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 we care about is earnings guidance, not so much the fourth

quarter. the big stocks reporting today have all provided reassuring guidance for 2019. that's one of the reasons we're up that includes united technology and ibm. both of them were above consensus guidance and procter & gamble which is in line with good organic sales all are trading up in the mid single-digits helping the dow outperform the s&p 500 where are we with earnings right now? it's a early only 76 of of the s&p 500 have reported so far. here's the main trends first the fourth quarter numbers are strong, q1 numbers are still coming down. pup put you want next full screen the fears of an earnings recession, consecutive quarters of negative earnings growth, they're not materializing, at least not yet. we are not going to zero for 2019 as of now the commentary from ceos indicate lower growth but no recession. that's one of the reasons we're holding up so well

first quarter earnings have gone from 8% growth in the beginning of october to only about 3% growth today that's a notable decline, more than usual but again, it's not negative there may be some pressures emerging revenues for the first quarter are over 6% right now. earnings growth only about 3%. put up the next full screen. that indicates costs are rising. revenues better that be the bottom line here this was reflected in a comment this morning, who said overall it was a challenging macro environment and our margins declined reflecting significant -- we heard this from kimberly-clark before but these are continuing into the new year. >> let's bring in jpmorgan's global marketing strategist, and stifel's u.s. equity strategist. thanks for the help today. we know it's early in the earnings season. what can we say about it at large right now? >> i think what we can say is that the bar was really lowered

over the past few weeks for the earnings season, both for the fourth quarter as well as for 2019 as a whole. so the market is taking, as a relief, that actually earnings have come in a little bit above expectations and ceos have been confirming this trend that we agree with, which is that there's slowing growth but no recession. i think it's been a good confirmation coming off of a very pessimistic low expectation end to the year. >> barry, coming out of december, people said 2,700, 2750 would be resistance is that exactly what we've seen? >> yeah, when you have real interest rates, which is your interest rate after core pce inflation cross above zero as it just did in the last several months for the first time in ten years, your price to earnings ratio is going to stabilize and after a sharp decline last year that offset most of the earnings growth from thetax cut, but yeah, we're looking for 165 of earnings this year against 157

last year. the street is at 170 down from as high as i think, 178 last summer earnings are still under pressure, but i agree with bob pisani that there's not going to be an earnings recession this year it's more a risk in 2020 >> barry, your full-year target for the s&p is 2750. that's less than 120 points fwrae hefrom here what would it take to make you more optimistic? >> as i mentioned a real interest rate between about 0.5 to 1.0%, which is a reasonable expectation for this year if the fed is fairly cautious and inflation doesn't tank, then you're looking at something like 160 times 16 provides really good support at 2550, and some of these estimates you see out there at 2,900, they're assuming 170 times about 17 i think what i'm worried about is the earnings growth is going to be a little slower than expected we're going to get weak global gdp in the first half. the capital spending outlook is

poor buybacks are a difficult comparison on a sequential basis, and the s&p earnings are more cyclical than the general economies and we've seen commodity deflation. i'm happy being about $5 below the seethe, a street, and there some downside risk to my effort, which is what's concerning me. >> that commodity deflation seems to be a key part of the story, something i'm watching with the industrials you look at aluminum prices, they're actually down double-digits over the past year it's a similar story for other commodities. we've seen it with crude as well the fear around tariffs on some of these raw materials prices, are they already baked in? >> i think so, and i do think that's what's been moving these commodity price over the past couple of months has been more that fear of the global slowdown, and in particular for those industrial metals, the concern around chinese growth. we do acknowledge certainly china is slowing structurally as

well as cyclicly, we do take a lot of comfort in the fact they have been implementing a lot of stimulus measures and they're still set to do more especially on the fiscal side, things like infrastructure spending, that should help some of those more industrial-related commodities. i do feel like there is a little bit of pessimism reflected there in commodity prices, a bit of a fear of a too strong of a global slowdown, especially in china. we think there's going to be more stabilization over the next few months >> barry, do you think a potential trade deal between the u.s. and china is already baked in here, or not? i mean, how should investors be thinking about that given the fact that we've had so many sort of conflicting headlines on the topic? >> when you think about it, it's interesting. when the federal reserve turned up the heat last year, they pressured not just the u.s. administration, but they pressured china and the emerging markets through the currency and the global growth outlook, so in effect, the fed has forced both parties to come together, and it made a deal more likely. the devil's going to be in the details in terms of compliance

and extent, and because the president retans enormous trade powers given to the president during the cold war, no president of any party is going to give up those powers. we're going to have trade conflict as an enduring theme for at least ten or 20 years but as far as a short-term cease fire, yeah, that's increasingly likely, and i think the market recognizes that. >> finally on the consumer, morgan stanley hasn't had a buy on walmart in four years they go to one today arguing that the spending funnel from the consumer will constrict as income growth slows down given that, are you in -- how are you feeling about defensives versus aggressive consumer names this year? >> we think that really the consumer is the strongest piece of the economy it's really what's going to fuel growth in 2019 some of the commodity deflation we were speaking about, the energy price decline, that's a really good tailwind here for the consumer over the next few months so we actually feel very strong about the consumer, more broadly, we are not in the

defensives camp yet and exactly because we do not expect a recession. we just expect a slowdown, so we're much more in the cyclical value camp, still a good tie to the economy but a little bits of income growth expected there as well the not full on defensive. >> barry, gabriella come back soon thanks guys. >> thank you. we're getting some news on hulu julia boorstin is in los angeles with that story. >> hulu is changing the prices for its streaming services it's lowering the cost of its on demand service with ads cutting it to $6 to $8 without ads is holding steady at $12 and month, and it's raising the price of streaming bundled with on demand from $5 to $45 a month, while the top tier service goes up to $51 from $44. this is hulu's first price hike since launching skinny tv bundles 18 months ago. it has added a dozen live tv

channels includining cw and the discovery channel. presumably this is to hold onto customers when there is so much streaming competition. this makes its ad-supported experience meaningfully less expensive than netflix which doesn't have ads this comes as all of hulu's parent companies prepare to launch streaming services, comcast, is working on an ad supported service free for anyone who pays for a tv bundle. disney launching disney plus later this year when at&t plans to debut a three-tiered streaming service. all of these companies are also battling netflix, which just last week raised prices. john, back to you. >> it's getting dicey out there, lots of competition, thanks. when we return, with the tech sector more than 15% off its most recent 52-week high, we're going it take a look at the buying opportunities investors should be watching during this morning's rally, which has faded quite a bit.

first, take a look at the best performing stocks in the dow so far in today's session ibm still up nearly 8%, procter & gamble, united tech all leading the way. a lot more "squawk alley" still ahead. don't go anywhere. 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. welcome back to "squawk alley," the early rally losing some steam this morning with the faang names now off their intraday highs the tech sector still in correction territory, but the group is up to start the year,

so which names in tech should investors be looking to for value? joining us now is aaron kessler, senior internet analyst at raymo raymond james. where should investors be looking for value in tech right now? >> well, look, the group on average is back to the midpoint of where it's been trading over the last five years. it's trading around 15 times to ebitda we think that's a pretty attractive entry point we put out a 2019 outlook piece last week where we identified our top five picks, and it starts with amazon first and foremost, then google, then facebook, and then expedia so clearly we think there is clear value, particularly among some of the larger cap names at this point aaron, i'll put the same question to you. >> yeah, we think the value is

in the large cap side right now as well. we still like alibaba here despite some of the china tariff issues we think if that gets resolved, trades around ten times our core commerce business there, and even though you've seen growth slow a bit, the december data which was released yesterday, china ecommerce is still growing about 25% in december. it did slow 21% for the december quarter, but at ten times earnings for the core commerce business i think weng that's attractive still like google, mid-teens on your core search business and then facebook, obviously despite the issues still growing, we look for mid-20s growth trading at around 15 times earnings. we think if sentiment gets more positive on facebook this year, we think you could see facebook rally as well. >> ewe receive, tell us more about your case for facebook you got a pretty strong price target on it given where it currently is do you view that the negative sentiment has largely played out and now it's time to get back to

fundamentals is there anything that the company has to show us to further solidify that? >> i think it's tale of two cities on the one hand you have the fundamentals of the story, and those continue to perform towards the higher end of expectations our checks intraquarter would suggest that mid-20s to maybe even high 20s year on year groetd growth is what they're going to record. 2019, we think you're still looking at a plus 20%. that tells us that advertisers are continuing to vote with their dollars. on the regulatory front, on a news flow front, that's a different story. i think what you're seeing from the regulators likely to get worse before it gets better. but to the extent that it's not necessarily seeping into advertiser's psyche, i think the stock has already reflected much of that downside from a pr standpoint and can start working from here.

facebook remains a top three pick as aaron said, you're looking at mid-20s maybe higher top-line growth. margins, i think we're probably going to trough the marges in the mid-3-- the margins in the mid-30s. if that's a fact, i think the stock definitely rallies from here >> aaron, amazon, there's a report in the wall street journal today that the company is looking to woo shippers with fewer fees than fedex and ups. every time we get some sort of story around amazon's ambitions to build out its own transportation network, shares of fedex and ups trade lower on this, but is it actually looking to do that is it looking to become an actual competitor to the delivery giants that are out there already? >> yeah, we think it depends on the geographic area. i think in dense urban areas it does make sense for amazon to do more themselves, more suburban more rural areas, it probably doesn't make as much sense

we think in cities like san francisco and new york you isstr toe see a lot of delivery vans it can make sense for them to in source the delivery services for themselves. >> youssef you mentioned googlingoogle some say facebook remains their favorite pick of the year, but as for big tech names that are going to benefit most from the earnings print, google's on top. i wonder if you are in agreement, and if so why >> so search advertising remains really strong and, in fact, some sources would indicate that q4 search revenues may have even accelerated a bit. it may have benefitted a little bit. so google may have benefitted on the margin from what's happening to the social spin, but generally expectations for google have been relatively muted and the company continues to perform towards the higher end of those expectations. the other thing is from a valuation standpoint, google is

by far the cheapest mega cap in our universe, nighttime cash flow, in fact, ex-cash trading virtually in line with the overall s&p. while s&p is growing 3%, google is still growing 15 to 20% that's why i think there's a fair amount of excitement around google, particularly in a market where people are adopting some risk off, then google seems like a perfect candidate for that kind of investment. >> aaron, you got this hold on twitter. people have underestimated it in the past why do you think it's already had its run? >> yeah, i mean, so if you look at the valuations, it's still not cheap. it's around six times revenues on our estimates we think they are performing better you've seen user growth improve to kind of low double-digits here but we're still not hearing from advertisers that much excitem t excitement they are coming back to it somewhat, but we like to see faster revenue growth, more 15 to 20% you're still growing revenues

maybe in the 10% range is the outlook right now. so for a company at six times revenue growing 10% doesn't excite us right now. if we start to see better earnings leverage or revenue growth we would look to get more positive. >> elliott comes out yesterday and calls for a break up of ebay, sends the shares higher. do you think that's a good idea? and b, we've seen these types of breakups in other sectors, in other industries but not as much in tech. tu do you think this is the start of a bigger trend? >> so is it a good idea? i think it's a great idea, and that's because ebay continues to be the second largest ecommerce platform they continue to have a really strong brand, but operationally, i think you've seen some failures to even meet management's own expectations. this is not a business that's keeping up with overall e-commerce trends. they're only growing low to mid-subjects year on year when e-commerce is growing 15%, so something has to be done, and as we saw back in 2015 when paypal

was spun off, it created a ton of shareholder value now, both stub hub and classified are not nearly the size of paypal, but there is definitely some value to be extracted there. in terms of trends, you know, at least within the internet and digital media space, we don't really have that many ebay like portfolio companies with a ton of really valuable assets so i don't necessarily think this is the beginning of a trend, at least in this particular subsegment of the technology. >> gentlemen, thanks for joining us today >> thank you >> thank you still to come on "squawk alley" today, microsoft chairman john thompson sits down with us on the $3 billion startup he's backing ahead of a potential ipo. first, watch the major ampleampl averages, sf&p has gone red. we're up 66 points, back in a minute

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take a look here at shares of ibm up 7.5% after earnings beat on both the top and bottom lines. the company also issuing strong full year guidance on continued strength in its services business the company this morning just announcing a $260 million services deal with the bank of the fill pea peen islands. there's some hybrid cloud service as part of that deal that's a day after the agreement with france's largest bank to make ibm a premier cloud provider lots of cloud announcements the beginning of this year of course we just had microsoft talking about its deals, companies trying to position themselves and argue for the power of their ecosystem ibm just saying on the call last night as well that things are moving on a pace in red hat and getting all of that nailed down. i still expect that to close in the second half of the year. i've had a lot of questions about exactly how they're going to integrate that. they've been talking about

leaving it independent, but at the same time being able to use it as an engine of growth. i talked to jenny remedy a bit about that a couple of weeks ago. continuing it talk to ibm about it it's taking shape. >> those strategic imperatives, they pointed out that it's 50% of revenues last year, they continue to look at this as a high growth area that they are executing on wias sort of his takeaway in terms of that interview. moving on to jpmorgan chase, ceo jamie dimon echoing the outlook of others on the peaking of global growth sara eisen is live in davos with more on what the most prominent leaders in business are saying about a potential slowdown hey, sara. >> reporter: i would say slowdown, not recession. that seems to be the message from the major ceos here in davos, and that's perhaps the fear from the end of last year that we saw in the markets was

overblown. take a listen to some of the ceos of jpmorgan, dow chemical and chevron just this morning. >> the u.s. economy is kind of like a ship that's growing at 2 to 2.5%, and that's going to keep on going for a while. then you have all this other noise, okay? geopolitical noise, brexit noise, what's the fed going to do, shutdown, trade, and those kind of -- they're kind of like boyin the waters in front of that ship. eventually that may cause a slowdown or a recession. i don't know if it's 2020 or 2021, but the range of possibilities is broader, and the range of bad outcomes is increasing. >> 2018 was a strong year, so strong demand growth around the world. i think we saw as the year ended, obviously, some change in sentiment, and people are attributing a lot of that to trade discussions. i think around the edges there are also some concern about demand demand is good for products.

2019 will be a good year the shape of the year might be a little different than 2018 '18 was a very strong start and 2019 may be a mirror image of 20128 where we ramp into the year. >> we're not seeing signs that we're hitting any kind of a wall things may have slowed down a little bit in parts of the world. >> reporter: and you heard jim fitterling talking there of dow chemical about the end of the year, that it may ramp in 2019 in fact, he went on to tell me that if we get these policies and politics solved, which are the chief risks for the global economy right now, brexit, the shutdown and most notably the trade fight between the u.s. and china, he says we could see pent up demand toward the end of the year if those issues get resolved, and carl, that is a big if >> one of the many opinions on global growth coming out of davos today. sara, thank you. our sara eisen in davos for us this week.

let's get over to sue herera and get a news update. here's what's happening at this hour, everyone. white house press secretary sarah sanders says democrats need to decide if and when they want to work with president trump to get thousands of furloughed workers back on the job. >> all right, that obviously was the wrong video. let's tell you about denver teachers they have voted overwhelmingly to go on strike more than a year of negotiations on base pay. the school district says it will turn now to substitute teachers and administrators to keep the schools open. and actor alec baldwin has pleaded gluilty to harassing a man over a dispute over a parking spot last fall the 60-year-old actor appearing in new york city in a courtroom this morning he agreed to complete a one-day anger management class and pay $120 fine to resolve the case.

so you are up to date, that's the news update this hour. john, i will send it back downtown to you. >> thank you, sue. meanwhile, european markets set to close in just under a couple of minutes, see ma modi joins us now with a breakdown of today's action. >> european stocks are attempting to bounce back, but losing steam in the final hour of trade, a couple of strong earnings reports from european retailers easing concerns about the health of the european consumer this comes after those upbeat results from hugo boss yesterday. plus, a surprisingly strong read on euro's own consumer sentiment. let's get to those earnings names, europe's largest retailer car 4 surging more than 6% even though the french protests dented sales growth. belgian supermarket operator reporting a boost in sales driven by strong online business in the netherlands, and that stock is up over 3%. now with that investors are counting down to tomorrow's ecb

policy meeting no change in policy expected, but it's what ecb president mario draghi says about the health of european economy, on inflation, exports, softening demand from china, and on going political uncertainty around the brexit deal and italy. will draghi acknowledge those risks. that's the big question, now since the last ecb meeting in december, european stocks have held up pretty well, up about 1.5% the euro has basically remained flat morgan, back to you. thank you. the dow turning around giving up most of its gains after being up as much as 296 points earlier in the morning. it's now only up about 48 points if it weren't for ibm, it'd actually be negative ibm is contributing 62 positive points right now. how china trade headlines are impacting this morning's market move is coming next.

and later microsoft chairman john thompsonis with us. we've got bia g show of "squawk alley. it's going to continue right after this break so all... evening long. ooh, so close. yes, but also all... night through its entirety. come on, all... the time from sunset to sunrise. right. but you can trade... from, from... from darkness to light. ♪ you're not gonna say it are you? ♪ hawaii is the first state in the u.s. 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

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markets today. at this point it's ibm alone keeping the dow in the green adding about 62 points at the world economic forum in davos, global growth and china trade concerns continue to dominate the discussions

take a listen. >> china is still a rapidly growing economy. it's growing, i think the estimates are going to be around 6% on a pretty large base, second largest economy in the world. >> we all hope that they will focus on making the trade terms better rather than walking back. i mean, no trade deal out there in the world was perfect they can all be improved, and let's hope that that's where the agenda ends up. >> so what do china's slowdown and the trade fight mean for our markets? joining us here chief china economist, and the head of america's asset allocation at ubs global wealth management good to see you both we know what she said, we know what the data said earlier in the week, ask then proctor comes along todayand says china up 1 organic. what is the truth in terms of the pain china's enduring right now? >> well, i think china's slow down's already confirmed by data most important the chinese government has been fully recognized the current

situation, and they have been taking measure, policy action today this year. they are committed to have much more ease policy, aggressive policy, they are taking measures to actually stimulate in particular investment demand i think, yes, the growth will continue slowing down but are probably going to be slowed. >> so you think they can manage this for years essentially in house through their own tools? >> i think currently, they appear to be facing a lot of challenges, particularly external challenges this year. everyone is painting that the year 2019 will synchronize -- china's challenge is definitely -- so they have to emphasize a lot domestic demands. policy wise it's enough or not, i think they do have -- they're trading between whether they

like to have a really big stimulation or they're going to be short-term possibility to see. i think they should be able to manage it so-called recession market worry now. >> so i guess the question then is how much urgency is there on either side to get this thing done or push it past march >> certainly an amount of urgency on the u.s. side if wu don't get a pickup of growth activity in the u.s., if the shutdown lingers, it's possible you could actually get negative territory by the end of the first quarter. if that happens, the markets are not priced for that. we need to get some signs of either the shut down's resolved. markets unstable, any more substantial progress i think that's a boom to the market. >> you think the shutdown is altering the trade talks with china? >> beyond government workers not getting paid, you're seeing tsa workers not showing up at

airports there's things like that that are going to have a material impact i think it forces their hand a little bit >> some of that's going to be recouped in the second quarter if it happens, right we had larry kudlow on who said he expects the economy to bounce back and bounce back quickly if that's actually the scenario that plays out. >> it should, but we're also on uncharted territories. we've had government shutdowns of maybe 25 days, we're now at record setting territory if we go two or three months could this have more structural damage to the economy that doesn't easily bounce back in the second quarter >> when china is looking at this negotiation with the u.s. and sees the shutdown playing out, how do you think that's playing in terms of the leverage that they have or the amount of patience that they're willing to have in maintaining their position despite pain? >> from my observation, the shutdown definitely making chinese party worried, concerned, whether they're going to be official coming out, from chinese side based on my

observation, they get ready to talk, okay i think there's three levels issue, agree to agree, agree to disagree, and disagree so i think that agree to agree might only be settled down but agree to disagree is what allows structural change they need a more intensive discussion between chief negotiator in china that's going to be represented by premier is coming to talk they need a lot of preparations coming up. if they can sort it out, i think china and the u.s. ready to get a negotiation to reasonable deal but this is actually really up to the u.s.'s side it's not chinese side. >> that's a really interesting wrinkle. reuters has this piece today saying the president will not take away a hard line just to get a deal done, but then others argue that he didn't campaign on ip protection and jvs

he campaigned on a trade deficit. >> it's unclear what is their threshold. a trade deficit coming down is easier and whether he can sell that, that's a harder story. it's also people in the administration, his advisers, lig lighthizer they're the ones that think of china as a long-term threat it's really unclear what is his hard line in the sand on this. >> it seems to me based on some of the comments, greet to disagree, the structural issues, if there's not an agreement on that, it would take china to acknowledge that's even taking place, and i don't think we've gotten that, right and then this idea of an enforcement mechanism to uphold that, those still seem like they're very -- the two countries still seem like they're very far apart on that, which makes me think a longer term deal is not necessarily possible am i crazy here? >> i think i would probably agree with you they would have to distinguish what china and u.s. can reach agreement, what could be, what cannot be.

cannot have all agreements put in together for the longer term, so we have to understand there's is so-called the trade issue there will be an issue or dispute over technology development, and there will be strategic developments, so the china and the u.s. i don't think will be able to solve within a short period to solve the strategic competition, but we will be able to solve actually like trade, competition, so that's what as you said, the trump probably going to be more interested on trade deal are that is the three areas, so agree to agree trade imbalances, ipr protections and the market excess, these are three things, i think both the china and the u.s. could reach agreements. for technology, for structural changes, the government subsidies, the made in china 2025, that might be regarding more or less actually longer term so they're going to be -- not

going to be slow all the time. >> so those longer term situations, those more structural issues, if we don't get some sort of agreement on them and president trump says that's it. i'm walking away, and i'm raising tariffs to 25%, what happens to markets >> your markets fall off we've seen over the past month that part of the rally is attributed to investors believing there's going to be some sort of a deal. there was talk a week ago of the tariffs coming down, which floated and went back quickly. if this goes to 25% coupled with the shutdown markets are down quickly. >> is this scenario even priced into markets at this point >> right now it's not priced in at all or at least very little. >> we hopefully will learn more next week if we get some of these high level meetings. thanks so much for your time appreciate it very much. >> thank you and still ahead, much more on how this morning's earnings movers are driving today's action as the dow gives up the majority of its gains. but before we go to a break,

rick santelli, what are you watching today >> well, as stock prices move down, so do yields but something else is going on, a bit of volatility in the dollar index let's look towards japan, maybe europe for the answer. what's the question? tune in aftethbrk.r e ea

here's what's coming up, halftime report at the top of the hour are earnings going to be good enough to keep stocks moving higher they've already turned around today, so we'll debate the big

reports that came out, what they mean for your money. plus, super investor mario gabelli is with us today for the hour we'll ask him where he thinks the markets go from here. and is walmart right for your portfolio morgan stanley thinks it is. it's our call of the day, and it's all coming up at noon we're about 15 away, we'll see you then. scott, thanks. s&p down about five. let's get over to rick santelli and get the santelli exchange. >> reporter: thank you, carl bng bank of japan is behind us and we have mario draghi and the ecb to look forward to these central bank meetings ought to be really important to the fx markets having said that, let's look at a three-day chart of the dollar yen, what you really want to notice is the way the dollar started firm up, especially yesterday against the yen and the way it reads to crescendo after the announcement came out that kor row doe didn't really change much, in a way he did,

still keeping lots of stimlouse -- stimulus in place, sounding very cautious, and cutting inflation targets. it is something the market prepared for, so the dollar moved down let's look at the three-day euro versus the dollar. when the dollar went down against the yen, it accurately predicted what would happen. this is not an abnormal move as the dollar moved down, the euro kicked in on that the proactive hot gun here was the dollar/yen relationship that spilled into the euro, but the euro's time will come. the point of this is is that fx markets, particularly the dollar, if they get above last year's closing high around 9750 and change, it will be a big potential upside because these central banks are caught right now in a lot of cross currents around the globe, whether it's trade, whether it's brexit, whether it's economic horsepower in general, china, germany, all the data points, so the stock market's giving it back, that's affecting the dollar, but the point is is that the

comprehensive list of other central banks outside the u.s. really demonstrates, in my opinion, a lack of will to normalize bad timing they shoul have begun earlier, even small bites demonstrate to the market that the party can't go on forever, but yet, it seems to be and finally, there's an additional feedback loop of pressures our central bank has normalized many think too much, some think not enough maybe the market at some point will think just right, especially as our balance sheet in the u.s. is under 3.9 trillion, which is a big positive but to summarize this story, if you're an fx trader, after this is all said and done in the cross currents of expectation, get out of the marketplace, most likely listening to coroda already and mario draghi tomorrow, i can't believe that buying a dip in the dollar index won't be a highly successful trade as long as you keep tight

stops. morgan, back to you. >> rick santelli, thank you. as we head to break, the dow just turning negative down about 5.5 points right now joining both the s&p and nasdaq in the red as that rally from earlier this morning has faded it's gone away it's been called one of the highest valued private tech companies in the valley, now coming with some serious name recognition behind it and on the board, microsoft chairman john thompson joins us next on his latest venture and his thoughts on the fading tech sentiment coming out of davos. "squawk alley" continuing after this break i'm a veteran

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the dow joining the nasdaq and s&p turning negative this morni morning. cloud plays seem to be driver of invest at silicon valley we're joined now by john thompson and the ceo good morning to both of you. john, more and more, particularly over the past few weeks, the conversation that have been having with enterprise executives on the practicality of moving customers further into the cloud. it's about hybrid, how to rewrite applications to make

them cloud able. is that the key tra t.j.ic thing that so many of the companies will have to figure out to figure out who surges ahead? >> what happens over the past couple of years is many of the large enterprises have needed to put in place a transition to the cloud. to the extend that providers could provide a hybrid model that gave customers options of figuring out do i do things on prints or do them many the cloud. that's been the key as it's moved from a high briybrid modea cloud model and it's driven their business >> is that what made you interested how did this fit in? >> i've always had a view about every ten years and that was the case when i met dipple

he said what do you know about this, that or the other. i became impressed with him. more importantly i became impressed with the idea that they had i made an early investment in the company only to evolve three or four years later and join the board. much because of the progress the team made over the course of the three or four years. >> what extent from you impressive oted impressive pivoted or redirected your efforts >> what we brought together this softer fabric from data centers

to clouds. we have building a software data control plane for all businesses around the world to leverage public cloud rgs multi-cloud and manage data in terms of recov y recovery >> john, i want to shift gears a bit. we had alex, ceo here on cnbc earlier today. in regards to the recent opposition from some tech companies about taking contacts from government defense agencies he called hit bro eed it border and not sustainable on and on. it does seem like there's this growi inin inin ining bifercati. are these conversations that are happening increasingly in tech

compani companies and do you agree with the comments >> well, they clearly are increasingly part of the discussion in the tech community these days i'm not sure i agreed in the sense they are customers and if we don't provide the technology to them someone will ultimately if that someone becomes china or some other entity that we are concerned about, then we end up with a different situation where our country is not as competitive in its use of technology in china maybe. it's very important we have a balanced view about what we're going to do to the federal goth in terms of new technology >> i want to you about an ipo. a company that is valued this highly with these kind of

investors, you expect them to be on your mind this year perhaps despite all the big names that are planning to go, what are you watching to determine whether you go this year >> our commission is to build and have a strong point of view. we grew from zero to 1400 employees in operating in 20 plus countries around the world. we'll say our own readiness and market readiness at the right time and will be public when the time is right for us we are wanting to be a public company. we are looking for the time. >> maybe we'll see you here in new york some time soon. john, dipple

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ceo tim hockey that starts at 3:00 p.m. today on the closing bell. after the market close we'll get another parade of earnings >> let's get to the judge. i'm scott wapner if today's earnings were so good why has stocks given up their gains? it's 12:00 noon. welcome to the halftime report today mario gabelli weighs in plus can we depend on growth >> we'll have a recession one day. we're adults one wall street analyst call on walmart the halftime report starts