something this is not the time to get too tight too quickly. >> if you listen to what powell said, he's actually great, plain english spoken not overly quantitative. sort of humble monetary policy doesn't think you have to really follow the models and he'll say, listen, in a crisis, you need to act fast, do big things. that makes sense otherwise, be gradual. be incrementalists if you look at what he says, now is the time to put those words into action. now might being a potentially good time to make a pause. if you think about not just the fact that you've gone from zero to 2 1/8 on fed funds, if you look at what the fed used to publish, the shadow rate both the fed fund rate and quantitative that says funds

rates. up to 2% 500 basis points rate increases significantly affects it we're seeing that. you're not seeing the end of the cycle but you're definitely seeing later cycle behavior in housing which is rate sensitive. powell's approach is to be gradual when it makes sense and moving from three to two as we expect the fed to do and a pause probably makes sense >> this is not a bearish piece at all this is a time for choosing. we believe the u.s. economy can sustain strong performance next year as long as there's no major policy error, which is sort of a different take than we're already at the late -- we're at either the end of the cycle or very late stage cycle. it's inevitable. he's not always there.

and it sounds pretty positive overall which is worried about a policy mistake not that we're just long in the tooth. >> right we don't think the fed has made a policy mistake if the things that we like to point folks to is you saw in the mid 30s. you saw it drop 100 basis points two months everyone thought, it's going to revert whampt did the fed do the fed reacted and paused early in 1995 and wound up easing later in the year. that extended the recovery which had been going on five years all the way to the end of the decade as long as the fed reacts they

can continue the expansion if you listen to all of the governors, they'll all tell you the same thing they want the expansion to continue they're all on the same page that they want it to continue. while it's later in the cycle, we don't think it's en cycle, but we think the changes you're seeing, can -- can you adjust it? >> i think we need to come down some the s&p earnings for this year with mean estimates have trended down from 179 to 176 we are at 171. to your other guest's point, 2.5% global growth would support a 15, 16 multiple.

i think we're going to probably come back on our target to 2950. that's still with dividends could give us a good year next year volatility is here to stay you need to let volatility be your friend and accumulate names that have good balance sheets, strong product cycles and loads of safety tarnd. >> i think if you have cash kevin. look to accumulate names volatility is going to continue until the fog clears >> all right >> 2950 is probably what we're going to come back to, which is where we were at the end of this year so i think it's kind of a redo. >> andrew tomorrowly is taking a lot of flak about bitcoin. >> are we at 3,000 >> 3200. >> people are saying his forecast for the giants, 11-5 this year, he's revisiting that.

revisiting the -- we haven't really needles him too much about that >> look, it's very hard to make the call. >> what was it, 20,000 >> 19,000 was the top. >> no, he was -- >> oh, he thought it was going to be 20 the question is what's the breaking point on this does he go materially lower? you know, is this -- by the way, there have been these dips three times in its history there have been these sort of terrible moments. i don't know but i don't know if this is -- i think i was reading something over the weekend, people lost collectively $700 billion on bitcoin trading. if that's the other times. >> no. this is the -- >> just this time. so if you think that's true -- >> i didn't think it was that big.

if that's possible, you have to find a whole new generation of people completely burned to ever decide they want to do this. >> that's what we had to do with the stock market >> maybe this goes back. it may be like a decade long proposition. i don't know i don't know do you have a take on this >> i do not have a take on bitcoin thankfully >> smart. >> he's had great calls on the stock market why would you stick your neck out snnchts ditto on this end. this is speculation. >> thank you is that the same steinberg of global -- asset management company? you are the same steinberg, right? >> there's two, michael steinberg's big cap, small cap shop in new york and we're down here in sunny florida where you should come and gavel

interestingly novagrass who's made a huge bet on this thing thinks bitcoin will succeed long term but calls it a -- two is too much but one's okay. when we come back this morning some new data those an increase in teen use of ecigarettes. as we head to break, here's a look at the biggest premarket winners and losers in the dow. exxon mobil leading the way up by 61 cents.

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welcome back, everybody. the annual monitoring the future survey about adolescent drug use was released this weekend and it

had some good news and some bad news let's go to the good news first. teen use of alcohol and opioids actually fell. unfortunately the rate of adolescents who vapd nicotine products increased from 11% to 21%. that's the largest increase in the 43 year history. nearly 29% of high school seniors said they used some form of nicotine product. marijuana use was also up. 36% of seniors said that they used marijuana sometimes and close to 6% actually said they used it daily. >> an article over the weekend that used to be in the workplace was people putting fish in a microwa microwave? >> what? >> that used to be the office taboo where people would -- >> yeah, that's a taboo. >> bring fish and heat it up in the microwave and now -- >> stuff they were having for lunch. >> yes. >> now it's vaping. >> now it's -- >> yeah. >> i didn't get that

>> has that ever happened? i mean, i can remember very rarely where it's like, oh, my god, someone had brought in fish in the microwave >> old fish. >> now it's been replaced by people don't like people who vape. >> vaping sounds so innocent you forget this is nicotine. you're getting hooked on something. >> isn't it just -- doesn't it disperse very quickly. >> yeah, sure, it does. >> it can smell a little bit. >> it smells a little? >> it's kind of like -- >> it looks like secondhand smoke. i wouldn't like it i don't think it's like breathing in secondhand smoke. >> nicotine, i guess. >> you'd rather have the snish. >> the fish. >> i thought you were talking about phish. hot, phish the band. >> i thought he was talking about live goldfish. >> no, i was talking about people who had fish -- >> firing on all cylinders. vladimir putin does not like

rap music. no the russian president is so opposed to rap and other it says here modern music, modern music that he's calling for controls on it. anyway, in russia, putin met with cultural advisors and said he objects to the three pillars of rap, sex, drugs, and protests pult continue's comments came amid a crackdown on contemporary crackdown. >> that's the three pillars of all music. like a great love story. >> not quite >> that's what i'm saying. a lot of sex, drugs, rock and roll sex, drugs, protest. >> what am i listening to. coming up be when we return, it's going to be a very busy week for investors in china.

president xi set to deliver a major speech that's going to happen tomorrow and the country will hold an annual economic conference we will talk about china's economy and the trade war. as we head to the break a look at friday's s&p 500 winners and losers back in a minute

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in times square. >> good morning, everybody welcome back among the stories that are front and center this morning, news breaking early this morning that malaysian authorities are filing criminal charges against goldman sachs relating to the 1 mdb financial scandal. goldman calling the charges misdirected. also saying it will vigorously defend itself. sharps are down 1/2 a percent. new york officials say coli colin kroll was found dead in his apartment over the weekend he was the ceo of the hq app he launched vine he was just 34 years old french car maker renault is calling on nissan to have a car shareholder meeting. top executives sent a letter saying ghosn's arrest creates

significant difficulties for renault and its alliance if there's a shareholder if they own 40%, they can make it go their direction. let's take a look at the u.s. equity futures at this hour they've been mixed to flat right now it looks like the dow futures are down 36 points s&p futures down 1 1/2 it is a very busy week in china this week. policy meeting on the docket president xi holding a meeting tomorrow are you excited? do you think there's a stimulus coming >> i'm not stimulus.

what does china have in store for us the difference between this is physical but they're not going to make. it would sound too good to be true >> how damaged is their economy right now? what are the politics inside the country vis-a-vis what they're going to do in terms of opening up or dealing with us? >> economy's not good right now. we had flash data come out 2 1/2 weeks ago. >> do you believe those numbers? >> we believe our numbers. the numbers they're releasing are good, the numbers we're releasing are much worse. >> how much worse -- the numbers they lee leased relate before g20 was the dwoort but was

looking down would things get better with a positive g 20 solution look, the problem has been manufacturing has been the engine behind that manufacturing is hurting and the trump trade war is hurting that. it's over heated what engine in china will fuel growth in 2019 >> go back to what you said which is an important distinction. how much is coming because of the trade war. how much is because even if the trade war comes off, what happens to their economy >> even be if the trade war comes off they're still going to have a tough time. there was an idea with the momentum but the to bed down they juiced state firms, the old economy. this was the -- they wanted to

make sure the party congress turned out well. you were going to have the over heating and slow down in 2018 no matter what. you have global rate hikes and this is a dangerous recipe for china right now. >> when you saw some of the announcements that china made or the stuff that we dealt last week in terms of auto, some of these other things, did you that was a real snift was that a head fake >> no. these are baby moves do they mean anything? not in the grand scheme of things they're nice movement towards some sort of solution that president trump wants. this is not restructuring. the question is can they do enough of these head fakes to get president trump to say yes to a deal in 90 days i think the answer is they could get a deal i think the 2020 is going to be

the resumption of the trade war. president trump changed his mind, i think we seethis going in one direction and then flipping quite dramatically by 2020. >> why do you say it flips again? >> politics, campaigns whoever runs against the president in 2020 is going to come from the protectionist left on the democrat's side you'll have both of them arguing who's great. you're going to see additional programs and a much tougher china stance in 2020 i don't think that there's any way to get around that at this point. >> interesting that you think that is that a very progressive left position or do you see that even in the middle? >> i think that is a panned u.s. politics position at this point. i think that the only thing the people in d.c. can agree on right now is that china is dangerous and the question is how dangerous are they how do you -- what tools do you use in order to push back?

i think there's very little disagreement on the fact that we have to have a stance on china >> do you agree with that? >> i do. i think for a lodge time this problem has been ignored now are tariffs the answer are tech restrictions the answer the there's a lot of things that are right and wrong. >> do you ever go to china z >> i do, but aim much more careful about it. >> when was the last time you were there >> earlier this year >> picks his words carefully. >> slipped in, slipped out >> you have to be careful. the signals being sent are ambiguous. are executives going to china safe do you think they are? given with what's happening with huawei >> look, i think there's a risk. if you're a tech executive -- >> if you are a senior tech --

>> i would not too much risk. >> we will leave the conversation there a warning to tech executives it morning. thank you. pulitzer prize winning columnist tom friedman will join us to talk china, saudi arabia, russia, i'm sure trump first, the countdown to christmas is on. it is peek season. frank holland, what do you expect co fed ex plans to break its rerd they're going to show you how they stack up when it comes to on time delivery

welcome back u.s. equity futures have turned south a little bit down 33 points on the dow after a big selloff on friday. nasdaq indicated down 5 and the s&p indicated down 1.65. treasury yields this morning, last i looked were below 2.9 again on the ten year. 2.88 then almost -- let's see the two-year and the five-year

still inverted but it's very, very close almost the same rate almost flat between the 2 and the 5. that would be positive. >> uninverts >> if it uninverts do you think >> maybe let's talk about what's happening for the holiday season consumers in the final stretch leading up to christmas and the packages are flying. frank holland is right in the middle of it all he joins us from a fedex facility in edison, new jersey, with a big shipping push what do you see so far, frank? >> reporter: today is the last day that fed ex will guarantee that your package will be delivered. packages were flying down here the shipper expects today to be one of the busiest of the entire holiday season this was similar in edison automation allows them to process more than 12,500 per hour that could be something from

furniture to a sweater that goes under the tree a wide range inside. all three of the shippers expect to break a record. busy season largely due to ecommerce. so far all three are seeing pretty good marks when it comes to on time delivery service. fedex at about 95% of on time deliveries very busy time of the year fedex is hiring 55,000 ecommerce is a year long trend last quarter fedex saw their package increase by 3%. >> frank, how much of this crush is simply amazon >> reporter: you know, amazon is a factor but it's not as big as many people think. fedex said 3% is amazon.

ecommerce is huge. amazon is a piece. >> how much is ecommerce >> ecommerce is not that big of their business as you might think. when it comes to home delivery, they do a lot of b2b 15% btoc >> that's nowhere near as much as i would have assumed it would have been. frank holland who is hang willing out with us today. >> thank you according to com score, sony's animated "spider man" into the spider verse brought in $34.5 million. the most successful opening for an an nhim in. when we come back, a few

trading days left. are we due for a santa claus rally? mike santoli will join us with a look at one wall street firm out with a bullish call this morning. as we head to a break, let's take a quick check of what's happening in the european markets. the biggest decliner is the cac in france expanding the losses that we saw earlier this morning at&t provides edge-to-edge intelligence, covering virtually every part of your finance business. and so if someone tries to breach your firewall in london & you start to panic... don't. because your cto says we've got allies on the outside... ...& security algorithms on the inside... ...& that way you can focus on expanding into eastern europe... ...& that makes the branch managers happy & yes, that's the branch managers happy. at&t provides edge-to-edge intelligence. it can do so much for your business, the list goes on and on. that's the power of &. & when this happens you'll know how to quickly react...

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welcome back to "squawk box. on this week's agenda, today mario draghi speaks in italy tomorrow china's president xi jinping will give a closely watched speech in beijing. then on wednesday we get existing home sales and find out if the federal reserve will hike interest rates then on thursday there are policy setting meetings by central banks in england and japan. friday we get the third read on u.s.gdp in the third quarter if congress doesn't act before then, yes, there will be a government shutdown at the stroke of midnight in a volatile couple of months for the markets as we've been covering. with just ten trading days left this year, wall street looks to be doubling down for 2019.

cnbc's senior markets commentator mike santoli joins us who's positive >> strategists in general are positive david kostnik says the s&p is 3,000. that's up 15% from here. what's interesting to me is the strategist math. one year ago s&p was at 2650, we're at 2600 right now. the aggregate up side forecast was 7% 2840, 2850 around this time last year we hit it a couple of times actually a couple of times on the way up and a couple of times down obviously now that we've backslid, the earnings base is higher the math that they're using pretty much gets them to up 10% or better number and that's only getting you back to where the index was in october i think the way the psychology works or models work, it's getting to see as if the strategists are rolling forward

the standard process 3,000 is his base case bull case 3400 which he gives a 20% probability and then bear case would be just down about 4% from here. >> down side >> yes exactly. >> how much is market sentiment versus -- i mean, if they're just not considering market sentiment in this >> i think what they're not considering is the sort of technical behavior of the market they're not necessarily considering sentiment. i don't think they're making a big fed call one way or the other. kostin is right in thinking it all comes down to, you know, is the market going to be handicapping a recession come 2020 or not. that's what it's about >> i noticed you were on twitter this weekend talking about the way the press was playing all of this there was a big story. >> certain parts of the press. >> the style section of "the new york times" about a crisis coming and you were saying that you thought when mainstream -- when

there's a cover story like that, it's actually a bullish stock. >> i was careful not to say what i thought about it i remarked on the fact the style section says prepare for the financial crisis that's coming next year. which shows you it's in the air. it shows you that people who don't pay attention to this stuff all the time are kind of itchy for predicting something like that. so i didn't say that's contrarian implications but it shows you the mood has definitely changed >> ron paul says we're going to a standard of living after 1929. the depression soup lines. and so -- okay so you say at the beginning of 2018 it was 2,850. >> right >> if you go back to being 2018 and the strategists say the end of 2019 we're going for 3,000. that's only 150 points higher. that's only 5% higher. and you're saying it's not that

bullish. who will sign on for 3,000 at the end of next year >> looks pretty good right now >> i'm saying it's bullish, but i think that -- >> with the downside, wouldn't anyone say okay? >> absolutely. >> because we're all worried we're going to 2,200 >> exactly and nobody is really predicting that >> you're going to see more of these selloffs get used to this they think it's going to be the norm for global markets, not just the u.s >> i think the consensus is volatility is here to stay you know, you have to get used to it. that might be true, but -- >> the people saying volatility is here to stay aren't helping anybody, to be honest. >> if we were at 3,000, i would be slowly -- if i could be confident in that. how's this kostin guy? seem like a reasonable guy >> he's reasonable but i think he trusts the model. he's not saying -- they're not looking at saying, hey, banks are down every single day. what is that telling us about

the credit environment that's what they're not saying >> and he's reasonable, but markets aren't always reasonable or logical >> right or new information comes >> you see the miller piece? >> sure. >> he's pretty good. and he's constructive if there's not a policy mistake which is not what we're all worried about. we're all worried we're in the soup already >> i think the scary part is somebody like him coming out two days before the meeting and saying 25 basis points is the difference between a really good outcome and a bad outcome. that's where i don't think we've gotten acclimated to that situation. >> the market in the last two months was a far cry from what we'd seen in the last year and a half or last five years and you can -- you might connect the dots the fed moves and that or late cycle things that were bound to happen anyway

or china or trade fears. or the sugar high wearing off. there's a lot of things you could attribute it to. but some people could connect exact plots. >> yes >> you could and people are. but i think the difference is that we have a fed meeting on wednesday. we know they make a decision we can't say this a when china's going to make a decision on stimulating the economy. >> and what's going to be the response if they're dove irk in their comments >> i think the base case is in the short-term -- >> one and done. one and done >> one and done. >> or maybe june or something. thank you. >> all right. >> to mike santoli >> nice to see you, sir. among the other stories we're following this morning, qatar petroleum is looking to invest at least $20 billion in the united states over the next few years. this comes just weeks after the gulf arab state quick opec

additionally, qatar plans to announce partners for the new lng trains they're building for the middle of next year. coming up, when we return tom friedman is going to join us going to talk about trump administration's biggest policy issues we'll continue to monitor u.s. equity futures this morning. after friday's 500-point selloff for the dow, this morning the market looks it would open off about 37 points. "squawk" returns with two very g urju aad bihos sthe

investors gearing up for the final full trading week o of the year >> santa is coming to town >> oh my god

santa here i know him >> or is he? what you need to watch as we head into the holiday rush geopolitics and your money tom friedman is here to talk about how changes in congress could affect your money. >> the second hour of "squawk box" begins right now. ♪ live from the beating heart of business, new york, this is "squawk box. >> good morning. welcome back to "squawk box" here on cnbc we're live in times square i'm andrew ross sorkin along with becky quick and joe kernen. take a look at the equity

futures. nasdaq would open down 3.5 points i'm going to call it unch for now on the s&p among the stories front and center, boeing and embraer air have finalized the terms of a deal first announced this summer to run the commercial operations boeing will pay $4.2 billion for an 80% stake that deal still needs the approval of the brazilian government boeing shares off by half a percentage point malaysia has filed criminal charges against sachs. involving state rund fun 1 mdb goldman denies any wrong doing apple's google unit says it's spending a billion dollars to accomplish a new campus in new york city. that campus will be the primary

headquarters for the operations. >> sounds like they're taking a shot at amazon two weeks after because they're not taking any subsidies. there's the underlying tone. there's a blog post you can read online >> this headquarters is going to be in manhattan where everybody wants to come. not in long island city. i think that point gets lost in a lot of these arguments made saying other companies have o come here and done it for free meanwhile, are ceos losing faith in the economy dom chu has some of the answers with new interesting data for us >> so the chief executive group puts out their monthly survey of ceos in america. thousands of them from varying industries and market caps and all different varieties of businesses and this particular month, we saw the steepest drop in ceo confidence we've seen pretty much all year. so the level we're at right now represents the lowest level that we've seen in ceo confidence

since october of 2016. right before the election of president donald trump you can see right here, that dropoff is the biggest dropoff we've seen in confidence in a monthly basis during any month this year. that's got to be one thing to watch. as for the drivers going on here, it's the usual suspects. we've got the big concerns maybe late cycle stuff, cooling economy. that's one of the things we're watching rising interest rates. put the fed into focus there for that part of the discussion. trade and tariffs especially when it comes to the china discussion right now and current levels of corporate debt echoing concerns that former fed chair have had with regard to the economy. also looking at some of the breakdowns, are we tampering some expectations for 2019 still optimistic on rising profits. around 71% of companies and ceos still believe that profits will rise still optimistic on future hiring that's another big one there as

well we've got more than half those ceos thinking they're going to hire more next year. opposed to other ones, we are less optimistic on capital expenditures half of them say they will, but it's down from last year and we are less optimistic on revenue increases as well. still that's a little bit lower than it's been in quarters past. but this expectation of whether or not we will see business get better, will that translate into the consumer side as well? we know ceos have been pessimistic with each incremental month over the course of the year we should say, joe, we're still at relatively high levels for confidence back over to you >> i don't know what it is, dom. that just seems so much more -- i mean, so much smarter, what you were saying there. made so much more sense. is that it

>> i don't know. this is a new thing. >> it just seemed, i don't know, just listening to you, i'm like, god, this guy is smart he's savvy >> and his eyes are bothering him. >> does it make me look that way with the salt and pepper here as well >> we busted the warby parker guy when he comes in those are -- that guy that wears them, they're clear glasses. they're not prescription glasses. he wears them when he comes in >> as becky pointed out, i'm having issues with my contact lenses the next few days so the next two or three days will be glasses. >> did you scratch a cornea? >> i didn't. just my eyes have become more sensitive to my current contacts so i'm going to get new ones >> you need daily disposables. >> i have disposables but not

daily. >> i never wear them again >> i put them in, sometimes i have to wear it too because the first one i don't like for some reason then i feel like i'm a day behind that i've used one. then i'll make sure to put that one in solution and try to wear it the next day. >> you have gotten so much cheaper. between that and paying for cash with your gas. >> i know. i know >> what is happening to you? >> there's a long list of things that are changing. you're right i don't know what it is. you should see me with the trash and -- or bowls. like, my mother says -- >> ocd is setting in. >> penelope says it's because i grew up without a dishwasher >> so you're conserving. >> you know what's better, joe i grew up with a dishwasher, but we weren't allowed to use it because my brother and i had to wash and dry dishes by hand. shoutout to my mother and father, by the way they're on the west coast so they're probably not but if you're dvr'ing this right now. shoutout to you because i remember growing up having to hand wash and hand dry dishes.

>> builds character. zblec >> even though we had a dishwasher a foot from me when doing it >> i even have a dishwasher. and one bathroom except there was a crummy horrible bathroom in the basement my dad used to go. that's a tmi >> i know exactly -- >> he would camp out i'm going to the basement. okay, dad. good take a paper i've turned into him we all turn into our parents what's wrong, andrew >> no. >> i've noticed just in the l t last -- >> let's turn to the markets let's bring in chris varone and kathy jones. >> kids, get off my lawn >> kathy, so you're looking for them to go on wednesday.

and then two more times next year do you think the economy is strong enough that that is justified? and inflation is strong enough that is justified? do you think the market ifs they knew that's all there was that they'd be okay have they done enough jawboning to where they've got enough power where they want it right now? >> right now the market has not built in anything for next year. so right now we're discounting less than one rate hike next year so the idea that the announcement can be dovish is a little hard. >> can it be taken batdly then >> keep in mind we're only right now at zero real interest rates. so i think the reason the fed may go two more times next year is they want to get into the mid-range of where neutral is and have a positive real

interest rate. obviously if the economy rolls over and doesn't do well, they can pull back from that. and i think they will emphasize a flexible approach from here on out. but the economy's still pretty strong unemployment still at 3.7% we're still seeing wage growth pick up. it's not like the u.s. economy has rolled over and died >> you think the 10-year hit its peak at 3.25% and next year it continues to go down >> i think they will be in a range from 2.5% to 3.25% next year i think we continue to see the flattening yield curve at the front end of the curve but i don't see a lot of inflation pressure with the fed tightening with long-term rates to go up >> chris, you specifically are commenting a lot on the financials and a lot of them have broken through support and are acting miserably. but you are looking at that as a

positive, as a capitulation that could be bottom former is that what you think >> i think maybe it's the first sign than any point really since the lows in 2015 you can look at that as the first step of putting some type of low in that group i think it's too early to make that call. you asked an important question. has the market done enough to get the fed to pause this week the nasdaq is still up on the year right? that doesn't sound like a market that has done enough at this point. >> and frankly, i don't think the fed -- this fed plays as much attention to what the market's doing at any point in time i don't think they care as much. >> and i'm reluctant to say those are in place yet when you look for the leadership conditions that present themselves off the low, those haven't taken shape yet either that really hasn't been the case

yet. so i would be reluctant in embracing the we're putting in a major low call just yet. >> do with need a little checklist of what we would need to get more bullish? >> sure. number one, we need a flush. i think secondly we need the factors that measure liquidity to improve i want high data to outperform i want ipos to act better. those are good prompters of how the market perceives liquidity none of them have made a turn yet. >> are you using the flush word because of our previous thing got you thinking that way? >> nailed pit -- it >> did you see the miller piece?

>> no. i heard about it i think he's worried about the global economy slowdown? >> not so much he wanted -- remember at delivering alpha a couple years ago, he really wanted the fed to get off emergency levels. >> get off the pot >> he wanted them to get off the emergency levels >> we have a metaphor going. >> we keep going back to that. but now i think he and kevin think that maybe the fed has missed the opportunity and that the time they spent not doing it, you know, has -- the asset bubble has inflated of now could be a problem if we go up too quickly. >> keep in mind, they've been reducing the balance sheet for quite some time now. so that's another form of tightening and i think it's running in the background but it's still happening so, you know, i think with the markets adjusting is the year of easy money is over and we had low volatility and

great returns for some time. and, you know, it's an adjustment period. >> but does this perception -- is this already reflected in the market meaning has it already been pulled forward, all of this skepticism and pessimism i don't know if you saw "the wall street journal" poll that came out, people's sentiment you know, worse numbers we've had in years in terms of what their expectations are is that already reflected in all of this? >> i think it's largely reflected. and a lot of what we're seeing in the credit market is the credit market is adjusting to the tightening so we're seeing in the market whether they've fully discounted the tighter monetary policy yet. >> friday was probably the first day where they sold some of the good stuff the stuff that had been working. they sold health care on friday. there's nothing safe

there's nothing sacred maybe one of the positive takeaways from last week is they finally went after some of the better stuff >> interesting cool >> all right thank you, chris varone and kathy jones. okay a lot more to come on "squawk box" when we return. tom friedman is our very special guest. we are going to talk china, the middle east, and of course washington and what it all means for your money when we rerntu stay tuned you're watching "squawk box" right here on cnbc ♪ there's no place like home ♪

argh! i'm trying... ♪ yippiekiyay. ♪ mom. ♪ welcome back to "squawk box. the futures, a little quiet this morning relative to what we've been seeing over the past couple weeks where we've been on quite a roller coaster ride. dow looks it would open down 25

point. nasdaq has been oscillating between positive and negative territory as we speak. same with the s&p 500. also some news for you natural gas prices are down substantially once again this morning. after falling nearly 15% last week, this comes following weather forecasts that imply lower demand all right. coming up, tom friedman joins us to talk geopolitical concerns and your money then later, johnson & johnson looking into the baby powder containings a bes toes it's down like 10% on friday we'll ta authat lkbo tin just a bit. "squawk box" will be right back.

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welcome back, everybody. let's get to our special guest this morning tom friedman is the "new york times" foreign affairs columnist and author of "thank you for being late" and many others too. tom, it's great to see you thank you for being here on this morning. >> and being on time >> great to be with you guys i'm just back from paris >> i have so many things i want to talk to you about >> great >> because you are somebody that travels the globe so much, just coming back from paris and in madrid and other places, i thought we'd start with the idea the markets are watching closely. that's what's happening with the global economy whether that's going to catch up

here maybe you can tell us what you're seeing from these travels around the globe >> let's start with europe where i came back from i was in rome, madrid, and paris. if you step back far enough, what do you really see i believe geopolitically speaks and geoeconomically speaking, the world has been held up by two pillars in particular. china is important as well but one is called the united states of america and the other was the european union the world's biggest market and if you put what's going on in england with brexit, what's going on there, you're actually seeing a country i believe that's decided to commit economic suicide and is now arguing over how to kill itself. whether by poisoning, hanging, drowning, or is shooting itself in the head. that's what this brexit vote symbolizes to me it's the dumbest thing britain can do at the same time, what happened

in france is in many ways even more unnerving because france and germany are really the core of the european union. and president macron did a lot of the right things to stimulate growth in france again but he could not have done them in the more wrong way in the most insensitive way cutting taxing on wealthy people and corporations while actually raising taxes on the working poor and it produced this vicious backlash of the yellow vest who basically came to paris and have smashed up the place for the last four weekends and what's really phenomenal about it is that how deaf macron was. he came from a third party that didn't exist until he was elected and therefore he had no mayors he had no sort of local ties around the country and he completely missed the mood and the mood came to him now he's had to reverse course,

bust his own budget. that really raises into question the whole franco/german alliance now. you think of this united states of america and the united nations of europe, eu, for the first time you can begin to worry that this other pillar, this other united states out there and i'm a believer that two united states is better than one. this thing could really crack up especially when you see italy in a way pulling out of its euro commitments and getting closer to russia and the like so for the first time, i come back from this trip really worried about the future of the eu >> tom, i understand philosophically what you're saying, but i just wonder if, you know, you can't just not consider the experiment itself of trying to have a common currency without a common fiscal authority. there are some smart people say

it was the wrong way to go about it and anything that's happened -- and what's happening right now is, it's like trying to fit a round peg into a square hole why try to force something based on ideology or philosophy instead of just pragmatically. it just doesn't work it's too unwieldy. and it's hurting the prospects for all the people who live there especially in southern europe >> joe, i think you may be right. i'm not hostile to that question or argument. this straight jacket of the euro around particularly the european countries, you know, has simply constricted their economic options so tightly that it's -- >> the best ones, too. >> pardon me >> the best places >> the most fun places >> where we like to visit. >> exactly you look at italy. it has a government represented by now a coalition of the far

left and far right you get these really bizarre political animals that emerge in response to this i think the question you're raising, joe, is one that's going to be front and center especially now that macron has had to maybe bust his own eu economic budget constraints. and that's going to raise all kinds of questions between the french and the germans >> and merkel leaving, too, eventually >> there's one thing i would say. you're right, joe, but it would be a tragedy in the sense that, you know, the eu today is the other great center of free markets, free people, and free ideas. it's been our wing man in the world ever since the end of the world war in spreading those ideas. it doesn't necessarily mean they have to end certainly if the eurozone breaks up but you do worry about the drift in some of these countries to some really extreme far left and far right options if the eu

imploeds >> i want to turn your intentions to the middle east. you have some strong views about mbs who you've written about and spent time with. there's a good piece about being on the ground in riyadh. do you have a new take on what the congress and senate has done here in the u.s. and what that ultimately means to the country? >> let's start at 30,000 feet. i was on your show about a year ago talking about mbs. i basically made the same point then as i've made since. which is that he had a big upside he had a big upside in that he was ready to tackle issues none of his pred ser so-- predecesso up lifting the ban on women driving, lifting the religious police off the streets, opening the country to western cinema. none of his predecessors were

ready to do that and he had a big downside. he was impulsive he had a very tight circle with some really bad apples in it and he did some crazy things abducting the prime minister of lebanon, a stupid boycott of qatar, among others. what i was arguing for the last year was we got to encourage his upside and really curb his downside now, the trump administration never, for starters, had an ambassador anyone of their real weight to actually observe let alone apply pressure what i watched was him fall into a con spear i can't tell mode. my sources there told me at the end of the summer he'd been sold this china idea just as -- he could do the same kinds of things

we forget these countries in the middle east not only saudi arabia but all of them, they kind of need an more than coach. they need an more than to basically give the excuse to their leaders to be able to say to their own extremists, i'd love to do that, but the america americans, they broke my arm and we're simply not present was being run by texts between jared kushner and mbs. and so that was the context for this what he did in i think ordering the murder of jamal khashoggi was one of the most viral and incredibly stupid things i've ever seen in the middle east and it was just you can't fix stupid and the implications of it for saudi arabia is going to be enormous in this way, andrew people are still going to buy their oil. people would be happy to sell them anything they want to buy but what he's not going to get is the core thing he needed to keep his reforms going and that

is massive external, private direct investment in saudi arabia to create an economy where all the young people he's trying to get off the government doll will have jobs. that's going to be the biggest impact of this >> therefore, what happens though he's also made commitments internationally in terms of investments on the outside that he has to make and it's unclear to me that he's going to be able to make those payments >> here's what he's going to learn. remember princess di after divorce from prince charles once said there were three people in the marriage, that was the problem. what mbs is discovering is there's three people in his marriage donald trump can give him a pass and he can give himself a pass but now what he's running up against is a weaponized civil society armed with social networks who are going to dog him and chase him wherever he goes it wasn't an accident when he went to buenos aires, he had to

stay in the saudi embassy because he was afraid of being served a warrant, you know, for international law violations and he's going to be dogged by this for a long, long time you know, trump did the worst favor for him. which was to simply embrace him. had we actually censored him very loudly, maybe even banned meeting with him for a period of time, demanded accountability, had he come out and fully acknowledged that whatever responsibility he had in this, promised to pay restitution, let the women he's driving activists out of jail. he had one chance to make a second impression. what did he do with it he high fived vladimir putin you can't fix stupid i just have no idea what's going to happen there next >> all right, tom. we've got a lot more to talk about with you would you mind sticking around through the break? >> not at all. >> all right we'll continue our conversation with tom friedman, plus johnson & johnson shares plunging after a report the

company knew as asbestos in its baby powder. box.

want to get back to our special guest this morning tom friedman "new york times" columnist. we were going around the globe with you, tom, last talking about the middle east and saudi arabia i want to talk about china but i'll put it in this context. if you were a business executive today, would you feel more comfortable traveling to china or more comfortable traveling to riyadh >> well, let me say one more thing about riyadh and then we'll go to china. there's this perception, you know, that we have a choice in the middle east between the good guys and bad guys. but, you know, as my friend said, a real choice in the middle east is between bad allies and bad enemies what's going on in saudi arabia today, this is not like a good ally i'm sorry. but we're also losing sight of the fact that the iranians have been running wild. this is a country that was involved in a genocide and ethnic cleansing in syria.

it's perverted democracy the day jamal was tragically killed, you know, france sanctioned two iranian ministers for involvement in a plot there to kill iranian dissidents and denmark that week basically shut the country down looking for an iranian agent there looking to kill a dissident. so there's a lot of bad actors out there. our choice as we say are not between good and bad >> but there's no enemy of my defense for not being too tough on saudi arabia, tom it sounds to me almost like you're saying we should have made it look good and continued business as usual. that's what it sounds like you're kind of saying. and i understand that, but i don't know if you're going to get that from this president and i think about, you know, i think about -- we actually engaged iran under the obama administration we sort of -- after dealing -- even though you're doing it for a strategic reason to stop nuclear proliferation, you still

feel like you need a shower after sending money to them and everything else. i hear what you're saying, it's just that the middle east is a place where i think enemy of my enemy does make sense sometimes. we have no choice with saudi arabia >> again, joe, if you look at our middle east policy over the last ten years, you can say the obama administration thought the way to stabilize the region is to try to stabilize the biggest power there. so we'll do a nuclear deal with them we'll take their nuclear options off the table and then hope that begins to moderate their regime. that just didn't work. they pocketed the nuclear deal they did live up to it, but they used the opportunity and resources they got from that to entrench their four arab capitals so that really didn't work so the trump people came in -- let me just finish the trump people came in and said we got a better idea. we're going to align with the saudis and we're going to, you know, do the things we did.

and what did they do they also used the carte blanche they got from us to do crazy stuff. all i'm saying is both of them, they're like thelma and louise we gave this opportunity and they both drove off the cliff. them being the middle east, they did it in separate cars, but this is the challenge. i'm not a softy on iranian either it's just, if you want to do this with saudi arabia, we had to have a much more sophisticated policy >> does that mean the opportunity is gone and lost, tom? >> you know, i don't think so, becky. but, you know, this guy's got a third chance, i'm not sure we're going to get it. i think we would have done him a big favor had trump been much tougher. i don't think the options were give him a free pass or break relations. i think there was a middle ground that would have given him room to maneuver >> if we had taped recordings of the stuff that goes on in iranian prisons or the way they

export terrorism, it would curl your toes, i'm sure. >> it's a badneighborhood. perfect is not on the menu not even near perfect. >> no matter how well documented the murder was is part of the story, i think i don't know we just deal with -- all over the world we're dealing with people presiding over stuff like that it's almost like, i don't know, how you -- i don't know what you're supposed to do about it but the strategic interests of the united states, it's not that they should, you know, that you should turn a blind eye to these things but just making a good show of it, i don't know you think that would be -- you think we could have extracted something from mbs we got lower oil prices somehow. >> i think you could have done better by censoring more i think you would have done him a favor. but these are -- when not only perfect isn't on the menu but your choices are between awful and bad, these are the kind of

dilemmas you get into. on china, andrew you asked. i happen to agree with the president broadly on what we're doing with china i think it's the right approach. you know, if you look at the last 30 years, china grew using a strategy of really hard work, of focused investments investments in infrastructure and delayed gratification. number two, stealing people's intellectual property, violating trade rules and forced technology transfer. number three, they took huge advantage of the naval presence in save s-- asia. it ensured neighbors they could be economically occupied by china as it were but not geopolitically dominated by them that allowed china to get rich around cell phones, sew lor -- solar panels, t-shirts

if we allow them to use that around supercomputing. we'd be crazy. this game had to be called we can discuss another time because it would take a long time what the smart way was to do it, but i think direction directionally -- >> but tom, let me ask you this. long-term and maybe there's an inevitability to this, that we were going to move from an age of cooperation if you believe we were in that age before to an age of a different type of relationship in which we are effectively trying to contain china. is that what you think's happening here >> i fear that's what's happening. again, it's like the saudi point that joe raised. this is going to take such sophisticated delicated diplomacy to navigate to a point where we curb enough of their bad behavior enough, but we don't tip into a cold war of containment. it's going to take a really

sophisticated policy >> isn't that the underlying strategy the underlying issue is to effectively change the way china not just behaves, but how it relates to their ascendancy versus ours. >> no question all i'm saying is it's going to be really hard it's going to take a very delicate approach. i would have, myself, signed up for tpp, have 40% of global gdp on my side, kept the europeans on my side not imposed steel and aluminum tariffs on them. i would have asked the leader of china to meet with me vetly. we'll do all this privately. no one will lose face. but privately i'm going to nail you with my allies that's what i would have done. >> right thanks, tom. appreciate it. great to see you >> you bet when we come back, mike santoli an what you need to be watching in this week's trading action and as we head to a break, take a look at this morning's premarket movers in the dow. biggest gainer so far

exxonmobil up by 0.5%

welcome back to "squawk box," everybody. happy monday morning let's find out what investors need to be watching this week in the rkt ma -- markets. mike santoli joins us now. >> it was a rough week the market itself, the index is what you're watching initially because last week ended with the s&p 500 right after the floor of this trading range the lowest close for this correction is this floor going to hold? we've had multiple opportunities. the chart shows we're at the 2,600 mark we are below this in the spring and winter briefly but i think that's the first thing. the fed hopes and fears now building up around this meeting. normally you'd get some upward drift into the market right into a fed meeting. also seasonal factors friday was kind of the low point for december seasonality, so to speak, if you look at the broad tendency in theory

the u.s. dollar index at a new high but it also reflects a general financial tightening around the world. all those things are inputs today. >> the one weird thing with the dollar index, it's the fed versus other central banks, but the fed we decided we're going to get a more dovish tone from them do you think that holds? it won't be a surprise if the fed says that. >> it shouldn't be a surprise the fed says that. first of all, it's capital flows. i think there's a lot of kind of capital flow here, demand for assets here. obviously you want to capture the yields here. you have to do it in dollars i think if there is a dovish hold, maybe some comes off in the dollar and maybe people are saying that shorter term yields might go down a little bit. then you get a steepening from a different source in the yield

curve. >> we're getting right towards the end of the year. other things you might anticipate happening at this point based on a down year potentially? >> it's interesting. newswise, you're not getting a lot. if you look at year where december you had a down 10% december at this point, it's some pretty bad years. but it's not always ahead of a bad year 87 is in there i think 2000 in is in there too. a lot of the typical kind of stuff hasn't worked that you would expect this time of year and the market has been immune to good news we'll see if that changes, maybe, with the fed here and the fact the market is slowly, i think, getting sold in sentiment. and maybe getting more negative. >> it seems to me it's conventional wisdom at this point. how do you get a market rally out of something that we're anticipating and expecting >> i think it could be consensus without it being priced, necessarily. i don't know if the market would

love the fed taking a pass or not at this point. i think now you have intellectual cover for it. you have people saying it wouldn't be the worse thing. so we'll see >> okay. mike, thank you. mike santoli coming up, johnson & johnson under pressure after reports saying they knew their baby powder contained asbestos. first, though, check out the shares of goldman sachs. that's a 26-month low. we're going to talk to an analyst about this stock at the top of the hour. stay tuned "squawk box" will be right back. ♪ there's no place like home ♪

argh! i'm trying... ♪ yippiekiyay. ♪ mom. ♪

johnson & johnson stock posting its biggest one-day loss since 2002 after a reuters reports they knew of asbestos in their baby powder. the reuters article is one-sided, false, and inflammatory simply put, the reuters story is an absurd conspiracy theory in that it apparently has spanned over 40 years orchestrated among generations of global regulators, the world's foremost scientists and universities, leading independent labs, and j&j employees themselves the dow component was down 10% during friday's session erasing $40 billion. joining us now to talk about

j&j's damage control is dean crutchfeld do you know the specifics behind this or is this a generic approach >> this is very different. they're a very famous company in their ability, they were the it poster child of crisis management how this handing this could make the the it of crisis if they don't handle it well they've got a great case >> tylenol >> the tylenol case, they pulled it off the shelf this is they're saying there's nothing in the product >> this is an old fear i haven't used talc in 20 years. i didn't associate it with asbestos contamination, necessarily, but i had seen some type of concern that talc itself, the molecular

structure -- >> where it's made, comes from >> no. the talc itself might have been ca carcinog carcinogenic is there no asbestos in talc >> they're making the case it's pharmaceutical grade talc. it's not the natural element, they're claiming >> my question is, these charges go back a long time. some of the e-mails brought up make it look as if it wasn't always pharmaceutical grade talc what happened in those situations, was there a coverup? their attack is there's nothing wrong with talc. what i didn't see in that was was there some asbestos in that talc in the past >> they put out national

advertising today talking about science. >> but it doesn't address asbestos >> therefore, the question is even if you say it's a 15 or 20 year ago issue which is not -- >> or 40 years ago issue >> by the way, there are people suing relating to what was going on -- no, they're -- i mean, they're suing now based on what happened 20 years ago. the question is do you ever say, okay, maybe we made some mistakes or the material was different? or you think you can't even acknowledge that >> at the moment they're still defending. but what they need to do is respond boldly now they've put out their ad campaign about science, not sensation. they're trying to create more of a consumer message. >> what bothered me about this campaign is it doesn't address the real questions i mean, when i read that, i thought, my gosh this is so

lawyered up. nobody can tell us was there asbestos in your talc. >> that's the big fear for j&j to your point, you haven't admitted anything here you haven't had any indication that there are those now i think the problem is you can't blame an executive 20 years ago. they're protecting the ceo as well but he hasn't said anything. >> i don't even blame alex but what i want to see is what happened all those years ago. >> should he be on television this morning >> absolutely. he needs to be saying we're looking into these investigations we take claims seriously >> they've had this lawsuit lying around for years >> exactly in crisis there's a build-up phase. and this build-up phase has been going on potentially for years >> is $40 billion, that's what the company lost in market cap,

is there any way it could reach that >> they've just lost $5 billion on the pelvic mesh thing they lost $4.5 billion on the talcum powder. there's a long tail here the truth will be coming out soon my beggest word they've said is conspiracy i want to know what more do you know about conspiracy to your point? >> i think it's was the johnson & johnson foundation, i mean, if you look through what "the times" was reporting over the weekend, they were saying the johnson & johnson foundation which had some former executives on the board was giving money to mt. sinai and a researcher had to withdraw some of what he was saying the question i have as a consumer is was there ever asbestos in your talc, did the company realize that, and did

you cover it up? >> have you resolved it? i think that's the question. >> even if you don't believe there's any possibility of anything in the talc today, if i told you there was something in the talc 20 years ago, i'm sure you're not going to buy it >> no. i had adults who reached out saying i still use the product they're freaked out about the whole thing. but now this information, this gossip has become fact or gnnot fact, but it's become news >> then the question is do you buy nothing that says johnson & johnson on it? do you buy the shampoo right? >> exactly there's a huge effect here depending on how this crisis is handled right now, we will dictate which direction it takes. >> what happens if they came in and said you know what actually we did know about these claims which obviously they clearly did know because there's lots of evidence that suggests that. we knew about these claims, we looked at it, we did this, this,

this we were not trying to cover it up, but if it was murky even that's not a salable idea either you think he's losing his job? >> i think potentially, yeah if this gets out of hand -- >> because he's been involved in a coverup or because -- >> he's accountable to this situation. he's well aware of these accusations because there's been cases in court already there's been litigation. it's just not being handled well ultimately he's the boss -- >> even if it wasn't on his watch? >> yes where do i go as the consumer? right? >> here's the american cancer society. there's two tests that have been -- talc that has asbestos has been generally accepted to be able to cause cancer. the evidence about asbestos-free talc is less clear so they've done mouse studies on

asbestos-free talc with mice. on some it appeared to be tumor forming, others didn't it's not just the asbestos concern. thank you. dean crutchfield how do you address that? if you prove there's no asbestos and you still have conspiracy theorists that say just regular talc could be carcinogenic a lot more to talk about when we come back, goldman sachs shares dropping to a 26-month low this morning after malaysia files criminal charges against the bank we will talk to a top rated analyst about the firm's future next tireiss kellogg ceo carlo guerz our guest

are markets finally calming down futures are pointing to a quieter open today president trump celebrating his deal to replace nafta. congress still has to have its say. we'll be joined by former commerce secretary carlos gutierrez to talk all things trade including the possibility

of a truce with china. and contrarian market calls from this year that actually worked one of nomura's analysts is here the final hour of "squawk box" starts right now >> live from the most powerful city in the world, this is "squawk box. good morning and welcome back to "squawk box" here on cnbc live from the nasdaq market site in sometitimes square i'm joe kernen with becky quick and andrew ross sorkin right now the futures have worsened down 80 points almost on the dow. the nasdaq indicated down 16 treasury yields are on the 10-year which we focus on the 10-year note are below 2.90% again this morning 3 and we are still just slightly -- what is

that that's a half of a basis point i think that might be right. i don't know i took calculus, but it's been a long time. that's a half of a basis point, right? >> that's right. >> i got the senior commentator here checking my math. now it's the same again. all right. we are watching three big stories this morning one, markets pointing to a calmer open this morning than we've been used to lately. although the futures have been weakening with the dow down 78 points you saw nearly 500-point drop on friday that being said, the dow, the s&p 500, and the nasdaq all remain in correction territory two, reuters reporting that the board of car maker nissan is meeting today for the first time since carlos ghosn was fired the point of the meeting is to come up with ways to improve

governance at nissan ghosn was fired for allegedly underreporting income and misusing company funds three, alphabet loves new york the company's google unit announcing a $1 billion investment to establish a campus in the big apple few stocks on the move this morning to tell you about. shares of restaurant chain jack in the box seeing a big jump this morning they're exploring a number of strategic themes to help sale. bank of america downgrading best buy to underperform from neutral. this was one of those companies people had lots of good views on recently, but not now. b of a noting the growth trends as well as continued caution on key areas for best buy such as televisions. then there's lululemon upgraded from buy to hold

it puts it on target for double digit revenue growth joe, you've been buying more of those pants. >> i wash them but -- >> thank you. >> they are washed i haven't bought any new ones. my son's wearing them now as well they're like, they feel like jeans but they look like they're not jeans. i was wondering, what are those? i thought those were jeans >> suit pant there's a suit top to it >> i know that >> and new shoes. >> no. i got shoes down here. >> like those big brown gondola things he wears. >> thanks. >> you know the ones i mean. >> fashion police over here. >> fashion and restroom police we talked about that earlier the basement bathroom. now, last week's 2% decline in s&p financials helped to drag the sector down nearly 10% in the last month mike santoli joins us with more.

i almost read that like chather in might have read it. >> yeah. >> i don't know why. i just did >> what's the line places no man has gone before. somebody's gone here before. >> but not often >> s&p financials also down. i think it's exhibit a if you want a build a bear case for the market it's how badly the stocks have been acting really the question is what the message is is it just about the flattest yield curve and people concerned about the cycle kind of getting long in the tooth? is there a credit stress event been reflected in the bank stocks it seems like the market is not sure what to make of it. the group is oversold. you've seen big -- that's kind

of a maybe building into a sentiment kind but they still think they're cheap. they're saying they're cheap if you look at goldman sachs in particular, they're more -- it's about half and half buy ratings. no sells even though the stock has been an awful performer. it's trading at tangible book value. saying whatever exposure to malaysia might be manageable i don't know if it's going to take people saying, okay, there is a big problem here in raising some alarms about banks to get people to finally rethink the thesis right now for the overall market but again, we come back to this fed decision this week you wonder if, in fact, even though we got into the habit of thinking that's good for banks, that hasn't worked some kind of a dovish move by the fed that could lower the 2-year yield and maybe make people think it's going to stay positive for awhile could be the game >> it's like basic math. >> it's basic math, game theory,

it's some multi-part chess game to figure out what's priced in what would kind of release the banks from this fix they're in right now at least psy psychological psychologically. malaysia filing criminal charges today against the bank and two of its former employees. this all tied to an investigation into alleged corruption and money laundering at the state fund there 1 mdb. shares dropping to a 26-month low. this stock now down over 30% here steven bigger, director of argus research, good morning >> morning >> this stock has stumbled this now several weeks ago you throw on what else has happened in the market, we are way under book value for this bank

what do you think the real liability is here? >> look. i think up to now there's been an amount of smoke, not much fire last month we had some guilty pleas by goldman sachs partners that were trying to skirt anti-bribery rules that's serious that's significant enough. and of course this past weekend, now we have the malaysia authorities coming with criminal probes into goldman. you know, the liability they figure at least is at $2.7 billion. which is the money that's gone missing. and sour eed relations there cod be hurtful to goldman's revenues >> okay. so you could take those clients off the table. i think the largest question is you talk about the reputational

risk at large. if you are the ceo of a s&p 500 company, historically goldman sachs was the good housekeeping seal of approval on a transaction or on the kind of business that you would want to do business with you think in today's day and age if there's a board meeting, that the board is going to look at using goldman? >> no. i don't think this is a secular risk, necessary for goldman. there is a cyclical of me market downturn in market making. whether it's corporate finance or underwriting. that sort of thing but, no. i don't see the reputational risk at the corporate level in the u.s. i think this is probably going to be contained to the sovereign wealth funds that have had specific problems here >> i know some who think it's now a screaming buy. >> well, we have a hold on the stock. goldman right now is out of sync

with what's doing well in the market if we look across the financial sector, as of friday we're down 20% from the highs reached in january -- >> but we're looking at a stock off by a third basically where it used to be. >> absolutely. that's what i mean banks like goldman have had a tougher time because of their institutional focus and the businesses that had been doing well in the margin expansion story on the consumer side have just not had the right business >> do you think there's any risk to goldman sachs as a function of all this? >> i think it's too new. the management team is too new they're certainly not implicated in anything as yet the former ceo, obviously in charge while this took place so no. i think it's too fresh of

allegations to implicate them. >> and what is your read on how the justice department here in the united states will look at this >> well, it's probably a wait and see. see what more is uncovered and, you know, at least one individual fighting extradition to the u.s we're going to have to see how that plays out >> all right thank you. coming up, u.s. and china are working to solve a trade standoff by that 2019 deadline it's already approaching fast. we know how quickly time goes. when we come back, we're joined by carlos gutierrez on what deal could be possible in the next 75 days or whatever we've got left. 74 73 ayun st tedyou're watching "squawk b cnbc see that's funny, i thought you traded options.

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♪ there's no place likargh!e ♪ i'm trying... ♪ yippiekiyay. ♪ mom. ♪ . welcome back to "squawk box. the futures now down about 85

points on the dow. we saw 90, but earlier we were basically unchanged and down 30. we were slightly higher right at the very beginning of the premarket session. the nasdaq is now down 13. and the s&p is indicated down about five points or so. china says it is removing auto tariffs and will purchase more american soybeans that could point to a thawing of icy u.s./china relations, but a march 1st deadline for the current trade truce is fast approaching. joining us now is carlos gutierrez, the former commerce secretary here in the united states thank you for being with us today. >> thank you >> you say not everything is what it seems on this picture. what do you mean >> well, you know, these are pretty much baby steps and even though they're small, they're being negotiated as we speak. so, you know, car tariffs are

coming down to where they were, but that's only for the 90 days. so this is being taken on a 90-day sort of step by step. i don't expect anything to come out of 90 days i don't think the president will settle for language that suggests that 2025 will be different. perhaps some market access issues but i would keep expectations very low for the next 90 days. and i think the best thing that can happen is perhaps an extension. and just keep this thing going and not ratchet up anymore >> you've watched negotiations in the past. how long do you think it would take to actually come up with something somewhere both sides potentially but especially president trump can say he walked away with the win >> i would say years if you're really trying to make a difference and if you're really trying to change china's structural

architecture impossible to do it in 90 days we want everything resolved. we're not going to settle for just a change in language. this is very, very long-term and then of course you have to ask will the trump administration settle for language without seeing results? or are we going to have these tariffs in place until we see some results so, you know, i think there's a lot yet to be defined. but this is not short-term this is going to continue. i doubt if the president will give up his leverage before 2020 and that leverage is the tariff regime so this is going to go on for awhile which is too bad because slowing down of china isn't good for anyone >> which means what in terms of how the market's been watching this the market is looking at this sa

s saying, okay this is the first time there's thawing. but it's not 90 days anymore i think it's 73 days to the deadline >> i think the market is a little bit too anxious president xi and president trump had a good dinner. then the next day it wasn't that good it was down 500 points there's too many fragility in the marketplace and people are too anxious. if they're thinking about china, think of this as being the status quo for the foreseeable future we're going to have trade frictions with china and the best we can do at this point is make sure they don't escalate and hopefully start ratcheting down. but this will heart u.s. companies, the chinese economy, the world economy. and it's also expanding beyond tariffs. the huawei situation as much as we like to think it isn't part of trade, it's front and center.

chinese students, 25% down from the previous year. there's a lot going on that works against china. the new cfius law which could have been a lot worse because we were going to -- that's going to expand dramatically. the export control regime to include foundational technologies, emerging technologies so things are moving in the wrong direction if we want to see a deal if you want to go back to some harmonious relationship. >> you're sure we don't want to slow china down ever we know they're going to eclipse the u.s. economy in terms of world leadership i don't know

that seems like a weird blanket statement to make. does it mean that we have to grow faster? or we should not try to stop their ascent to the most powerful nation in the world just let it happen and we stand idly by. is that what you meant by that >> no, no. i'll tell you what i think we should follow our principles let's compete. let's out-compete china. >> they compete now. can they compete fairly? >> we have to clarify the ground rules. and we have to make sure that everyone's playing by the ground rules. but the only thing that's going to fix this based on our principles is to compete and out-innovate china and to tell them your rise works against us. >> if we made them play more fair and it ended up hurting their growth rate -- >> that's the thing. we're doing it with tariffs. that hurts them and us i think this is going to happen

gradually over the long-term we're talking 5, 10, 15, 20 years from now we're not sure where they're going. i think the chinese have a plan and they're taking it at their pace their concern is that they're not able to get to a developed market or a prosperous market stage. that they're being held back but look let's compete with china let's make sure they've played by the rules but this tariff regime is hurting us we're not going to do it in the next six months. this is gradual. it's a slog. it's negotiations. it's talks it's what we've been doing for 20 years and i don't buy the fact that we haven't made any progress. >> mr. secretary, i want to thank you for your time today. >> thank you >> carlos gutierrez, again, the former commerce secretary joining us this morning. >> thank you when we come back, some good news and bad news on the report from teen drug use we'll tell you what you need to know when "squawk box" ces ghbackom

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welcome back to "squawk box" this morning take a quick look at the futures. let's show you what's been going on after a big down day yesterday. on friday i should say dow jones looks it would open

off about 85 points down nasdaq off about 12 points, s&p 500 off about 5 points good news and bad news from the annual monitoring the future survey of adolescent drug use. the good news, teen use of alcohol and opioids fell but unfortunately, the rate of adolescents who vape nicotine products nearly doubled from 11% last year to 21% this year that's the largest one-year increase of any substance use in these surveys' 43-year history they use some form of nicotine and marijuana use. coming up, volatility causing a lot of hair pulling on wall street over the last few weeks. but coming up next, we'll find out what's working before break, here's another look at u.s. equity futures before we head out down 93.

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 this morning, health care stocks are under pressure after a federal judge ruled that the affordable care act was unconstitutional a case that could go all the way to the supreme court the stocks you're seeing on screen right now are among those with the most exposure to any potential changes in the affordable care act or those that would suffer the most if it went away. centene and anthem among them. >> the guys and gals rain shower in the court the same five or four are there. but the tax law -- so it could be a different -- >> what's that justice roberts decided on that it was okay, it was part of their authority to do that. this new case says because that's gone, it's no longer -- >> you can't count on him to swing it that way.

this is -- you know, this is new territory here are they going to expedite it? >> not at all. it's got to go through another process. go to the appeals court. they've got to decide what to do the supreme court might not decide to pick it up at all. a lot of ground to cover before we see what happens next for years on natural gasline safety inspections the state's probe said pg&e pressuredemployees to complete the work anyway. the company says it's taking action in response to the findings malfunctioned near the area where last month's camp fire started. spider-man topped the weekend's box office it took in $35.4 million in north american sales "the mule" came in second place with $17 million in ticket sales.

and president trump just tweeting about the fed this morning. it is incredible that with a very strong dollar and virtually no inflation, the outside world blowing up around us paris is burning and china is way down the fed considering even yet another hike take the victory, he writes, exclamation point. >> it's incredible with a strong dollar, no inflation, the outside world blowing up around us, paris burning and china way down, and then the fed is thinking about -- >> it's like he's saying don't take another rate hike >> take the victory. cease and desist in august was the first time he was saying that. and it's weird a lot of people have joined in that chorus you wouldn't expect.

joins us now -- >> it's abe. >> oh, good. of centerstone ninvestors. modest pullback is what you're describing the most recent pullback as. i agree. it's just that i guess the big down days are staggered with some big updays and we've had more action going down than maybe we have. is that fair to say just because of the volatility? >> this time last year, what were we talking about? there's no volatility in the market right? one year later, look at the 180 degrees we've turned and so there's been a lot of volatility the -- i think the path has been set by the federal reserve as you were just describing from

president trump. and if that can just sort of -- that head wind can lighten a little bit, that the market would stop being so volatility like this. >> low chance of recession in the next -- i don't like your time frame i want longer. low chance of recession in the next three to six months what about seven months? i don't want -- >> everyone's focused on this yield curve. and that's what's driving these forecasts. >> would it surprise you if we had a recession in 2019? >> all of the anecdotal evidence suggests we're closer to the peak we're in new york city it just all looks like late cycle. you have to question the validity of the yield curve as an indicator for recession given how manipulated the government bond markets have been not just in the united states but all other the world. i'm not dismissing it out of hand you know, maybe the market's a

little too much of a reception because of the signal from the inverted yield curve we don't see indications from our companies as far as earnings announcements go or forecasts are concerned. we don't hear or see any significant deterioration. you have slow downs. that's part of the economic landscape. as of now, we don't see broad base indications there's a recession right around the corner >> the point you're making is you invest for the long-term does that mean you're comfortable buying here right now? i mean, you point out that emerging markets are cheap too do you buy both right now and wait >> we're at centerstone, we're global investors

we have a view over the entire world and our opportunity set is growing by the day our cash reserves, i started with 20% in cash now wean down to 15% >> why so much in cash the beginning of the year? valuations >> yeah. particularly in the united states had no problem finding stuff outside the u.s., but the u.s. market was pretty expensive. the headline number hasn't changed that much in whatever you want to look at. >> you just said that you're up 15% in cash. the question is what are you waiting for? >> if this continues, we'll be fully invested but i haven't been fully invested in ten years. >> how much do you typically leave on the sidelines and you should have been fully

invested >> i wish i had been but of the 15% that's sitting around, your thought is -- what are your discipline thresholds we're kind of opportunistic. as of right now, i have no problem. we're continuing to put money to work here, as a matter of fact the -- you know, the market what it does is it anticipates all of the bad things that can happen when it's shocked by an unanticipated outcome, you see this volatility. right now the market is -- brexit, italy, manufacturing, trade talks. i mean, so much has been in the public discourse that it's been, i think, you know, fairly discounted by stocks even a potential session now >> so you think 15% is -- it's not even neutral you're already bullish >> i tell you what

we have 15% in cash yielding >> but you would go -- if they're bearish, they're 50% cash if they're bullish, they're 10%. >> for us it's what's available. an opportunity set even in 2007 i had 20% cash going into that. not knowing what was about to happen but mostly because of valuati s valuations by the time april comes around of '09, i'm fully invested so, you know, there is a counter-cyclicality to it. it's almost pure ly based >> thank you only ten trading days left in the year. as we get ready for 2019, want to take a look back and talk to the strategist who had some contrarian calls this year and was proven right we will do that right after the

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welcome back to "squawk box. the futures right now down significantly. down 150 points. the futures extended earlier losses after the new york fed's empire state manufacturing index came in well below estimates

the index fell to 10.9 versus 21 in september so you could almost -- >> blame the economists. >> no. but that definitely is a factor in what's happening. andrew, i think steve may have comments on this actually. >> it is a big week for the fed. steve liesman is here. the central bank set to announce a decision on wednesday. there's no shortage of guesses as to what the fed will do actually, everyone has a view and there's not a lot of debate about what they're going to do today. i mean, this week. it's about what they're going to do in 2019 >> and how they do it. that's important >> and what they say about it. >> i want to say the market doesn't normally react or sell off violently to a miss on the new york state empire. i pay attention to it, but here's the thing >> i notice a passing headline >> if it's going to move the

markets, we break in at 8:30 we don't break this one normally unless it's part of a lot of data out there but this is part of a spectrum of confidence data. >> it's not just confidence they also say new orders. >> i'm sorry i meant survey data. it's not real data it's asking people in the area what they think about this and expectations and it's down across the board yet dom chu came on with the survey this morning -- >> and his glasses >> long discussion about the contact lens issue >> we were worried he just seemed much smarter. you did that you worked the glasses for the cerebral look. >> no, no. these are $19 glasses. if i wanted to look good, i would wear something more expensive -- >> but you look good with them. >> do i? >> it's a low bar. >> by the way our all-america survey had the lowest plunge in

the 12-year history of it. navigating between a prior forecast to hike amid strong growth numbers, a market and a president screaming no more and a weakening economic outlook fed officials' commentary indicates they're having a significant rethink of how much higher they need to move interest rates okay let's look at their 2019 forecast this is the dot plot put in a hopefully understandable way this is how many fed officials are at how many quarter point hikes on your left assuming december okay >> okay. >> work with me on this, becky >> two are at two and a half >> and the median looking for three to six >> what? >> if you assume the quarter points in there. some guys are way up there >> throw those out like the olympics throw out the high and low >> you can do that you can do that. a trim mean, we call it in

economics. this whole thing is going to move to the left, i expect that's going to be a big factor for the market we'll come back and show you on wednesday how that changes goldman sachs says it will help the fed ease off if financial markets have more restraints here's another way to look at it here's the actual number of people at a given interest rate. does that work better? you can see four of them are at -- you like that better >> yes >> that's whooy i did it both ways i expect this so shift to the left i don't think they're done, but they have some more work to do some people think they're going to stop entirely and i will make one underscore of the druckenmiller piece this morning. i do not believe there's been

nearly enough of the balance sheet reduction. i think for the fed they said it's off the table as an adjustment to current economic sirks. their plan is to reduce. i have questioned fed officials publicly about this quite a bit. they insist it's off the table there's the -- you can see on your screen there, fed tightening not now. i think there's some in between kind of thing. >> by the way, kevin warsh has been talking about that for a long time. >> if you thought it brought us prosperity and better growth on the way up, then you should be talking about the effective on the way down >> agree steve, thank you >> one more thing? >> yeah. >> we'll have all the outlook of the market tomorrow in the cnbc fed survey >> the outlook of not just economists >> economists, political fund

strategists, and market guys >> the fed survey. >> what's the difference between the fed survey and the all-american survey? >> i was going to ask. >> don't join joe. >> he's sensitive in that clarification. >> again and again and again >> don't worry about it. >> these are guys that are economists >> they're economists. they're fund managers and strategists. >> it's about the fed. >> it's about the fed. all-america is all of america. >> no athletes >> no. we left the athletes out of this survey >> okay. they're in the all-america survey okay this year's volatility has shocked a lot of investors but not charlie mcelliot who has corrected many of the year's big moves we've been watching. he is nomura's asset director. let me ask you from the beginning. some of the calls you made, back in january you were saying we were due for big volatility? >> yes

one of the first things we saw when i was coming off of my garden leave, you are had the screaming equities market but also a vix up type of environment. so sending a pretty unique signal that something was off. i think the real catalyst behind that, you had to look back into december the start of december was the first passage of the tax reform bill and that next week you saw the bottom in treasury term premium. effectively measure of your interest rate risk within that next week of that bottom of the cycle on treasury term premium, the next week you saw the highs made in s&p earnings within the next month, you saw the credit, et cetera, and highs in equities out through january. and i think what that tax package did was that we lost visibility already late in the cycle with regards to the forward path of interest rates right? you're throwing gasoline on the

fire and with that, too, not only was there going to be fiscal stimulus we're also looking at an environment where you're going to be increasing issuance. and ultimately at this point in the cycle, you no longer have visibility as to where interest rates are going. and it's kind of the catalyst of all -- central banks have polled >> so we switched to delta hustled to another terminal. >> which gets us to where we are today. some people will tell you we're at the end of the fed rate hiking schedule. you know at least that's the expectation from a lot of people in the markets. do you think that's the case >> so part of my core thesis over this entire year has been the first part of the year we're going to see this cyclical meltdown phase which is traditional late cycle economic and escape inflation.

you see commodities outperforming. you see tips outperforming cyclicals over defense and equities all that stuff played out by and large over the first five months of the year. even with the equity volatility events. the year the back part of my kind of two speed year thesis was financial condition tightening phase it is when real yields bleed into the economy >> equity gets a bad rep it may be a false indicator. two of the earliest signals i have watching without question, topping autos and two years and a half in advance is where we

stand now. very economically sensitive and sensitive sector coming off. clearly over the course of say the last you know three to six months regional banks and semiconductor and other deep cyclicals showing the same distress the rates market this is where it has accelerated the last couple months the trick is -- this is where i think it is a dangerously false optic out there. the extent of the community bearish trait is over shock. there is an environment the macro hedge fund and the big

fixed income and unconstrained bond funds i think there is a situation where that trade was so sized up and it has been one of the only macro winner out there that it is created off of already a low base and your last guest spoke to that. quantitative easing. you are already coming off a low base once you have these trades get blown up and force unwound, i think it added to the optic that fixed income is all a sudden i am -- imminently price recession, too it corroborates with some of the cyclical behavior that we have been seeing in the equity space.

it pulls forward of the end of day panic. >> policy mistakes in japan and europe which caused them to have crappy economy for the last 20 years, the that does not have anything to do why yields are so low? it is all quantitative easing which sets to yield too low? we are tinabeth piñethered to c makes a lot of mistakes. is it all qe the e.u. experience, does it work a lot of problems causing yield to be tethered low >> there is the long-term structural debt demographics >> if you look at japan is kind of the past and future state of where this is going, part of the reason that we are going to have these ongoing tremors throughout

2019 where each month you will see unique markets and reversal strategies just as you think you are hitting a scape velocity the fed is unwillingness to back down at $50 billion a month even if they pause rates, it is going to continue to destabilize >> very quickly, what does it mean for somebody who's sitting at home trying to figure out what you just said do you go along with the equity markets or not >> i am a tactile guy. i do think out of the gates next year in 2019, next year. you are going to have an environment where deeply in position institutional community and retail flow and we saw last

week equity funds out flow the largest ever you will see under positioning and dovish fed and leaking from china trade deal equities will probably work. equities that'll work is stuff that people have been in it is going to look like long income generators and long cyclical growth. you have more dollar potential to keep squeezing people, financial tightener. it is going to continue to add to the volatility as we push closer >> let's get down to the new york stock exchange. jim cramer, back-to-back week where you must be so -- it is the same team, you are right there is still a chance and it may happen two great weeks for you.

am i right >> i wish we had taken the cowboys. i would tell you if we win out and cowboys lose ne, looks lik they got to go some where in january. >> it is really not over for you yet. >> jim you think it is over for th the -- did you hear that tom lee along with bitcoin, he's lowering his outlook on bitcoin, he's going from 11 and 5 for the giants and 10-6. >> bitcoin a year ago it hits 20,000 this is the anniversary. how about j&j? >> i think -- i have been working all weekend with j & j the second day is the market and the first day is the reaction that i understand on a friday afternoon, very difficult toll try to refute. i like what j&j had to say this morning.

the market is so skittish that it has not been able to find the bottom, i am working hard to see where it will be >> we got to go. goldman sachs. >> not yet >> wow >> look at j&j, they have to settle it then you can buy >> all right, jim, we'll see you in a couple of minutes stay tuned, "squawk box" will be right backcaug the crowd, the investment managers at pgim take a long term view. uncovering opportunities for alpha across public and private markets, while anticipating unforeseen risk, has powered our rise to a top ten global asset manager. partner with pgim. the global investment management businesses of prudential financial, inc.

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one last look at the market before we head off to "squawk on the street." you can see the dow and futures now. down by about 100 points we start off with markets barely buzz in any direction. now you can see down 160 for the dow and down by 32 for the nasdaq that does it for us today, make sure you join us tomorrow, right now it is time for "squawk on the street." ♪ good morning, welcome to "squawk on the street," i am david quintanilla with david faber and jim cramer at the new york stock exchange. >> down at 150 on the dow. europe is down about a percent 10-yr 288. our road map begins with the