it is 5:00 a.m. and a snowy cnbc here's your top five at 5:00 it's not just apple now. samsung spooking the market. we'll tell you what they said, and the market fallout ahead ousted auto legend and nissan charge carlos ghosn speaking for the first time since his november arrest. get ready. president trump pushes the border wall tonight on national tv as the government shutdown enters its 18th day. could it really finally be the end of the line for sears? why today could be the real make or break moment for the iconic american brand and whoa nelly clemson tigers making history last night as they rolled over

the crimson tide worldwide exchange begins right now. zbliefrmt good morning, good afternoon, and good evening. welcome. i'm brian sullivan do you hear that sound you can still hear them partying at the tiger town tavern in clemson, south carolina. yeah, the game was played on the west coast, but i guarantee you all those orange paw marks off of i-85 are rocking already right now this morning because they did not go to bed we'll give you more on that historic win coming up first, let's get back to what we do and that is the money, and your global markets and how they are setting up their tuesday dow futures, maybe pulling a clemson. they are solidly in the green right now. triple digit gain for the dow. up 108 points. the nasdaq kind of a similar story. most asian markets, not all but most moving higher as well japan, another up day.

hong kong, up as well. the hang seng up .1% not the similar story for the shanghai or the south korean kospi index as well. an upstart on-line retailer called amazon.com, well, once again, they are the biggest company in the world with yesterday's move they overtook microsoft. yes, microsoft, to become the world's biggest company. those two companies in a dead heat does anybody else find it bizarre that the two richest men in the world, jeff bezos of amazon, and bill gates of microsoft literally live within about a mile of each other in a pacific northwestern city known assist seattle it's a mystical place. let's bring in another mystical man. he is president of mercedian asset management i will not ask you to comment on that don't you find it odd? the two richest men on the planet live within about a mile of each other in a northwestern

city anyway, let's get to the markets. there's market stats on this network every day. we hear all kinds of stuff i think there's one market stat to our viewers that matters more than any other, which is that -- you can take the time period you want if you miss out over a 20-year period on, say, the best 30 days of trading, and you never know when they're going to come if you miss them, if you're not invested when one of them happens, you effectively have almost no gain over 20 years >> well, it's absolutely true. it's the thought that timing the market doesn't work. i mean, if it worked, we wouldn't have needs for networks like this, if there was a way of really going about it. >> bite your tongue. >> and faithfully doing that what people need to realize is that as you said, if you just missed the top 30 trading days over the last 15 years, instead of having the positive rate of return that we've had since the market rebounded in 2019 -- in 2009, you would have actually had negative return. what's even more interesting about that is that some 75% of

the best days in the market came within two weeks of theworst days in the market now, we've seen that play out -- >> huge rebounds, in other words? >> absolutely right. when you get scared out because you get all panicky, you are almost a lock to miss that rebound. >> this is incredibly important because, i mean, you get these huge down days we had december a month to forget very volatile. people get spooked when they get spooked, often they sell. don't do that. often they do do that. your point is that, a, you're probably going to miss one of the best days, and, b, especially if you sell close to one of those big down days again, don't do that >> well, if you try to time the markets, think about what you have to do you have to make three decisions correctly. one, you have to make the decision that we're about to go down and i have to get out then you got to get out. then you have to look at, okay, i'm going to get in. you are going to get in when everything seems down and we're

talking about negative markets on programs like this. you have to have the fortitude to say, no, i'm going to get back in, and then you have to have the smarts to do it again and rinse and repeat that's why it's kind of a fool's errand >> no disrespect to anybody who appears on this fine network, but nobody has the smarts to predict when one of these amazing up days is going to happen >> no. i will give credit to someone who is i think is very soft, david kelly from jp morgan >> very frequent guest on this network. good irishman, you know. >> he osd a call something that stuck in my mind people that wait for the market to settle down are missing the point that markets don't settle down they settle up what he meant by that, i believe, was that when things calm down, they're only getting calm in your mind because the market is moving up. if it's moving up, in many cases you might have missed the first one, two, three, or 10%. you can't wait for that calm to come risk taking is about managing your portfolio, and how much risk you can sleep at night. if you are not sleeping at

night, it means your portfolio is isn't balanced correctly for your risk tolerance. it doesn't mean that you shouldn't be in the market >> you may not be sleeping because your friends and clients probably have been calling and saying, what the heck should i do the market volatility scares me. should i sell everything and run off. leave us with actionable advice. what have you been advising people to do right now in this environment? >> well, one, i have been saying that we're in an environment where things are rolling over. even the two wealthiest men live in the same neighborhood the entire -- >> you're not one of them. >> that's fair enough. >> not you, but people you talk to >> but your portfolio doesn't have to live in that neighborhood with them we're starting to see the market roll over from these big names that, you know, people are realizing that amazon is not going to put every retail store out of business. not everyone is going to want to give up their privacy to facebook, and not everyone needs to update their iphone to the next model.

fixed income represents rollover even though it might not be giving you great return. stop chasing returns slow and steady will win the race >> maybe the fangs won't be the hot stocks this year get home safe. >> thank you >> it's gross out there, isn't it >> it is a foul day. >> if you are in phoenix for some reason, it's great. here it's sleety and slushy and gross. trade talks between the united states and china wrapping up in beijing. nbc's janice macke is there and joins us now with more with what occurred overnight janice >> reporter: brian, two days of trade talks have wrapped up, and there has been no word on whether there has been any progress no update, no use of words like constructive, concrete nobody was expecting any breakthrough from these talks beyond the fact that they actually happened. the best case scenario is that chinese officials will in the coming weeks head to washington

for the next level of talks. there are very fundamental differences that exist between these two sides. the u.s. is looking to level the playing field here and change the way that chinese businesses operate. there is that march 1st deadline looming, however if we look at the editorials in it the newspapers here, which are typically a guide to how the political leadership is thinking, they are saying that the u.s. should not demand too much from beijing. then there was this other strong message today in the form of the other big meeting that was happening in town. kim jong un literally rolling into beijing on an armored train to meet with chinese president xi jing ping on his birthday, no less this was sending a very important message because the timing was not coincidental.

north korea finds itself in the mix as well. thank you very much. have a great day >> let's now get analysis and insight with iris pang from ing joining us from hong kong. iris, thank you very much for joining us here. i know it's a little later on there. what do you expect to happen if anything, from these trade talks? >>. >> how newscast is that that they'll be going to washington again to conclude the trade talks? otherwise, we will be actually giving no answer from beijing

and washington my take is that if there is no announcement from today, don't be too upset because there could be another round of talks with higher level officials, but without that, we will be really upset, and the market will be really upset there is something in the china economic quiver, which is the lending term facility, iris. it's 5:00 in the morning here in the united states on the east coast. i don't want to glaze our viewers' eyes over, but tell us in a nutshell what the tmlf is and why it might matter to the chinese economy. >> the tmlf is actually a liquidity function from the pvo, central bank of china, going into small and private

companies. unlike mlf in the past, it's not untargeted it is targeted for small and private companies. this is the first thing. the second thing is that the interest cost of the tmlf is cheaper than the mlf, but as banks have to take on more risk from these small and private companies, they have to decide the size of the tmlf that they want to, so this is -- this is the size of the tmlf may not be really driven by the pvoc. it may be self-driven by banks the size is unknown. >> bottom line, iris, do you believe that it will help boost a slowing china economy? >> yes in 2018 we see a lot of poe bond defaults, and it actually

aggregated to around 100 billion yen. in 2018 alone. usually 2018 is a special yooe year therefore, it is very critical to have poe's have all -- some v some of the stimulus and monetary easing. >> iris pang joining us from hong kong. iris, a pleasure thank you. now to your top corporate story, which is also out of asia and may be, just maybe, the iphone doesn't fall far from the apple tree samsung slashing its guidance for the quarter. let's get to frank with more on this story frank. >> brian, samsung really surprising investors today saying it expects fourth quarter profits to fall by 29% that's well below analyst estimates. they also say revenue, likely, fell by 11%. samsung shares were down today

in south korea about 1.7%. now, the company typically raises preliminary numbers on a quarter before reporting full results towards the end of the month, but this time samsung also issued its first commentary ahead of earnings since late 2014 when mobile phone profits dropped. it says weaker demand from data center customers drove down chip prices in the face of rising macrouncertainty, but the company really didn't elaborate. analysts say data centers account for about 30% of demand for samsung's dram chips first quarter profits will be subdued, but they should improve in the second half of the year as customers launch new smart phones more tech news out of asia lg electronics also issuing a warning. the world's second largest maker of tv sets right behind samsung says profits likely fell by 80%. lg didn't give out a lot of details, but analysts cite thinning margins for high-end tvs while its smartphone business continues to lose money. lg shares dropping in south korea today.

about 3.5% back over to you, brian. >> lg also facing a lot of pressure >> see you in a bit. thanks >> up next, a double dose of developing stories carlos ghosn making his first public appearance since his november arrest. we will go live to tokyo ahead the clock ticking. one of america's oldest companies, sears why today could be a make or break moment for the company sticarndk ou was it necessary to create a luxury car more teched out than silicon valley? with a cockpit fit for aspaceship. hang on. radar that senses things the human eye can't. busted. and the ability to make a thousand decisions before you even make one.

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my name is mike, i'm in product development at comcast. we're working to make things simple, easy and awesome. welcome back happening new right now, ousted nissan chairman carlos ghosn making his first public appearance since being arrested back in november akiko fujita has more on a story that has captivated the business world. akiko. >> reporter: yes, it certainly has captivated the business world as well as the public here in japan as you pointed out, since carlos ghosn's arrest back on november 19th, he has been re-arrested twice, leading to 50 days of detention so far this was the very first time we saw and heard from him he was visibly thinner as he walked into the courtroom with his hands kufd, a rope around his waist. he was certainly defiant,

providing a fiery ten-minute rebuttal of all the allegations that have been put forward against him. reading from that statement, he put before the court, he said he has acted honorably, legally, and with knowledge of approval of the appropriate executives inside the company he says he has been wrongly accused and unfairly detained based on meritless accusations we should point out, this is a court hearing that his lawyers asked for. specifically wanting the judge to publicly explain why he has been detained for so long. the tokyo district court judge today saying they believed he was a flight risk and could tamper with evidence against him if released. the defense lawyers argue that there is no reason to hold him right now, especially on this accusation of a breach of trust. allegations that he used company funds to cover up his personal losses his lawyer saying that they have board meetings that will certainly prove the prosecution's case is wrong. this morning, though, brian, he does remain behind bars. at least until friday, january

11th >> the japanese legal system is incredibly different from ours here instead what is the next step? january 11th we may hear from him again, but how long can he be held? we haven't heard from him. it's very unlike our system here what are the next steps? >> you're certainly right about that the criminal justice system in japan has come under harsh criticism since carlos ghosn has been arrested. the next step is january 11th. that's when the current detention will end now, if prosecution does not move forward with an indictment, he will be released at that point. the defense lawyers today, though, say they believe the prosecution will move forward with those charges at that point, carlos ghosn would have to push for bail. there are questions about whether that will be granted unlikely here in japan, especially given that he has refused to confess to these allegations, he says, simply aren't true. still a long road ahead. a legal road ahead for him >> certainly is. akiko fujita in tokyo, thank you so much. still ahead, a hedge fund

making a major play in the permian basin, offering a fat premium. we'll give you details and an exclusive look at some companies that could be next on the oil shopping list. making a case for the border wall president trump to make a major primetime speech tonight with the government shutdown enters its 18th day we'll take you live to washington and what you can expect as wodwe chge tus.rlidexan

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quick check on oil and gas you're seeing wti crude continue its slow march back higher it's up another percent right now to about 49% and change. brent under 58 sticking with the oil story, late yesterday kind of a shocker in the oil patch hedge fund elliott mann has been offering to buy qep resources for $2 billion the proposal could force qep to put itself up for sale that stock rallied as deals tend to do, the market may turn its collective eye towards other similar companies that could be in play. based on my reporting in the oil and gas space over the years, here are some names that have a similar profile to qep basically midcap producers with operations either entirely in the permian basin of texas or

with significant operations in that region. you have diamondback energy, the original fang stock. parsley energy, run by the sun of pioneers, former ceo scott sheffield. jagged peak energy, a name that you have heard analysts highlight recent will i on this network. also, sitting out there kind of in the midcap permian space, matador resources, callon petroleum, and cimarex they do have operations in the permian as well as new mexico and other regions as well. again, if you think there may be follow-on deals to the qep offer, those are just some names to watch nobody is saying they are in play, but they have a very similar profile and size to qep. maybe not from a land basis, but at least for the region they operate in in the meantime, we are also following a developing story on one of america's most iconic and oldest brands. of course, that is sears it is planning to announce its decision on chairman eddie lampart's bids to save the company. sources telling cnbc sears

believes lampart's bid is short. the two parties have been unable to come to a resolution. keep this in mind. without a fix, sears will liquidate. in other words, one of the oldest companies in america, if not the world, will be gone. all stores will be sold off and shut down. a decision is expected before the bell today on sears. switching gears to politics. president trump set to address the nation tonight as the partial government shutdown enters now its 18th day. nbc's tracie potts live in d.c. with more. >> brian, good morning, everyone all eyes are on the white house tonight. president trump dlifrg hits first ever primetime address from the oval office the topic, we know, is border security the question, will he use this opportunity to do what he has been talking about and declare a national emergency at the southern border? >> reporter: tonight president trump, salesman in chief, convincing america why he wants

$5.6 billion to build a wall at the mexico border. >> i was elected to protect our country. that's what i'm doing. >> reporter: he is threatening to declare a national emergency to get the money if congress won't approve it >> probably the worst public policy idea i have heard in about ten years. it would be horrific >> it's already horrific for federal workers caught in the middle of a showdown over funding the wall this is day 18 of the partial government shutdown. now tied as the second longest in history if it continues, 51,000 tsa employees won't get paid friday. >> here i am as an essential employee, have to get up and go to work every day, and i'm trying to figure out how to get my child lunch >> it's tough. it's tough to wake up and have your wife reassure you that everything is going to be all

right. >> reporter: president trump says he feels their pain, but insists most federal employees and the public are with him on this we'll speak to the public tonight and visit the border thursday >> now, the administration has said 4,000 known and suspected terrorists were caught at the southern border, but homeland security told congress it was just 41 in the first half of last year, and six of those were immigrants brian. >> all right, tracie potts we'll wait for tonight and the speech thank you very much. up next, hinted on volatility what is driving some of the big market swings that we have seen. we'll get a top market player's ken sthaahd.

get to know the name trevor lawrence he is a true freshman and has long hair and probably a legend for the rest of his life thank you for joining us on this cold and sleety morning in the

northeast. i'm brian sullivan let's get you caught up outside of the weather here's your executive recap. >> here's a cnbc approximate the com right now. samsung slashing guidance. they tell investors that they expect the fourth quarter to fall by 29% on weak demand for its chips. the warning comes a week after apple cut its guidance for the quarter. samsung shares falling more than 1% today auto news. ousted nissan chairman carlos ghosn making his first court appearance since his arrest. ghosn telling the court in a tokyo courtroom he is innocent standard & poor's is cutting pg pg&e's credit rating to junk status is warning of a further downgrade. citing regulatory and political pressure as the utility company faces potentially massive liability claims stemming from deadly wildfires in california pg&e shares fell more than 20% yesterday. brian, investors also concerned

about the company possibly going bankrupt back over to you >> frank, thank you so much. let's now get a check on the other top headlines outside of the world of money and business. nbc's in new york i'm told well sweatered who also has a story about vladimir putin and a big gun. >> i do. i even put on a tie today. how about that, brian? good morning arson investors have been called to the scene of a massive fire at a storage unit facility outside of lasz. frames spread rapidly. no word on what caused it. dozens of firefighters responded, knocking down the blaze within hours, and no injuries were reported the second largest school district in the nation is on the verge of a massive teachers strike it would affect well over half a million children and their parents. 25,000 l.a. teachers are preparing to walk off the job on thursday among their demands? more money, smaller class sizes, and less standardized testing. the district says it is negotiating in good faith, and appears to have hundreds of

substitute teachers ready to cross that piquet line here's the story we are talking about. russian president vladimir putin celebrated orthodox christmas by firing a howitzer at a fortress in st. petersburg. christmas is observed january 7th there. this midday shot has been a tradition since 1865 you can see putin appeared to only flinch slightly when that canon finally went off there you go in russia i guess there's no better way to say merry christmas than firing high-powered weaponry. >> we had a pool here as to when the first day of the year would be that you said howitzer. i did not have january 8th i think kayla chadwick won that pool here. thank you for that thank you. >> ding, ding, ding, and congratulations to the winner. >> exactly and won't you be my neighbor thank you. here's how money and investments look as we're halfway through the 5:00 a.m. hour stock futures solidly in the green. dow futures up just about triple digits mixed to higher day in asia where japan and hong kong

markets did rise as well shanghai pulled back just a bit, though the european markets are showing green on the screen as well. i don't want to call it a rally, but certainly the markets have had a pretty decent start. 2019 certainly better than it ened the year. right now let's get smarter and help you figure out what to do with some real world advice. joining us are two very smart men wrrks michael, managing director at vios advisors, and patrick, his chief strategist at silver crest asset management. michael, things were insane at the end of last year i mean, it was so 2018 all that's changed the calendar, but it does feel like sentiment changed a little bit to what do you make of this sort of return to normalcy for the markets? >> well, look, we had the most economic expansion we've had since 2005 and better earnings growth since 2005 at some point it was going to slow down. people forget we're going to continue to grow it may not be as fast as we're

growing, and people just started to panic when the market went down, and it just piled on it was sell anything you could, end the year selling things, and let's start the year fresh >> patrick, i know you believe the economy is slowing it probably is because it's coming off a pretty hot pace is it slowing enough that would justify the worstdecember for the s&p 500 since 1931 >> that's exactly what i was going to bring up is that it's the worst market in december since the great depression is it the worst economy? no you can point to things that are slowing, but i look down the list of leading indicators, my checklist of things that would tell me that the session is coming, and very few of them are signaling anything other than, you know, continued growth, albeit slower. you know, i think the sell-off was both premature in the sense of seeing the end of the cycle

upon us, and overdone in that sense that, you know, right now we've seen valuations come down from 21.5 times pe trailing multiple for the s&p 500 to 16 times. that's quite a comedown, and i don't think it's justified by the slowing of the real economy. >> yeah, michael your viewers, i'm sure, or your clients watch cnbc, listen to cnbc, but then they call you to know what to do about what they hear from us give us some practical real world advice >> we look for fundamentals. everything was so caught up in everything went up it was not normal. >> or everything went down >> everything went up originally, and then everything went down. there's no fundamental value to anything that people are doing let's refocus on the fundamentals there are many bank stocks, oil stocks, even technology stocks that are trading way below historical normalized pe's, and so if we focus on a stock picker's market as much as i hate that phrase >> why do you hate that phrase

>> it becomes cliche everyone says i can pick this so supreme court and that stock >> for ten or 15 years every commercial and every ad in barron's says don't try to beat the market, buy a big etf, and go play with your children i think we're learning that's not the most effective strategy right now because people are, to your point, buying and selling everything without regard to how any individual company may be doing. >> last year that was okay that worked last year. >> it worked for eight years, to be honest with you >> and then now, boom, when it's not working, people panic. let's refocus our fundamental values let's refocus on what's most important. are these companies making money, are they growing their earnings, and geopolitically, all this will get soft as hard as it is to imagine, we're coming to a -- some sort of a reasonable resolution geopolitically, and we're going to refox back on the markets >> patrick, would you agree with what you just heard? do you think it's going to be a stock picker's market, even if you hate that phrase >> i don't hate that phrase at all. when you have a market that's

going up, a rising tide lifts all boats. when markets hit volatility or they go down, that's when the quality of picking stocks actually reveals itself. i would also add that investors need to be focused long-term they need to be thinking not just trying to guess when this cycle ends, but actually looking beyond it. you know, one thing that really i'm keying off of is the fact that the equity risk premium, the amount of risk adversity that's priced into this market is very high it's well above average. it's around 5.7%, the long-term average is 4.2%. when you go back in history when the equity risk premium is above 5%, you get significantly outsized returns over the next five years 11.8% historically when it's below 3.4%, you get about 3.2% returns the reason why is at some point all that risk adversity that's been packed into the market gets

unpacked, whether a recession happens in the meantime or not it doesn't tell you -- looking at that doesn't tell you where stocks are going to be a year from now, but if you are looking beyond where stocks are going to be a year from now, it's a very important number >> michael, what do you think? do you think the last word -- do you believe that stocks one year from now will be higher than they are right now >> yeah. >> despite all the worry out there, the wall of worry about the wall >> aside from historical norms in the third year over presidential election, the s&p 500 is up upon average 16.9% let's leave that aside fundamentally i do believe they'll be higher. our economy is still growing it may not grow as fast as it did last year. earnings are still growing companies are still producing. i think there's no question it will be higher by the end of the year >> fair point. we used to be really excited to hear about 3% growth now somehow it's bad it's the same number going up or down >> even zero growth we would do well this year >> because we put the fed back

in play maybe. >> right >> appreciate it patrick, thank you very much guys, have a great day be safe out there. nasty day. coming up, rolling the dice. why now could be the perfect time to take a gamble on some of the casino names that's right top gaming analyst will make his case ahead, and a cosmic crash a story out that will tell you that nothing really matters. we're all going to die jaen wany you have to hear this story.

welcome back pour yourself another cup of coffee the world is now ending. we're all going to die >> you're just a ray of sunshine today. >> there's no sunshine out there. no sunshine when she's gone. >> he is half right. the end of our end of our world. this guy has me tongue-tied. the end of our world with and our whole galaxy might be coming sooner than anybody thought. the ending could come in 2 billion years from now that's about 3 billion years sooner than scientists previously thought i guess we don't have to worry too soon the ending expected to come with a bang as our galaxy collides with a group of stars. >> that's good news. we still get to live another 2 billion. >> fine. >> not 5 billion two. >> i read the tease. >> that forecast has been cut.

the stock is dropping rapidly. >> awesome >> well, it's official diners in california will no longer be able to order foie gras the u.s. supreme court rejecting the foie gras industry's ban the ban was first passed in 2012, and it's been making its way through the court system since then that's it. in california. >> not getting a lot of sympathy i think the goose lobbyists have -- >> yeah. i kind of like it. i'm a big fan ofregular liver, but i like foie gras too >> is that it on the trending side >> that's it all you now. >> still legal here, i think in the sports world it was college football's biggest night last night alabama versus clemson for the national title bama was favored the tigers absolutely rolled clemson won easily, and then we have an rbi coming up in a few minutes. this is also random, but interesting. did you know that with that win

clemson finished 15-0? that has never before happened in college football. they had a lot of gimz they had cc championship, and the college football playoffs. then the win congratulations to clemson i spent a lot of good time in the tiger town tavern back in the early to mid 1990s don't ask me why congratulations to clemson switching gears, tonight at 10:00 p.m. eastern and pacific, cnbc presents the premier of "the profit" high stakes marcus getting an inside look at how las vegas got so good at separating you from your money what could be simpler than a little roulette. >> do you know roulette? >>ure going to explain it to me. >> i sure will how about do you have a rewards card with us a total rewards. >> i do. watch out. >> all right >> my first dollar on the diamond card >> i asked martina for a quick explanation. >> so you can bet on one number.

that pays 35-1, by the way or you can bet on two numbers, which pays 17-1. you can bet on three numbers 11-1 four numbers, 8-1. this is the only spot on the board for five numbers, which pays 6-1 >> honestly, i had no clue >> or you can bet on six numbers, and that pays 5-1 you don't have to remember all that >> and i should have stopped right there. >> there we go >> so how did marcus do? you have to find out tonight that's why we call this the business a tease, the profit, high stakes. 10:00 eastern time all right. staying with the casinos, arguably no sector that is maybe more purely consumer discretionary than the casinos.

don't you want to get them in the casino so they order drinks and another six drinks and then some food and throw some money down on the black jack table >> that's right. some states, like mississippi, where sports betting is legal, but confined to the four walls of the casino. you do -- you are seeing an impact of year-over-year growth since sports betting has been introduced in sports betting and

other segments of the casino, like slots >> any day you can learn something, i think, is a good day, right i learned something from your excellent notes today, which is that the slot machine is sort of the cash cow for casinos i had no idea. >> 80ers approximate of the revenues >> young people, they don't like slot machines. >> no. our best knowledge, they do not. >> that doesn't sound good for a lot of these companies >> that's right. so we do view regional gaming, which is everything outside of las vegas as weak. that's not to say it's falling off a cliff. it's still one of the relative to retail. it's still, you know, pretty healthy. secularly, people are retiring, and those are the people that are playing slot machines, and their discretionary income is declining. you're trying to rely on the millenials to come in and back fill, but the millenials are not coming >> the biggest change in cam l gambling in 20 years has been

happening. that is japan. been illegal to gamble in japan. now it is going to be legal to gamble japan is a lot wealthier nation than china is per capita is this going to make a difference for u.s. operators? are they going to go into japan in a big way >> to get a tokyo license, osaka license, that would be the biggest thing since singapore and makao ten, 15 years ago. we are sort of trefof tempering expectations buzz there are regulations in place in japan. people have to pay an entrance fee to gamble. there's a high tax rate that will impact the market the casino force will be somewhat confined to a limited space. we are coming out with about $69 billion forecast for the whole market, which is relatively small relative to a $70 bill market in the u.s. a lot of that has to do with the regulation >> alex, pleasure to get you on.

thanks for braving the elements and coming out here. >> he so you soon. on deck, navigating all the recent volatility. how you can weather the recent wild swings on wall street ahead of etf's a if you think apple has been hit hard, wait until you see how some of apple's suppliers are doing. it is your morning rbi it is something you only see here on worldwide exchange it's going to blow your mind stick around your brain is an amazing thing. but as you get older, it naturally begins to change, causing a lack of sharpness, or even trouble with recall. thankfully, the breakthrough in prevagen helps your brain and actually improves memory. the secret is an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. healthier brain. better life.

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welcome back to worldwide exchange, and good morning it looks like a pretty good morning for dow futures. we're now up 144 points. kind of the mini rally we've seen to start 2019 is in effect right now. a lot of green on the screen also in europe joining us now is nick churny, head of etf's at janice henderson. always a pleasure to welcome you back to worldwide exchange thank you for joining us it was such a crazy end to 2018.

1,000 points down. 800 points up. 2019 has rolled over, and suddenly it looks a lot calmer what are you seeing at janice hearn son that would explain sort of this return to normalcy, if you will? >> it's interesting. we've had, obviously, volatility kind of spike up quite a bit in 2018 relative to prior years if you kind of look at where we are now, it feels like we're, you know, seeing more turbulent markets. obviously, kind of trending up what's interesting is that, you know, vix, which is what we really look at in terms of the indicator for stock market volatility, you know, getting close to touching 20 probably this morning that's actually its long-term average, and, you know, despite what went on in december and november to a certain extent, the kind of fear gauge, the volatility markets didn't really react very strongly compared to

what we would see historically, and we seem to have shrugged it off again pretty quickly the thing to remember that, you know, the prior couple of years we've seen such muted levels of volt tilt that where we are today even despite a lot of geopolitical issues and concerns around trade tensions and, you know, the issues that everybody is talking about, is really at a pretty muted spot. certainly in terms of equity market volatility, our view is that there's still a lot of risk to the up side on volatility >> yeah. you know, i don't get too wonky given the hour of the day at 5:54 in the east, but here's the thing, the vix is a futures contract, in large part, and when you buy a futures contract, you have an implied cost you are basically -- it's not -- nobody rides for free, as they say. that implied cost seems to have come down. what are you seeing from the markets that may give us semiany kind of a clue as to which way

"the smart money" thinks volatility is going to go? >> yeah. that's a really interesting issue. like you said, you can get a little technical, but generally speaking, if you want to be long volatility and long the vix, you pay a cost to do that, and it comes from that futures role that has been a pretty significant, you know, negative detractor to long volatility positions. you know, it averages maybe 6% to 8% a month as a typical kind of negative roll yield that we see, and that fact has led to every year since 2009 negative returns to investors who are long vix futures, and last year was the first exception to that. actually, you did generate positive returns, and interestingly, since december, beginning of december, the futures have actually given you a positive roll yield. you have actually gotern a positive return from the roll yield, so the kind of carry has given you positive boost to your

expected return for about a month, and that's actually a fairly unusual scenario, and particularly, with rvix where it is, again, touching 20, we still have positive roll yield this morning. what that is telling us really is that the market thinks we're pretty close to fair value the curve is pretty flat, sf we're not seeing the significant negative roll yield that we have >> i like it very smart segment there we learned a lot you also gave me my fantasy football name for next year. positive roll yield. nick, janice henderson, thank you very much. >> thank you smart conversation 5:56 have another cup of coffee time for your morning rbi. today it has to do with trade and china. you know how tough a year it's been for apple investors feel better. if you had invested in the companies who supply to or build apple products, yikes. of the eight major chinese companies who make this stuff or make the phone, the best performing stock, the best down 25%. the worst down 3%.

the average of the stocks, a drop of 50%. half of investor money, gone, like keiser sose back in a minute 7pgñóo

good morning stocks on the move futures pointing to a triple digit gain at the open for the dow. full market rundown is straight ahead. carlos ghosn appeared publicly in court for the first time since his november arrest kevin spacey we're going to get a live report from tokyo two dismal reports from south korean electronic companies. we're going to show you the stock moves and asian trading overnight. it's tuesday, january 8th, 2019. "squawk box" begins right now.

♪ ♪ take a look ♪ at the kids on the street tha never miss a beat ♪ >> 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. let's take a look at the u.s. ek fit futures. after closing modestly higher with the dow up about 100 points just over 17, and the nasdaq up by 84. you are looking at green arrows once again today dow futures at this point are indicated up by just over 154 points nasdaq has indicated up by about 37 points. then the s&p has indicated up by 16.5 overnight in asia, you'll see that markets there for the most part ended higher. nikkei up by .8% hang seng was up by just over .1%. the shanghai composite was down by about a quarter percent all of this coming as trade talks continue we'll talk more about that in a little bit in the meantime, take a look