this week with some of the major players we talked to including chevron's ceo earlier today on "squawk. oil prices now looking at up 27 cents. $53.29 a lot to talk about. we're really just getting started. >> powerful three hours. powerful three hours >> big three hours >> powerful hours coming tomorrow join us then right now time for "squawk on the street". ♪ ♪ i've been losing my mind good wednesday morning welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber a wave of earnings from utx, procter. they'll above the the dow by 125 points at the open got some mild gains in europe. bank of japan holds steady the ten-year around 277. snapback rally on the back of

some strong corporate results as we said, united technologies, p&g, ibm, comcast, sharply higher open. >> and shutdown, day 33. and the sign of some progress in washington senate set to vote on competing plans to reopen the government it is the chamber's first such vote since before christmas. >> and the streaming wars go mainstream viacom buying the ad supported streamer pluto tv. $340 million we're going to talk to ceo bob bakhash later on this hour stocks set for a strong open after the sell-off which snapped a four-day win streak. dow components, ibm, p&g and utx posting better than expected quarterly results. comcast meeting the street with a 10% div hike 1.2 million xfinity mobile subs, big strength in broadband over there. >> broadband ads are where people watch they continue to watch video sub declines, which were not substantial. and that's always encouraging. we know where the trend is going

it actually not as much as it had been broadband ads very strong. although some of the numbers out there perhaps higher than what they came in with. overall, a strong quarter for our parent company it would seem at this point. the conference call is going on now, jim we'll get more off of that revenue up substantially adjusted ebitda, you have the sky acquisition having been closed during the last quarter and so sky is now a full part of what comcast is reporting. they're also giving you pro forma numbers as well. does appear to be fairly strong there. what investors do focus on in terms of video sub declines, and broadband ads, both came in well i guess that's the best way to put it at this point it was up more in the premarket than it appears now with 28 minutes to go before we get started with trading. >> there is a couple of lines about pro forma revenues, if you

include sky. it is so funny, you look at the united states versus europe, italy, which we know is a disaster, according to the ceo of stanley black & decker yesterday, italy, italy and germany, premium sports and movie channels, you know, exclusive sports rights, these -- these are growing at a level that we used to see in the united states. >> you're talking about sky now. >> sky >> people wanted to compare sky to directv or dish those comparisons were not accurate because sky is a very different animal i think investors are going to start to get a better sense of that as the results become entwined with that of our parent owns a lot more content. and is dominant in its market in a way that the satellite businesses are certainly not here in our country. >> was it a bargain? >> i don't know it will ever be viewed as a bargain, no. that is a far cry. >> you can change the complexion

to a growth stock and stop speaking about the -- they put the release out, the parent company of our network, they're pretty straightforward, but before i always focused on how many of this did they lose, how many of that did they lose, now i'm focused on italy in germany. the green field nature of premium sports and it is like espn for europe. >> strong take as for the dow components, i wonder which surprises you the most ibm has not gapped up on earnings only six times since 2002 has it been up 5% on earnings. >> i think ibm is real shouldn't have gotten where it got to there is, you know, kenny uberty, it is a clean quarter. here what i think people are starting to think about, they're setting a table for red head the deal is not closed they got some growth and they are -- people are looking at revenues and thinking there is no real growth they're getting rid of lower growth businesses to get -- to

prepare for red hat. they're not buying back shares once the red hat deal closes why? the growth opportunities how many times have you heard that from ibm, the growth opportunities are too great they don't want to buyback. wait a second, they have to worry about the bond rating because there is a tranche of bonds coming to pay for it i'm impressed by the cash flow i'm impressed by their cloud, hybrid cloud game plan and i can't understand how the stock got to where it was. they did miss in some divisions of the third quarter brought divisions back in the fourth quarter. >> why are strategic comparatives no longer important? >> the whole company is, you know, you got cloud, and you've got hybrid cloud work and when you see red hat added, what you see is a company that is where oracle should have been. good cloud business. that's cheap shot oracle. >> it is >> cuts the target to 115 today, on slowing growth, at strategic comparatives some skeptics.

>> it is okay. everyone has a right to be wrong. >> and to be fair, as it gets larger, as the revenue gets larger and larger, the growth rate does slow down a bit. >> right i think this company, look, i have tremendous respect for jim whitehur whitehurst, very energized they did not talk about red hat on the call. this is some of my own summary of where i see things going. and i think that red hat is being viewed by the analysts as a 2% to 3% winner for them that's totally wrong hybrid cloud needs on board, the great thing about red hat, they're agnostic ibm is considered to be too pro-ibm so to speak. i think red hat is is the breaking of the -- >> get ibm into new areas they haven't been in and able to offer new services >> red hat only scratched the surface. i'm very cheered by this ibm call it is, by the way, in terms of about the davos worries, no, not seeing it. seeing very good engagement. that's typical of what i'm seeing when you look at united

technologies, no issues. no issues. just growth. aerospace, no issues, just growth digitization, we heard chuck robins talk about digitization, it is an alien term for people who have not followed the industry everybody needs to be on the web. and anybody who is not on the web is going to die. ibm is doing very well international on the web >> same line came out of procter, no signs in their view of a recession. >> did you see the numbers >> organic sales up 4. we were looking for 2.6. grooming was weak. beauty up 8. the pricing is sticking. the volumes are up >> they're innovating again. this is really great to see. there is a line in procter i loved. which is if you look for health care plus, oral care, health care plus 5, oral care innovation, innovation, oral care, that's what i expect from procter instead of a lot of plastic things i have to call the cvs person over and say can you open this?

this is a great quarter. this stock is going to be up big. board very motivated, board doing a lot of good things this is mcnerney being the lead, but i put in peltz in the mix, amy chang i'm putting in the mix, dong a good job, younger person with a very good notion of what the consumer wants >> they can break out far above gdp growth, that's a positive. >> that's it >> that was the knock. >> i just like that quarter very much these are dow stocks so you look at what happened yesterday, you wouldn't think that we could get away from the powell conundrum and say trade on i don't think it is -- i think it is a continuum. trade didn't come up in any of the conferences, in my background i didn't hear about the conference calls, just my background work, really positive. >> we still have the shutdown to work with. day 33 here. jpmorgan's jamie dimon on "squawk box" talking about the failure of leaders on capitol hill to resolve the standoff earlier today, spoke about the

shutdown's impact on wall street >> ipos can't get done anything that has to get signed by the s.e.c. can't get done the backlog will continue to grow, people making comments on their 10k, just not good this is not the way to run around our government should veer away and never do it again. >> even referenced david rubenstein's idea to have a bipartisan commission to study immigration and allow us to open the government in the meantime. >> i just can't imagine president trump going for that he's got his own way of doing things, whether you like it or not. bipartisan certainly not in the cards. look, people are mentioning the shutdown now and the conference in some of these recommendations. but, look, i look at walmart, morgan stanley whole to buy, flywheel is working, growing sales, not sacrificing margins, 3% is the right growth i come back to walmart economy, amazon economy and, yes, it is just terrible what is happening. when you see capital one, they

have costs that are higher you can imagine when people aren't talking about enough is that people say, listen, they don't have enough money paycheck to paycheck. they have enough credit paycheck to paycheck except for the credit is it 15%? and people really misunderstand what is happening for those 800,000 people, which is if they have a credit card, they're going to max out and so that is something that is permanent. you do not -- larry, to -- god bless him, larry said, listen, things snap back if you're one of these people, you're taking your credit card and you are ramping, and those credit cards are pernicious. it is amazing how much more of these people have to pay who work for the government. it is really a shame >> there are plenty of people beyond government employees who max out their credit cards in this country. >> people may not have had to do that at all. >> once you take it on, it is difficult to get out there are other options through the these days, refinancing your credit card debt, goldman sachs has one, right >> marcus, i think have you gotten the flyers >> marcus is good.

we didn't talk about solomon solomon delivered a good quarter at goldman people are, like, we have forgotten that, we have forgotten everything it went from 160 to 200. that's a dow stock i'm focused on dow stocks doing well, versus the overall gloom you can't just say, oil is down, no trade, navarro is angry, sell stocks he's an angry guy. he's funny. >> is he funny >> oh, my god is he funny. >> is he really angry or just seems angry. >> when you write a book called "death by china". >> you got to know somebody to understand the true angle, i think. >> i don't think he's really angry. >> okay. >> jim mentions kudlow on the tape yesterday after we got these headlines that some preparatory talks have been canceled kudlow talked about that pushed it back and talked about the impact of the shutdown on the economy. >> i acknowledge that we will lose some in the accounting of gross domestic product, okay i do not acknowledge that the fundamental economy will be adversely affected at all.

this is temporary stuff. and when the shutdown comes to an end, and the negotiations are satisfactorily completed for the administration and others, we will get it all back >> so you take issue with that >> i think with the economy, yeah, i have to. because i did a lot of work on the previous shutdowns and previous shutdowns did not impact that second paycheck. and this is different. >> we are at 33 days in. we're now in unchartered territory. >> we can't -- >> by the way, the people furloughed who are not working, who will get paid, i expect hopefully, we didn't get their labor during the course of the period they weren't working, even though we're paying for it, it is costing us something. >> how about we show up to work for -- we had guys, "squawk" has been unbelievable. have to watch the davos coverage it is unbelievable i'm jealous as all get out. >> would you show up if you weren't getting paid i think you would.

two empty chairs next to you, but -- >> solo at 6:00, solo at 9:00. >> destroyed a whole -- there was a wild cat strike once now it is like the man you know i believe in the man. institution must be preserved. >> you are the man. >> i am not the man. i believe in the man i'm not the man. people working for nothing. >> #theman. >> viacom's bob bakhash, the company looks to capitalize on the new streaming deal downgrades of merck and pfizer and tesla. we'll get to that. look at the premarket, more "squawk on the street" from post nine in a minute alpha seems more elusive today.

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and the army taught me a lot about commitment. which i apply to my life and my work. at comcast we're commited to delivering the best experience possible, by being on time everytime. and if we are ever late, we'll give you a automatic twenty dollar credit. my name is antonio and i'm a technician at comcast. we're working to make things simple, easy and awesome. to the bond pits, check in with rick santelli at the cme in chicago. good morning, rick. >> good morning, carl. i guess we're already developing a kind of fingerprint of the treasury markets for 2019. they just follow the stock market i mean, really almost a tick for

tick with regard to stocks move lower, yields move lower today is one of thor haves look at intraday of 10s. we're basically recouping what we lost and do we remember friday, we closed at the high yield close of the year at 278 you see on the year to date chart, we're just basically a whisker away from retaking that area, which i think is important to pay attention to. you know, when we really are light on getting fundamental economic data points with the partial closure, the treasury market and stock market look towards each other for information in the notion that we are lacking any other information. one thing we're not lacking, central bank meetings, today is the bank of japan. so let's look at a year to date of the dollar versus the yen if you notice there, the dollar is basically hovering at the highest level since the end of december i'm not sure what mr. corona and mr. abe have in mind but their balance sheet is

expanding a little bit again, like the ecb tomorrow, look at the next chart, year to date of the euro versus the dollar. and as you can see, it is stepping off the ski slope on the right side as well granted, in the bigger picture, the foreign exchange market is choppy, but really hasn't had any huge moves considering the dollar index, it is always within an arm's reach of 96, really for the last couple of months but these are levels to pay attention to the global slowdown will put much pressure on the heads of foreign central banks, especially those with the deteriorating economies and rising debt and negative interest rates carl, david, jim, back to you. >> rick, thank you rick santelli. we'll get cramer's mad dash in a few moments. count down to the opening bell look at the premarket as we get a big pop out of three dow components utx, ibm and procter week back we're back in a moment was ahead of its time.

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8 1/2 minutes before we get started with trading here. it is hump day >> hump day. >> united technologies, one of our favorite ceos, i think fair to say, greg hayes, and good quarter? >> no, a great quarter it is growing 22%. the organic, you're talking

about double digits. frankly i've never seen anything like this. they spent a fortune, $10 billion on this new jet engine they got a thousand -- they made a thousand engines david, this is a company that is firing on all cylinders. the rockwell-collins deal, a winner immediately additive, terrific they'll be divided into three companies. >> into three. three companies! >> you're going to get the form 10s later this year. will happen ahead of schedule. you're getting carrier, huge install base residential for carrier in this country, incredibly strong go figure. stanley works talked about a negative you're talking about 10% growth. doing incredibly well. there are -- >> in china? >> there are other places that use it china has the great install base i think 88,000, it is 88,000 for the elevators, 86,000 china. what i'm saying is china --

88,000 last year -- >> you need to do some of parts. it is important they all be performing well, but eventually it is going to take time but eventually this is going to be three different companies >> absolutely. but the cash flow for just for carrier, for climate control, could be good. the numbers are rather extraordinary. otis has the great revenue stream stand alone the companies will do better. greg hayes put together a juggernaut what people will want, this is the alternative to boeing, because, david, they're agnostic >> all right. >> china -- >> i like to write on this thing. >> i think the old highs could be -- that was david that was when -- that was before jay powell this was jp. jp this is jp that's what happened that's not jet propulsion. that's jay powell. jay powell does this and then jay powell changes his mind after doing some homework this is hwk. powell does homework realizes he's shutting down the economy. and then look what happens now it is a chance to go up

here, but there is a chance that he raised rates. listen to jamie dimon. if the jet propulsion is allowed, if we get jet propulsion and not jay powell, david, we will see new highs i said it. the fed is great i love the fed everything he says is good i'm just -- i love, love, love >> we'll see you opening bell coming up next. ♪

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because the changes we make today... can you hear me? ...shape the possibilities of tomorrow. u.s. bank the power of possible. you're watching cnbc's "squawk on the street" live from the financial capital of the world. opening bell in just under three minutes. busy wednesday morning as we're watching some premarket action in utx and procter and comcast and ibm, which the guys have already covered. has et is on the tape at cnn saying we could end up with zero growth in the first quarter if the shutdown extends for the entire quarter he goes on to say that q2 would

be humongous in his words if the government reopens and adds that the chance of a recession in 2020 is close to zero. but this debate is going to go on as long as the shutdown is in place. >> i find this zero growth thing a little -- not disingenuous, but there is a -- i don't know how i get that yes, there is 800,000 people plus multiplier effect but there is a big country giant economy. 320 million people i do worry about housing but other areas of the economy are doing well retail, like i said, the walmart, the dollars, burlingtons doing well i don't know, maybe people aren't going to the mall as much they're going to strip malls because that's -- you're see something good buys, buy it here, pick it up -- pick up. did you get your vaccine from glaxo? >> white house said percentage

point a week, 10, 15 weeks and you're there, out of the quarter. >> geez, i -- i just -- these people still spend, but they spend the wrong way. spend with a credit card the -- they're not walking out if you look at the numbers that we got this morning, a lot of these are enterprise but i would think that procter would have adjusted. procter is a consumer product. why wouldn't they adjust why wouldn't -- >> what? >> i'm not sure anybody knows how to -- what -- we're in a new unchartered, again, to use that word again, territory, in terms of shut down, length of time and what it will do to demand. i understand your point, though. we have a $19.5 trillion economy. >> greg hayes would tell you people are still going to get their air conditioners fixed the number of air conditioners bought 2005, 2007 before the cataclysm are now coming due for

refurbish. people will use -- you have millions of air conditioners, people will fix them even if they're work for the government. >> that stanley conference call -- >> yeah. and today we got a downgrade that was also betting that marvin ellis is not going to be able to turn lowe's around as fast all right, all right we got the point with the bell but walmart, bunch of people are saying walmart is good i guess i regard walmart with 100 million people go through they should be feeling it, they should be saying it and they're not saying it. starbucks, they're not saying it i'm talking about the purchase, these incremental purchases don't seem to be going down. contractor, i'm worried. >> the opening bell, celebrating the 100th anniversary at the nasdaq the alkaline water company, producer of bottled alkaline drinking water it is the first time in four years that morgan stanley has gone to overweight on walmart.

their price target is 110. they also downgrade williams sonoma, the same idea that as income growth slows, as they put it, the spending funnel constricts. >> i think that is exactly the area i'm worried about, that pottery barn, west elm area. and that piece also talks very negatively about tariffs williams sonoma, they're saying, one of the most really levered i think our age, the old restoration hardware is the most levered. they have the ability to pass it on they have a customer that is a little bit impervious to spend that's the level nordstrom, williams sonoma, tiffany level is really getting hurt tiffany also hurt by a decline in tourism and also russia and china. >> particularly chinese tourism. >> wow. >> which that was -- that's an important engine for growth in their business >> totally. >> do you know that -- only 1% of the people in china have

flown on a plane 17% of the people in the world stepped on a plane i continue to think that aerospace is the greatest sector of the story out there in terms of employment with digitization being second i think that there was a moment this morning when chuck robins was talking again about -- i've been talking to chuck a lot, green field digitization people still haven't gotten to where they have to go. banks are still digitized. >> you talk to chuck robins, have any sense as to the government shutdown there? in terms of those businesses that do rely on government contracts? >> not that bad. i wish i had asked michael dell about that they always had a -- >> i don't think that came up in the interview. >> dell is doing quite well. i did a piece last night, telling people to buy it they're using it using like 6 1/2 dollar number on that thing. >> i pulled out from my notes on dell, remember how long i covered that for, of course, here is some of the estimates. remember they were shopping

around saying we may go straight ipo, which they had the right to do, until they did, the new deal where they offered more cash and a higher consideration for the tracking stock when it comes to dell, here are some of the numbers being offered at the time by those who wanted to underwrite it. jpmorgan said some of the parts will come to 125 to 135. cs said 8 to 11 times gets to 105 to 125 goldman sachs said 8 1/2 to 11 times pe will get you to 90 to 105. citi set 13 1/2 to 15 times eps consolidated eps gets you to 9105 and morgan stanley said 8 times ebitda, 90 to 100. these are the numbers that the underwrites on the potential dell ipo were using if they thought the stock would trade at is wall street completely full of it? >> they are. i'm using 651 for next year. we came up with my -- my team

came up with 763 for 2021. 12 multiple? >> or something going on here with dell? >> acceleration and revenue we don't know about >> i don't know. it failed so miserably to live up to the expectations set by those seeking to underwrite a straight ipo. >> a lot of people recommend it because it is so below what they said i think vm ware is the story here they're doing incredibly well. that is the -- one of the best acting stocks out there, red hat is doing the best because of the takeover bid, but i am faithful to vm ware i know there is guys at nutanix, they hate vm ware. nutanix is out there slagging. vm ware is winners >> tesla, three month low this morning as rbc cuts it to underweight. 245 target basically saying they'rerealistg

and workforce and that's going to bring negative revisions. >> a lot of the bears have been saying to me, jim, how can you not go out there and just bash the heck out of it i think the answer is because i've been doing all this stuff about innovation and it keeps coming out amazon number one, tesla number two. i think tesla is overvalued. but the faith people have in tesla is just unmitigated. unmitigated. >> they argue that about a third of the price is an elon premium. if you take a 15 multiple, average asp, 55 grand of cars and that's assuming no capital. >> look, i think that that is the premium. when you go -- london, they have tesla rounds, where they get together and drive their teslas. that's the kind of thing that -- you don't see a lot of people going around with a chevy truck, doing it, right, doing a rally chevy truck rally. >> good point.

>> number one, nice -- heavy, you know, super duty. >> super duty, got it. >> you know what is flying in the face of procter is kimberly clark. they miss 1.60, they miss, they'll sell off some businesses that account for about 1% of revenue. >> yeah, you know, i -- i'm not buying that miss i think the company is making a turn i think the company has got actual growth. i think they have cost problems. they did say 2019 would be better than 2018 3.6% yield i think it is an opportunity no, they're not as good as -- they could put out a release and says, we're not as good as procter. right. that should be their headline. kimberly delivers x, not as good as pro as procter. >> lowe's to home depot. >> i think kimberly is going to prove they're not as bad as they used to be. >> the old avis, we try harder.

>> kind of like that there is that great ad, good enough, pretty good, but not good -- >> at&t ad i would have not been -- >> at&t has gotten a little aggressive. >> some of those are funny. >> they are funny. they're replacing -- >> i like the doctor one. >> guess who got reinstated. i'm imitating an ad. but there is -- i think kimberly is a comeback story and this guy is doing a good job. you can sell it all you want not as good as procter, but it was okay these -- you know what is funny, there is a genuine belief that all that matters is the s&p. what happens when the s&p company actually reports good numbers? the pajama traders are -- they don't know the difference between procter and kimberly love's, huggiys, whdoes it mattr they're symbols to people, those people they don't know anything, david.

>> no, no. well, comcast and ibm and procter & gamble, which we highlighted at the top, all up sharply. >> all we have to do is move on. i wish we could focus. the comcast number we didn't talk about nbc universal. there. not bad. >> didn't talk about wireless either they're losing a billion dollars. >> can't talk -- >> sorry >> really? >> wireless, comcast has 1.2 million wireless subscribers now. >> how are they doing? >> spending a lot of money. >> okay. >> big three powering this market, dow up 265 to bob pisani on the floor good morning, bob. >> happy wednesday you're right, ibm, procter, united technology are more than half of the gains in the s&p 500 and the s&p is up a lot more than the dow up much more than the s&p 500 because of the gains in the stocks here is the sectors that are moving here, consumer staples strong, procter is moving, consumer staples up a little bit, industrials, tech, health care, really nice broad rally overall. 4 to 1 advancing to declining

stocks earnings guidance, that's what we care about, the 2019 numbers and what we have gotten today is better better than we had yesterday united technologies numbers, full screen there, above consensus. ibm, 2019 guidance, above consensus, procter & gamble in line for their -- very good organic sales overall. so if you look at the numbers today you see this reflected in the dow. why we're moving up here utx, ibm, procter & gamble, all strong put up the board there for that. you see that synchrony had good numbers as well we're not going to zero anytime soon for 2019. october 1st for the first quarter, we were at 8% today we're at 2.7%. this is the first quarter, not the full year. numbers still about 5% for the full year. and the key point is, where do we go from here? they get lower or do they not get lower? overall, q4 is still strong if you look at the numbers.

but q1 is still coming down. a recession in earnings, zero negative earnings in 2019. not yet. we're still in the midsingle digit area, coming down, but not there. the overall commentary, it is early, we're getting lower growth, but not recession overall. so here's the one thing that i'm seeing a little bit of margin pressure here is the q1 estimates for revenues, up 6%. earnings up 2.7% re var t very rare. there is some margin pressure, some kind of cost pressure coming in, in between. and we heard this a lot. remember those inflation concerns we had last year. i think they're sort of still there. look at kill berle clamberly clk they didn't give good guidance overall for 2019 and they had a specific reference to their inflation. they said, overall it was a challenging macro environment for kimberly-clark here. and our margins declined, reflecting significant commodity inflation and currency

volatility so i think these margin pressures are still not going away and there is kimberly-clark down 1.8% on that disappointing guidance holding up great, 266 points in the dow jones industrial back to you. >> all right, bob, thank you bob pisani. when we come back, viacom's bob bakish on his company's new tv streaming acquisition as bob says, we're getting some of what we lost yesterday, dow is up 264. we're back in a moment people know aflac... aflac! ...but not what they do. so we're answering their questions. aflac is auto insurance, right? no. uh uh. is it homeowner's insurance? no... uhuhuhuh! is it duck insurance? nope. ahhh! do they pay me money directly when i get sick or injured? yeah. aflac! you got it. you know aflac! boom! get help with expenses health insurance doesn't cover.

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viacom announcing a cash deal to acquire ad supported tv streaming service pluto tv the deal gives viacom access to pluto's 12 million monthly active users and strengthens the company's ability to serve advertisers. bob bakish, president and ceo of viacom, nice to have you down here thank you for coming from times square downtown. >> always great to be here >> nice to have you. $340 million deal, no offense, not very large why should we care >> look, this deal is bigger than it appears. if you look at it, it is a very differentiated asset in the marketplace, it fits viacom's

strategy on a number of levels when we look at it, we think of it as a tremendous financial expression. >> in what ways? specific in answering this to streaming, explain the strategy. >> so let's start with the differentiated asset this is an asset, in some respects we're zigging as everyone is zagging. this is an asset that doesn't play in the subscription on demand, it plays in the avod space. ad supported, largest free streaming service in the u.s i talked about the fact that the mark set segmenting over the years including with you this product appeals to that entry level free segment so that's a big market you look at the ad projections for current time, that's an $8 billion ad market, projected to go to $15 billion by '23 big high growth. and if you look at the asset itself, it is differentiated from a consumer perspective. it presents content in a very channel driven way, has 100

channels, very familiar to consumers. but also has an on demand option with over 5,000 hours. so really cool asset playing in a very specific and different place. >> our parent company also has plans to introduce a largely ad supported streaming service in 2020, i believe, that being nbc, of course. it occurs to me that we seem to be going back to a time when tv was free and you put your aerial up and you're able to get stuff free. are we >> again, we're going into a world, in fact, we're already there, the mark set is segmentig basic cable sector, more pri midprice point so what you're seeing is fragmentation. from a viacom strategy standpoint, we love how that fits in. it is a scale d to c play to us. over 12 million active users by the end of the year. that's a stand alone opportunity and opportunity to upsell our

niche products >> does it accelerate the deterioration in your subscription business? for example, you have a large deal coming up with at&t, directv, not too long from now people are worried about that. they say no way they'll take all the viacom channels. does this accelerate in a sense their willingness to say, no, our subscribers can get it on this >> that's the really cool thing about this it is both a d to c play, and integral part of our core business on the distribution side, as you know, over the last two years, we broadened what we do with distributors we not only license them, linear concept and on demand, we advance advertising partnerships and co-production. now you bring pluto to the table, this is an ad supported platform that we can work with them, with their broad band only, you can walk across a whole sub base we think that's tremendously excited and the next leg in our distribution strategy. it is key to moving forward.

>> when you look at the -- what people go to, how much of what they go to is that trending column in the right-hand side? >> well, you look at pluto, it has a broad range of content cnbc is on pluto today, not in 2020 you got news, sports, you got general entertainment, movies are really big on it, batman returns is an example recently of big source of consumption on pluto. wide variety of content. it is not concentrated to any one particular way what i will say about it is the user base is nice and young. over half of it is 18 to 34. that's a very attractive audience it is clearly supplemental and incremental to the viewership of core basic, which, by the way, is also why it reinforces another area of our strategy, advance marketing solutions. these are billions of impressions we get out of the gate and helps us drive growth in that critical area. >> i would assume as other rivals, hike prices that extends your window of opportunity at that part of the spectrum?

>> absolutely. this is a great product for value conscious consumers. works for broadband home homes in wired, cable, but, by the way, great mobile product too. we see tremendous potential with this asset >> i'm trying to understand when we look out as we know these trends are continuing, what viacom is going to look like in terms of where you're actually getting your revenues from and where the dollars today will still be dollars tomorrow or will they be quarters, nickels and dimes? >> viacom's story of a turn around and evolution, we cemented the turn around last year now leaning hard in 2019 to evolution. we're taking flagship brands and have them live in more places. some places owned and operated platforms, some are third party partner relationships. pluto is an example of incremental owned and operated platform, we think we can create tremendous value it is really -- the viacom of the future if you will is where one where we're leveraging in more and more places and that's fundamental to what we're also doing, started in the fourth quarter, we turn the company to

revenue growth and look at '19, total company revenue growth, so it is an exciting time at viacom and pluto is really the next piece of the story. >> so, okay, sorry. >> i wonder, when i lived in l.a., i was involved with -- in the '70s there was paramount and then there was everybody else you wanted to work for paramount. it was the best. and then i don't know what the heck happened, box but, look, i like the "mission impossible" series and obviously "a quiet place is good" but what the heck is paraabout mount work? if i go to the bowels of paramount do i see such i want to watch and you can put it on pluto? >> absolutely. paramount is an iconic hollywood studio in the minutes of a creative resurgence both on the film side. it has a very high-growth television business that business in television will go from 400 million and in '18 it will do over 600 million and '19, not just delivering

revenues and delivering hits whether it's "jack ryan" or "13 reasons why" and there's a broad set of customers, traditional, inhouse, streaming folks the mountain is back we put a whole new management team in there. we delivered seven straight quarters of oi improvement and we're excited about the 19 slate and next film up is "when men want" which is our second b.e.t.-branded film. it does it in african-american and flips the sexes on the other side and it's hill aureus so tremendously excited about paramount. the mountains is back. >> when "the times" does a big piece on paramount and ends on diller why are you calling about paramount, it's irrelevant, what do you say >> everyone is entitled to their opinion. that article illustrated what bad shape paramount was in two years ago, and it had a whole set of challenges. again, it's in a much better

place today. it has great momentum. it's a place that people in hollywood want to bring projects, whether it's film or television, and the road ahead is very exciting. >> you know, like a lot of people and investors, you struggled to understand, okay, what is this road going to look like you mentioned demographics you skew younger to a certain extent on a lot of offerings the show "you" and didn't get any viewership and went to netflix and became a big hit and there are young people who view netflix as the ecosystem is that a problem for you? >> we've been focusing on trying to evolve viacom into a better serve. this pluto acquisition is a great step in that difference. it brings significant incremental younger audience, 12 million active today grew 3 million in the last quarter, and if you look at the deals they have in place for distribution with vizio, with

samsung, a young npd that has yet to be announced. this has real tailwinds and will increase the competition that viacom is driving circa 2018. >> ad sales right now doing okay how is the market? >> we like the market. demand is strong the biggest problem we have is not enough inventory to sell and, again, that's where pluto comes in billions of impressions day one. very lightly sold inventory, so big upside potential. >> bob, thank you for coming down appreciate your time this morning. >> great to be here. thanks a lot. >> dow up 277, and the s&p up almost 19. back in a minute i'm a veteran

and the army taught me a lot about commitment.

which i apply to my life and my work. at comcast we're commited to delivering the best experience possible, by being on time everytime. and if we are ever late, we'll give you a automatic twenty dollar credit. my name is antonio and i'm a technician at comcast. we're working to make things simple, easy and awesome. jim, what's on "mad" tonight? >> unfortunately, we didn't get to the key stock of today which is asmlf, a semiconductor company that disappointed horribly and now it's turned around big said you should go buy lam research and the feedback i got in the most controversial piece that i've done "mad money" and apple what it should do for healthcare people hate apple on twitter and

yet they are typing their hatred on this! this is no innovation whatsoever this thing is nothing. there isn't any. it's the same as 2004, and tim cook -- i am sick of the negativity i'm sick of the negativity, i mean, by people who would swear by apple except they don't like the stock. they should -- they should have to go watch pluto for 12 hours a day, pluto >> jim, we'll see you tonight. "mad money" 6:00 p.m. eastern time dow up 279 and ibm and utx proctor leading. only a handful of pharma dragging it down back in a minute

♪ ♪ true feelings, it's a true feeling ♪ >> good wednesday morning. welcome back to "squawk on the street." i'm carl quintanilla with david faber live at the new york stock exchange sara eisen is with us from the u.s. economic world forum in davos, switzerland dow up 265 and proctor, ibm and

comcast up s&p up almost 18 points. david? >> stocks are rebounding this, movement earnings giving the major averages a boost we'll break down results from the results of p & g and ibm the white house shoots down reports of ains can a ed trade meeting with china and the government shutdown enters day 33. >> and leaders from the world speaking out from where i am what titans from wall street and the global economy are making of the economy, trade war and, of course, the government shutdown? >> markets rallying on the results of good news out of ibm, utx and procter & gamble investors still keeping a cautious eye on trade talks and the ongoing shutdown in washington joining us this morning is the oppenheimer cio and libby cantrell, pimco's head of public policy good to see you both.

>> good morning. >> what do you think of, a, schumer and mcconnell talking and some votes scheduled in the senate tomorrow >> i think more talking is better than less talking for sure i don't necessarily think that we'll see a breakthrough on the government shutdown tomorrow, however. i think by and large these will be more symbolic votes this will be two votes scheduled tomorrow afternoon they will probably fail to get the 60 votes required to pass, but you sort of assess where your caucus is the votes in the republican party and the votes in the democratic party, but i don't think we'll see an end to the shutdown tomorrow. >> this lasts long enough, you do get a goose egg on q1 gdp. >> we're describinging it as a pothole but the pothole gets deeper and deeper the longer the government is shutdown this is unprecedented, on the 33rd day and the longest government shutdown before was only 21 days we're expecting like the nec and cea, about a tenth of a percent shaved off every week that the

government is shut down so you can see half a percent being shaved off in first-quarter gdp, not to mention all the other ancillary economic activity shutdown. >> i think we have to report fact that it's not a recurring thing, so what we're talking about is the trend growth rate, and the trend growth rate despite a shutdown-related impact is still pretty much together, and we're talking about, you know, close to 2%, probably slightly north of 2%. the economy had enough momentum coming in, so despite the shutdown i think it will be okay as long as we reach a settlement of some sort we can't afford own goals. both trade and shutdown are own goals for the markets. >> what about the debate about what you get back afterwards larry kudlow suggests there is a snapback jim's point this morning with us was that maybe some of these employees get extended on credit, and that's hard to work off, even once your paycheck resumes. >> i think you probably don't

get all of it back, but i think you get a substantial amount of it back. having said that, i think the thing that we have to focus on for 2019 is the fact that despite the fact that the economy is going to be softer than it was in 2018, we will have significantly better policy, and that policy gets the markets higher rather than the strength of the economy or earnings growing at a significantly higher pace. >> hey, guys it's sara from davos i had a question from libby. libby, ceos here are talking about these big risk factors, the shutdown, the brexit, the trade war. they are all solvable, and they are all political, and if politicians can solve them, the picture for 2019 and beyond is going to look a lot clearer, but one of the issues is we're just not getting the market pressure like we got towards the end of 2018 that would push these politicians to any sort of resolution without that can they solve it

>> yeah. i my that's obviously a great question that's on the minds of any of our clients as well our view has been that political risk, policy risk was going to be a big headwind for the economy and for markets both in 2018, and we don't see that changing as much as 2019 either. you know, maybe the china-u.s. relations are getting incrementally better maybe the president may be a more inclined to make a political deal and really turn in there in terms of escalating trade tensions with china. however, there are other risks that come in the forefront nafta with draw ring continues to be something that we're monitoring, auto tariffs are and the fading fiscal still plus, and we don't really see any big fiscal impulse on the horizon so we continue to think that there is more kind of political risk than opportunity here, and i think the government shutdown is the late example of that. >> libby, i'm just curious you mentioned your clients are they calling and really asking do they seem engaged on trying

to figure out the impact of the shutdown >> one of the leading questions that our asian clients are asking, i'm going to australia next week. our foreign clients are very concerned about what's going on in the political environment observers from an outsider perspective seems like we're more of a country in crisis than we are we're doing a lot of education and especially since our clients outside the united states are concerned about this. >> i think while the impulse is not to get to a settlement too quickly, as the economy slows down both here and as is happening in china, for example, the pressure to reach some sort of a settlement increases meaningfully as the year goes on but from our perspective the policy is going to be supportive at the place where it matters the most which is the central banks. the fed has backed off the ecb is probably going to be taking easing measures such as

an ltro and china will throw in the kitchen sink to support its growth i think that combination gets us higher from an s&p perspective. >> you're not worried about financial conditions loosening again, and the fed being back in play. >> well, i think that risk always exists, so if in that context a percent, 2% drawdown is probably a good thing if the market rallies 15%, 20%, then the fed gets a free pass, and then they have their back and the game back to where we were in 2018 i don't think they get that pause there's enough uncertainties with res to growth and other issues so it's a 5% s&p target for the full year from our perspective. >> the next five or six weeks are going to be crazy. libby, krishna, thank you. >> thanks. >> shares of p & g are up this morning. sara is following that for us and all the internls pretty interesting insights that they gave us today into the

consumer, sara. >> insights into the consumer and another quarter of strong growth for procter & gamble making big moves this morning, as you said. carl, take a look at the stock it is jumping. company beating estimates by four cents per share and revenue beating wall street forecasts and gooding a boost in part because of a large demand in beauty products and gdp sales up 4%, stronger than the 2.6% consensus estimate guys, tomorrow right here on "squawk on the street" from davos, sawitz land, i'll have an exclusive interview with procter ceo david taylor despite the fact that it was a big beat, it was the second quarter in a row that procter & gamble has posted 4% or more organic growth, and that's as big change

p & g was in a long streak of doing 2% or lower growth nelson pellets h nelson peltz has helped with the execution. they raised are the higher end of their forecast on organic revenue growth so they have an ability into the future that rival kimberly clark does not. that company reporting earnings this morning, it was a big miss, poet on the profit and down 1% on sales, which tells you the consumer is in a good shape, yes, but procter & gamble itself is executing and doing a much better job than it has in years. carl and david. >> outcould go gdp for sure, sara jim wanted to make a lot of potential innovation is that really it, or is it about executing and eliminating lines of reporting and just making it a flatter organization

>> i think it's a combination of both because the whole purpose, david, of making it a leaner flatter organization, getting rid of the complex matrix structure is to bring out more innovations and make those teams more agile when it comes to addressing consumer need so the company does like to talk a lot about innovation, but a lot of it is the structure they put in place and a lot of it is the environment because one message i'm getting out of a lot of executives in davos is, yes, things might be colleague down a bit especially globally for the economy and we're not in recession. as far as the u.s., people are worried about the shutdown and the impact that will have on the first quarter. still saying the consumer is in good shape not going to be in as good a shape last year and that's part of the message that we got out of p & g today as well. >> you're part of the show you're actually just here so i

don't even need to say good-bye. >> i'll be back. >> very nice background there, by the way sara eisen in davos. >> it is day 33 of the government shutdowns, and the senate is expected to hold its first vote since pre-christmas today on competing plans to reopen the government. meanwhile, concerns growing over the economic impact of a prolonged shutdown, national economic adviser larry kudlow downplaying any concerns. >> i acknowledge we'll lose some in the accounting of of gross domestic product but i do not acknowledge that the economy will be adversely affected as all. when the negotiations come to an end the negotiations fact is airline completed from the administration and others we'll get it all back. >> with us now is the former chair of the house financial services committee, former texas congressman jeb hensarling nice to see you, congressman you and i haven't talked since

last may i guess it was when we were on stage there. now that you are with a view that's a bit different than being part of the chamber, what is your sense here in terms of the chances that we get a deal in the near term >> well, i'm a little bit pes miss it here public opinion has to start turning against speaker pelosi the numbers have stayed pretty confident throughout this debate and she's painted herself into a corner even if she wanted to negotiate. this isn't about policy anymore. it's about the politics of the 2020 presidential election, and frankly it's visceral. it's visceral against the president and anybody else that attaches their name to his proposal for border security i think the thing would have flown through by now $5 billion in a $4 trillion budget is likely a rounding

error. the other thing that has to bring this to a conclusion is to have the moderate democratic voices, and you hear them had a little louder today than you heard in the last couple of weeks. they would have to have their way. they would have to put their foot down and say we absolutely insist on these negotiations in the 16 years that i served in congress, i never found them to be a particularly potent force in the chamber, so i'm not terribly optimistic there. last but not least, the president still probably has the ability to declare a national emergency for policy purposes which may be a good thing so i agree with his policy, but for process it's bad it sets a terrible precedent he probably has the power to do this, but for decades congress has been pouring more and more power over to the executive branch, and i don't think it's good for docksy and as conservatives we would rue the day if he recall does that

two votes in the senate is progress but it's far from being settled. i guess i agree with larry kudlow and its impact on the economy but in the short-term it will start affecting things. >> in the long term also we're all dad. if this thing go keeps going on. we keep using the term uncharpted territory we're in uncharted territory already. are you getting any sense. i know you're not actively in public office anymore in terms of the impact in your home state or others, and do you have any sense of the longer term implications if this continues, as you a seem to think it will >> i'm suppose ed to be on a plane from new york to pennsylvania this afternoon. if you're one of the families that are living paycheck-to-pay electric

i salute the tss people who show up for work but for the vast amount of americans this hasn't impacted them. if i airports start getting clogged up and companies can't ipo, if we can't get aid to farmers through the ag bill, you know, the list goes on and on. sooner or later this is going to impact real voters out there, and they will have their voters heard so i think the impact has been minimal, but i think we're on the precipice of real american families outside of those who work for the federal government to start feeling the impact of this, and, you know, i know the president has put forward different proposals on the table. so far they all seem to be dead on arrival with speaker please, and we'll see if public opinion changes to where she would want to go in and negotiate because i think a big deal could be had here we all know it. >> you think a big deal could be had, you really do, like a big

deal on immigration? >> i'm not. >> a big deal involving daca what do you mean >> it's theoretically possible that this is going to happen i'm not betting on it. i'm certainly not going to bet my first born on it, but it could happen, but it's not going to happen any time soon. there would have to be a pause of some sort, and there would have to be some good-faith negotiations, and so far speaker pelosi doesn't want to negotiate at all i mean, that's pretty clear, and the public polling data are her moderates haven't sent her in the direction of the negotiating sglabl what do you make of people who say she's not negotiating because they are busy passing bills in the house to fund the government a la carte first? >> again, it takes at least two parties not to agree, and last i looked the senate hasn't necessarily agreed with the house position much less to get a bill to the president's desk but this is what congress does under article i section ix of

the constitution, it appropriates money, and so far it hasn't appropriate that had money so it hasn't even gotten to the president, so we have to also look at the fact that the house and the nat haven't agreed. >> yeah. well, the president did have two years where he had control of both bodies. didn't seem to get anything done then on his wall. >> i don't agree with you. as you well know, most measures in the senate take 60 votes, so i'm not sure -- unless you have 60 votes like the democrats had when they passed obamacare and defrank, i wouldn't characterize it as control. i would rather have majority than not a majority but particularly when it comes to appropriations bills, that takes 60 votes in the senate. >> representative hensarling, always good to see you. >> thank you >> jeb hensarling joining us sara >> reporter: when we come back, the state of play for big tech former facebook board member jim briere, billionaire venture capitalist is with me next from davos.

we'll talk valuations and where he's looking to invest quk t see wl be right back don't go away. in the u.s.irst state to have a hundred percent renewable energy goal. if we don't make this move we're going to have changes in our environment, and have a negative impact to hawaii's economy. ♪ verizon provided us a solution that lets us collect near real time data on our power grid. ♪ if we can create our own energy, we can take care of this beautiful place that i grew up in. ♪

and the army taught me a lot about commitment. which i apply to my life and my work. at comcast we're commited to delivering the best experience possible, by being on time everytime. and if we are ever late, we'll give you a automatic twenty dollar credit. my name is antonio and i'm a technician at comcast. we're working to make things simple, easy and awesome. welcome back to "squawk on the street" live from the world economic forum in davos, switzerland. joining me now is jim briere, the founder and ceo of briere capital and an early investor in facebook and sat on the company's board for a decade wears many hats talking about ai and much more. welcome, jim. >> sara, what a pleasure

thank you. >> i actually wanted to start david was talking with viacom earlier. they made a deal today to buy a streaming service, puto tv our on the bore of 21st century fox. >> i am. >> can all of these companies have their own streaming services how many streaming services can we have? >> we'll have dozens of streaming services but there are dozens that are highly unprofitable no doubt that netflix and amazon were very much at the forefront of why 21st century fox and disney decided that great scale matters and whether it's comcast, the parent company that, of course, reported nice numbers today. >> our parent company. >> your parent company, also launching its otts. >> or 21st century fox does any, there will be a couple other major studios, and it's not unlike the technology business my view is there are three to five very important worldwide media companies going forward. there are three five technology companies that are going to be

truly important, and it's also a great time to be a tv script writer, television producer, independent ai software developer and building on the cloud services i'm very interested in entrepreneurship and innovation which is represented in today's viacom transaction, but the opportunity to use a lot of the new technologies around cloud services to build wonderful businesses or non-profits. >> but you see the big players really owning the world of streaming, so what is do that mean is there room for new fox to have a streaming service >> don't nope. >> i will not be joining the new fox board. i'm retiring from 21st century fox upon the merger. my view though is ten years from now as investors, the top 20 companies in the world by market cap will be in the u.s. and china.

18 of the 20 will be technology oriented and that means ai first or technology first whether it's comcast or disney or facebook, netflix, google, ten cent, others what really matters is building great customer and enterprise some of the wear experience-- s experiences and i'm two years into an ai investment strategy made six investments in ai last year after receiving approximately 10,000 ai business plans, and they run the gamut from cancer research to helping police forces do a better job, to helping our troops all around the world have better information around -- where their bank might be. >> who is winning that race? >> it's never a sound bite, but it makes space race look tame. in certain areas like facial recognition, china is far ahead.

in solutions sold in government, the u.s. is catching up, and in areas like devices those -- it's korean and japan on the display devess but on semiconductors the u.s. has at least a five-year lead which is why i love inindividual ya and intel and some of the semiconductor stocks long term. there will be slowdowns but u.s. at least has a five-year lead when it comes to semiconductor technologies. >> i was going ask how you play this in the public mark, this growth of ai you like is through semis? >> three come of the great the software companies many that are selling into business and microsoft accounts. i would buy mcagain and again

and hold it. i do like the vang stacks because i would beilike to deal with the public offerings. with oracle and others it's a seven to ten-year bet and facebook in 2005, mark was 20. >> you were there. >> i was there and i helped navigate a very treacherous public offering as we all remember, but these fundamental businesses long term are so important and instagram may be, even with all the accolades, the most underrated application in the world >> well, 2018 was another turbulent period for facebook. >> i've heard. >> losing public trust what does 2019 hold. >> i hate to throw barts and pile on when a lot of people are but i can and i said this to

cheryl, mark and others. we at facebook should have been much more transparent and i hope and pray in 2019 that they get it. >> do you think they really get it >> i have a long-term buys mark zuckerberg is a genius. >> does he deserve to be ceo and chairman >> yes. >> and sheryl sandberg >> deserves to be president. they are great this is one of the indio sinksies of the world we live in i really believe in chairman and ceos for founders and young companies being in charge, and whether it's media companies, whether it's the best technology companies or whether it was the emerging ai companies where i'm spending a lot of time very often -- >> you think even when a company is going through the turmoil

that forecast is going through with some keel execution and leadership request questions >> there's many -- i really belief it's the function chairman or ceo. and as a technology investor the biggest successes are when the chairman and ceo are in the same spot. >> i wanted to ask you about china. you've been in china for more than a decade and very dullish on it. cross-border deals dried up completely can you invest in china right now during this trade war? >> the answer is yes, and i've been investing in china for 15 years. the team i've worked with series a and ten cent and baido we'll ton to do that.

>> they did not get approval to worm. >> three to five years from now i'm still very optimistic. it's really half found for -- india will be the next turnaround >> jim briere of prier capital carl, back to you. >> all right sara, thank you very much. when we come backs, sharing, of our parent company comcast higher we'll dig through those numbers and another stock today ibm not fading so long good guidance for 2019 on continued strength in its services business. some nice have jumped toin the mix but with that the dow is off the highs. up 165 each tempur-pedic bed is made

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good morning, everyone i'm sue herera here's your cnbc news update at this hour. the russian military rolling out a new missile and releasing its

specifications seeking to dispel u.s. claims that that weapon violated a key nuclear arms pact the russians rejected the u.s. claim that the missiles increase the length reflected a bigger fuel taping allowing a greater range saying it's the same size as an older model. democratic senator elizabeth warren who is running for president visiting dreeko. she promises to help rebuild e the -- >> the president united states has doubled down on the insult by toying with the idea of diverting your recovery funds to build a wall. now make no mistake. this wall is dumb. >> niagara falls covered in ice. take a look at that. as frigid temperatures delivered breathtaking views this comes as the weather service has issued winter storm warnings or advisories for a

swath of the eastern u.s. that is home to some 100 million people it's cold but it's beautiful. that's the news update this moufrmt i'll send it back town to you thanks, seeler or. comcast posted third quarter ults before expectations and raised its dividend bet in to 19 and fell short on the addition of high-speed internet customers. we talked about the proform, a ef-knew: and at the same tlim they spend some time on the benefit of sky overall net additions of 64,000 in the first quarter of 2018.

if you combat the loss of vice subs by adding 1.2 mill. research knew growth of 1.7% and adjusted ebitda growth was 7.3% higher than the quarter in 12 between which is being robarded by the market rate trading eight times ekeda at a relatively closer look. >> why jamie dimon says the administration is doing the right now. the dow is up 165 and the s&p up 9 and change we're back in a minute

time for our etf spotlight we're going to focus on financials jpmorgan chase ceo jamie dimon was in daff yogs this morning sneaking about the health of the u.s. financial system. >> 3.5% growth global growth, the united states is doing fine and all those things may reverse. we'll have a recession some time we don't know exactly what is going to touch them. the financial system in pretty the are. >> i think the market pretty much agrees with what jamie dimon says, at least in the last month or so which means we need to be worried about credit costs going up, loan demand eventually, but we were too worried about it a month ago or five weeks ago so if you look right here in the last month, the very ctfs that cover

financials xlf, much broader. up 12.5%, but you can see the kbe and major banks. s&p and the regionals up about 17% in the last one month. look at one year and you'll see they are down a whole lotmore the market in a panicky way was saying things are going to go bad. flat yield kur ever and what is happening with credit. it's unclear where we go from here they did hold up yesterday which was interesting as the market had a bigger loss. they are in the same position and exaggerated where the whole market s.bounced really strongly and now what. >> it's interesting when you look at the conversation of the etfs and always learn something because as an investor out there i want to play the banks, xlf and then you're getting berkshire which is a heavily

weighted. >> like 11%, 12% of it a half trillion dollar company keep in mind almost and a lot more informations and i don't know if wells you would put it the. >> trying to remember what's more revered, the u.s. ole s&p >> obviously it's mostly smaller banks and finance companies as opposed to stuff like that. >> is the thing after we move into qs results that the story will be did trade rebound, did loan growth rebound or something else >> i think that will be it yeah, essentially, you know, if we're in a 2 been t.5% economy,d is probably oak with that. it seems at these valuations the market has kind of made its peace with that probability, but definitely there was kind of a

collective decision let's put those aside and assume >> is it comparable? >> the best performance since november of 2016 was a huge many function after the election where they said we're not longer fearing inflation, the yield curve widened out. we're de-leveraging inflation. you probably go the what is delevering you're going to get the banks are discovering they are no longer held to the capital they used to be. they are hold more capital but are doing a little bit less. >> that's why we're watching financial services in the next couple of months until everybody gets back to work.

>> mike santoli. let's send it over now to sara in davos. >> hey, guys, when we come back, two titans, one stij my questioning with the goldman sachs shoal. david solomon is next. you don't want to miss it. >> what should david be doing becaused on your penal experience >> one day when we call you goldman and women saks. >> goldman and goldwomen saks.

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welcome bark to "squawk on the street" live from davos. most notable heads of state are here, and some of them are absent president trump and theresa may cancelling at the last minute because of ghest domestic crise. those who shock emphasized the same theme, the importance of globalization and the global world order. in fact, shinzo abe of japan saying japan is determined to preserve and enhance the free, open and rules-based international order. merkel even voiced support for multi-lateral organizations like the international monetary fund. guys, it's a stark contrast to some of the global issues plaguing the economy right now, the trade war, brexit, the border wall fight, all more isolationist and nationalist

policies i think that's one of the difficult cop travis for some of the leaders, shows and rec nile here, just the difference in some of the domestic and populist policies happening at the same time where leaders here are advocating for working together globalization. free trade and those types of themes it's really opinion an interesting mix here at davos? >> you know, sara, a lot of headlines coming out of there have been about angst and worrisome feelings about the global economy and growth. are those headlines fair from what you see so there's some concern about a slowdown and i think there's some concern about the risks rising around trade, around brexit as we get closer to the march 29th deadline around the shutdown which has now been in record time territory, but there's also a sense that things are okay in the global economy we're still all growing and even

3.5% growth forecasts by the imf is still better than it was in 2016 i would say there's angst about some of the big problems taken down a darker road but there's optimism about where we are now and the ability by politicians to get it done and to solve it for brexit that would mean making a deal or postponing brexit, having a second referendum a lot of people would be in favor of that kind of option for the u.s. it's reopening the government and getting a trade deal with china so that's definitely the big topic guys, i also wanted to bring you a piece of my conversation with ibm managing director christine lagarde. i wanted to share with you what has been a hot topic in davos. here it is. >> we made a commitment a year and a half ago to get in our out-of-school hiring which is what a big part of goldman sachs is to equal men and women and no reason we shouldn't.

we're hiring 3,000 people out of year in universities that have more women than men in them, and the problem is if you look at the ole systems that -- how those hiring processes work, they perpetuate the bias instead of basically going out and saying hey, if we're going to hire 3,000 people out of school, we're going to find 1,500 great women and is a hundred great men and figure out how to make that work. >> citi group recently put out a study saying 28%, 29% gender pay game, and it wasn't because men and women were being paid for the same job unequally it was just that women weren't represented in the upper echelons of management. >> it's you have to get more people into these jobs and, look, from our perspective we're trying to identify and pull women along into leadership positions where they have more visibility, but as you're looking to senior positions it's person by person, and we just have to be more aggressive you've got to take a little bit of risk and take advantage of it. >> the me, too movement that

we've seen unfold. does that help or hearse the cause for women in business? >> that's -- you know, it's difficult to say because i think the future is going to tell us whether it helped or not, but i think it was a phenomenally important moment when people -- and i say people on purpose because it was women and men, and it was hopefully not necessarily in equal numbers but with the same number of concerns came out with the violence, the hurting, the frustration, the reminiscence and all of that, and that was out, and i think it -- it was as important for the people themselves as it was for the organizations, and i -- i very much hope that it will be for good and for long and that it's not going to come back and haunt us to the point where men are terrified of having anything to do with a woman frankie will, we all know

monsthers but equally we're not targets. i think that's something that we should be hopefully well accepted by the community, but we need to be super attentive because vigilance is in order. >> reporter: managing director christine lagarde, david sul van of goldman sachs david and carl i want to show you guys in the audience part of this conversation. i think that's the unique opportunity here at davos to show what business leaders are thinking about and working on internally beyond just the quarterly earnings and the one mbd scandal for instance for goldman sachs that we talk about in the news, i think for a ceo like david solomon making this commit to do 50/50 hiring, it's a huge commitment. that doesn't necessarily get spoken about when we talk about the stock price or on cnbc it is a rare opportunity we get

here in davos. >> interesting to listen to. real quickly, it's funny we saw that citi report from last week on gender and equality i heard from your question, though, it wasn't based on the same position. i thought it might have been at the time you've clarified that for me it was actually just overall pay? >> correct it was overall pay, and what it represented, as i said in the question, is that not that men and women were being paid different amounts doing the same job, but women were not in senior management, were not in managing director or whatever higher levels that received the higher salary, and that's the problem. and the point that david solomon made was the issue is hiring coming in, so you have to grow the women's careers at the same rate that you're growing men it's not that you are not necessarily promoting them or not hiring them at higher levels, it's that you're developing them internally starting from the beginning and having a bigger talent pool then to do that

>> okay. a little jarring to hear laguard say we're not monsters, as if we actually need to say that out loud. >> unbelievable. >> sarah, we'll see you in a minute actually. a quick programming note, by the way. here's an interview you're not going to want to miss. former sears ceo alan lacy, he's the man who sold sears he's going to join us to discuss the retailer's bankruptcy and talk about the future of retail overall. let's send it over to john. >> good morning, david, john thompson is the chairman of microsoft. he also sits on the board of a company that's deeply invested in the hybrid cloud. he's going to come on with us and with that company to dive into what's happening in the th'sou at coming up on "squawk alley.

let's take a look at the broader market right now we've been discussing of course over the last couple of hours very strong earnings or at least a very nice market response if you are long on the stocks to ibms earnings, procter & gamble. carl and i have talked about comcast. overall the market, the dow benefitting, ibm's a part of that, but the s&p kind of back to flat, so we are starting it see a bit of regression there in

the broader market let's get back to sarah who is in davos and find out what more is coming from that snow laden land >> reporter: the snow laden land, david, you mentioned p and g being a stock story of the day, right here on "squawk on the street" tomorrow at 10:00 a.m., procter & gamble ceo david taylor will be here exclusively. we'll discuss his company's earnings, trade, the state of the global consumer, and of course much more, and i've got something special as well. coke's ceo, pepsi's new ceo on stage together with me it is certainly a rare opportunity and event, especially as someone who covers the beverage makers to get them together in conversation, i'll bring you highlights of that as well tomorrow. for now, back to you >> wow, that's a tease, sarah. can't wait for that. sara eisen in davos. "squawk alley" is coming up next we'll talk some ibm on these earnings we'll break down today's big movers dow session high was up 296,

we're up 103 don't go away. sfx: [phone ringing]

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in new york. it's 11:00 a.m. on wall street, and "squawk alley" is live ♪ ♪ there we go, get out of the way ♪ ♪ there we go, get out of the way ♪ ♪ what the people say >> good wednesday morning, i'm carl quintanilla, the new york city, we'll start were the markets today obviously got a rally at the open after major indices broke a four-day win streak with their worst daily performance since january 3rd. good earnings of the surge from utx and proctor and ibm, but we're well off the highs and bob pisani is on the floor >> good it talk to you what