join us tomorrow futures right now, looks like the dow will open up 250 points higher the s&p 500 would open up 24 points higher. make sure you join us tomorrow "squawk on the street" begins right now. ♪ good tuesday morning welcome to "squawk on the street." i'm cart quintanilla with david faber at the new york stock exchange cramer is at the conference once again in san francisco futures up better than 200, adding gains for the week. a lot to watch samsung warns on q 4 sears expected to liquidate. ces in las vegas and the president addresses the nation tonight about a border wall. oil holding on to 49 we begin with the china trade trade.

the president says talks with china going well, and investors cautiously optimistic that negotiators are moving forward on a trade deal. >> plus, stocks are looking to extend the rally we have seen so far this year. futures are pointing to a sharply higher open. you saw shares of tech giants such as facebook, amazon, anybody seeing how much netflix is up this year, all trading higher before the bell. >> and shuttering sears afte 126 years, the once iconic american retail brand apparently now on a path to liquidation stocks are on track for a strong open, a day after the dow and the s&p 500 posted their fourth positive session in five futures rising on hopes for progress between the u.s. and china as trade talks continue in beijing. jim, got a ton of research calls on a number of names and then there is the samsung warning looking at a decline in preliminary opernet. >> look, samsung is a combination of micron, d-rams,

and also cell phones where they say the galaxy is slower, takes off a little pressure from apple. maybe there is a little bit more universality to the slowdown of cell phones. i think we all know that smartphones are not selling the way they used to you know what, carl, this is a market that plays to the tune of oil. and once again, even though germany had terrible numbers, even though samsung indicates basically a worldwide slowdown, the fact that oil is near 50 is driving the futures. it is insane but it has been the big connection and the research today, which is so pro-f.a.n.g., the selling was done, overdone, amazon, largest company in the world, these are the kinds of things that feel like a resumption of september, not october, but september before jay powell went on tv saying three to four and we're really kind of returning to the days where it was hassian. >> it has that feeling and the connection you pointed out between wti and the markets

doesn't go unnoticed we were talking about it last week and it continues and that with oil, now pushing closer and closer wti at least at this point, where are we, 49.43, almost 50 bucks netflix up over 18% so far this year this year. is that justified? >> no. not at all i mean, you and i both know the amount of money they have to spend just to keep up with disney, which, bit way, is coming back, is absurd but a lot of people are saying, you know what, we're back to the resumption of what is high growth david, the facebook, the facebook piece that i read this morning that was positive basically said, listen, as bad as you think it is, it is not as bad. well, there is a reason to buy a stock, right it is terrible but not as terrible as you think. and that's kind of analysis that is working at the beginning of the year also, we're seeing upgrades to the industrials related to oil why? because oil is terrible, but not

as terrible as we think. that kind of analysis shouldn't take us as far as things are going. but right now, people want to own these stocks that they liked in september >> yeah. jim's referring to jpmorgan on facebook they reiterate they're overweight, 195 on the target and as jim says, the core app they believe stickier than a lot of people believe and that the revenue deceleration is manageable one of the top picks in the internet space for 2019. by the way, jim, netflix, it is hard to believe, but we're going to get our first wave of earnings next week and netflix will be the first f.a.n.g. among them in addition to banks and transports >> they win some awards, people maybe are looking at the schedule and think there is new things switching back to the facebook for a second notice there has not been a negative story about facebook in maybe nine days. you pick up "the new york times" now it is talking about the wall that's displaced facebook as

enemy number one for "the new york times." we're seeing the end of headline risk, talking about better programming for netflix and facebook hasn't screwed up in days what is that about >> i was thinking another name we haven't heard about, which is goldman sachs. it has been days also since we heard about the malaysian problems there hasn't it? and i have noticed the financials, jim, outperforming the broader market by a bit so far as this year has progressed. >> yeah, you know, we got jeffrey saying that jpmorgan is going to fall short. that's what we need, david we need plenty of people to say jpmorgan is going to miss, that citi is going to miss. look out for bank of america we need those expectations lowered. that's perfect i like that environment. and i do have to tell you, i got to go right there, david, union pacific is going to be up ten points why? they have someone who is a new coo. i mean, honestly, we have this

really -- this great moment where goldman is not -- we're not reading about malaysia, malaysia seems to be a political situation. we are not reading about facebook, because they haven't screwed up and haven't lied of late, which is really extraordinary, we don't know about. and then union pacific is a new coo and up 10. we're in some sort -- 12 we're in some sort of moment where everyone is feeling -- i think jay powell decided not to smother the economy. the president has -- is deeply mired in the wall. and fights with nancy pelosi wow. i mean, we're off the front page how positive is that >> indeed, yeah. we'll get to a lot of that later on in the program. by the way, talking about some of these calls that the jeffrey's note on jpm is largely about the yield curve coming in, right, and diminished expectations for more rate hikes. you got bostic yesterday saying one this year. i know you talked about it with joe a few moments ago. i mean, how do you view

financials in the framework of a more dovish tone from the fed this year? >> well, look, i think it -- we're seeing mortgage rates going down we're seeing the housing stocks -- all the home builders are breaking out the back like september. we're not going to have the most beautiful bank numbers, but people are expecting awful things from the banks. when you get awful coming in, if you remember last quarter, jpmorgan, the stock came in hot, and it didn't do anything. citi came in hot and it has been a disaster bank of america was looking good now, looking terrible. that is exactly what you need going into earnings week you need lots of people having given up on a group that i think is going to report not that bad numbers. >> yeah, i don't -- jim, and carl, just feels like sentiment has changed, at least so far this year. somehow people don't seem as concerned about the things that they were at least investors don't, we did turn the year, performance numbers, last year's

numbers. we'll see when it starts to come back in terps of soms of the ov global concerns falling short. since we heard from powell last week and a change in his wording and/or tone, doesn't seem like the concerns have risen to the floor at this point. i don't know when that comes back as a big concern, jim you can imagine, if we got the samsung numbers last year, everybody would have been, okay, got to sell! >> yeah. instead micron is touching 35. that upgrade is still resonating christmas eve massacre seems to be total rear view mirror. it is entirely possible, people are starting to say bear market. even though we had been in a bear market for three months, it was the jay powell bear market, suddenly like, i think that -- look, calling him jay, like he's my pal, but i think that jay recognized that he did not want to be the reason why the market continued to crash

i think that the -- just the tone of trump versus powell was so bad, trump's deeply focused on a steel wall, by the way, i think it is not concrete the only companies impacted by that is u.s. concrete. isn't that terrific? rather than the entire market. the s&p 500 has been able to lift and that one other thing that is really important, the government shutdown, the s.e.c. has not allowed new supply into the market we were worried we would be inundated with new deals but the s.e.c. can't review anything, another positive >> yeah. does look like we're going to get tax refunds out of the irs, which is a bit of news and we'll see what the president says about the border wall and the shutdown on tv tonight by the way, talking about mood, bill miller on with kelly evans yesterday. talking about amazon, and his expectations for the next few years, take a listen >> i told you this several years ago, apple should -- amazon should double in the next three years, i would say that again

right now because -- >> you think amazon could double from here, in three years? >> the top line there is going to grow somewhere in the 220, 225% range. >> doubling in the next few years. eclipsing microsoft as most valuable public company on a day where we expect sears holdings to finally liquidate >> look, i mean, we got irony on our side with amazon the problem with the doubling, i often find that when you say something is going to double, why not say it is tripling why not say it is going to quadruple? i like to think amazon, at 2000, maybe it can get back to 2000 if amazon web service is really, really strong. people come on air and say tesla will go to 5,000, amazon to 5,000, i blanch and i blanch because can we just say that it might go to 2,000 as a weigh station on the way to 3200 i don't want to get people so excited they get their head

chopped off, the way people did when they bought amazon at 2,000. amazon is not sears. it is also not the greatest thing since stroehmann's sliced bread. >> got it. took me a minute thank you. >> oh, david david, it is called white bread. >> yeah. >> okay. you could have said wonder that one i know. >> you're right, but i'm from philadelphia >> i'm aware of that >> we mentioned sears, the iconic retailer, sources telling cnbc they are due to announce liquidation plans later this morning. chairman eddie lampert's $4.4 billion bid to save the company was rejected by sears advisers who deemed the offer insufficient all the metrics being pulled out today, no profits in seven years, more than 50,000 employees. 46 quarters of declining comps, 11 years of just quarter after quarter after quarter of declining comps. >> we pointed out many of the

quarters, certainly early on in particular, when it had so many champions, whether it had been tisch berkowitz with the fair home fund when he was lauded for some time and mr. lampert himself seen is a strong investor but not a surprise i can argue, in speaking of plenty of the people around this company now for the last six months or so, done actual reporting on air, nobody surprised by this end here in terms of potential liquidation what is the reason that a sears/kmart needs to exist very much unclear in this current environment. and they clearly believe they can return more value perhaps by liquidating as opposed to just continuing down a path that as carl said has seen nothing but negatives. >> well, remember it was a real estate play, fooled the old home depot management and be able to buy some of the properties i never thought eddie went into it as an actual store.

a lot of the people i think who own big positions never went into a sears and couldn't have gone in a kmart. kmart has been liquidating for years, at least when you go in there. it was so terrible, i bought some tires at sears about seven years ago. and i bought a grill and it was really scary to be the only person in the store i thought it should be a bowling alley, but bowling alleys are, you know, a secondary way to play retail. it was incredible. any single rich person who owned that company simply didn't believe that comp stores mattered comp stores matter more than anything else. you hear that from the days of wt grant the problem with sears, it was terrible >> i don't know. it is not like they didn't have the tools. for decades, the catalog, a path to direct to consumer in itself, kenmore, craftsman, remember the brands. >> great brands. >> you could return a hammer

after two years. it was fantastic i bought a shredder at sears, like fargo, it was during my hedge fund days, only thinking some of the people underperformed, but steve buscemi didn't work. >> thank god you didn't use it in the offices i don't recall that. >> it was a great threat it was a great threat that people would pick bad stocks. >> right >> it just was a way to demonstrate what i thought should happen. >> speaking of picking bad stocks, there was a time, 14, 15 years ago, when mr. lampert was seen as the next buffett he had had a very successful career as a hedge fund manager you can certainly look back and say, why why did you do this? why go down this road, making it your single -- yeah, he had some other good investments on his o autozone. >> give him credit this stock went -- the stock went up big because it was a

great real estate play and real estate collapsed that's what it was i do not think that -- i don't know how much time eddie spent wandering the stores, you and i -- >> no, i know. i know >> you wouldn't change the course of the universe you had to go to the store to turn it around do you think eddie ever got caught dead in a sears >> he did not believe in investment necessarily in the stores was the way to effectively maximize profits >> no. >> but maybe -- >> believe me, when i walked into goldman sachs with a kmart suit, they sent me home. it was corduroy, david corduroy suit. >> i wish we had pictures of that i really do. >> an oldie. >> i had hair then that's what people cared about. >> when we come back, hans vestberg at ces.

and news regarding disney on 5g media partnerships look at the premarket. more "squawk on the street" from post nine in a minute. [knocking] ♪ ♪ memories. what we deliver by delivering.

hey, batter, batter, [ crowd cheers ] like everyone, i lead a busy life. but i know the importance of having time to do what you love. at comcast we know our customers' time is valuable. that's why we have 2-hour appointment windows, including nights and weekends. so you can do more of what you love. my name is tito, and i'm a tech-house manager at comcast. we're working to make things simple, easy and awesome. we increased our investment significantly. i know people first questioned when i first joined the company, you don't have r&d i said, yes, i do. i'm paying over a thousand people every day to bring new products to the marketplace and they're doing a good job getting our products to the marketplace

and importantly products that can help make a difference in patients' lives and that's why we're doing really well and seeing the organic growth. joe papa talking to jim last night on "mad money" at the jpmorgan health care conference. jim will talk to medtronics omar ishrac it gives us a chance to talk about the overall tone from the conference this year what are some of the takeaways >> oh, boy, so positive. and it is positive because a lot of the pbig cap pharmas recognized you can't be a sales force anymore, you have to develop new drugs. speaking of developing new drugs and organic growth, joe papa is putting it up. he's paying down debt. i got to ask david, do you remember when valiant was teetering and why do you think joe papa was able to put it all together >> listen, i don't know. clearly there were those who were more negative than they should have been in terms of the

ability of a company to actually sell some assets, right size the balance sheet to the extent it needed to. and kind of get things moving again in the right direction, jim. you got to give them credit without a doubt. because there were plenty of doubters at the time especially coming off a perego which has been a disaster also and he ran that for some time. one of the worst decisions ever saying no, of course, as they did to potential deal that they had in hand with millen. >> yeah. but i got to tell you, carl, one thing that is exciting out here is that the companies themselves are so optimistic that the tone is great out here. it is not a high five tone, but it is a we'll get it done tone i like that. they want to get it done >> yeah. biotech, one of the best performing sectors since the christmas eve lows as the overall s&p up almost nearing 10% from that level. we'll get cramer's mad dash and

count down to the opening bell, one more look at the premarket here, opening bell in ten minutes and the dow futures up more than 250. i'm ken jacobus and i switched to the spark cash card from capital one. i earn unlimited 2% cash back on everything i buy. and last year, i earned $36,000 in cash back. which i used to offer health insurance to my employees. what's in your wallet? right. but, uh, a talking gecko? i'll tell you why because people trust advertising icons. some bloke tells you to go to geico.com and you're like, really? and just who might you be? but a gecko - he can be trusted. i ask you if you want to save hundreds on car insurance. and you're like, yes thank you, mind babysitting my kids? i'm like, of course i'll sit with the kids. you're like a brother to me. geico.com. fifteen minutes could save you fifteen percent or more on car insurance.

weveryone, looknk isn'tat your phones. the design thinking, the digital engineering, security, blockchain, and we will be first to market!

yes. when we do we launch? unfortunately, in 2 or 3, hours. why the delay? cognizant is helping banks use digital technologies at scale to advance speed to market. all right, time for "mad dash," getting ready for the opening bell, 6:30 from now. back over to jim, unp in the mad dash spotlight this morning,

isn't it >> well, david, i always look at union pacific as extremely well run. it was just a great company. what i didn't know is that it wasn't run well enough dave, do you know jim venna, a disciple of hunter harrison? this man caused four upgrades for union pacific, more than you would get if cargo jumped 10%. >> wow good old hunter harrison, of course, passed away, but was lauded for his ability to run the railroad, so to speak. i don't know this guy, jim, but the market seems to. >> i think it is a little outrageous, david. i have really loved what has been going on at union pacific, yes, been a little bit weaker because of crude by rail kind of slowed down and fracking slowed down but they did have some issues in terms of what was going on with traffic. they were overloaded they solved those issues by hiring more people and getting it together. but it doesn't matter. you know, i remember that csx, i

thought that was well run and people thought it wasn't it was a bit of an insult to the current union pacific team, dong a fabulous job but, jim venna, this man, as a coo, not a ceo, has produced the greatest move in a rail since hunter harrison went to csx. my hat is off to this man. let's understand each other, in the end, it is a railroad, it is not a biotech. >> we'll be watching shares of union pacific this morning and jim will be coming back to you very shortly got to get to an opening bell less than five minutes away. we're back after this.

♪ ♪ ♪ each day, brings new possibilities. that's why you need a partner dedicated to helping your company reach its goals. u.s. bank -- the power of possible. you're watching cnbc's "squawk on the street" live from the financial capital of the world. the opening bell in about 90 seconds. busy tuesday morning as the president will address the nation tonight on television regarding a border wall. ces in las vegas continue to wait for a readout regarding the u.s./china trade

talks. as the president says they're going well, jim. and on a week where we're waiting for preannouncements, big question is whether we're in an apple/samsung/fedex mode or more nike/danner mode. >> danner speaking at 11:00 at the conference, looks like dental is better fedex has to start coming back from the abyss it is in because it has been a nightmare. what i'm focused on is general electric if we remember, near the end of the year, during the christmas massacre time, what happened is we were starting to fret about ge larry culp has been able to have the stock rally on the talk about they can do some liquidating or liquefying divisions. steve tusa, tusa relatively silent about bashing ge. he reiterated $6 target, but i detect a little action from tusa

i think he's going for a spare, not a strike i like what i hear >> ge will be one to watch today. to the opening bell and the s&p at the cnbc real time exchange at the big board, it is janus henderson investors celebrating the launch of the mortgage-backed securities etf over at the nasdaq, american finance trust, a reit focused on retail and commercial properties getting a little news on pcg after your reporting yesterday. >> it was interesting to take a look at shares of pg&e, of course, the utility, we spent a good amount of time talking about yesterday, carl, because they are down another 13%. they took a leg down yesterday this of course on reporting over the weekend from reuters and then "the new york times" and i added this part of this story in terms of trying to quantify the liability they may face both the 2017 and the devastating 2018

fires in california being as much as if not more than $30 billion, also pointing out a few things stock moved down a bit yesterday on our additional reporting. you can see it is down again question now, frankly, you know, where are they in terms of this potential process. will they get a going concern opinion from their auditors. seems unlikely what will that do, accelerate things with their lenders. and is it all a big bluff? that seems to be the belief, those who own the stock or willing to buy it here, that the california legislature will come to their aid in some fashion or forum. also, people looking back to the 2001 bankruptcy and saying there was equity value there then, the stock traded as low as 7 bucks back then and three years in bankruptcy moved up. there was equity recovery value. few people pointing to that,

jim, as positive signs but what i would point to or i'm trying to focus on right now is what is the next step here do they move towards potentially trying to secure debtor in possession financing, which i think would be another sign of their seriousness here in getting ready for bankruptcy we're not done yet in terms of this story for sure. >> this is amazing, david. you talk about a gigantic utility, you talk about a company that people felt, well, this is just one of the safest stocks, it shows you that in this market, in 2019, the same stocks are doing poorly and the stocks that are doing great are the stocks that are made up of hope pg&e versus netflix is an interesting contrast, isn't it >> yeah. netflix up yet again, 19% is the gain just for this year it is a long way from disney's market cap, and back when, of course, the middle of last year, if not through the summer, i think, when it was exceeding the

market value of disney, but, jim, the appreciation of value of netflix which we pointed out has been fairly remarkable, as the f.a.n.g. complex is the biggest winner i can't get past those -- some of those reports i saw i think goldman that came out. this is a company they see spending $24 billion on compton by 2022. those numbers are staggering >> yeah. those and i would compare that with tesla, we got larry ellison with a billion dollar gift people want f.a.n.g. again f.a.n.g. is so hard to bury. every time you think it has given up, amazon says something good about retail sales, netflix unveils its slate, alphabet hasn't said anything apple is -- david, apple is coming back to where it was before the preannouncement what does that say and then facebook, again, facebook has been able to dodge the headlines, the piece that i saw this morning about facebook

still doing well, instagram, people are starting to say maybe -- why did i sell facebook what was it? something about that cambridge something or other, russians, the russians that did it we kind of forgot. the russians, the election, it is incredible how the narrative changed. instagram is doing well. david, facebook was supposed to be at the crux of what is wrong with tech. and now it is, like, hey, you know what, that's an interesting stock. >> yeah. and so, carl, i guess we're reminded of the actual financial performance of these companies as earnings season, as you pointed out, not that far away with netflix coming. we will get a view, again that is based in reality in terms of not just sentiment at this point. though, plenty of people thought facebook, jim, to be fair, was cheap. and continue to believe that, even with all of the head winds they're facing and the additional costs they're facing as well. >> a lot of the -- >> headline risk.

>> there have been some who put facebook on their top ideas for 2019, based solely on a change in sentiment, that would be enough to swing the valuation on a name like facebook given what they have been through the other story will be, jim, some transports, got some traffic numbers out of southwest. 3% plus. and then you have delta, ual and some rails report next week as well we mentioned unp. >> delta preannounced early, this is a good opportunity for delta to put a better spin on it i find the companies that preannounce, this market is very forgiving. carl, 2019 was supposed to be a horrible year. we heard it over and over and over again the people that thought it was horrible got a jump on it and sold in december and we heard again and again in december, you got to get out, 2019 is terrible and then jay powell decided to make it so 2019 wasn't so horrible but yet a trade deal where it

looks like peter navarro of the world, the hard-liners, are saying, you know, death by china, which is quite a book, death by china is saying that they are a mortal enemy. we're not hearing that kind of rhetoric trade deal, maybe earnings not so bad, expectations very low. jay powell joining the idea that, you know what, we don't have to end the business cycle in order to save it. these are all new themes, just when everyone told us to get out, get out, get out. even europe's doing well, the stock market, not the business. >> so where is your radar, jim, in terms of how much credit a rally is given and to what level? people talk about 26.50 being a real test. does this rally get full credit if you're still dealing with the sort of end of cycle worries >> well, one of the things that is a little nutty is the order of how companies report tends to define what happens to the s&p i like your analysis of where it

could go but we have companies that report, the banks that report, and you to hope that wells fargo, the day that wells fargo and jpmorgan and citi report, bank of america, we need to see better numbers and then goldman sachs could be very, very important will they actually come out and say something about malaysia, will the justice department let them say something about malaysia obviously goldman very important. we have a downgrade today of mastercard that is completely unbelievable. and against the gospel o payments so we have to watch the order of how companies report, and if they report good, the financials report good, then i think that the rally can continue if the financials sputter, we're going to have seen the top for a little bit >> yeah, good call on mastercard, b of a to neutral. worries about cross border deceleration into 2019 and, jim, we talk about f.a.n.g. a lot here this morning, but also procter to their u.s. one list saying we're not calling

for a recession, but even in a turbulent market environment, pg tends to outperform. >> yeah, i keep hearing good things about pg internally i keep hearing that nelson peltz has been terrific as a catalyst. what i love is the 3% yield, the idea that that dividend will go higher and a lot of what procter makes, of course, let's remember, is somehow oil-based in some way or another. oil did collapse, that will reverberate through the procter chain. i'm watching the dollar. the dollar is starting to go down a bit jay powell being a lit bit softer that will help procter procter is the stock that you want to own if you don't believe the economy is really going to roar back. i think that the possibility of the housing stocks being a better place than procter, i've been watching them very closely, tells me procter will be good, only because of internal things at work with procter, good stock, safe stock, no one got hurt by procter when oil goes down remember what a bottle is made

of, not made of glass. >> jim, speaking of bottoms, bristol-myers doesn't seem to have found one yet you had an interview yesterday with the ceo of bristol-myers and celgene. you were kind to them, more constructive on the deal in some ways than we did in our initial conversations about it but the investors don't seem particularly constructive yet. if i told you it was going to be down more than apple this year, so far, and it is, at a 7.5% loss, interesting. they just did a deal they didn't want on earnings >> well, look, they're buying celgene at six times earnings. this is a company that if you wanted to, you take out a lot of costs. synergy is real. i believe there are five drugs that will replace revlimid, revlimid is a lot of what celgene is some say it is all that celgene is some don't like the doubling down on oncology there are too many companies

focused on the needs of oncology instead of unmet needs nobody is focusing on. i think the combination is going to work. i love the word that you said that i was being kind. i'm not comfortable with being kind but i do believe that you have to be, let's say benevolent toward this combination. >> jim, as we're talking dow jones with china headlines here, negotiators between the two sides narrow their differences on trade made progress on a number of issues including purchases of u.s. goods and services. cabinet level follow-up talks expected later in the month. the two sides still not ready to conclude a trade deal. but is that essentially why we're up 276 >> yes and, remember, this thing that we need to see is american express, the one most wanting to be in china, granted a franchise saying we do not need you to be with some bogus company and then we need to have some company be

repudiated at the top level that has been stealing a lot of intellectual property. i'm not -- remember, at times we have known that thousands of people have suffered -- have had capital punishment for white collar crimes. that seems insane. but remember communist dictatorship if we can see some discipline and some more than just knuckle wrapping from some of the companies that have been stealing technology, you have the sign that even navarro, even navarro would be at peace. remember, when you talk about peter navarro, he's the hardest of the hardest liner, lighthizer doing a great job negotiating. i think there will be a deal in china, and nobody thinks there will, but we are starting to hear really good things. we just need american express to be able to its franchise that will be the bingo. >> there is a continued focus on not just reaching an agreement in principle, but how do you actually get the chinese to comply that's certainly going to be a

key consideration, already is, in terms of where they are in moving towards a potential deal. but certainly these headlines -- >> how about a double boeing orders that would send a strong signal. >> sure. but the key is the chinese can say, we'll do this, we'll do that, how do you keep them to it how do you make sure and/or is there some sort of penalties or what are the mechanisms by which you actually get compliance to whatever it is you agree to. >> well, i think that's what's holding up the final resolution. remember, with reagan, we had the true trust and verify. they got to let us be able to verify we can't have any more huaweis, worldwide outcast. terrific to see they would come back and say, you know what, people should be very comfortable buying apple phones. we feel that maybe apple, they do great phones. i'm not asking for a big

officers in the communist party to be walking around with the 10r, but i think we need a lessening of the united states is not who we -- we all want to buy nikes. they should be buying nikes. >> yeah. one last point, jim. you mentioned what goes into the cost of a bottle monster gets up by sun trust today in large part because of declining input costs, better for margins, stuff you've been saying about clorox, for one, for over a month now >> yeah. two things i think if you drink are dangerous for your health. i think that this monster comeback, which was also -- a lot of people thought that james quincy from coca-cola had broken the historic buying between monster and coca-cola, i like the idea of monster, i don't think that james quincy wants to buy it raw costs coming down, particularly with, we hear from pepsico, we need to hear the driver situation has been solved, that driver costs have come down and we need to hear

that gasoline is actually very positive for companies that deliver to the stores. i like what is going on in the consumer packaged goods because of the decline in the price of natural gas, liquids and therefore plastic. >> up 320 now to start the tuesday. let's get to bob pisani on the floor. see what's moving. >> hi, carl. we took another leg up on those headlines you were talking about, negotiators narrowing their differences on the trade issues we had other headlines overnight that helped us very strong to start. 3 to 1 decline advancing to declining stocks look at the sectors here two sectors i want to highlight. retail, on a tear, they have been on a tear for several days now, not just amazon, but nordstroms up 7% this month, macy's been strong, tiffany, dillard's, the whole group the semiconductors, despite samsung warning, all the semiconductor stocks trading up in the united states here. energy is up 10, 12% since bottoming late december. and the industrials, it is not just unp they have a new coo. the whole sector is moving up

nicely here. i want to point out general electric over 9 at the open i can't see it from here, 8.78, it was $9. this was $6.70 december 21st or 22nd that's a huge move up. every single day ge coming off the lows the big story is samsung, this would have been a disaster five or six months ago. a lot has come under the bridge since then samsung cited mounting macro uncertainties. they did not mention china by name lackluster demand of memory, intensifying smartphone competition. they didn't mention china. china is an issue here they get revenues all over the world. this is one of the most diversified companies in the world. we put up the next full screen, europe, 19%, china is only 16% of their revenue korea, other big diversified company here the other good news, look at the chart here, they priced this in. we're down 10% in samsung since november and more than 25% since may.

that's a straight line down there for samsung. same thing with lg electronics this is what, the second biggest televisionmaker in the world, also a big smartphonemaker they also warned on fourth quarter, but that stock is down 35% in the last seven months look there, essentially straight down for lg electronics. a lot of bad news has been priced into the market recent earnings warnings, we had this just a few weeks ago. we talked about fedex, they said the u.s. economy was solid but europe was weaker. micron talked about the chip environment being weaker all of this with that wave of downturns that we saw in late december that got us all so nervous and depressed about the market here is the question now, how much bad news is actually priced into the markets right now we have seen a very notable turn around, just since the recent buy. the s&p up 8.5% since bottoming a week and a half ago. oil is up 16% since bottoming. the vix was 36 ten days ago.

what is it now 20 roughly 20 now that's enormous move to the downside obvious ly a lot of panic set in around the markets' anticipation of the problems we were talking about i don't know if it is a bottom or not, but the market is certainly acting like trade and the fed clarification are the two things that help turn things around there you see the markets. there is the dow jones industrial average, december 3rd, down 4,000 points to december 24th. that's an enormous drop, worst since 1931 since then regained almost exactly -- now more than that, it is now more than 2,000. we have regained more than half of the losses we had in that terrible month back to you. >> bob pisani. yields also high for the year, back over 27 to rick santelli in chicago. good morning. >> good morning, carl. you nailed it. look at the two-day chart of 2-year note yields up three basis points. from low to high intraday over 24-hour trading period, we have

gone 11 basis points from 246 to 257. now if you look at the two-day of 30s, different story. it is unchanged on the day, even though it is totalling the gains from yesterday back to carl's point, treasuries, if they close here, 2s, 3s, 5s, 7s, 10s, all at 2019 highs, except for 30-year bonds which have closed above 3% and nearing that hovering, just below $2.99. if you look at 10s minus 2s, it jumps out at you we had curve flattening today is an interesting day. today's curve flattening with rates higher that means something, we want to pay attention to that. foreign exchange, one week of the dollar index, it was always holding the 96 on the closing basis, toying with 97, for two and a half months. now we're trying to block through on 96 from below that level, this is very significant. whether it breaks through in a closing basis or not, you see

that we close at the lowest level since about the third week in october on the next chart and finally bob just mentioned this, the vix. you get out of the intensive care unit, you might be less apt to call an add to your life insurance size that's what the vix reflects on this chart starting in december. we have gone from 36 on a closing basis to 20. we have almost sliced it in half and the reason, because we're buying less life insurance on the ultimate direction of the equity markets carl, jim, david, back to you. >> thank you, rick talk to you in a bit as we go to break, the morning's top performers on the s&p, unp leading the charge with monster. boeing and cat leading the dow up 262

one-millionth order. millionth order. ♪ there goes our first big order. ♪ 44, 45, 46... how many of these did they order? ooh, that's hot. ♪ you know, we could sell these. nah. ♪ we don't bake. ♪ opportunity. what we deliver by delivering.

markets reflecting new optimism involving u.s./china trade.

negotiators are narrowing their differences. more talks planned later in the month. boeing, cat, dupont leading the dow. we'll get stop trading with jim in a moment. i am a family man.

i am a techie dad. i believe the best technology should feel effortless. like magic. at comcast, it's my job to develop, apps and tools that simplify your experience. my name is mike, i'm in product development at comcast. we're working to make things simple, easy and awesome. let's get to a cross-country edition of stop trading.

jim? >> you know, look, everybody is excited about the semiconductors credit suisse decided to rain on the parade they are talking about nvidia. the overhang persists. do not be so aggressive. i have to tell you this is an opportunity to buy nvidia yes, one quarter that is a gap buy some now and when they report their new chip came down in price. my friends in the gaming industry say people are going to start writing for it they have machine learning, artificial intelligence. don't give up on nvidia but recognize this quarter is still not a good one >> all right, jim. how do you follow up last night's "mad money"? >> well, you know, we're going to bring in brent saunders from allergan people are still saying it's not transformational the stock has been cut in half maybe at a certain point, let's say we have to wonder what allergan is really going to do >> jim, see you tonight. "mad money" 6:00 p.m. eastern

time a big week as jim remains at the jpmorgan health conference in san francisco. dow up 230 here. almost every component is in the green. jpmorgan the one laggard as jeffreys cuts that to a hold today. we're back in a moment

good tuesday morning welcome back to "squawk on the street." i'm carl quintanilla with dave faber and sara eisen most components in the green weird reversals in the early going regarding semis, the vix swirling around the low 20s. data coming out as well. let's get to rick santelli in chicago. >> a bit of a miss we're expecting joeltss to give us the fourth ever 7 plus million job openings but we end up with 6.88 million and that follows sequentially an upwardly revised 7,131,000. what's noteworthy there is that revision makes that number the second highest, the first highest was august when we were just shy of 7.3 million.

and these are really great numbers. 6.88, spectacular. but it is a reversal and we've seen the reversals from very lofty to above average levels in many of the other feel-good type indices like ism and, of course, some of the regional feds. this is a much more quant type number so we should pay attention the fallout, still hovering at the highest levels should we close there in short maturities though we've come off just a basis point. sarah, back to you >> thank you our road map starts with sears facing liquidation after 126 years as a big buy the ceo fails to save the company. >> stocks moving higher. according to dow jones, u.s. and china negotiators are narrowing their differences. negotiations are set to continue tomorrow we're going to dig in on what that could mean for markets. plus, live to the consumer electronics show in las vegas where the top names in tech are

unveiling what is in their pipeline >> first, though, stocks sharply higher this morning. investors cautiously optimistic about progress being made on a china trade deal sources telling dow jones that negotiations and negotiators have narrowed differences, but the two sides not yet ready to conclude a deal. progress made on issues like purchases of u.s. goods and services and that more cabinet level talks are planned for later this month with us now, yuri from fidelity investments and alan, deutsche bank's strategist. talks are making progress, differences are narrowed sounds positive. and cabinet level talks are coming next. >> how many times have we gone to and fro on this particular story, really? it feels like there will be so many more iterations, really, before we get something definitive i'm reasonably optimistic that both sides need a deal

obviously, the more negative you see risk appetite on the u.s. side, oddly enough that propels the u.s. and pushes the u.s. forward towards a concluded deal >> it just adds to the better tone and centism we've seen. is it safe to get back into the market >> i think the risk/reward here has been pretty good over the last month or so we got that big washout. hit 20% down for a new york minute we saw record outflows which is unfortunate because the human nature is to sell when things are going down and a lot of people locked in losses, down 20% but as we know from being in the markets for a long time, when a market stops going down on bad news, a lot of bad news has been discounted and i think we're starting to

see that whether it was the samsung story or what have you so i do think the market is on a better footing whether something comes out of the trade talks, my guess is that it is certainly a 20% decline will focus the mind to get something done but i do consider this to be a very long-term containment strategy so i wouldn't ring the bell too quickly on something positive happening, although it likely will for the near term but ultimately, the market had to derate because of softer growth and tighter liquidity and i think that's what's happened we saw briefly a 13 handle on the p/e a few weeks ago. so i think the market is fairly compensating investors for less certainty or more uncertainty than what we were used to in recent years >> do we put recession risk fears aside, alan, or is that still on the front burner? >> no, i put it on the back

burner we've been looking at a variety of financial indicators based on where prices were off the recent sell-off and what our financial conditions indicate is still suggesting that q4 and q4 growth 2019 would still have at least a two handle on it so that's a long way from recession. it's slightly above rate growth. you can get into circumstances where you get into financial conditions tightening, weak growth and feeding back into financial conditions but you really need to get into an environment where you get into that negative flow. that negative cycle where financial conditions drive the data, that drives financial conditions i don't think we're really there. certainly not in the space of 2018 and i don't even think in the space of driving the recession any time soon. >> we just put a graphic up. you're expecting the dollar to weaken will that be helpful for overall risk sentiment and growth and earnings >> the dollar has gone nowhere essentially for a while.

the dxy over the last six months it's been tracking around 93.5 to 97.5. it's near the middle of that range. i don't think it's going anywhere very quickly. i don't think it will be the key element in terms of financial conditions the thing i'd be watching most is if the credit spreads balloon. the leverage loan market is crucial. corporate bond market in general is crucial from a financial conditions standpoint. i think the dollar is very much an aside >> jurrien, how are you thinking about various hot spots around the world? samsung getting a lot of attention in south korea this german ip number is no good and hasn't been for five of the last six prints. how much of that matters to us >> well, it matters. global growth has been slowing for a while now. it's just the u.s. was immune to it because of all the fiscal stimulus we had. and now the u.s. is going from great to good while the rest of the sworworld is going from good to --

that doesn't mean we're facing a recession and one of the bright spots is with the fed on hold for a while or maybe even done for the cycle it gives china much more leverage to reflat its economy and actually see some results from that. as we know what's called the impossible trinity if the chinese currency is linked to the u.s. dollar, then basically china is importing u.s. monetary policy which has been tightening, while china has been needing to ease and, of course, on friday it lowered the triple r rate and these moves will now get a lot more traction now that the fed is basically out of the picture for a while. the dollar is starting to come down, and i think that will be a story in 2019. so my sense is on the global front. especially china em. samsung plays into that. maybe we're going to start getting better traction on efforts to stimulate while the u.s. is slowing. so i see a big convergence

happening in 2019 between the u.s. and the rest of the world >> all right, guys good discussion. we'll leave it there on this market rally jurrien and alan ruskin. the fate of an iconic american retailer. after 126 years, sears is due to announce liquidation plans today. courtney reagan is back at hq with more details on that. amazing story. >> sears has rejected chairman eddie lampert's $4.4 billion bid to save the company setting the retailer on a path to liquidation after more than 125 years in operation it's a sad day a bankruptcy hearing was scheduled for 10:00 a.m. this morning and sources tell cnbc the retailer plans to tell the judge it wants to liquidate and the hedge fund will protest that decision though esl declined to comment. they had until this morning to come up with an offer to save the company. when sears filed for chapter 11 bankruptcy october 15th, lampert

stepped down as ceo but remains chairman he personally owns 31% of sears shares his hedge fund esl owns 19%. he and his fund are the largest equity and debt holders. before the bankruptcy was filed, though, lampert had planned to restructure or proposed one to try to avoid all of this this only came after years of various complicated financial engineering maneuvers that lampert and his hedge fund undertook to keep sears running. sears holdings hasn't made money in seven years shoppers have been complaining of empty shelves and racks at sears and kmarts sears holdings had more than 4,000 stores in 2011 at the store peak it had around 700 when it filed for bankruptcy in the fall at its sales peak in 2007 sales hit more than $53 billion in annual revenue its most recent fiscal year, january 2018, sales were $16.7 billion with assets of more than

$7.5 billion and liabilities of more than $11.3 billion. carl, there are 50,000 employees today that are likely to lose their jobs in the coming weeks back over to you >> we'll be looking for headlines that make this more official today courtney reagan, thank you when we come back, cramer is back from the jpmorgan health care conference in san francisco where he'll have a big interview. meds tronnic and its ceo omar ishrak take a look at the top performing names on the s&p. dow up 263 i am a family man.

i am a techie dad. i believe the best technology should feel effortless. like magic. at comcast, it's my job to develop, apps and tools that simplify your experience.

my name is mike, i'm in product development at comcast. we're working to make things simple, easy and awesome. fl let's get out to san francisco where cramer is at the jpmorgan health care conference. jim? >> i've got to tell you. we've got one of the most exciting stories here. not necessarily -- it's a good one and could be better than people realize i've got omar ishrak of medtronic. omar, can we get a do-over what happened yesterday your stock got crushed because of what i regard as pennies. i want to hear about the dollars. what's really going on is the deutsche bank note about commentary spooks investors, the barclays note back in the penalty box. are those adequate descriptions of what you said yesterday >> not at all. look i would say -- i've said it before and i'll say it overed in over we stand with the strongest

pipeline that we've ever had in this company across its breadth and we do certain things with technology we innovate. we create new markets and disrupt our own markets, and we've got that across a breadth of technologies we've never had before and no one else has we think these are game changers and we'll be in the middle of that >> omar, the research is saying otherwise. it's saying there was a guy down in cardiovascular. some are saying abbott is taking share. others are saying that this is the same old medtronic kristin stewart. if it isn't one thing, it seems to be another when it comes to medtronic. spotty record. what do you say to that? >> well, look, we had to give a heads-up on some tax issues that may be possibilities not something we've given up on. something we're going to work on, and we'll get this thing right. but the most important thing here is our technology and, you know, that one cardiovascular issue is one thing. but it's much broader than that. we've just introduced a product

called the micro it's a pacemaker it is what the company was started on 60 years ago and we've reinvented that market and disrupting that market we're going to upgrade that product so that it addresses almost 60% of the addressable population that's a major step. this changes people's lives. that's what we're all about in cardiovascular we're going to -- we recently acquired a company with a robotics -- for spinal implants. that's a great company but what we've done already is integrated our stealth navigation system together with that product and now it's a new product which we launched and it's being received enthusiastically everywhere. together with that, spinal implants that give us a unique position in technology >> let's talk about mazor. this could be the next intuitive surgical a $56 billion company. can it be that big

are there other uses, and how big is it right now worldwide versus what medtronic can do with it. >> it's at its formative stages. it's just starting and what medtronic can do is take a product like that and company like that and scale it at a speed that that company alone cannot even reach. and by the way, it's more restricted in procedures to spinal procedures, but spinal procedures are one of the biggest health care challenges and in planning, those procedures, in the implementation of those procedures and the guidance of the implants, this is invaluable product. and that's what we will drive. what we can do which other companies may or may not be able to do is not only take the robot but add in other associated technologies integrated with the robot. in addition to that, add in the final implant itself, which we manufacture. that combination of product is absolutely unique to medtronic and one that i guarantee will make a difference in this

market, and we'll drive it >> let's understand each other this is the jpmorgan conference. most talked about raising numbers or saying good things. i go through the narrative you outline. somehow medtronic got pegged to the idea you devoted two inches to mazor. two inches was it really the people's fault or was it your fault that the story got trapped into tax rate and a part of cardiovascular because this was the story i don't know whether i should blame medtronic or the sellers for why people didn't like this. >> whatever happened, happened the important thing is the reason it was so small was not because of tax and everything else there are so many other things if you look at that page alone, there's neural modulation, brain stimulation, where a year from now we'll be launching a product that senses brain activity in addition to stimulate for parkinson's disease and other movement disorders that has never been done before. that's a game-changer. >> i know this

so you're talking about implanting something, a chip, that would make -- i know the ucsf are doing this. it's experimental. you're saying this -- >> this will be a product we'll release about a year from now. this is the first time a stimulator will have associated with it a sensor which tells you an accurate and quantitative way what the brain is doing so the stimulator then can readjust it accordingly. >> this is something i've heard over and over. it's experimental and not be able to be blown out within a year, not in our lifetime, we will -- >> within a year >> -- have this? tell people what that would mean for people with parkinson's. i've seen the proets prototypet it can do. >> this is night and day people who suffer from that condition get immediately cured. >> immediately cured >> immediately cured -- >> millions. >> millions of people. so i think this is a big step. and, again, it's a year from now. but that's one more example. there is many more examples. >> a year from now, then why are

we using this talking about 5.5 versus 4 why did you get trapped into a narrative about tax rate and a small part of cardiovascular >> well, i mean, that's up to others to kind of take from what we said. the majority of our dialogue, in my own presentation, it was about technology about our pipeline that is something that we have built this company around. something we're dedicated to we're broader than anybody else. and one that we will ensure that this company leads in that area. >> so what do you say to people that say it's been spotty. that your record has been spotty and the stock is at 82 because of execution issues? >> well, nothing has happened yet, okay? quarter is coming up we said we'd deliver the quarter according to guidance. and a two-year stack basis, we've grown at 5%. and so this is something that we will do. and to the degree that we have pressure, we will work to offset

that and that's what i'm determined to do. and we will do everything we can to ensure that the company delivers on its commitments, not only technologically but financially. >> you know, i think that your stock is just way too cheap. it's kind of crazy 82 bucks bye, bye, bye. omar ishrak, chairman and ceo of medtronic. thanks for getting the story the way it should have been. sarah, back to you >> jim cramer, thank you many more interviews from jim throughout the day coming up -- former nissan chairman carlos ghosn making his first appearance in japanese court today. we'll have the vy te wn erlasthe "squawk on the street" comes right back why are you so good at this? had a coach in high school. really helped me up my game. i had a coach. math. ooh. so, why don't traders have coaches? who says they don't? coach mcadoo! you know, at td ameritrade, we offer free access to coaches and a full education curriculum- just to help you improve your skills.

boom! mad skills. education to take your trading to the next level. only with td ameritrade.

welcome back time for our etf spotlight morgan brennan is looking at industrials. they are leading today's trading with union pacific as one of the top gainers due to their addition of a new man people seem to like a lot >> a whole lot a big move for that stock. industrials, name of the game today. xli industrial select spider etf. off highs of the morning but still definitely an

outperformer big contributor. union pacific. top holding in that fund, it's up 9%. a big move for that stock. the freight railroad hired canadian national veteran jim vena precision scheduled railroading as part of the longer 2020 plan at that company. vena is well regarded by the industry and wall street it's an operating strategy that's been controversial but it's also made investors a lot of money over the years and such a big reaction today norfolk southern also adopting precision railroading is also up about 2% as well it's worth noting dow transports are trading out of so-called bear market territory with this move higher today. but it isn't just those transport stocks bouncing either caterpillar, 3m, united tech moving higher as the u.s. and china meet for trade talks seems to be more optimism there. and boeing is the biggest gainer

on the dow investors await what are expected to be record delivery numbers for 2018 we're supposed to be getting those soon all of this is helping the xli today. keep in mind, still down about 14% over the past three months in this bigger sell-off and direction that weave seen. >> morgan, thanks. >> thank you former nissan chairman carlos ghosn speaking out for the first time today after his arrest and appearing in japanese court this morning phil lebeau joins us with more >> this is the first time we've seen or heard from carlos ghosn since november 19th. that's 51 days ago he was brought in to a hearing in tokyo, japan, this morning. everybody who is in there, the reporters say he appeared to be 10 to 15 pounds lighter and that a little bit of graying as he spent this time in jail. he basically said, look, i am innocent i have disclosed all my compensation from nissan those are the allegations against him. that he was not fully disclosing his compensation in a statement he said i've always acted with integrity and

have never been accused of any wrongdoing in my several decade professional career. i've been wrongly accused and unfairly detained based on meritless and unsubstantiated accusations. he may be detained for a little bit longer here's what's next in this case. he's detained until at least friday when a judge will make a decision on whether or not he can be let out of jail on bail but his attorney yesterday in a press conference after the hearing said there's a possibility he could be indicted by friday and re-arrested which would mean he'd continue to be detained nissan, the corporation, issued a statement saying separate from everything that's going on in a japanese courtroom, their internal probe found financial misconduct on the part of carlos ghosn. that's what the company has to say. so, guys, we expect this to play out not over several weeks but several months could go well into another year before we finally see what happens with carlos ghosn in japanese courts.

>> wow what a story phil, thank you. phil lebeau in chicago, of course, on the latest with mr. ghosn. all right, up next, 126 years after first opening its doors, sears heads down the path of liquidation we're going to speak to two retail experts about the end of this iconic company and what it means at this point for the retail landscape "squawk on the street" right back

good morning i'm sue herera here's your cnbc news update at this hour. secretary of state mike pompeo holding a news conference in amman with his jordanian counterpart. he's in jordan to begin an eight-nation trip of the middle east pompeo says he's looking forward to strengthening ties with the jordanians >> to working continually to counter tehran's influence in

the region jordan made a powerful statement by recalling its ambassador to tehran last year in protest of the flagrant transgressions of sovereignty and security >> kim jong-un arriving in beijing for his fourth summit with chinese president xi jinping. his four-day visit comes after he expressed frustration over the lack of progress in negotiations with washington since his summit with president trump seven months ago back home, the clemson tigers are college football's champions for the second time in three years. they crushed alabama, the defending champs, 44-16, to finish the season, 15-0. they are the first team to do that in the modern era you are up to date that's the news update sara, back downtown to you >> congratulatory tweet from the president at that. thank you. welcome back to squawk on the street i'm sara eisen with carl quintanilla and david faber. one hour into trade, and stocks

are rallying off the best levels of the session, though s&p up 0.5%. most groups are higher within the market led by energy and industrials. the only group lower right now, the banks ahead of earnings next week the nasdaq is up about 0.3%. yields up. the dollar is up overall a better risk sentiment on signs of progress, day two in the u.s./china talks and let's dive deeper into that story. elon is on capitol hill following the latest on the trade talks. what do we know? >> those talks will now go into day three. that came out of some headlines from beijing we've confirmed that stateside as well. chin had allotted two days for these talks to conclude, but the u.s. had always kept the time frame open ended in order to see how things went. apparently they're going pretty well china had also said that there was some progress being made on narrowing the differences between the two countries. those were some reports we saw

out of beijing the u.s. had sent china a list of 142 requests that they felt had to be dealt with in any negotiation. perhaps some of those items getting crossed off the list also some headlines out of beijing that this meeting in beijing will be followed up by a cabinet level meeting. that would be with secretary mnuchin, ambassador robert lighthizer, perhaps vice premier from china no word on where those meetings would take place or if they'll definitely occur the u.s. trade representative's office has not yet confirmed that to us but also out of beijing, there are reports that there is progress particularly on the front of purchases of goods and services from the u.s. if you remember, secretary wilbur ross on cnbc yesterday saying that was the sort of first goal for these trade talks. reducing the trade deficit second would be structural reforms and enforcement. larger issues but first step is to make progress on that trade

deficit, and it seems like they're doing so president trump does appear pleased with the way talks are going. he tweeted earlier today the talks are going well we'll see if more details come out after the meetings finally conclude tomorrow. back to you. >> thank you at least we're getting an additional meeting tomorrow, ylan mui investors watching them, too. every headline out of the outgoing trade negotiations. stocks well off the highs of the session. let's bring in kevin carron and jimmy. morning. good to see you. here we are again sort of reading tea leaves on twitter. does this round of optimism feel any different than ones in the past >> i think it does a little bit. you also have the president not exactly lowering expectations here the president is super positive. the cabinet positive markets reacting to that

i think in the end, markets are not really going to care very much about the details of any deal that's struck as long as a deal is struck and directionally, it looks like we're going toward de-escalation rather than escalation i think that's a very doable goal >> kevin, does that explain the strength we saw at least at the open >> i think so but i'd be careful putting too much weighton any one thing. if you look at china, china's stock market is off over 30% trading at levels where they haven't been since 2014. and manufacturing there is weakening. so overall, china in particular needs to see some enlivening action in their economy. and to take the threat of a protracted trade war off the table would be a big win for china. so the devil is in the details, though remember, if they are looking for structural reforms, those are going to be -- those are going to be tougher to come by it will be interesting to see what comes out of it but body language is good here, for sure

>> i'd also keep an eye on -- what this deal is really going to require of china, it's probably not going to be like an offer on thing where this could be a phase down over a number of months or even years as china meets certain goals. if this is going to be a real deal, that's actually going to change how the u.s./chinese economic relationship, it's going to be a tremendous monitoring operation by the united states. i'm not sure we're really ready to do this under this administration which has had trouble filling basic positions. from that perspective, that's a long-term thing. but like the good news pop that, yeah, we'll not have more tariffs and 25% tariffs on everything, that can come right away >> kevin, we don't have an accurate picture exactly as to how it's affecting us because some of the data releases are being delayed because of the partial government shutdown including the trade report which is why there's so much emphasis on some of the surveys which have actually shown some weakness on the u.s. economy what's the latest on how much damage this is doing globally

and to the u.s. and whether, even if we get a deal there could be more months of pain >> yeah, well, we just published our outlook at washington crossing on our website, and it's all about the trend this year which has been weakening foreign conditions some concerns about a very significant ramp up in credit and emerging markets and a dislocation between emerging markets and china performance versus the united states which has been an island of strength and prosperity the last year ultimately, though, we are tied to the global economy. especially china so if we don't see an improvement there, that could make for some tough sledding in 2019 ultimately, this trade thing has to be resofld, but as i said before, the devil is in the details, and structural reforms are hard to monitor and hard to achieve. >> and jimmy -- >> i think -- go ahead >> i was going to say, let's switch briefly to the politics of government shutdowns. do you expect the president's

address tonight to change the calculus surrounding that, and, you know, a lot of headlines swirling about how the shutdown is starting to bite, quote/unquote, as we're into a full pay period now for some workers. how does this matter to federal workers, contractors and the economy at large >> yeah, well, listen, it's a lot more uncertainty if this goes week after week there's already analysis showing it's knocking off 0.1% of gdp every week it goes on. you expect to catch up on the other side but i would think the risk here is what the president does next. it sounds like they have given up on the idea that they'll win this battle, a straight-up toe-to-toe battle with congress which is why you see the president talking about emergency action i think this speech tonight is laying the political groundwork for that that could be a mess could be litigation. could go to the supreme court. you have the president's third

year being consumed, hopefully no longer by the trade war but litigation about the wall and immigration and we don't know what happens with the mueller report if you are looking for washington to do positive stuff, this is not a good direction >> the trump administration gets another high-profile appointment opportunity with the world bank president, jimmy abruptly resigning three years early. this could be a chance, i think, for the president to put additional pressure on china and emerging markets who have been fighting for more of a say and more influence at these multilateral organizations like the imf and the world bank when it comes down to it, this is going to be an american appointment. >> it will be an american appointment. peter navarro, we have a new assignment for you china would not want to see that right. so you can really put someone in that position who very much reflects the president and, listen, the u.s. remains a very powerful, influential country. and we have many, many levers if

we want to make things painful for beijing. >> kevin, you've been suspect of the markets going into the weakness of the fall, and i wonder if the action of the past four or five sessions has made you think, time to jump back on the train. >> not really, although there are some positives the positives mostly would be a correction in valuations that actually lifts forward looking returns. but whatwe haven't seen yet is a turn in the foreign data and investor enthusiasm. the data here in the united states, employment, that kind of stuff is strong but we'd like to see a pick-up in investor enthusiasm to that end, if we get relief on trade and interest rates, that would boost enthusiasm which could feed back into the economy. maybe that's the turn. maybe we'll see a turn in the next few months but we're just not seeing it in the data yet. >> we'll see how that stands kevin, jimmy, thanks, guys

see you soon when we come back, an iconic american retailer apparently heading for liquidation. we'll find out what other retailers should learn from sears as we go to break. take a look at the major earnings dow up 142 s&p 9ndhae.up a cng ♪hold on, i'm comin' ♪hold on, i'm comin' ♪hold on don't you worry,♪ ♪i'm comin' ♪here we come, hold on♪ ♪we're about to save you i'm comin', yeah♪ ♪hold on don't you worry,♪ ♪i'm comin'

[kno♪king] ♪ memories. what we deliver by delivering.

yale professor stephen roach says apple could be the canary in the coal mine when it comes to the markets find out more on "tradingnation.cnbc.com. more "squawk on the street" is coming up.

let's get to sears after 126 years, the once iconic american retailer is planning to close its doors for goods due to announce liquidation plans later on today they rejected chairman eddie lampert's $4.4 billion bid to save the company and the 50,000 jobs at stake. lampert's hedge fund esl investment plans, too peel that decision joining us is former sears

canada chairman and ceo mark cohen, director of retail studies. we've talked about this day for years, in theory, and now that it's finally here, i wonder what your thoughts are. >> well, to your point, as you know, i've been saying for years on cnbc and elsewhere that the die was cast on this miserable outcome in 2000 when sears roebuck's board gave lacey the job. he bumbled along for five years and then handed the company over to eddie lampert the fact is that this is a tale of stupidity and recent events, as you know i've been saying for a very long time were inevitable lampert is proof positive that just having a lot of money doesn't mean you have any intelligence or skill or capability, and he certainly hasn't demonstrated any of that.

in fact, i would submit he had no intent to run this company in any way other than to line his own pockets. so it's not a surprise that creditors are pushing back on the scheme that he's come up with to take the company out of 11 through use of a credit bid they see right through the fact that there is no future for this company, and even if it is somehow allowed to come out of 11, it's going to go right back into liquidation promptly. >> when do you think the last period was where the company was saveable as it -- was it before lampert's tenure or at some point during >> well, i think that the company was damaged in the 2000 and 2005 period by a ceo who really didn't know what he was doing. but the company was not fatally injured. it could have been remediated. it could have been put on a more

successful track, even with some of the mistakes made in that period this is a company that, as you know, had originally had this enormous bond with customers on a direct to customer basis through its catalog. and in 2000 was making plans to go back into that mode through sears.com. but that strategy, which had no leadership, basically went nowhere. this is a company that could have been the amazon of today as it once was the amazon of its day when it was founded. >> mark, talk us through your own experience at sears. in the marketing department in canada, and when you went from insider to very vocal critic >> i joined sears in early 1998. the company had had a heroic turnaround from about '92 to '96, '97 when the turn around stalled, i joined as a senior merchant. quickly became the chief

marketing officer and shortly thereafter, president of softlines. in '98, '99 and early 2000, the company basically got back on track. it had its best year in its history in fiscal 2000 the company had gotten into some flights of fancy with very, very attractive marketing that did not relate to the merchandise in the store or in some respects to its actual core customer, but the company got back on track, and the company was producing an enormous amount of free cash flow and had restored its comp store sales, which is a vital component of a legacy business, certainly. arthur martin was the ceo during that period so he created the turnaround he presided over the turnaround's second chapter, but then in 2000, he retired and he was replaced by someone who really did not have any idea how to run the business. he was a financial executive

from sears and he purportedly had merchandising experience but that was not the case. in 2001, i went up to sears canada as chairman/ceo i had some familiarity with the sears canada operations because i was servicing them through sears roebucks overseas and sears canada which had a seven-year run of tremendous success had also hit the wall in an acquisition of a bankrupt retailer in canada my principal role was to shed that issue which we did promptly and get that company back on track. >> mark, we appreciate the insight. obviously, and some of the history we're deal with today. mark cohen talking sears let's continue that conversation with former target vice chair and former toys "r" us chairman and ceo jerry who is here with us head of storage advisers

is mark being too hard on lampert? >> let's take it up a level and look at the broader picture. so, you know, retailer is undergoing a massive revolution. sears really got hit with a one-two strike there are two parts of this, sears and k mart the first was the advent of discount retailing in 1962 the same year when target, walmart and kmart began within a short period of each other this has been several decades since where discount retailing has been dominant and walmart and target aren't doing too shabby the sale of kmart is certainly a tale of a company that was not managed well and that could not compete. keep in mind it was bankrupt, kmart, when lampert bought it in 2004 now let's go to sears. sears was, in fact, the amazon of its age the greatest company that retailing had ever seen, right and it did go through some ups and downs since that 1962 period in fighting against the discount retailers.

but then it got the second hit when amazon started about 25 years ago. almost exactly 25 years ago, by the way. i think july is amazon's 25th birthday that will be something that's the second hit it got so along the way, it has seen a lot of trials and a lot of trid tribulations it did see it turn around, but the overriding picture was one of assault on the company. in comes the money guy one thing we learned is mark did a look having money is one thing, but knowing how to run a company is another thing. one thick yng you can do is brii a guy who can manage it. they were violated here. one is comp sales do matter. a lot of talk at the time the merger occurred in 2005. retailers are focused on growing sales if you focus on the bottom line bs if you lose the customer, you lost the game. >> especially down for 11 years straight one or two years, yeah

>> comp store sales are the king pin of retail. you don't have it and you will go out of business secondly capital investment ed lamper. it is lampert is a smart man let's stop doing so much of that you need more capital investment than ever to make the stores great and interneinternet. >> this was a high degree of difficulty to begin with you need to bring in a management team willing to potentially faceoff against orthodoxy has been in place for a long time. >> massive transformation on the back of the catalog and internet to turn this into the company of the future instead of the company of the past. fixing the company of the past is what happened to jc penney.

it will not work >> are they done donating share to others? >> sears >> there's no more share left. >> there may be around $10 billion in sales after the liquidation. even the smallest bit survive. it is nothing. it is absolutely nothing you won't find it. penney's shares are up today i guess they have the same malls. their problems are bigger. >> you say sears and toys r us next up? >> i think they have one year. one year to get something going. penney's if they don't, they have to go they're shrinking too. they are going through massive liquidation. >> remember ron johnson? that did not go well >> he tried to do the long game. he had revolutionary new ideas the problem was the customer did not want what he was selling it has to work, too. that is why it is a high degree of difficulty. >> jerry, thanks

jerry storch on sears. let's go to jon fortt. he is in vegas at ces. let's see what is coming up on "squawk alley. >> we have you covered from all angles verizon ceo is with us to talk about the networks and 5g. we are talking trade and more. we have the head of voice from exazon all that and more coming up on "squawk alley. on. more than half of employees across the country bring financial stress to work. if you're stressed out financially at home, you're going to be too worried to be able to do a good job. i want to be able to offer all of the benefits that keep them satisfied. it is the people that is really the only asset that you have. put your employees on a path to financial wellness with prudential. bring your challenges.

♪ acan echo throughout ane entire community.nge that's why we proudly support, invest and volunteer in communities like yours. because the changes we make today... can you hear me? ...shape the possibilities of tomorrow. u.s. bank the power of possible.

welcome back to "squawk on the street." stocks off the best levels of the day. still higher and around flat for the s&p 500. we are seeing some weakness in a key sector that is technology turning negative in the last few minutes here tech now down by a quarter of 1% dragged lower by semiconductor names. that group trading lower by more than 1.5% after starting the day in positive territory. tech and semi conductors, that industry is a key part of the market sara, back to you. >> dom, i'll take it

back at hq "squawk alley" is a few moments away but first? >> sara, what's ahead on the closing bell >> thank you for asking. we have big interviews on the health of the global economy what it means for the market jeremy seigal. the world bank is coming out with the new economic outlook for the globe. we will speak to the arthur of that report. i will see you in the most important trading hour of the day. >> i think jim who does the voiceover is what with is this line i have to read? >> he did a good job. >> i don't like being replaced >> more authoritative. >> we're back in a minute. dow is up 82

good morning it is 8:00 in vegas. 11:00 a.m. on wall street. "squawk alley" is live