>> i like it it's fine. after that story, i'm good. >> you can't complain. we're going to talk to some of the most interesting, influential people in the world. >> morgan stanley have come back a little make sure you join us tomorrow "squawk on the street" is next ♪ ♪ good thursday morning. welcome to "squawk on the street." stocks may take a breather at the open after rising for seven of the last nine sessions. weak results out of morgan stanley. europe is relatively mixed oil's down on that record u.s. production number 11.9 million barrels. a morgan stanley miss. and new concerns about the

chinese economy weighing on stocks futures point to a decline of the pen. >> netflix is up 50% since the december slump. will the momentum continue >> and he brought wall street investing to the masses. we're going to pause to remember vanguard founder jack bogle. stocks are set to open hoer one day after closing at their highest levels in more than a month. morgan stanley is down the firm says net revenues negatively impacted by a volatile global market environment. the biggest drop of the five largest banks. >> the stock had the unfortunate experience of having run up into the quarter. frankly i am disappointed because this was the one that i felt that had the most stable. this turned out to be really not

stable. >> surprising in the sense that we knew that there was a great deal of weakness in december without a doubt but we did not expect it to be reflected as strongly in their results as perhaps some others, given its focus particularly on fixed income being the weakest part and morgan stanley not being as reliant on fixed income typically. if you look at the results from goldman or jpm equities, pretty strong immediately gorman in the call comes right to those six weeks at the end of the year and says, listen, they were tough. also notes what he calls some idiosyncratic items they'll go through. as you'd expect, goes through all the different growth initiatives at the company particularly focused on investment management and on the

recurring revenue streams and stable source of revenues from fee-based pricing that the company gets from all of its advisory work in terms of individual advisory on the broker side and investment management. >> didn't you find that there was a note that says, intraday and intraweek volatility -- intraday >> there's a ton of color coming out from the cfo, specifically cash deposits in the wealth business up as clients simply did not recycle their dividends back into the market >> look, you're going to hate this j. powell made you feel so uncertain, so scared, he made you feel like cds are the right place. >> you're laying this at powell's feet?

>> i just think that you scare people we have seen this. this has been a theme of a lot they don't say it. no one says hey j. powell wrecked it that's me. i'm saying that. what happened is he froze the market now it's thawed but i think people said wow, wait a second, if this man thinks that we ought to overshoot to break an economy that we think is okay, maybe we should all pull back that's why goldman put out that wealth effect piece. it was nordstrom that had a bad quarter. i know they're poor executers. there was something that happened in the high end morgan stanley -- the people who really are attuned to what was going on, they stopped. >> you think that's why we got macy's and nordstrom and signet and vail resorts. >> vail definitely signet, i haven't spent some time in signet it's not as high end but still you have to spend money to buy a

ring so i'm concerned that the month of december was aberrant but not because of anything that james gorman did it was aberrant because people were afraid everywhere what this tells me, it wasn't just hedge funds it was kind of everyone who had wealth >> people pulled back. >> now we have 800,000 people living paycheck to paycheck. >> well, not getting a paycheck at all. >> paycheck to not paycheck. >> the statistic that 400 bucks would break a lot of families. >> 40% don't have 400 in emergency savings. >> these are people who are not watching our show because they're busy working we have the high end obviously frozen in december po powell powell. then we have this group of

800,000 people and the ripple effect these people aren't going out to dinner they're not going to olive garden they're not going anywhere. >> they're not. >> they're eating velveeta >> the number of federal employees that did file doubled, 10,000 federal workers filed for first time benefits. >> powell's dialogue is like this i don't see any weakness, but others do. the moment he sees weakness, you've got to fie bye this market hand over fist. he has yet to see weakness i think he ought to go to the ophthalmologist. we need a cleveland fed to come around they're still smarting from i

don't know baker mayfield not going to the playoffs. what is that about >> you're all about bull haard. things change. >> and you change with them. >> right >> speaking of things changing, i wonder given the performance of some of these financials this week, which has been such a great week despite what was early signs -- for example citi didn't look like it was going anywhere as a stock. they recovered and have rallied since. any thoughts on the group and morgan stanley in particular going through its growth plan, the fact that it does believe it's going to generate capital far beyond what it need and is talking about returns of capital to shareholders, talking about their stability that is beyond,

they believe, that of the franchises of some of the competitors. given that part they have in terms of the old salomon smith barney and morgan stanley brokerage units -- >> but 78.3 above goldman's ratio. morgan stanley did not execute, is my take. >> you expected different. >> i was wrong i was wrong. okay >> they also bought back stock again. i did the math they bought $49 billion worth of stock during the course of the year so about 50 bucks. >> there you go again. bank of america, which was the best, bought back stock below where it is. i hope the bank market does not go down on this morgan stanley number that would be a mistake.

there are weaknesses in the economy. jp morgan sat down with home depot and cut numbers. housing is not going up. i'm starting to get worry that is the reason why the strength of home depot was when you started thinking if you invest in your house it's good. ppg with very discouraging comments about paint someone's going to say it's the rain the defenders of the fed will say it's the rain. the fed still has a lot of defenders, which i find qu quizzical. csx not seeing the big slowdown. alcoa not that great. >> taiwan semi -- >> worse than ten years. we know that cell phones, people decided to destroy their cell phones the stories about cell phones

are so bad i hesitate to bring up the positive note about j and j and the watch. it says good things. i don't want to say anything good about apple right now because i want to be one with the negativists. this is 180 count. this is butter >> you guys are comparing your thread counts. >> i'm touching his thing. look at this my fingers are falling apart we are missing the big picture >> the financial world is mourning the loss of a pioneer and champion of investors, vanguard founder jack bogle has died at the age of 89, best known for the introduction of the index mutual fund. he preached a buy and hold strategy this is some advice he gave

three years ago. >> if you're investing in a retirement plan, as tens of millions of people are, don't stop investing when the market goes down. the prices are 10% better than they were. keep investing keep putting money in. just as you would. don't interrupt your savings pattern because you'll pay a huge price in the long run if you've got a good balance, and 60-40 is as good as anything else, just stay the course don't do something just stand there >> don't chase performance use bond allocation relative to your age his frugality. so much has been said. >> i loved him so much he was the most anti-wall streeter watt strell streeter ie seen it is remarkable how ant th antithetical he was.

you don't need anybody and we are going to give you a low fee. when someone passes away, i know i should be more sad about it. i want to celebrate this guy's life he was a friend and he was amazing and vanguard was an incredible institution this guy really just said -- a lot of people are praising him today. i think he'd be laughing all the people he tried to wreck their margins, he wasn't trying to hurt wall street but he did say it was irrelevant. >> the journal compares him to michael dell, sam walton, other discounters. >> henry ford,althoughs s

althougalthough athe although athetically >> it exists on wall street but not necessarily in this area. >> he recognized -- i mean there are a lot of people who took him

in vain. like the people who do the double and triple etfs that wasn't what he was talking about. he wasn't even talking about sector etfs. he wanted you to take a piece of progress, not unlike what warren buffett would say. he was pixy-ish. i remember talking about his new heart that he got after he had seven heart attacks. he was a joyous man that he got a second life. >> philadelphian >> when you interviewed him, you always knew -- he kind of reminds me of the late herb k kelleher they're friction in the system he was telling me that i was

friction, but he said are you going to take a lot of money then you're okay it's the guys that get the big money in that wreck their performance. that's true. >> it is true. >> iconoclast is not strong enough. >> what buffett told becky says so much. jack did more for american investors as a whole than any individual i've known. a lot of wall street is devoted to charging a lot for nothing. he charged nothing to accomplish a huge amount. that says everything right there. >> he did something that i thought was impossible he gave you this instrument and the charges -- i always say to people go to vanguard. you can't even notice the charges. the higher the charge, because the dividends are so key for reinvestment, you just didn't make money he basically said this industry makes too much money and i'm not going to allow it. >> we're going to miss him.

>> he was interviewed on cnbc, was he not sensational. when we come back we get the countdown to the opening bell. the future of technology investing lies beyond the tech sector. it's about technology transforming every sector. ♪ at pgim, our bottom-up approach uses a technology lens to identify long-term winners. from energy... to real estate... to retail. finding such opportunities for alpha is the true value of active investing. and around the world, you have a partner in that pursuit. pgim: the global investment management businesses of prudential.

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revenue of about $2.4 billion. shares have surged after they announced the price hike since christmas stocks up 50%. >> there is just, to me, the amount of hype associated with this one they have to blow out the number of unbelievable proportions. now, the people when they recommend this stock, it's rather amazing they've been right the price increase might trump anything that they say, but this one is the hottest stock i follow you don't want the morgan stanley effect, that it looks like the best and it's not >> investors typically focus on the addition of subscribers, both here and around the world last quarter was not well

received. >> no, it wasn't >> it did send the stock down sharply before this big reversal since the lows in december from my perspective, it's sort of much more interesting to follow the larger implications of netflix and everything else going on now in terms of streaming as we move into this world, whether it be disney as we get more sense of what it's going to cost which is such a focus of investors at disney our own parent company with an ad supported streaming service releasing in 2020. at&t via time warner, what its plans are with streaming there's so much going on here. so much content potentially being pulled from the netflix

platform which is a concern. but it's a power house. >> i'm going to talk about one that fits distinctly in that for my mad dash. >> we'll count down to the opening bell as well we'll talk about what csx said about revenue for the coming here

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time for mad dash on this

tuesday. cbs. >> this is an even more interactive mad dash than typical. it's just a foregone conclusion, cbs and viacom will merge and you should buy cbs right now because it's been pressed too far by all of this chatter they say viacom has to do this directv deal but i thought this piece was basically enough is enough, time to buy. i loved it because it's real research and it's also ethos and it it's zeitgeist it is time it's just time to buy cbs. >> really. >> because of moffett nathanson's report. >> given all the things we've gone through, i don't know that you'd ever want to say foregone conclusion

but certainly as i have been reporting -- and they haven't reached out yet, by the way, but they are expected to we are expecting that the boards are going to start to talk at some point in the not too distant future. >> i think they watch the show. >> the directv negotiation -- >> how's that going? >> well, we'll see how much of viacom is must have programming? >> well, better than others. >> maybe. >> i think that moffett nathanson and favor are saying -- it was a great piece of research. they do quality work. >> we'll be watching cbs shares. wche got a lot of other things toat

opening bell coming up next.

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you're watching "squawk on the street." opening bell in just eithover a minute we talked about morgan stanley it shut down day 27. we got about 10% of earnings in so far what would you say at this point? >> i still like most of the earnings i do think that we're colored by something -- ppg really said some things. the carrier impact from first half 2018 cost inflation, that is the industrial wrap so far and that's not a great wrap. that's the cycle peaking wrap. pristine growth at jp morgan, the fabulous loan growth at bank

of america i think it's kind of a mixed picture. >> it does appear -- that's what a lot of people expect them to do at least this month and in march. let's get to the opening bell. the big board, it's canadian gold mining company at the nasdaq, bravo, the exterior design series premiers tonight. >> we have kirkland on tonight because i am a gold bug right now. i think gold's going higher. i think that the chaos, whether it be brexit, the wall, the chinese huawei cahaos, germany slowing down kirkland's got a very good growth profile these guys are getting together,

these gold companies. >> yeah. it's considered the late stage consolidation. >> right about time, though. >> you need to pick your dance partner to try to compete. >> is this something that people talk about gold companies are getting together because it's finally rationalizing. >> how many deals are left to be done now that you have two big guys having made their choices >> i'm going to talk to kirkland about what they see. i just feel like what's happened is their grade of gold is getting better and better, but a lot of the other guys grade is going down because they can't find cheap gold. these guys are in canada and australia. they're not like rand gold which is in a lot of places that you might not want to go to. i said i don't know if i want to be exploring in west africa. he said that's because you're a sissy and i justnodded no one's ever called me a sissy

before. >> that's some hard core business travel if you're in the mining business, nothing like what we're used to morgan stanley is down almost 5% tiffany, home depot, lowe's -- >> home depot numbers going down jp morgan, this piece reads -- geez, it's so different from the conference call. here's some lines. hd expects a deceleration in sales trends to occur as a result of a deceleration, not a cliff, in housing trends geez, i wasn't expecting a cliff. now i should be thinking about a cliff. >> careful careful with the cliff. >> yeah. it's pretty amazing, isn't it? >> yeah. >> we're going to home depot this weekend. >> what about sherwin williams

>> lowe's supplier, i don't know this is not what i was looking for. looks like sears is no longer the shared donor it's been for so long. i don't know what's left with sears. so much to take. >> carl mentioned tiffany, signet jewelers also getting hammered today. >> signet gave flat numbers when i spoke with the ceo not long ago. tiffany is not signet in terms of the price range. >> omni channel more than offset by larger than expected declines in legacy product lines. they changed their guidance at signet you can see stock down almost 20%. >> did people go to jarred >> including a 19 cent charge. same store sales flat. not good they did buy back a lot of stocks people on twitter lamenting the fact that they responded to an activist investor by having done

that, which is a fair point. >> one of the big problems with signet -- remember, the old model of signet was really kind of a credit model. they made all their money in credit this is not the model of -- they said we're going to actually be a jewelry store and turned out to be a little harder business macy's talked about some jewelry being weak that's something that people can cut back on. so this is that economy where i think people are just not spending as much it's a little disconcerting. >> holiday comps down 1.3. we were looking for somewhere in the .7 range autos, some weakness on this chuck grassley headline that he believed the president was inclined to move forward with import tariffs on autos as we

await this commerce report next month. >> this is why you can't get too complacent the xlf has been up for days and days i saw that grassley -- my first thing was like, is it really time for that? these guys aren't watching the stock market it's a moment of pluses and minuses, which is why we thought in december that the fed only saw pluses because they only saw employment numbers theoretically, everybody should be seeing much better numbers because of employment. it's not happening some of it's wealth effect, some of it is chaos csx, big railroad, they had some things that made me feel a little more tepid even though the numbers were great this quarter. was it the last good quarter for some companies i don't know i don't know i'm not crazy about it i think that the ones that are doing best -- like we thought

citi was doing terribly. turns out they're not. we thought goldman was doing terribly that conference call was good. the goldman conference calls previously would have closed in new haven. they would have never gotten to broadway this one is like "cats". >> big hit >> the journal today tries to argue they probably haven't set enough aside for 1 mdp and that m & a is unlikely to stay this strong for long. >> they're right it's going to be much stronger >> the times has a pretty scathing story today about the investment banker in malaysia that goldman seems to be trying to lay all the blame -- when you do speak to people they say for a while we were focused on the outsized fees. perhaps they weren't as outsized as we think when you look at the risk they're taking on but the risk profile of the

transactions themselves is something that others have told me should have raised flags. >> i agree with that. >> the exposure they were taking on and why the risk itself didn't necessarily get a closer look and perhaps people said what are we doing here, wait, you know >> the idea that it was going to wipe the company out, which is what we started hearing, not going to happen. i think that screen play that's in the times is very good. did it not read like a screen play >> it's a great book already. >> yes, but there's more >> without a doubt. >> you could do a series it could be like a netflix series. >> could be. >> not really. >> guys, wanted to continue our coverage of pg&e, the enormous california utility with 16 million customers that plans to file bankruptcy on january 29th. not unexpected but worth noting. you've got one hedge fund coming

out this morning with a long letter, blue mountain capital management which owned the shares saying we don't understand why you're pursuing this you should not be pursuing a bankruptcy you have a fiduciary duty to us to avoid bankruptcy. it would not be a surprise to see some other voices added to this line of reasoning doesn't mean it's going to be listened to by the board at pg&e which seems very much determined to follow that plan to file bankruptcy in a little over a week or so from now. but here's what they had to say or at least a couple of things they had to say at blue mountain pg&e is solvent, they say. a chapter 11 feeling lyle pg&e is solvent is an utter abdication of its fiduciary duty it may appear easier for board members to file for chapter 11 shifting the burden of the myriad issues that face the board and placing it squarely on

the shoulders of the bankruptcy court and the company's advisors they go onto say they implore the board to undertake a solvency analysis immediately to be proper. we believe this requires the retention of disinterested advisors who would not stand to benefit financially if pg&e were to file bankruptcy the proper use of the word disinterested. kudos, guys. you don't see many people on wall street use that word properly you get a checkmark for me right away blue mountain, yeah, you could get confused finally, they say, hey you saved more than 30 billion it's insufficient to say such liability could exceed 30 billion. courts have held and good business judge dictates that a

more nuanced analysis is required it's going to be the debate for the next week or so, most likely to fall on deaf ears. >> by the way, ppg is up on that bad quarter. >> yeah, it is >> ppg i'm sorry, because pg&e is up on this >> no i'm switching ps >> that was tough to do that. >> ppg is up on that terrible quarter. i'm struggling it was at 99 in premarket. that could be nelson peltz >> speaking of analysts john inch arguing that the aviation leasing and lending business could be worth than 7 billion less than the current estimated book value of 3 32.8. >> he's digging in his heels

i think that inch is just saying, listen, you've got to stay away from this nine ways to sunday as the stock goes up, there's more optionalty. we wanted them to do 100 million share offering at 12 inch is really on a mission. he's become more ahab like >> monomaniacally focused. >> that's so good. he's not disinterested >> got a nice nichuatio initiatf sales force. >> anyone who is not impressed by the new ceo keith block, who sadly is a patriots fan, this is a customer man

when you -- do you know who's been really a great client and has done a lot digitization,ing bank of america has been a client of salesforce forever i think that digitization -- moonshine h salesforce has helped many a company get more digitized. >> you really love that bank america digital thing, don't you? >> i love it because the numbers were there you think i'd love it if it was a last place team? >> no. >> there are no draft choices in companies. >> i know. >> when you finish last, doesn't mean you're suddenly thinking who's coming out >> are you prepared to lose nick foles to the jaguars >> that would be tragic. what i always do when i hear that i love alshon. we wouldn't be where we got to

the it weren't for alshon. i salute you, alshon. >> apple interestingly, tim cook with a piece in time magazine basically arguing that the ftc should create a clearinghouse where we can all go and see what transactions have been made involving our data >> that's why i wanted him to buy epic, but epic is private they don't want to do it you should own the data of your life you should own everything involved in your health care j & j announced a research study with apple watch to help improve afib outcomes. this piece is another reason why i think this is so chronically underestimated this is the largest revenue watch in the world and all people care about because of the 63% being cell phone is some part maker saying cell phones are not as strong. >> you think cook's fame sempha

data prievacy involves our health >> yes i don't want apple to have your records. i want you to have your records. apple is democratization i think that cook wants you to own your data. j & j within the wants you to or data when you go to any doctor, you have to fill out that darn form again and again. let's just have it here and you just wave your watch. >> i don't doubt mr. cook's desire and interest in preserving privacy but it does also make for an interesting distinction between apple and two of its main competitors. >> well, do you want to give huawei your information? >> in general, right >> absolutely. facebook now has sold your

health care. that's facetious remember when i was out in san francisco -- they're not talking about it every day like they did, but facebook is not known as a company you want to share your data with unless you want it shared with the russians. >> amicrosoft contributing 500 million in housing for seattle most of it is going to be in the form of construction loans. >> isn't that something? this is exactly what lenin faced when he went to the finland station to the winter palace. >> it's like watching the real thing. it's like going back in time. >> he couldn't call on microsoft to contribute to the community back then. >> no. i'm telling you when my great great grand uncle came back to st. petersburg -- well, he called it leningrad, it was bad.

to call it a tale of two cities is wrong i'm sick of dickens. i prefer steven king to dickens, for the record finland station is a great book. >> dow was down 118. that loss has been cut in half bob? >> 3-1 declining stocks initially. we have off the lows we are in an up trend in the last few days. let's look at the sectors we've got. health care, consumer staples doing a little better. banks down, but they've had a great run, a lot of them up 4 or 5% this week we've got a new market fear. fomo, fear of missing out, that's what seems to be going on right here the market versus renewed this this upward drift. it's been replaced by a kind of

different fear why are we drifting up well, managers are behind their benchmarks right now you can't underperform on the downside last year and under perform on the upside this year. you can't do that. earnings expectations are lower. i put up these numbers every day and how they came down in the fourth quarter and that's how the market moved down. 8% upside for the first quarter. now we're down to 5.3 and now 3.1. the market is adjusting to lower earnings expectations, as everybody knew it wanted to. you want to watch a number 2626 on the s&p 500. we haven't been there since early december and it moved the markets when it went below that in early december. finally, jack bogle, i am proud to say i knew jack and i am a jack bogle desiisciple. everybody should understand why he is famous number one back in 1975 active

managers rarely outperform second key insight, high fees are a drag on performance. over time when you charge fees on top of everything else, you can't outperform it's the fees that drag you down so he championed low cost funds for index funds as well as active funds he was not against active funds in the long run. he had several active funds at vanguard he wanted low costs for everyone and eventually attracted people who believed in indexing as he did and wanted lower cost for active funds as well my favorite quote for him, you want to be average and then win by virtue of your cause. jack bogle's impact is still evident today. this morning morningstar put out its annual report on fund flows for 2018 $207 billion went into passive those are index accounts

that's jack bogle. $174 billion went out of active. ladies and gentlemen, jack bogle's legacy is very much with us i'm proud to say i too was a jack bogle disciple. as we go to break, take a look at the markets. dow is down 58 points. movement in treasuries today, 2.73 back in a minute was ahead of its time. still, we never stopped making it stronger.

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we'll get stock trading with jim in just a minute hey, batter, batter, batter, batter.

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stock. "p" saying revenue decelerated 290 basis points they will actually think the company is going to kind of report inline numbers. our december quarter amazon estimates are slightly below consensus. i was surprised the stock was up i regarded this piece as damning. stay focused on this not going to be a blowout quarter. they do survey work, but they do very fine survey work so i'm pointing it out, right here, right now. >> okay. >> pointing it out piper does a lot of surveys. >> they do fantastic work. >> dow jones on the wires saying that les moonves, formerly ceo of cbs will fight the company's decision to withhold that severance of $120 million and that he'll take the company to arbitration over that fight. >> yeah. he has right to do that, carl. and they are citing sources, something you'd be potentially known about.

surprising. >> quizzical. >> cbs believes they have a very strong case to deny him his severance. >> no comment. >> what's on "mad" tonight >> i can't comment kirkland lake gold, i just mentioned i'm a gold back and appian another software company that got crushed during the selloff. this market has had a little bit of teflon to it, right you think corman is going to be mad at me that i said this. >> you said yesterday. >> does it matter? does it matter that's interesting no no only matters if i'm a longshoreman and one of the patrons is mean to me. that bothers me. >> jim, we'll see you tonight. "mad money" at 6:00 p.m. >> i'm going to read it. >> jim is right about teflon s&p and green and the dow has cut its losses to 20 points. back in a minute

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when it might be time to buy or sell? with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today. good thursday morning. welcome back to "squawk on the street." i'm carl quintanilla with sara eisen and david faber at the new york stock exchange. markets shrugging off some early weakness brought on by morgan stanley and csx. bringing the losses close to

zero on the s&p and on the dow as we go for eight wins in the past ten sessions. >> our road map for the hour starts with wall street. weighing a miss for morgan stinstin stanley. new concerns about the chinese market. >> netflix reports after the bell shares up 50% since the end of december will that momentum continue? >> and remembering an investing legend, jack bogle who passes away at the age of 89. we'll have a look at his life, legacy and how he changed the way americans invest and save. >> stocks cutting their losses obviously dow is down 34 and s&p trying to flirt with the green here investors weighing concerns about geopolitics, china and the conditioned flow of corporate earnings is the bull market back. joining us today northwestern mutual chief officers and luskin strategist david rosenberg good morning guys. good to sigh both. >> good morning. >> david, let me start with you and talk about all the negativity we heard about in december is that really being unwound

here because some are looking at things like etf equity flows and suggesting that sentiment is not as good as the tape would suggest? >> well, actually if you look at the aaii index, the net bullish sentiment among individual investors is actually stronger now than it was back at the september highs. i think we have to take a look at that in a certain context in answer to your question is the bull market back i would say that it's not. i think this is a classic bear market real. if you go back historically to previous periods, you know, when you had a 20%, you know, three-month plunge in the markets, it's completely normal to then have a retracement that could be anywhere from 50% to 75% so this tradeable rally probably has some ways to go, but if the question is we're back into a bull market, i would say the conditions simply aren't there. we just got dramatically oversold to the lows, and we're just in technical parlance

closing the gaps right now >> ron, you go along with that, and if this rally is simply tradeable, how do you handle it? >> yeah, well, i would agree that markets certainly were oversold a bit, by guess i'm feeling a little bit more confident in where things are. i see a very strong consumer still hanging in there which is great to see, of course, and when you look at previous markets in the past where you get worried is when you have a consume their isn't playing the game and where you have banks that are having difficulty both of those things are not happening. very strong financial system, very good consumer i actually see some bright horizon ahead of us looking forward to 2019 and making some money. >> yeah, david, just to pile on that view. the data we got this mornings jobless claims still looking good even in the middle of the shutdown even the philly fed perked up. it does go away from your recession call >> well, not necessarily if you look behind the headline of the philly fed index, you'll see in the special question that

over half of the industry respondents actually said in the past three months that demand was actually contracting for the products that they are making, so you have to dig beneath the veneer and we've got the new york fed empire index which told you a different store to, but we have to operate really on what we know about 2019 with the certainty. we know that we're going to get the peak impact that everything that the fed has done, and the fed has done a lot of tightening that hits home this year, and we also know that the fiscal stimulus is going subside this year as well, and the other thing that we know with certainty is that this is the first of four years of a literal tsunami of corporate debt refinancings at higher interest rates, and that's going to curb corporate cash flows and you're seeing it in the data. the one thing you didn't mention is how weak capital spending has been in the past couple of quarters the surveys on capital spending intentions have actually rolled over fairly dramatically so i know this is not a banking

issue. 2000, 2001, 2002 was not a banking issue. it was not a consumer or housing issue. it was a capital goods recession. it was a corporate de-leveraging cycle, and i think that is what a lot of people are mission right now. that's going to be the underlying theme for most of this year. corporate de-leveraging that hits capital spending and causes the recession. >> yeah, ron, there's really two schools of thought right now on the federal reserve. the optimists, and i would assume that you're in this basket, say the fed looks at pause and looking at flexibility and patience that's a good thing. it's going to help our economy engineer some sort of softer landing. the pessimists like david would say the damage is already done seen tremendous tightening in the form of interest rate hikes and the quantitative tightening and we're going to really start to feel the negative effects this year. how do you think about it? >> well, you know, i think what the fed is doing it's actually very interest, right, so on the one and they are saying, yes, we're going to pause because we're seeing what's ahead i they they have even seen the

government slowdown and said that's a good reason, among other reasons, to not continue with the rate hikes, so i do think they are being responsive. i don't think the fed is going to be going to want to be the cause of a slowdown, but i also think, and this is -- continues to be something that you have to considered you hear comments out of the atlanta fed where there still may be a point where need to raise or hike rates a couple of times, so what's happening is i think the fed is being very careful. i think all other things being equal, they still would like to raise rates, but they are not going to do it if they think it's going to cause or cause this recovery to roll over, so i'm not that concerned i see a very responsive fed right now. >> yeah. i have seen, david, some arguments even yesterday saying that the -- that the sav that is lower interest rates in the short time bolsters a landing

for a soft landing, and if you had to make that argument, what do you need to see what's sufficient to make that argument >> well, you know, make no mistake that we've had a appropriate to us 50-basis point decline in interest rates, and it seems to have helped mortgage applications and the nehb index yesterday ticked up which was encouraging for the intrasensitive sectors you know, the capital spending story is really one of uncertainty and one ever a year where the corporate sector is going to have to hunker down remember, the last cycle was a bubble on household balance sheets this was a bubble on corporate balance sheets we saw the household sector hunkering down remember that bear stearns went down in march of 2008. lehman and aig and merrill went down in september of 2008. the recession started in december of '07, and it was a household de-leveraging cycle that caused all these other things to happen, and this is going to be a corporate

de-leveraging cycle, much akin to what we saw in 2000, 2001 and 2002, and there will be other knock-on effects so the point about the sped this. look, greenspan cut interest rates in a meeting on january the 3rd of 2001 when he realized we had actually a corporate de-leveraging cycle on our hands. he cut rates january the 3rd and kept on cutting, and the recession started two months later. the fed started causing interest rates, never mind pause or talking dovishly bernanke actually cut rates in september of 2007 and the recession started two months later, so the reality is that what the fed is going to start to do, and i'll make no bones about the fact that the next move is probably going to be an easing, and that might provide a bit of a circumstance's real, but what the fed does now to stimulate economy is not going to show up for 12 to 18 months everything happening this year will be a product of all the tightening they have accumulated over the course of the past 12 to 24 months that's the story for 2019.

>> yeah. sadly if it's the case, then we only are going to know about it in hindsight ron and david, we'll talk soon, guys thanks very much >> thanks for having us. >> meantime, wall street and the entire investment community remembering the life of a man who forever changed the way we all invest jack bogle passed away yesterday at the age of 89 he's considered one of the world's great long-term investors having revolutionized wall street by creating the world's first index mutual fund. he's someone we all knew professionally over the years and was one of our most cherished guests tyle tyler mathisen gives us an incredible look at the life and career. >> indexing always works best, up, down or sideways >> reporter: in 1975, jack bogle started the vanguard group, and with it a new way of investing >> jack was the creator effectively of the index fund. >> reporter: index funds, mutual funds whose portfolios match a

market barometer like the s&p 500, are commonplace today, but they one heard of in the 1970s, much less the early 1950s when bogle wrote his senior thesis about the concept at rinceton. >> i said mutual funds should be operated in the most honest, efficient and economical way possible i had a sentence in my thesies that said mutual funds can make no claim superiority over the market average. >> reporter: his thesis laid the groundwork for what would become the most powerful investing movements of the last 20th century. he concluded that active trading mutual fund managers failed as a group to outperform the relevant indexes, especially when you subtract fees and expenses >> anybody can do it for a year, and if you can do it for five years and if you can do it for ten years, but over an investment lifetime there's

about a 3% chance that a money manager can beat the market. >> after princeton bogle went to work for wellington management for over two decades, eventually becoming ceo he was later terminated for what he called an unwise merger so he started over, putting the indexing concepts from his thesis into practice at vanguard. >> investors suddenly found the playing field more level, so to a certain extent, in fact to a great extent would i say, he democratized investing more individuals which was a hunk contribution in the mutual fund space. >> reporter: that initial fund called the first index investment trust and later renamed the vanguard 500 index tracked the s&p 500. skeptics ridiculed it as bogle's folly, but by 1990 index investing had taken root the reason, bogle turned out to be right in the 15 years ending in january 2017, nine out of ten actively managed large-cap

mutual funds underperformed vanguard's 500 index today vanguard has more than 5 trillion under management. >> jack bogle is pretty much like a t-rex in terms of what vanguard is verseus, you know, a little tiny lizard over here had. you don't see too many folks anywhere in the world that mac that much money. >> reporter: after retiring from vanguard in 1999 bogle started a research center on the vanguard campus there he continued advocating for indexing and buy and hold long-term investing. he called trading stocks a loser's game. >> it comes right out of shakespeare. the moves in the market are lyle a tale told by an idiot full of sound and fury signifying nothing. i think it's speculators speculating on what other speculators are spec late on. >> reporter: and speaking of speculation, few would have bet on vanguard back in 1975 even fewer still would have thought bogle would still be jousting with critics deep into the second decades of the 21st

century. he had his first heart attack at age 31 doctors said he wouldn't make it to 40 much less live to 89 he had five more heart attacks before undergoing a heart transplant at the age of 65. >> i maybe -- i don't want to get carried away here, the luckiest guy in the world. >> jack bogle was 89 years old, a great package there remembering him from tyler mathisen bill griffith has a great story on twitter he was the keynote speak are for a big morningstar conference in 1985 and cancelled at the last minute because of his heart transplant and keynoted in 1986 and said i cancelled last year but then i had a change of heart. >> he was very plain spoken actually and one of the reasons why -- for so many reasons we loved to have him on, so many different shows on cnbc during all sorts of period of market turmoil and while his mantra was stay the course, sort of plate long game, think outside of the day-to-day volatility, he did in

some of his last interviews actually warn that the bull market can't go on forever he was on with us on "power lunch" a few months ago and then talking to barron's in december and said that trees don't grow to the sky, and i see clouds on the horizon. a little extra caution should be the watchword and i actually said if you're looking at the traditional 70/30 portfolio stock/bonds maybe now is the time to go to 60/40 stocks and fixed income just because of the more defensive tone. this was during the december volatility >> yeah. and listen, listening to that one quote from him which they use, only 3% of active managers over a long period of time are really going to outperform the market shows you that there are very true superstars though. wall street would like to convince you otherwise really only buffet and maybe one other person who actually has outperformed the market over that period of time. >> so true we went back to the buffet archive on cnbc.com at the 2017 berkshire meeting where buffet

called jack a hero, and then we with poguele on our show shortly thereafter, and we asked him about it >> he called you a hero, man how do you take that >> well, i mean, to be called a hero by a hero gives it more credibility than being called a hero by a non-hero i wrote-- i've already written him a leather morning of thanks and i'm not a hero, very ordinary guy who has tried to do my best for investors and who gave a damn about the people investing and wanted to make sure they got a fair shake if that's heroism, so what, so be it. >> yeah. >> but it was wonderful to be out there. ulted with your grandmother's doctor. we can do the screening at her house. hi. this is the man that's going to check your eyes grandma. cognizant ai solutions are helping healthcare companies advance diagnostics and prevent blindness in patients with diabetes.

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my name is mike, i'm in product development at comcast. we're working to make things simple, easy and awesome. time for our etf spotlight wilfred frost taking a look at the financials following morgan stanley's earnings miss. wilfred. >> sara, despite disappointing numbers from morgan stanley the xlf is up 3, up 6% this year having underperformed last year. the main theme for earnings this week has been that there is no recession in sight allowing share price gains due to very cheap valuations citi with good expense control, goldman with solid numbers all around, outperformed this week because they had been the cheapest valued coming into earnings bank of america probably had the best numbers overall morgan stanley today, as you said, reported a messy quarter, but the ceo james gorman said, quote, we do not believe the

fourth quarter is a new normal in fact while it's early days, the first quarter has started on a similar path to the first quarter to the saturday of 2018. wealth management now 50% of their business was the main disappointment here is gorman addressing client behavior in light of the recent market volatility. >> the clients moved more money into cash, absolutely. deposit numbers went up. cash levels are -- i don't want to say at historic highs, because i -- ilpractically don't have the full history, but as long as i've been doing this business which is almost 30 years, these cash levels are high, and people are sitting on the shrine number two, declines pull assets out during, you know, the financial crisis i think we lost 2.5% of our client assets during the financial crisis so did, and that was -- that was, you know, obviously very, very different world from what we've been in with a little market turmoil here so, no, there's no issue there. >> morgan stanley shares

currently up 6% given all of their week-to-date gains before today and the xlf down about 1%. guys >> wilfred, one. headlines has got to be now that we've heard from all the big wall street investment banks that it's another, what, near record profitable quarter? i guess a lot of that has to do with the corporate tax cut and how much these banks have benefited, but overall strong. if you look at the profitability, right >> absolutely right, and if you take 2018 as a whole, particularly given the tax cut that you mentioned, record years for all of them, revenues, profit before tax and after tax in particular, interesting to see the compensation expenses because both citi and morgan stanley's hope they are back more because of that poor q4 trading performance whereas some of the others didn't it will be interesting to see next year whether that's really closely linked with quarterly performance or whether it was a one-off and what that means to the long-term market shares of some of these different stocks

>> wilf, correct me here if i'm wrong, but it does seem investors may have been a bit surprised because we knew there was weakness in fixed income but morgan stanley's franchise there not as strong as some of the other competitors but somewhat unexpected to see it as much on the investment management, wealth management side of the business that gorman was talking about. then they did spend a lot of time talking about growth opportunities i know on the call and a whole slide deck about that as well. >> absolutely right, carl. this fixed income trading is had a much smaller part of the pipe for them and that did disappoint, but overall it wouldn't have led to the biggest -- the big eps miss that they had wealth management very much the driver of that miss, but, again, when we think about things, you know, clearly wealth management was going to have a tough quarter given the environment. i think people were a bit spooked by the miss in the margin there because that had been steadily improving over the long term. as you said, david, on the call, gorman made it very clear he felt this was a one-off quarter. long term reiterated all their

targets, roe, margin for wealth management growth targets and did say very clearly they were considering a few acquisitions in the wealth management space so we'll keep an eye on that. >> busy week appreciate that. wilfred frost back at hq on morgan stanley when we come back, netflix is up tonight. shares up 50% since the slump in december and shares of signet s cbe hammered and what theeo hato say about it. dow down 61 and s&p down 2.5

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learn more about why you should choose an aarp medicare supplement plan. call today for a free guide. netflix reports tonight after the bet. the company is expected to announce earnings at 24 cents on revenue of about $4.2 billion. shares, as you know, have surged earlier this week after announcing the price hike for its 58 u.s. million subs cnbc.com has a story on the site that they periodically do. if you invested in the company in '07 when it first began its streaming service that investment would have paid off

big time $1,000 investment would now be worth more than $90,000 as of january 15th that's according to our calculations, and we'll see what they say tonight about competition. >> forget the long term. howabout if you put money in christmas eve. look at the setup into earnings. one of great expectations, the stock is up 50%. befgt all t befgt all the other faang stocks since christmas eve 7.4 is the expectation and 7.4 million, that is, and domestics at 1.8 million there's a lot of hope there after this price hike that they announced, and we're going to wait with word from the executives on why and how optimistic they are in the u.s. being able to pass on the higher prices interesting that of the three of us, david is the only one that has seen "bird box." >> carl has seen it. >> i have not. >> you are the trendy one for a change >> that is a change. because i try to be anti-trend in all ways. >> but i think that's one of the reasons that analysts have been

so optimistic. they have been grading and have a good content slate right now. >> the questions if you want to ask them, and by the way to the point that we made at the beginning, the stock has defied expectations all along i can remember when it was via the mail and people wondereded about their business model but the questions now okay, so many other streaming services will be available whether it's from disney or something at least from time warner in some fashion. whether our own parent company with a free service, ad-supported service but so many other things to choose from, an content conceivably continuing to be pulled from the netflix platform, putting even more pressure on them to produce their own content of which, of course, they are doing an enormous amount, but how do the financials work on that? how long can you continue to believe that they are going to be able to generate hits in some fashion or or the way they are just throwing money at so much. >> the cash burn is what, $3 billion? >> the cash burn is very significant and obviously a lot of analysts have significant increases in how much they are going to spend in content, but

it's met by significant increases in the number of subscribers. most of the analysts coming around to believe that eventually this is going to be a free cash flow monster given the way the numbers look, but -- >> a lot of them do see an infliction point in profitability starting to happen we will see. they got the benefit of the doubt from wall street right now, and those numbers out during the "closing bell." shares of signet getting hammered, the jeweller cutting its guidance following slow holiday sales. same-store sales fell $1.5%. the ceo telling me, quote, as you can imagine, i'm disappointed, especially versus our guidance our results fell short expectations we discussed last month. she says what happened was the competitive environment we saw early in the season increased during the key gifting weeks even with our promotional investments. right now i'm squarely focused on the need to take even faster action to improve our performance guys

so not so unlike what we heard from some of the big department stores like macy's, just sometime in the middle of that season, things got very promotional, whether it was the market falling off a cliff or just a weakness in consumer spending >> what did you do that interview with her and then the stock really reacted positively for some time and then obviously it's new lows now. >> right when she took over. so she put in place this turnaround program, really built around more targeted marketing, now product assortments, revamping e-commerce and she's doing that, and she says it's just not happening fast enough, and the legacy businesses is what's dragging down the overall numbers so she said we need to move even faster and get that inven try out there. it was april of last year, i'm being told by a producer, so investors were excited about it, but there have been hiccups at least in terms of speed of which that has actually turned around results. >> those are been short the stock. an activist investor in there

encouraged them to buy back a lot of stock at higher prices. suboptimal. >> there's been shorts in the stock. >> a lot. >> so you get the massive moves every time there's a disappointment. >> big mover today let's get a news update this morning. for that we'll go to sue herera back at hg. >> good morning, carl. good morning, everyone here's what's happening at this hour the trump administration will roll out a new strategy for a more aggressive space-based missile defense system to protect against existing threats from the likes of north korea and iran president trump will lay out the details in a speech at the pentagon at the top of the hour. a senior north korean official arriving in beijing reportedly en route to the u.s. for talks ahead of a possible second summit between president trump and north korean leader kim jong-un. south korean media says kim yong chol is booked to leave on a flight to washington a bit later today. bomb disposal experts continue to search for potential explosives left over at a luxury hotel complex in nairobi where

an extremist attack claimed at least 21 lives an american was one of those killed back here at home, a series of storms whipping through the west bringing heavy snow and rain to parts of california. a blizzard warning has been issued in the sierras along with an avalanche warning whiteout conditions were reported in south lake tahoe and it's headed our way. that's the news update for this hour sara, guys, i'll send it back downtown to you. >> all right, sue, thank you when we come back, shutdown day 27 what washington dysfunction is signalling to wall street and main street. plus, the chairman and ceo of aerial investments john rogers will be join us as we remember investing legend jack bogle. "squawk on the street" will be right back or to carry on a legacy? its show of strength... or its sign of intelligence? in crossing harsh terrain... or breaking new ground? this is the mercedes-benz suv family.

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welcome back to "squawk on the street." natural gas with 81 billion

cubic, estimates for a draw of 82 billion cubic feet so a smaller than expected draw on those inventories. as a result you're seeing a little bit of action natural gas prices up 3.75%. now up 4.33% now on those prices 353. the natural gas prize over a year-to-date period up around 20% on forecasts for more coal later on this winter back over to you, sara. >> cold weather driving the charge there dom, thanks. >> investors keeping one eye on the earning and another on the ongoing government shift doup. now day 27 warnings coming in from analysts and ceos alike here's what jpmorgan ceo jamie dimon says worries him the most. >> i worry about most today is bad policy you know, just bad policy that we don't get things done that this country desperately needs like immigration reform. we need to get a good trail deal i think there's legitimate complaints about china i worry mostly about our own public policy and the government

shutdown in the same category. another self-inflicted wound. >> meantime, senator chuck grassley saying the president is, quote inclined to impose new auto tariffs weighing in here on the policy headwinds for business, former vice chairman bob lutz and partner and tulane university professor walter isaacson. good to see you both walter, how much do you think the government shutdown now is a big impediment to what has been a pretty strong economy over the last year? >> well, i think it's going to be big, partly because what have jamie dimon just said. it's not just about the billion dollars a week or so that it's costing, far more than this fence or security fence. it's about consumer confidence it's boston people like me believing that we'll be able to get our act together on policy all the way down the line whether it's trade or immigration. this is not that difficult of a problem to solve, the issue of

border security. we're talking about, you know, one side that was close to 2 billion and another side wants 5 billion, you can figure out, well, let's just have some fence and border security and appoint some blue ribbon panel led by michael chertoff and three generals from the corps of engineers, figure out what's the best way to do things and move on the real problem is we have a government and especially i think the president is pushing this in a way that we can't just move on, and it's going to hurt the economy in a direct way and certainly in an indirect way in terms of world confidence in our ability to do even the most simple things. >> bob, do you think that washington policy broadly has turned from a tailwind to business in the economy? last year the corporate tax cuts, deregulation into a headwind this year >> no, i don't think there's a headwind i think the government shutdown will be resolved and as we used to say in the automobile

industry, you know, if you run the numbers, you never take a strike, and what the president is doing, he's taking a strike, but we also -- we also knew that if you let the union creep and creep and creep and demand more and more hand more and more and you keep giving in and giving in to avoid a costly strike, ultimately you lose control, and i think president trump has decided it's time to take a strike will it be somewhat costly yes, but so far from what i'm hearing from industry, car industry, is there is no short-term -- there's no short-term effect, no real pressure on profitability or sales. the only thing is apparently certification of new models is getting delayed because the people in the epa and other regulatory agencies that certify new cars are not working, so

that queue is stacking up. it's going to delay some new model introductions. but right now there really -- they are really on the car industry as far as i'm able to ascertain not much of a negative effect >> walter, what do you think about this idea -- with enwaite wrote an article for politico saying people close to the president says he tends to gauge economic risk by market reaction so lack of big drops on wall street could be among reasons he does not yet feel significant pressure to change the wall demands and end the shutdown how should we feel about that? >> well, i think that's probably true he changed a little bit on china trade when the market reacted. i think that's a smart thing to do the market generally knows what it's talking about i do agree with mr. lutz, that you know, sometimes have you to take a strike so to speak, but it seems to me that there's deeper issues that you have to deal with than exactly how you'regoing to do, you know,

the type of funding for border security that's something that could be compromised pretty simply, and what worries me is that there's just no appetite for any sort ever sensible getting people together and saying how do we resolve these problems that you feel in washington, so i'm hoping that -- and i see that with the democrats coming in with the house of representatives, same sort of thing, so i think that's a head bind not just for the next quarter or so but looking at the united states i agree totally with jamie dimon we've got to find ways to get grown-ups who can say we know how to handle these problems and make the cost benefit analysis necessary. >> hey, bob, on the trade war, i was looking back to an appearance you had on our show back in july of last year. you said what the president is trying to do is eradicate decades of ongoing monumental trade deficits sucking the wealth out of our country. i guarantee you the u.s. will come out of this trade war as a winner

still feel that way? >> i totally stand by those statements i can't believe how clever i was back then. >> you said we wouldn't know more for a couple of months. it's obviously been more than that at what point do you think that's taking too long >> well, as long as progress is being made in trade talks it's not taking too long. meanwhile, we don't have tariffs. like i said, we wouldn't have tariffs until -- until the trade talks break down, and i think senator grassley is probably right. president trump will probably decide to impose tariffs on european cars just in order to get the eu to finally move on tariffs, and as i keep repeating every time i get an opportunity we have had decades of trade inequity in that our automotive tariffs are 2.5% the european union is 10% and then on top of that they impose

a 25% value-added tax on american cars that already have a full tax load embedded in them german cars that are exported from germany do not pay the german value-added tax, and when they get to the united states they don't pay a value-added tax either so why should had a mercedes or bmw be lower priced in the united states than it is in its own home country? it makes absolutely no sense, and somebody said, well, the average imported car is going to go up by $6,000. i have news for you. a mercedes should be $6,000 more than a conventional car, so i think president trump in my judgment as usual is doing the right thing. >> funny whenever i hear about v.a.t.s i think about the bothered adjustment tax as apart of tax reform and how much revenue that would have raised and addressed the trade issue. that's not my question to you,

however. i want to come back to the government shutdown. >> and i agree with you. >> glad to hear that what -- beyond the economic impact, in terms of just having the government shuttered and certain agencies not working and certain things not being looked after, we've done a story on cnbc.com earlier this week, for example, about szish and the risks there. you know, as this goes on, don't those risks continue to mount? >> yeah, i think you see both direct costs but also it's an indirect thing such as, whether you know, the fbi and the guarding against cyber attacks is being done at full scale. it's sort of a weird type of shutdown we're only a quarter of the government is shut down, but in certain ways as an interconnectiveness, and i keep going back to saying that it -- it's also a psychological thing after a while. we see a whole dysfunction across the world these days. i mean, whether it's in europe being dysfunctional, the british

parliament not being able to figure out how it's going to resolve one way or the other or three ways or another brexit and then the u.s. congress and the white house not being able to resolve simple things, i think it's probably time that a whole lot of people said let's take a more mature approach to some of these things we don't need to be -- it gets back to the jamie dimon approach >> yeah. a lot of man made issues out there. guys, thank you very much for joining us >> thank you. >> on the shutdown and some of the other head winds, walter and bob. >> mean times, shares of csx are down today after the company reported earnings. morgan brennan just talked to the ceo and joins us now with more about his comments. >> reporter: a new $5 billion buyback was announced last night and i caught up with the csx ceo and president just a few minutes ago jim foote by phone we talked about a variety of topics starting with u.s.-china

trade and what the flows have made in terms of the freight railroad little or no impact on csx u.s. steel expanding operations where he has seen a slight negative but csx has little exposure to it soybean exports and all of the railroads have seen a big push on container imports on both coasts as products are trying to get in ahead of those tariff increases that had been originally scheduled for the beginning of this year no impact from shutdown perhaps unsurprisingly, but like many other ceos monitoring that situation, in terms of the u.s. economy and the fact that we've had a number of economist strategists come out saying the risk for a recession has been increasing, he says it's probably a fair statement, but they look at every economic indicator. our customers touch about every part of the u.s. economy he told me and they are not seeing any kind of meaningful slowdown at all. instead planned investments, projects by customers this year and beyond do seem to remain on

track. i also asked him about precision scheduled railroading which is what csx implemented about two years ago. union pacific and norfolk southern are both implementing similar strategies right now nice to be copied and show the world what can be accomplished to the extent that all the railroads become more effective and efficient, he says it benefits csx in terms of csx's outlook this year which right now is forecasted to be low single digit revenue growth, one of the reasons that the stock sunday pressure right now, he said aggressive targets on the cost side and those are under control that maybe if they see a decline in demand for u.s. coal it was a great year in 2018 still remains strong for 2019, that that could be something to watch, but, guys, it -- on pricing as well, also saying that the tight trucking market, they see that as an opportunity, too. shares are down about 1.8% right now but keep in mind they have run up quite a bit 10% over the past year and much more than that over the last

five and ten years back over to you. >> thanks for that morgan brennan on csx. when we come back, remembering the father of index investing. legendary jack bogle passes away at the age of 89 the ceo and chairman of aerial investments john rogers will join us with some thoughts back in a minute

one wall street bull sees a record-setting year for the market taking shape. find out why on tradingnation.cbs.com. more "squawk on the street" is coming up.

the loss of investor john bogle is being mourned this morning. joining us now is john rogers. shares princeton in common with bogle. we were talking all morning long about the idea that this all came from a college thesis this revolution that he brought to investing >> it's amazing. i often wished i could have

written a thesis like that when i was in princeton those who knew of him and those who were learning about him today. >> i think the one thing is he -- he kept working so long o mission that he believed in so deeply you know, still working, showing up to krchconferences in his mi late 80s that commitment and passion is something we can all strive for. >> you know, the revolution, john, of index investing morphed into something he wasn't always a fan of, eft investing and the short term nature of trading efts and lack of corporate govern as. do you have a feel for how he viewed his legacy? >> i think he was quite proud of his legacy i've had a chance to spend quality time with him and see

him at the morningstar conference, to see him talk about his deep beliefs i know he knows he left a mark on america i was at the berkshire hathaway meeting awhile back when warren buffett honored him, and to see that kind of recognition from the world's greatest investor, i think jack knew what a difference he made for all of us >> we have been talking about the lessons he tried to impart on investors one of them was very simple. save your money. don't chase performance. and sort of lessons about allocation regarding fixed income versus equities i mean, they've almost become newton's laws to some degree in investing. >> exactly and you know, he stays on message and he built these deep relationships with people that cared about the same issues, people like don phillips and people that built morningstar,

have taken his message, delivered it to financial advisers throughout america and throughout the world, and there's just no one like jack. he was so strong, independent. he didn't feel a need to please everyone else which i think is also important value and skill >> when you think about the market structure and how different it is today versus when jack started out in the '70s, first investment trust was 1975, how different is it, how much impact did jack make? >> well, he transformed the investment world as you know, half of investing has taken hold, and so many people believe in it, so many believers like warren buffett have pushed jack's mission and message, though it has transformed the world for investors, given them a fair shake, low cost, ability to do

well for their families. >> that's exactly how jack would have put it. john, we appreciate the short conversation, but an important one today. john rogers of ariel, talking about jack bogle dead at 89. "squawk t see iba ter thist"s ck e's the closing bell. (sighs) i hate missing out missing out after hours. not anymore, td ameritrade lets you trade select securities 24 hours a day, five days a week. that's amazing. it's a pretty big deal. so i can trade all night long? ♪ ♪ all night long... is that lionel richie? let's reopen the market. mr. richie, would you ring the 24/5 bell? sure can, jim. ♪ trade 24/5, with td ameritrade. ♪

all right. it is that time of the show to turn to sara, say what's coming up on the show you do later this afternoon. >> netflix is after the bell, amex is after the bell and we have john calamos on. he is a well known stock picker. it will be interesting to hear his remembering of jack bogle and what he contributed to the world of investing brings us back to the conversation which we have every day, whether things are changing now in terms of the market environment. >> that and then netflix and amex, too. >> netflix is never dull earnings >> whether good or bad, never dull >> dow down 31 s&p is trying to climb into the

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good morning it is 11:00 a.m. at van guard headquarters in valley forge, pennsylvania 11:00 a.m. on wall street. "squawk alley" is live ♪ good thursday morning. welcome to "squawk alley." i am carl quintanilla with morgan brennan and jon fortt we are awaiting comments from the president at the pentagon regarding national defense we're going to bring those to you as soon as they begin. meantime, we'll start with tech names. netflix reports tonight after the bell it has been on a tear lately, up more than 50% since christmas, leading the faang basket