five records topping your five at 5 on this friday morning. one, the government shutdown entering its 21st day, that ties the record for the longest shutdown in history. two, macy's coming off a record bad day, investors losing 18%. more on the retail rout ahead. three, oil now in its longest win streak in nearly ten years, but will record american production stifle opec's plans to boost price s? four, america's record high national debt starting to worry fed chair jay powell what he said ahead and five, treasury secretary steven mnuchin going on the record about china what he said about those trade talks that is sure to get a lot

of attention on this busy friday, january 1 # 1th, as "worldwide exchange" begins right now. ♪ ♪ >> well, good morning. good afternoon, good evening and welcome from wherever in the world that you may be watching i am brian sullivan. be honest. when we said records, how many of you were thinking lps are we that old, 8 tracks? you know what, anyway, let's see if the markets are going to be music to your ears today not looking that way right now stock futures, let's call them flat, down 10 points that's nothing let's be generous on a friday. this after the s&p 500 clocked its 5th straight day of gains. folks, that has not happened since september. small caps have been on even a bigger tear. the russell 2000 on pace for its best week since december of 2016 we're still well off our highs back in august and september, but, hey, nice little pop here to start the year. we are also keeping an eye on

oil. crude oil, if you're keeping score at home and we know you are, is now up for nine straight sessions that is oil's longest winning streak since all the way back in 2010 wow! wall street, by the way, closely watching washington again today. what else? the government shutdown. now tying the record for the longest ever, entering its 21st day. let's get right on that. nbc's tracie potts more on what we can expect or not expect in d.c. today tracie >> reporter: maybe not expect, brian, because there is no sign that this stalemate is going to end, but the president is giving some suggestions that he might within days be willing to or be ready to declare a national emergency. go around congress to get that money from the pentagon to build the wall he was at the border yesterday making the case that a border wall, whether it's steel slats or concrete, is necessary to protect this country from growing immigration and crime that he says is spilling over the border

obviously democrats disagree with that, but they have been unable to work things out. the president said earlier in the day that compromise was still possible, but later last night in an interview, said that there is no reason to change his mind on this now, there is some controversy because he wants to tap into funds that, in part, are used for emergencies like hurricane clean-up in puerto rico and flood prevention in california that is some of the money that they are looking at using for this wall. the white house now has its lawyers looking at the legal justification for this emergency declaration. as you said, tomorrow this will become the longest government shutdown we've ever seen >> tracie potts in washington, d.c. we know you have a busy day ahead. thank you very much. wall street is beginning to chime in on the shutdown j.p. morgan out saying the shutdown is now starting to impact the overall u.s. economy, and they are cutting their first quarter gdp growth estimates by 25 basis points.

one quarter of 1%. not a lot, but they say it's due to the ongoing shutdown, and now see the u.s. economy growing at only 2% this quarter let's talk more now about the impact of this on the markets and your money joining us now also from washington is mark avalone president of potomac wealth advisors you and tracie may be the only people working in washington, d.c. today, mark out cutting the gdp forecast i put out a poll asking why sell 4% of the people said it was because of the shutdown. but at what point do we have to begin to worry about this with regards to the stock market? >> well, i saw that yesterday, and right now the government shutdown doesn't really seem to have much economic impact. but i'll tell you what, brian. since this started, i've bee driving back and forth to work and it's taking a lot less time. people are not on the roads as much they're starting to change their plans. there's more stories about personal hardship and slow down in selling you're going to see less

government business, travel, conventions things like that eventually trickle through it has a real economic and personal impact. keep in mind that a slightly slowing gdp, a quarter of a percent, what that might also do is take the pressure off of the fed, which is public enemy number one to this market. so in a very odd way for investors, bad news, once again, can be good news i wouldn't sell simply because we have a government shutdown. human tragedy, personal disappointments aside, not always so bad for economy to slow it down >> at what point do we worry, 21 days, 30 days, i doubt it would go for months, but what happens if this goes on into a month-long shutdown? then do we worry >> well, we've never been there, and i think the bigger worry i would have if that is happening is that would reflect an absolute and total break down between our governing

legislators. i mean, what's happening now is just such a standoff and what does that symbolize for the other things we actually need or want are we going to get anything done in two years? is infrastructure just a pipe dream? because nobody wants to give president trump a victory. he seems to be very intransgent himself. so the bigger worries i have is, is washington totally dysfunctional and what would that mean for markets? >> yeah, i think you nailed it on the head right there, which is all these things that we still want, right? we drive on the roads and the beltway, your hub caps popping off because there's so many potholes we want infrastructure we need it the market would like to see it. but it's like we just started this new congress and already there's so much animosity. the odds of anything big getting done do seem, at least from this side of the desk, mark, very low. >> well, very low, but let's keep in mind what divided government means it usually has been good for stocks and every year after a midterm election since the 1940s has been positive for stocks

so, somehow, ascrazy as it sounds, divided government and the dysfunction out of washington usually comes around. i wouldn't just throw out hope that it's going to be as catastrophic as the headlines look, because we do have something, some history on our side and anecdotally, especially with valuations at this point for stocks, and a reasonably strong u.s. economy, a very strong u.s. consumer certainly with these wage numbers, i think we have reasons for hope despite the dysfunction. >> i'm going to make a flag that says "divided government good for the markets, bad for your car's suspension." mark avallone, great to see you. have a good weekend. >> good to be here >> staying with the shutdown and the real world impact of it, today many of us out there will get paid it's a good feeling to get paid. a feeling 800,000 people will not feel today because that's about how many federal employees will go home without a paycheck. the good news, if there is any, is that furloughed government workers should get back pay.

in other words, they'll be paid for this period just in arrears. however, if you are a government contractor, you are unlikely to get compensated for any lost hours. for more on this coming up a bit later on in the show in the meantime, let's go to trade news treasury secretary steven mnuchin saying he expects more high-level trade talks with china in the coming weeks. here's what he told reporters late yesterday >> the current intent is that the vice premiere will most likely come and visit us later in the month and i would expect that the government shutdown would have no impact. we will continue with those meetings just as we sent a delegation to china. >> where they won't be going is davos. mnuchin's comments coming after the president canceled his trip to the world economic forum in davos, switzerland due to the shutdown, he was expected to meet with china's vice-president to talk trade, but that trip will not happen. staying with china news, reuters reporting that china

plans to lower its growth outlook for the year china currently sees gdp growth coming in between 6 and 6.5% for the year it is not clear where any new growth target might fall we would know more, hopefully, when china holds its annual parliamentary session in march actually, the shanghai composite up on that news. maybe the market expecting a bigger cut than what it will get. big news on apple crossing this morning the technology giant reportedly planning to release three more new iphones again this fall. the new models will include a follow-up to the xr, which has struggled with sales since its release. "wall street journal" says apple will introduce new camera features and a different display system maybe they can come up with a different name what is it, the xr 8 s plus 2. new this morning also, japanese prosecutors hitting former nissan chairman carlos ghosn with two new charges he is now being accused of transferring personal investment losses to nissan as well as

understating his personal income for three years. if those charges stick, and he is convicted, carlos ghosn could spend up to 15 years in a japanese prison. meantime, we're following a developing story of a totally different kind on the high seas. one of the world's largest cruise ships returning home after hundreds of passengers got sick frank holland cruise lines joins us now with more good morning >> good morning, brian nearly 300 passengers on royal caribbean's oasis of the sea has been hit with a stomach virus since sunday it has been on a seven-night cruise to the caribbean. it will return to port canaveral tomorrow that's a day early those affected by the virus including crew members are being treated by the ship's medical team royal caribbean said all 8,000 people on board will receive a full refund because of this outbreak the company releasing the statement, saying, we think the right thing to do is to get everyone home early rather than

have guests worry about their health the cdc notes there were about a dozen reported cases of virus outbreaks on cruise ships last year it's been getting a lot of publicity, brian checking out shares of royal caribbean, they're down about 1% today. of course we're going to have to keep our eye on the situation especially as the passengers get off the boat you can imagine there will be a lot of reaction. >> this is the largest cruise ship in the world. the reason we couldn't say the singular, it's one of three or the same size, right but there's none bigger. >> the ships are getting bigger and bigger unfortunately the situations where people are getting sick on them is becoming more prevalent, we feel like they are because they're getting reported more. it's something we'll have to keep an eye on again, 300 passengers including some crew members catching this virus. probably a really difficult situation on that ship >> tough for rcl royal caribbean. frank, thank you very much >> thank you, sir. >> on deck, macy's coming off its worst day ever investors lost 18% on macy's yesterday. are things really that bad or was this a market over reaction we'll talk about it. and later on, a big bet on

bird box a one-top ranked analyst is telling clients to buy netflix because of sandra bullock. stick around ♪

what's a gig of data? well, it's a whole day's worth of love songs. [ baby crying ] or, 300 minutes of baby videos. a gig goes a long way. that's why xfinity mobile lets you... ...pay for data one gig at a time. and with millions of wifi hotspots included, you'll pay even less for data. or, if you need a lot, we have unlimited too. plus get $100 back when you buy an lg or moto phone. it's simple. easy. awesome. click, call or visit a store today. ♪ ♪ all right. welcome back good friday morning. 5:14, here we go might get a little snow over the weekend. we'll see in new york. thanks for being with us stock futures are basically flat right now. we've had a beautiful rally to begin the year for the equity markets. the russell 2000, the small

caps -- when they play that music, even i get scared there we go. dow futures down about 25. the music seems a little much mort dow futures down 25 either way, small caps have had their best run in about two years. oil is something to watch. oil and the markets highly correlated lately. crude oil up again today we are on our longest winning streak,daily winning streak, ten sessions for oil, going back all the way to 2010. so far up again today. might be yet another record streak for the price of crude oil. by the way, oil and gas stocks, many of them -- the average is up 7% this year. many of them were up over 20% just in 2019 forget about oil let's turn now to retail macy's, yesterday, did you see it its worst single day stock performance ever, losing 18% reported weaker than expected holiday sales, they cut their earnings outlook that move sending shock wamz through the entire retail sector

other names, kohl's, nordstrom, target, all tumbling in yesterday's session. let's talk more about the macro scenario and bring in rick, president and ceo of the american apparel and footwear association. rick, thank you. >> thank you, brian. >> i know you're not a stock analyst. >> that's correct. >> macy's is still predicting growth 18% drop was that a bit of a market over reaction >> that was a complete over hype, over reaction. you know, if you look at the xrt index -- >> big retail etf. >> the big retail etf. on september 24th when the tarif tariffs kicked in, between that and december 31st, it was down 20%. a lot of the air was already taken out and it was tied to the tariffs. and then to get hit for being like reasonably flat was just an overplay >> listen, it wasn't like they cut their sales forecast to nothing. earnings came from 4.30 a share

to 4 growth expected at 2%. how much do you believe is, a, tariff related and, b, rick, is going to be mirror when had we start to hear the numbers from the other companies? >> i'm less concerned with sales. we had an interesting reactions this year. we had mall traffic down a little bit overall traffic pretty good. the question is earnings you hit the nail on the head and a lot of this is directly related to the tariffs it's the fear. it's not so much what we've already been tariffed. it's the worry about what could be coming down the pike. and also the disruption to the supply chains, that is going to raise prices when prices go up, sales go down, jobs get lost this becomes an ongoing -- >> and what are the numbers of your group saying about the tariffs? how much are their input costs going up >> well, here's the worry. they could go up significantly and it's not what is apparent.

it's what's not apparent analysts call our members all the time and they say, what's your china exposure? you know, if you don't have a good answer to that, you sort of get whacked on the head with a tennis racket. >> what do they want to hear that you don't have much >> they want to hear that you have a plan in place for china so i go over to china about two months ago and i'm checking. i figure there is some movement out. there was real movement out there, significant china flight. and -- >> to where? laos, vietnam, cambodia? >> that becomes a problem. take china and vietnam together, that's 55% of the u.s. market. china is 41% of the market you take the top five at 70% of the u.s. market, problem is they don't have a place to go and when they don't have a place to go, prices go up. and it's a given, so they're fleeing out of china they're setting up somewhere else we're putting risk into the supply chain all the way down

the line prices go up you just know what's going to happen >> do retailers have the pricing power to offset the higher input costs? in other words, they buy something for $20 now, and they sell it to us for 100, now they're paying let's call it $25. can they sell it to us for 105 >> here's the problem. they can handle a 10% tariff they can't handle a 25% tariff that would be disastrous to the industry so we're hoping we can hold this off. we haven't been hit fully yet. we've only been hit partially, but the flight is going on so you're looking at the end of q1, you're going to start seeing some rough terrain by q2 it could be really rocky out there. >> we'll see if something changes, the talks extremely important i know to your group and its members. rick of the american apparel footwear association, thanks for joining us >> thank you >> good to see you come back and give us an update. still ahead, the brexit battle the u.k. gearing up for a vote

what's at stake. but first, big calls on the three bs what else but buitrros, "bird box" and bandicoos stick around ♪ ♪ unpredictable crohn's symptoms following you? for adults with moderately to severely active crohn's disease, stelara® works differently. studies showed relief and remission,

with dosing every 8 weeks. stelara® may lower your ability to fight infections and may increase your risk of infections and cancer. some serious infections require hospitalization. before treatment, get tested for tb. tell your doctor if you have an infection or flu-like symptoms or sores, have had cancer, or develop new skin growths, or if anyone in your house needs or recently had a vaccine. alert your doctor of new or worsening problems, including headaches, seizures, confusion and vision problems. these may be signs of a rare, potentially fatal brain condition. some serious allergic reactions and lung inflammation can occur. talk to your doctor today, and learn how janssen can help you explore cost support options. remission can start with stelara®.

explore cost support options. so i got an offer and now i'm thinking... i'd like to retire early. oh, that's great sarah. let's talk about this when we meet next week. how did edward jones come to manage a trillion dollars in assets under care? jay. sarah. so i have a few thoughts on that early retirement... by focusing our mind on whatever's on yours. all right, welcome back and good friday morning. stock futures are down just a touch, though. i mean, down 27 points anything could happen in asia. japan and korea, though, if you didn't know, had their best week in two months. investors, by the way, still probably deeply in the red on

those. japan had a terrible year last year, but pretty good start to the year this year and in europe we're seeing some slight gains across the board. so a lot of green on the screen. we'll see if our markets can go with that as well. all right. sticking with europe news, the u.k. gearing up for a major vote in the brexit battle willem marx live in london with more of the details you need to know willem >> hey, brian. this was a vote that was expected to take place a month ago. you may remember that theresa may pulled the vote because she didn't think she could win it. we are now going to see this on tuesday night, where the house of commons, the lower chamber here in the united kingdom, will get a chance to decide whether they like her version of brexit. it doesn't seem over the last month she's ended up getting any more lawmakers on size it is very likely she's going to lose this vote tuesday night the problem with that, of course, as we get closer and closer to this deadline, march 29th, 11:00 p.m. that night, the u.k. will formally leave the european union unless something drastic happens.

what that drastic event will be, still very unclear if the government does lose the vote. but there is a growing concern that we could end up with no deal by that deadline. we've had that concern voiced yesterday by the japanese prime minister shinzo abe on a visit to downing street here in london we've heard this morning from one of theresa may's senior ministers, the foreign secretary jeremy hunt, talking about the increased likelihood of there being no deal. we've heard also from the european commission president jean claude talking in romania this morning saying that no deal would be a disaster. now, theresa may has been trying to get a bit of help from her european counterparts over this deal. doesn't look like she's got that in terms of claire if i indication how this will stack up among concerns of her own party about t. we had the labor party, opposition party calling for general election briefly to bring you sterling christ action, we saw some quite bad action in the gdp numbers. there's been a bit of a spike. it's trading up 1/5 of 1%.

>> over here we get concerned over things like dates what sort of the rough time line we need to know here in the united states about what's happening with brexit? >> you want to be watching very closely on tuesday night what happens inside the house of commons here in london if the government is defeated in this, we haven't heard what their plan b is for brexit we could end up with the opposition calling for the government to be dissolved, calling a motion of no confidence that could in theory lead to a general election which is what the labor opposition party says is their priority. or we could end up -- if that motion fails and the government doesn't have to dissolve, we could see increasing calls for a second referendum to decide whether the u.k. does, indeed, stay inside europe so a lot to watch midway through next week, i would say >> okay. going to be a big week been a lot of big weeks. willem marx, thank you very much appreciate it. well, "bird box," burritos and bandicoo, those are the

three big tokz so keep your eye on today first let's explain. first to "bird box," upgrading netflix from a buy to a neutral. the firm citing strong subscriber numbers ubs up against target to netflix 100 -- 440, that would be low. $410 per share second, brian blows it no, burritos brian did blow it. telsey advisory group is zbgettn bullish on chipotle. 5% to 4 1/2. analyst bob daring ton upping his revenue forecast at cmg to 1.2 billion. third, bandy koot, shares of activision blizzard, hit bandy kood call of duty down 6% today. the company is giving up the publishing rights for its game destiny. whatever that is activision doesn't see any material revenue income or

operating loss impact this year due to the move. i will stop getting cute with the alliteration it's not working up next, weathering the shutdown storm, how small business is dealing with the d.c. dysfunction the great kate rogers joins us with that ahead. plus this. >> we don't need roads >> the big buzz coming out this year's consumer electronics show is not too far off that scene from "back to the future" we'll show you what we're talking about when we come back ♪ ♪ usor 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.

going 6 for 6? maybe the s&p eyeing its 600 day of gains just ahead, oil, something it has not done in nearly a decade. we'll tell you what that is. and, yep, more on the d.c. dysfunction. now hitting main street. how small business is dealing with the government shutdown as it now enters its record 21st day. all this and more as "worldwide exchange" rolls on ♪ get along down the road, we'v got a long, long way to go ♪ ♪ cared to live, scared to die -- >> nobody is perfect, but we certainly do try good morning and happy friday. welcome back thank you for being with us on cnbc and i know they played that song because i chunked that last segment. it's 5:25 in the morning it's friday. it's been a long week.

hi, i'm brian sullivan let's kickoff the second half of the show with your executive recap. all the news you need to know in 60 or so seconds frank holland, are you up to the challenge? >> i am to that challenge, brian. here's what's leading cnbc.com right now. today marks the 21st day of the u.s. government shutdown white house officials are weighing the possibility of diverting emergency funds from texas and puerto rico to help pay for the border wall. this comes following the president's visit to the mexican border yesterday new this morning, japanese prosecutors hitting former nissan chair carlos ghosn with two knew charges he's now being accused of transferring personal investment losses to nissan and understating his personal income between 2015 and 2018. he could face up to 15 years in prison and a developing story on the high seas. a royal caribbean cruise ship is returning early after a neurovirus outbreak. the cruise line said nearly 300 passengers and crew members have been infected. the shares are down just under a percent this morning brian? over to you. >> all right, frank, thank you

very much. now let's get a check on this morning's other top headlines. nbc phillip mena with that >> a girl that went missing in october has been found alive she went missing october 15, the day both of her parents were found fatally shot in their home in wisconsin it was thanksto a phoned in tip. the teen was found thursday in douglas county 70 miles from where the klaus family lived police say a suspect has been taken sfwo custody officials did not share any information about the girl's condition. police have issued a warrant for ronaldo's dna as part of a decades old rape allegation against the soccer star. that is according to "wall street journal". the 33-year-old is accused of sexually assaulting a nevada woman in a hotel penthouse in 2009 ronaldo has denied the agization. his lawyer said in a statement thursday that the encounter was consensual and that a warrant for a dna sample from his client

would be a standard request in this type of investigation finally, one of the sports world's most eligible bachelors is off the market. 2017 heism 2007 heisman trophy winner shared his engagement to former miss universe. she made him the happiest man in the world. brian, he flew her family and friends in from south africa for this engagement. >> that is not a short flight, nor is it an inexpensive flight i'm told not bad. >> there you go. >> thank you very much, phillip, appreciate it. here's how your money and investments look stock futures not giving us a lot of clues which way this market will want to go yeah, we're down 27 on dow futures, but that's very early trade. thinly traded, a lot certainly could change hey, we had two upgrades of boeing yesterday that helped the market as well we'll see if we can continue this nice market rally so far in 2019 in the bond market we're seeing

yields continue to stay low. i mean, yeah, we're up a little bit, but the ten year yield, 2.71%. good for lenders now let's get a check on the asian markets. in fact, japan and korea have had a great start to their year as well. coming off terrible, by the way, 2018, but not a bad start there. let's see what else is happening in the early trade in the european market. it is a mixed bag as we say, with germany down just a fraction, and the u.k. market up just a fraction. outside of stocks, you've got to watch oil. oil is in the middle of its longest win streak, ten straight up sessions since all the way back in 2010 could make it 11 today crude oil up about 6/10 of 1% to 52.94. bitcoin at 3629. well, if you caught the show yesterday and we hope you did, you likely saw our segment laying out all the reasons to sell stocks. we asked you if you were going to sell, what's the main reason. well, we flipped the script as

promised on the twitter poll and we put up a poll on the twitter asking you if you were going to buy stocks right now, what would be the main reason. 51% of you said you just got to buy for the long term. 21% of you liked the valuations. 19% said, yeah, the fed backing off. and just 9% talking about trade deal optimism. let's now bring in michael purcha purvis yesterday, michael, the reason to sell poll, the d.c. shutdown only got 4%. now the d.c. news trade only getting 9% it feels like our viewers, anyway, or maybe my followers, are discounting d.c. should they? >> i think the market has been pretty jaded about these d.c. shutdowns. one way to measure it is not in the stock market, but in the treasury bill market if you look at the spread between the one month and three month bills, during these periods you typically see a big stress people will shift to buying the

three-month paper, not the one-month paper. and that spread as getting very, very pronounced. but when you go back and measure it -- >> what does that tell you >> it tells you that people are -- the treasury bill market is pricing in a lot of anxiety here, right? >> yet stocks have gone up the last couple -- >> i think what's happened here is we've seen this -- it's a little like watching a horror movie. sequel 2, sequel 3, sequel 4, the scary guy is coming around the corner it basically doesn't mean anything i think there is a jadedness setting in a president who is a different type of president arguably than the past in terms of he seems to be digging in pretty hard here, you know, are the real meaningful spill over effects into the broader economic picture? probably not >> not yet but, michael, that is the question okay, j.p. morgan out last night cutting their gdp forecast, not by a lot, one quarter of 1%, as

we say 25 basis points but they made the cut. others are likely to follow it at what point does this shutdown, now tied for the record longest at 21 days as of today, at what point does that hit the economy and thus hit earnings and thus hit the stock market >> look, i would say the thing i'm more focused on, maybe it's because i'm a market analyst the thing i'm more focused on is the data, the lack of data that we may be getting, you know, some of the -- >> data vacuum >> the data vacuum obviously with all the volatility we've had since october, that certainly doesn't help matters much, does it to be flying an airplane through the fog without your instruments working is not a fun thing to be doing. >> it does sound a little bit -- to use that analogy, it does feel a little like the bermuda triangle for earnings. you looked at macy's yesterday their numbers weren't terrible they were actually still predicting growth. they cut their forecast 4.30 a share to 4 for the year. that's not exactly an 18% haircut but that's what the market gave it

do we need to be particularly worried this earnings season >> you know, that's a great point. you look at the broader -- you look at the aggregate consensus estimates of all the analysts for the s&p 500. those were very strong for the q4 despite the volatility they were strong until the last few weeks. some of the expectations started lightning up a little. here, as we get into the season that is just around the corner this coming earnings season, macy's aside, when you look at the economic data, i think you'll probably get a little bit of forecasting concerns from the c.e.o.s because of trade more so than the shutdown. but i'm actually expecting the season to be pretty good, and i think that -- you know, one of the things that's missing in all this volatility, we've had a valuation reset. we haven't had that nice, oh, my god, earnings expectations have gone from up -- 9% down to like 0% so you can really outperform in the coming months. i don't know if we're going to get that and that's actually sort of a problem for the bulls. >> yeah, and that data vacuum that you talk about besides

earnings, not a lot coming out otherwise michael purves, that's why we have you on because you are a market analyst great tie, by the way. >> thank you >> i like it, the jockey, the horse -- that's nice >> yeah. >> can i have it >> no. >> joking. no borrow it. now my feelings are hurt let's find out what else we're going to be talking about today. time for this morning's stories. frank holland is back with those. >> that was a firm no. there was no gray area >> it was like maybe -- no >> i like that, you got to have conviction >> listen, that was a great final appearance for mike on the program actually [ laughter ] >> all right we're going to turn to trending. it's kind of a heart warming trending usually we do fails. >> good, we need something to feel good about. help us out. >> the government shutdown is officially tied for the longest in u.s. history and d.c. area schools are looking for help to feed the children of the furloughed workers prince george's county schools in maryland have created a charitable fund for meals for

kids affected by the shut down they are expediting applications for free and reduced lunches for kids who temporarily qualify certainly a good cause helping with kids. >> millions of americans will get paid today 800,000 federal workers roughly will not be paid today they are going on 32 days, 32 days, because the payroll cycle, they get paid every two weeks from the federal government. 32 days without a check, that's hard >> there's another situation we're looking a. a bus driver is being hailed this morning as she saw a barefoot baby wandering in the streets. this baby was not only alone, it was heading for an intersection. the bus driver stopped that bus, got out and rescued the child. the baby was cold and scared, understandably, but otherwise unharmed the bus driver says she was just glad to be in the right place at the right time >> yeah. thank goodness >> some big-time tech news jet suns has been promising us

flying cars for decades. they showed off their progress in the race to produce the first flying car the vehicles range from one seaters suitable for first responders to a five-passenger hybrid electric air taxi these futuristic vehicles could be ready to take the skies as soon as 2023 i don't know if our producers are being funny or trolling me i could have used one of these this morning i got -- >> that was you. >> that was me >> that was you that i passed. sitting behind or in front of one of fort lee's finest >> some flashing lights. >> you got pulled over >> i got pulled over >> did you hear me honk? and some dude got pulled over right in front of you. >> he got to slide here's the question. are there yellow lights in the sky? >> there you go. >> that's in my memo >> yellow means accelerate through the intersection i'm joking frank, thank you sorry about the ticket up next, the shutdown hits main street. the d.c. drama having big impact on small business.

miss small business herself joins us, kate rogers. that's you, kate i just gave you a nickname plus a double downgrade on food stocks why goldman sachs is getting bearish on coffee and pizza. we'll give you more on these calls fresh ofthprs. icarndf e es ♪ ♪ ♪ ♪ memories. what we deliver by delivering.

we are now in week three of the government shutdown, and small business everywhere, particularly in the d.c. region,

though, doing their best just to stay afloat. it is hard enough to run a small business must be a lot harder to run a small business in the d.c. region where 800,000 men and women are not working. kate rogers here with the impact on small business because of the federal government shutdown. >> good morning, brian yeah, we've been talking to small businesses across the country. a lot of them are very concerned, of course, about this government shutdown. kimberly stewart runs stepping stone consulting in northern virginia federal contracts makeup about one-third of her business and due to the shutdown, she's been told to stop work on a project with the department of transportation stewart said she planned ahead with cash reserves and is attempting to shift her focus to consulting work to make up the lost revenue but says her business will be jeopardized the longer this drags on >> it really does mean that it's more than 800,000 federal employees that are being impacted it's the small businesses. small businesses that are really truly at risk of going out of business, and then you don't

have that innovation you don't have that skills, and we are in a lot worse off than we are right now >> meanwhile, in houston, texas, helen kellier said she's without an important resource, the small business administration. her company, brad link, is also a government contractor. while she's able to continue her contract work, she's unable to work with the s.b.a.'s aid program during the shutdown to attempt to gain work on future contracts. >> key folks that we need to leverage to, to go after contracts in that program, they are not working. and so that's an impact that we're being real creative to see how we can still make something happen >> now, both business owners, brian, urge leaders in washington to come to an agreement to end the pain for federal workers, contractors and of course small businesses across the country >> it's the big story -- it's

hard infoenough to run a small business very difficult i want to put you on the spot a little bit kate's other beat is restaurants. we have breaking news from goldman sachs. couple of down grades. goldman sachs moments ago downgrading starbucks, first to a neutral from a buy a lot of reasons china concerns one of the big reasons. goldman saying the macroeconomic fears out of main land china could impact sales kate, what do you think they're talking about? they're not negative on the company. they think the stock has it a run and it's reflective of this. >> their ceo kevin johnson regarding china, they said they're not planning to back off amid all the trade war concerns. we had a story on cnbc about luck-in, their chinese competitor, they were planning to overtake starbucks in terms of the number of stores that they're going to have in 2019. so for the longest time starbucks has been the biggest player there and now this new player is coming in and kind of infringing on their territory. johnson said to us many times, we're monitoring the situation,

but we're moving full speed ahead with the plans that we have there which i believe is 6000 stores in the next few years. >> okay, goldman sachs out this morning moments ago downgrading yum brands this is mainly a valuation call. they're cutting yum to a sell. they say they are simply skeptical of pizza hut's u.s. recovery what have you heard about the hut? >> i mean, when all of this happened with papa john's, there was a lot of concern about who was going to pick up that business because -- >> people turning away from papa john's because of the offensive comments made by the founder and former ceo >> john snauder hasn't been in the news as much people thought it would go to pizza hut. the ceo said he's happy but there needs to be work done on pizza hut and they're continuing to push ahead. now they're focusing on delivery, lower prices and the quick order system which will hopefully give them a leg up over dominos, which has long been the dominant player when it comes to technology in this

space. >> because it wasn't -- i'm going to put you on the spot with double breaking news. are you ready? moments ago callan, our producers don't even know this cowan initiating coverage of dominos with an outperform the note is titled, it's cute, in pizza we crust. get it is dominos kicking pizza hut's you know what? >> dominos has been the leader because they laid all of this groundwork with the technology years ago under their former ceo patrick doyle. the new ceo is moving ahead with the plan that is already in place. they are so ease toy get to an order from that is something pizza hut has its eye on and wants to continue to work on -- >> i'll ask you a question you will not answer. are you ready to answer a question you will not answer i'm trying to read the cowan note while we're on live tv. at what point or have we gotten a note about the legalization of marijuana recreationally in so many states in literally, the food delivery trend is high. >> it's huge

definitely huge. i think you're making a smart connection there but nothing is coming to mind for me right at the moment >> when people -- i'm told when people enjoy the use of recreational marijuana, sometimes they get hungry and may -- do not wish to drive, but would like food to be brought to them in a delicious hot form have you heard this? >> i think that's certainly a trend. but beyond just using recreational marijuana, people want food easily and at their convenience. and delivery, mobile, that's all become so huge in this space that will continue this year >> has the recreational pizza trend benefited marijuana? that's the question. >> i mean, this is so much to take in. >> the whole universe is right in my finger nail. kate rogers, thank you very much >> wow >> all right two other big analyst calls just hitting the tape we thought it was going to be a lazy friday. nope evercore initiating coverage of procter & gamble with an outperform the analyst there simply saying peen g png ready to grow again.

png a dow component, that call matters. barclay out saying you have to sell the gap downgrading the stock on cost concerns you have a $25 price target. stocks really at 25. but another retailer, gps, getting a downgrade. wow. up next, count down to earnings season, all you need to know, plus rbi stick around 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. was all this, really necessary? what do you think? ♪

unpredictable crohn's symptoms following you? for adults with moderately to severely active crohn's disease, stelara® works differently. studies showed relief and remission, with dosing every 8 weeks. stelara® may lower your ability to fight infections and may increase your risk of infections and cancer. some serious infections require hospitalization. before treatment, get tested for tb. tell your doctor if you have an infection or flu-like symptoms or sores, have had cancer, or develop new skin growths, or if anyone in your house

needs or recently had a vaccine. alert your doctor of new or worsening problems, including headaches, seizures, confusion and vision problems. these may be signs of a rare, potentially fatal brain condition. some serious allergic reactions and lung inflammation can occur. talk to your doctor today, and learn how janssen can help you explore cost support options. remission can start with stelara®. welcome back stock futures not indicating we're going to continue this little rally we've had to start the year we're down about 23 points right now. earnings season, though, kicking off in a big way next week all starts on monday with citigroup, continues all week long delta, bank of america, netflix. joining us now rob morgan, chief investment officer at seti great to see you, rob. thanks very much for joining us. we have earnings season, the shutdown, the trade fight, brexit what is the most important thing for you and your clients >> i think earnings season, brian, because i think that it's going to be probably stronger than expected.

you know, most analysts last fall were thinking we'd see 10% earnings growth for this year and then, of course, we seem to hit the soft patch and a lot of analysts lowered their expectations down to roughly 7% you know, fed chair powell yesterday obviously came out and said, hey, the fed is not really seeing any signs of a slow down. so i would tend to be the upper end of that range for the year and i think we're going to see a pretty good earnings season. as you said, it really gets underway next week >> we saw what happened at macy's yesterday, rob. it missed a sliver and the stock fell 18% >> yeah, and that's the problem. we're in an environment now where investors are really looking for some evidence that maybe a slow down is right around the horizon so even if a company matches earnings estimates but gives poor guidance or they miss on revenues, they're taken out and basically shot in some ways.

so, yeah, companies better at least meet their expectations. >> do you think they will? >> i think by and large, yes i mean, usually we see more beats than misses, as you know but i think we'll see even more beats than expected than misses. i do think this is going to be a pretty good earnings season. >> should we buy small caps -- i mean, they had a lousy end of the year, but the best run, best two-week run in years. are they still a good value, rob? >> i think so. i think so and part of it, part of my thesis there is i think the dollar is going to continue to nudge up from here that hurts big cap multinational stocks and conversely should help small cap stocks. i would overweight small cap growth stocks. as you said, they did have kind of a difficult run, but i think going forward they should look at -- >> so somebody looks at their portfolio -- and everybody, by the way, it's the beginning of the year you should take a look at your portfolio. you have 40% exposure to international stocks and 30% to

small cap u.s. you need to trim europe and raise american domestic small cap. >> yeah, and that's kind of the flip side of a rising dollar, is that for u.s. investors invested internationally, it's going to hurt those international investments. the swap that you just described would make sense to me, absolutely >> any reason at all whatsoever to own either bonds or -- gasp, dare i say it -- t-bills >> well, you know, i do think that -- we, of course, profile all of our clients and some are more risk tolerant than others and obviously if a client of ours kind of profiles out at being very risk averse, then bonds do have a place in a portfolio like that. but i would certainly overweight stocks here versus bonds >> rob morgan of seti from philadelphia we appreciate you joining us we'll see you on "worldwide exchange."

thanks very much >> thanks. >> time for rbi. maybe we'll post it online if you're nice. that's it. have a wonderful wkeeend lot of market coverage see if oil can continue. "squawkbox" is next. w?w?uhió'ñó ♪

[ neighing ] [ screeching ] ♪ [ sigh ] it's bring your own phone, not pony. so i could have taken the bus? yeah. bring your phone. switch your carrier. save hundreds a year with xfinity mobile. plus get $100 back when you bring in an eligible phone. call, click or visit a store today.

good morning the s&p 500 posting its first five-day winning streak since september. it was boosted by real estate and industrial sectors thank you for that, for moving that futures pointing to a lower open today. he had one job, has one job. the government shutdown entering its 21st day that ties the record for the longest in u.s. history. we'll get a live report from washington on the potential for a deal and more signs of trouble in china. a new report says the government will cut its 2019 growth target, plus a big downgrade today on starbucks over china concerns.

it's january 11, 2019, and "squawk box" begins right now. ♪ ♪ >> 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 markets in times square and it's friday i'm becky quick along with joe kernen and wilfred frost andrew is out sick today our guest host for the next two hours is steve grasso, director of institutional sales at stewart frankel, also an cnbc market analyst >> thanks. >> let's check out what's happening with the futures the dow is down by 25 points below fair value s&p futures down 5 1/2 nasdaq off by 19 yesterday we did see gains once again for the markets with the dow, the s&p, the nasdaq, the roussel 2000, dow transports, all up for their 5th sessi i