>> $290 face creams are one reason for proctor and gamble's earnings sk2. that does it i'll be joining tyler and melissa in a moment on "power lunch" which begins right now. why the huge rally may already be over and why it may be downhill from here. president trump holing his hard line on china, but is it a good strategy and shares getting slammed we'll get you set up for that. "power lunch" starts right now welcome. it's a whip saw kind of wednesday. the dow went into the red. right now, up 101.

the dow carving out some gains at this hour the s&p briefly moving out of correction territory now it has dipped back in down by .6. three big movers today p and g. united technologies and ibm. all rallying on upbeat earnings. those responsible for most of the dow's earnings more on p and g and ford earnings earnings still coming in strong for the most part and so is guidance that is outweighing those trade troubles in the markets at least for now. let's go to bob pisani on the floor of the new york stock exchange >> p and g, ibm, united technology, all up not because of the beat, but because of the guidance. it's 2019 and look what happened here united technologies guidance, 2019, above consensus. ibm above consensus. p and g in line with good organic sales. lifting the dow's outperforming

the s&p and all the dow movers doing well where are we on earnings it's less than 80 companies reporting. but early signs are still good fourth quarter is strong first quarter is coming down, but still positive there is no earnings recession, meaning two consecutive quarters, that's not happening yet. they're stabilizing in the low single digits now. as for the macro commentary in the ceos, again, still early the implications are lower growth, but no recession and that's the bottom line, what we care about guys, back to you. >> thank you u it's day two of davos and another huge lineup. jamie dimon leading our parade of newsmakers. global growth taking center stage. >> 3.5% global growth. the united states is doing fine. trade may get resolved and all those things may resers.

we're going to have a recession. we're all adults we don't know what's going to cause the next one or the time b table, but the financial system is in far better shape the fed will look at what's going on if we, if they raise rates again in six months because we're growing at 2.5%, still a good thing. >> i think there's a difference between a downturn and less growth i think we're in the phase of 2019 where we're like ly to see little less growth a little less tail wind. not sure i'd go as far as to say it's a head wind it's going to be a slightly tougher year in macro economic terms. >> the consumer is still strong. business results are still strong and i think what most people are concerned about is are the political moves actually and the policy changes actually going to have a dampening effect. but i think most of that is within the control of the governments and they're working

through those issues they work through that on the trade side then i think we have a possibly even some pent up demand >> all right some optimism there, but our next guest has been bearish and quite so for months. he was on "fast money" with melissa in december. he said the bear market will last through 2020 and he's sticking with that call and he's got a new one today say iing th rally that started after christmas ended yesterday. and then it's going to be downhill then some from here joining us now the mark usco at morgan creek capital management. explain why you think this bear market as you strib it has much, much longer to go and could take stock prices down from the peek, 40 to 50%. >> yeah, we talked about this last time i was up with you and melissa. up in new york and we think that this kind of two year period from september of last year through september of 2020 is going to look very

much like 2000, 2001 and 2002. you remember the tech bubble popped there was this return to normal rally from late december through january of 2001. and then it was downhill from there. as people realize d well, not going back to normal we're not going back to those crazy evaluations. we've got the same thing here. the tech bubble 2.0 popped we had stocks down 40, 50, 60% from their highs now people are saying oh, it's going to get better. look at netflix recovery netflix burned is $1.5 billion a quarter. cash is king cash beat 95% of assets in 2018. we think cash will win again this year. >> so let me push back just a little bit as i remember 2000, 2001 and the bursting of the tech bubble relatively more of the companies that were part of that bubble at that time really either weren't company, didn't have businesses,

weren't profitable and today, relative to that time, aren't with the exception of netflix maybe you make a good point there, aren't many more of them actually thrivining ongoing businesses >> i'd push back on your push back which is good, it's what discussion is all about. if you think about it, we had the big four back in 2000. cisco, microsoft, eququalcomm intel. if you held those four for 18 year, you're still under water pretty lousy performance for almost two decades they just got overvalued and you look at amazon and netflix trading at triple digit pe ratios, just silly. thwe look at overall valuation

the when i said things would go down fair value, didn't go below fair value we're down about 10, 12% so we've got another 40% to go to get to fair value now we don't have to, but. >> it's melissa. the fed's hiking path has changed substantially since the last time we spoke so doesn't that remove some of the risk does it make the downturn more shallow? it removes the risk of companies not servicing their own debt as specifically when it comes to the small caps >> i think the damage is done. let's take small caps. 37% of small cap companies don't make any money

real time as we speak. more than one-third of companies in the russell 2000 don't make any money. it's tough to service your debt if you don't make any money. the problem with raising interest rates is the damage is done right? libor is up 300% people's adjustable rate mortgages are going to go up corporate earnings have been poor so far. you guys have been announcing every day. most of them have been bad a couple of upsides to prizes, but we think the damage is done. the liquidity is going to be tighter and whether the fed pauses or doesn't really doesn't matter at this point they already went through the hiking cycle from you know basically zero where they never should have been to begin with and now we're closer to neutral. i think we're 100 basis points from neutral where it should be. but we think the damage is done and 2001 if we don't have a recession, which i think we will, but if we don't, it's

going to be a significant slowdown that's going to be tough for corporate profits and stock. >> quick answer. do you see a debt crisis on the horizon? corporate, household >> yes 2020 again, i think it plays out just like 2001, 2002. remember all those fiber companies. all that excess fiber in the ground that's what publics do they create excess capacity. gets financed with debt. we had lot of debt bubble crashing the same thing is going to happen in 2020 when this mountain of debt comes due the next 18 months are going to be very challenging. >> thank you appreciate it. >> thanks, guys. >> you bet >> let's get to julia for a news alert on verizon >> melissa, a source tells cnbc that verizon communications media group will be laying off u about 7% of its staff. that's roughly 800 people. this was first reported by dow jones and this reportedly comes after months of review by the

new head of this verizon media group division he is the executive who replaced tim armstrong. this is all designed so the company will focus more, verizon media group will focus more on b mobile and video focused products a change under verizon's new ceo. and is more about creating more video content for its own properties such as yahoo finance and those run by third parties back to you. >> thank you the longest government shutdown in history. having some unintended consequences, possibly making things more difficult for the fed and chair powell's news conference next year, steve lease miesman is here to explai. how can the fed be data dependent when there's less data >> we put together a list of what you haven't been seeing on your left is what we haven't had. new home sales economic indicators.

wholesale inventorienventories the federal budget which is nice if you're running a big deficit. retail sales business inventory, we don't know what's on the shelves, which people can use all this data is used by somebody somewhere to make certain decisions about their business or in the case f o the fed, is is committee and housing starts here's what's not coming we don't expect to happen. do you reca durable good, new home sales all the stuff on the left feeds into the number on the right the fed will make a decision based on other data or information out there. >> could this make what corporations conference call more weighty in the eyes of the fed given the vacuum the fed is living in right now? >> i think so. some analysts have said we're going to get more deeply into the earnings calls one name comesout with a weakness in sales. and the tendency on the part of the market is to extrapolate

when it could be a single one-time story of just this company losing market share and the term they use in economics is anecdote is not evidence. so you've heard that before. you're smiling that's why they don't like to go from a single story. >> the good stories. we've had a lot of positive earnings surprises today and even that, it's hard to extrapolate. we talked a second ago, p and g. >> i like what i saw and what i heard in the earnings so far, but what are we talking about? 30 or 40 companies out of the 500. some percentage of that is overseas sales some percentage is domestic. and we don't quite know, which is why by the way, i don't know if you know this, but the big trend is the data and the word innilynn quisic b angel is of t earnings from the cumulative earnings calls, we're doing that here at cnbc it's a little more sophisticated. >> word cloud. >> yes that's what it is. >> thank you very much

tug of war going on inside the dow. ibm, united technologies and proctor and gamble pulling a index higher on earnings on the other hand, stocks like caterpillar and 3m falling as the president takes a hard line on trade with china. we'll take a closer look at trade tensions when "power lunch" resumes ♪ you should be mad they gave this guy a promotion. you should be mad at forced camaraderie. and you should be mad at tech that makes things worse. but you're not mad, because you have e*trade, who's tech makes life easier by automatically adding technical patterns on charts and helping you understand what they mean. don't get mad. get e*trade's simplified technical analysis.

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it is the most important relationship geo politically in the world for the next 100 years. the administration has raised very serious trade issues and they are right both sides want to resolve it. every time you might resolve it, tariffs. tariffs on march 1st that would be bad for the global economy. you need to get it around right and fair for the europeans, the japanese and i think both parties want to do that. that would be better for the world growth >> that was jpmorgan's ceo jamie dimon speaking about u.s. china trade tensions it comes as reports suggest president trump won't back down on a deal without concessions from china kevin has et says he's confidence a deal will be reached by march 1 is there really hope of getting a deal done?

you feel strongly about the china issue so when you hear the president is going to keep a hard line on china, does that encourage you or is it more important ft. hemt of the u.s. economy we don't rash et up tariffs? >> because i'm a long-term thinker and focused mainly on the long-term health of the american economy and the global economy, too, i get a little nervous when i hear people in positions of official power saying that some kind of a china deal is close at hand a. it makes me think they're more concerned about make ago deal for its own sake than the actual content and its repercussions down the road. >> some suggestions last hour when we spoke about this with michael pillsbury that china could end up buying a lot more u.s. imports that figure, trillion dollar

figure, has been floated out there. the president campaigned on closing the bilateral trade deficit with china would you consider that from your long-term point of view a positive sign even if they end up just buying more of our soybeans and less from brazil? is that the kind of progress you'd be satisfied with? >> up to a point but the big question is what would it do with the what different strategic issues the technology issues. the made in china 2025 program, which is of course china's effort to use every lever of power that the chinese government has to ensure domination of high-tech industries on the worldwide basis. i don't see where chinabuying more american imports, especially if they're low valued goods, if they're largely commodities. and even fuels

i don't see where that does anything to solve that broader steen strategic tech war problem we're in a tech war that has big, national security implications >> so david, if we don't resolve those harder issues, frankly, but ones that american companies and now the american public is really aware of, can we still come away claiming vigtry even if we get movement on the trade deficit? >> sure. you can declare vuictory and go home it's somewhat hip cypocritical f the u.s., having seen that in germany, implemented that in japan, supported that in korea the u.s. has a long history with supporting a development of industrial policy. this is a scary time for the u.s., but the chinese are not going to compromise on their industrial policy. their demographics are demanding it they need to upgrade the value

add in there and they have to stop importing screens and sensors and things, putting them together then sending them as whole iphones to the united states and getting penalized for the full value of the product. they are not going to compromise on made in china 2025 and is on a collision course in the united states >> they should decide to initiate a major u.s. disengagement from the chinese economy and regard china as an adversary yal presence in terms of xhashl security and economics. david, i want your reaction then allen, have you explain what you mean by that >> i think that's right. the united states needs to protect its own interest we're not in a position to disengage from china today the second largest economy in the world on which we're incredibly codepend ent on

manufacturing and credit we should be weary of their medium and long-term goals, which are very china first the same way that the chinese administration has been very america first. they're not going to roll over they see this as exten shl for them to upgrade their manufacturing at home. >> frenemys, what are we >> we are adversaries and it's high time u.s. policy recognized that that's within one of president trump's major accomplishments. where i would fault him and this is a serious problem, he's come nowhere close to explaining the full stakes to the american people and letting them know that as david just implied, any kind of significant disengagement is not going to be easy trade wars to quote president trump are not easy to win. and they're especially not easy to win with such a large economy with which we are so thoroughly

intertwined, but the effort has to be made and the president has to do a much better job of convincing the american people that whatever short-term sack i sacrifices and costs need to be made are imminently worth it and in fact essential. >> thank you appreciate it. >> thank you proctor and gamble on pace for their best since october.tu again. how much more could it drop? that and more ahead on "power lunch. [cell phone rings] where are you? well the squirrels are back in the attic. mom? your dad won't call an exterminator... can i call you back, mom? he says it's personal this time.. if you're a mom, you call at the worst possible time. it's what you do.

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tesla hitting the skids today after the automaker cut production hours for its models s and x vehicles this comes as rbc downgraded the stock this morning that meaning the number of sell ratings is now higher than the buy ratings on tesla matt and stacy arehere to weig in on this one matt, last week, i think i looked and this might be the 30th time this stock has crossed the $300 mark for share price in

the last two years where does this leave it technically? >> well it's been like you said, this range, it's been going on for over four years now. the stock is trading just below $300 that's where it was in september of 2014. now tesla is a stock for risk investors, they're looking to maybe hit a home run great. but the problem is when you get a stock that can move fall 40 to 50% within a range and rally 30%, that's a certain amount of risk involved, but four years later, you end up with a net no move, zero gain. that's not good. every time the stock gets to the lore end of its range, mr. musk says something that about the company that's bullish and usually doesn't come to fruition when it gets high, he says something that's more in line with reality so if you're looking to hit a home run, i just think you want to look at some risky names where the ceo's telling you more

consistently about what's going on with the company. to be honest >> stacy, how do you see traders set up with regard to this which seems it has a bit of a muscle memory to it now. >> absolutely. i would call the flow we're seeing cautiously pessimistic in a sense that most of the flow seems to be leaning short. whether that be the short interest, which is roughly 20% here or just some of the options activity we're seeing. we're seeing buyers of upside calls around the 330 level that could be investors saying that's the level they're going to call uncle. that's where they want to be out. on the downside, where we're seeing investors draw a line in if sand, closing out or willing to purchase shares here seems to be around the 250 to 270 level i would say the sentiment continues to hein slightly bearish here but certainly investors are looking for levels to get in and out. >> all right

when they're more sell ratings than buy, sometimes that's a positive contrarian signal, but i guess we'd have to wait and see. thank you very much. and for more trading nation, head to our website or follow us on twitter at trading nation back to you. >> thank you mike ahead on "power lunch." proctor and gamble soaring on a strong earnings beat we'll break down those results plus hulu is raising prices for its most expensive streaming plan will it drive away customers and ford earnings after the bell what to expect from the automaker. all this when "power lunch" returns. i consulted with your grandmother's doctor.

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hello, everyone. i'm sue herera here's your cnbc news update at this hour. michael cohen has postponed his testimony before the house oversight committee on february 7th. his legal adviser releasing a statement citing ongoing threats

against cohen's family for president trump and rudy giuliani president trump recognizing opposition leader as the interim president of venezuela over the current president. this after he declared himself interim president before thousands of cheering supporters and thousands of venezuelans are filling the streets accusing maduro of u serping power. >> bono calling it amoral, not immoral. >> capitalism has taken more people of poverty than any other ism, but it is a wild beast. and if not tamed, it can chew up a lot of people. along the way. >> you are up to date. that's the news update this hour that was part of a discussion,

melissa, on income inequality at davos. >> always provocative. proctor and gamble bable blowing away expectations and cleaning up in today's session up more than 4%. kimberly clark in a challenging macro environment. with us now to break down the results, jonathan. great to have you with us. the reaction is curious. i understand it was a beat on the top and bottom lines the outu look was bet ethan what had been given, but the outlook for the full year ending in june is down 1% to up 1% and people are paying a premium for this stock. what are they buying >> it's partly a gauge of how sentiment has changed on the market broadly in the past two or three months. i think it's partly appropriate given where, think b about where interest rates are think about the pricing power proctor has had in the long-term growth opportunities that said, we recommend clorox

certain ly the space it looks more appealing now than it did three months ago the power is something people cite as a halo of proctor and gamble at the same time, the cfo said they don't know the behavior of the consumer or retailers until six to nine months out isn't the swrur out as to whether they have pricing power, especially if one is to think that the economy is slow, that the consumer may be under any sort of duress you know, that's not a time to sort of be passing on price increases. >> you raise an excellent point, but one thing that's changed is oil prices fell 35% from the last day of fiscal q1 to 2 december 31st. that's his ttorically been presaged some cost relief on other places the jury might be out, but maybe the prosecutors lowered the charges a little bit you don't have to get that right away it gives you a little bit more time to you know, to work when costs

are falling. >> does the beauty category have legs because those 8% increase is pretty eye grabbing and we were talking ant thebout these expene skin care products >> yeah, 290 bucks 15% growth >> how do you think i get this dewey skin >> i got to try something. but it's a, you know, a lot of that is in china the high-end market in china and asia broadly has really carried company. i almost they they're a late bloomer. estee has been doing fantastically in that mark loreal thai they've done a good job. it's paying off. sequentially improving while others who have been going very, very strongly. >> is china going to worry >> i think it's a worry for everybody, but 15%, you're talking 40% numbers for estee lauder i think others see, people have criticized proctor for

underdeveloping that frankly not just in beauty, but every place. people think it's overly focused on the mainstream in a lot of these markets. i think they could continue to do well there. >> you mentioned you like clorox and other names over proctor and gamble is it because of valuation >> all right so i've been doing this for about 80 quarter us and 77, proctor has had a low er multipl than colgate they have the same structural benefits and advantages over proctor. higher margins better market shares generally speaking long-term growth opportunities that's just a brarometer of how optimistic people are are on proctor right now. that tends to be time when stocks don't perform as well >> so you like clorox and colgate? >> i do. >> thank you >> white or whites >> and we should note the ceo

will join "squawk on the street" tomorrow 10:00 a.m. so you want to watch that. >> at the top of the show, mark said the rally that started in december ended yesterday and it will be downhill from here our next guest says expect to pull back, but not the lows. andrew is managing director and senior portfolio director with morgan stanley you're more positive about things what's your view on how these issues get resolved? >> i do agree the markets had a big rally, so i wouldn't be surprised if we get a pullback near term, but i think that what happened in december was the market sold off extremely from mid december to right before christmas and that was all about you know, tax law. mutual fund liquidation. i think that accentuated the downside more than it should have so i don't think we're going to

have this big retest of this low. i think the market can pull back because it's had a big bourngs but i don't see a retest and as it pertains to china, i do think there's some resolution out there, but in terms of from investing in china, i think there's a much other story going on, which is the chinese government is stimulating their committee and people should focus on that. zpl or trying to every day seems like brings a freesh injection or something they're going to level through here, but people wonder whether those will collapse. your point of view focused on the markets, would you rather have the president come to a deal by march 1. allen said earlier he takes a longer term view from your point of view, would you rather just have the president obaositive headlines something. >> i think it would help stocks in both markets. i do think when you think about

the they start worrying when markets start worrying the politicses are worrying by monitoring fiscal stimulus that's the playbook right there. of when the invest in a market short-term, i think that would be good for both markets i think china is a particularly intriguing place to invest giveren it is when there's short-term bad news on the trade war. >> our first guest this hour who sees this as a bear market bounce where stocks go down maybe 50% and that a recession is all but a serpty in 2019 and 2020 and a ket crisis >> we had a 19% decline. maybe recession is betted in

stocks seems to me that 2018, '18, was more like 2011 and 2015, which is we came into those years with strong returns, high sentiment, high economic expectations, we didn't have very good years. multiples regressed lower. sentiment ended the years lower and 2012 and 2016 ended up pretty good years. we have washed away of too much positive sentiment so i think this year will be a better year for eck quities with lower valuations >> said it with added emphasis >> thank you always good to see you >> always. >> elon. >> nancy pelosi now responding to the president's insistent that he will deliver his state of the union on the house floor on january 29th. she is now saying she is not going to invite the president to

appear on the house floor. she said the house will not vote on a joint resolution that's required in order for the president to deliver that speech in the house chamber she said she looks forward to finding a differentdate to invite the president to speak and deliver his state of the union and that date will not occur until the government is reopened so now nancy pelosi formally saying the president will not be invited to the house floor to deliver his statement. >> technically s the state of the union only considered a state of the union if delivered in front of both houses of congress or can you call it a state of the union and deliver it from the oval office? >> he can call it whatever he wants at any time, but in her previous letter to the president, pelosi did say that he had the option of delivering the state of the union in writing. to members of congress so that is something that remains an option to him if he wants to deliver a formal state of the union, but we do know that in order for him to do that on the house floor, both

the house and the senate need to pass this joint resolution approving his speech and approving his arrival. whether he delivers that in the house floor or the senate floor, both chambers would have to agree and it's clear that's not going to happen. >> for many years, the state of the union was delivered on paper. written or typed does this, does this from speaker pelosi lay bear the fiction that postponement request had really anything to do with security and not anything to do with the politics of the shutdown >> i think that pelosi has tried to frame this as a housekeeping matt matter really the idea of finding a better date, but i think it is abun u dantldantly clear the po has turned incredibly personal democrats and pelosi saying that democrats should own the shutdown i think it also speaks to how difficult it is going to be for both sides to find any type of

compromise as federal workers are facing their second missed paycheck on friday >> i've been following politics for a long, long time and this to me is unprecedented i can't ever remember a time when a president was disinvited to come into the well of the house. anyhow thank you very much. bond market now. rick santelli. >> i'm going to nominate you for president, rick. >> tracking the action at the cme. >> president santelli. >> don't want the job. no thank you don't want the job you know, if you look at the kind of relationship that stocks are having with treasuries, look at this chart starting in mid january at the s&p overlaid on ten-year note yields seems clear to me if you could study the chart the way i have, not only are they together, stocks are leading if we look at five-day chart realizing their central bank continuing to pump with ongoing

stimulus, you could see the dollar is holding up pretty darn well if you look at a five-day, tomorrow, the ecb meets and we want to watch the reaction predicting the outcome is pretty easy here and a longer term chart shows that 113.5 is the big support below the market for the year and we should be paying close attention to all day tomorrow after mario draghi speaks back to you. >> mr. president, thank you. two big stocks to watch. comcast rising on earnings we'll tell you what else it said that is boosting the stock price up 4%. plus, we await results from ford the stock has been stuck in the mud. it is in the middle of a major restructuring. atndorcongp working th a me mi uon "power lunch." ♪ (vo) here's a question. was it necessary to create a luxury car more teched out than silicon valley? with a cockpit fit for aspaceship.

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they want to see crime stopped, which we can easily do on the southern border and it really is a shame what's happening with the democrats. this will go on for a while. ultimately, the american people will have their way because they want to see no crime they want to see what we're doing like today, we lowered prescription drug prices first time in 50 years the democrats would never b have been b able to do that so we're all working very hard we have to respond to it we'll respond to it in a timely manner thank you very much, everybody china very much wants to make a deal see what happens i like where we are right now. we're doing great as an economy. they're not doing very well because of the tariffs, but as you know, fairly soon, that the deal that i made with them will come off the tariffs will be substantially increased on china. they're paying billions of dollars to the united states treasury first time we've ever done that.

first time we've had money coming the other way from china. it's always been a one-way street but i have a good relationship with president xi and we'll see what happens, but we're doing very well under negotiations with china one way or the other, doesn't matter we're going to do well >> he says he's been threatened by you >> you know i would say he's been threatened by the truth he's only been threatened by the truth and he doesn't want to do that probably for me or other of his clients. he has clients also i assume >> straight to eamon javers. he seemed to address nancy pelosi's withdrawal of her invitation the him to deliver the state of the union as well as the china trade talks >> that's right. i was told just a few moments ago the president was not aware as he went into this health care event that nancy pelosi sent this letter sunlighting she wasn't going to hold a vote to have the state of the union there. so the president responding to

that, but that was the first he'd heard of it so saying we'll respond in due time. no official reaction yet from the white house to the idea that the spouz is now suggesting they won't hold a vote in order to authorize the state of the union until the government is reopen so that is a dramatic the presi talking about the chinese negotiations, say iing on the oe hand that things are going very well but also on the other hand that he wants a deal that's favorable to the american people, an issue that larry kudlow has been raising at the white house, that ultimately these negotiations are making some progress behind the scenes despite what appears to have been some miscommunication about a potential meeting with chinese officials before a scheduled meeting at the end of this month with the chinese vice premier. that little wrinkle, white house and aides around the president are sailing past, suggesting that the meeting at the end of the month in terms of chinese

negotiations is the one that really matters. >> thank you, eamon. >> you bet. >> eamon javers at the white house for us hulu is making changes of its own. julia boorstin join us with a look be at the late northwest the streaming wars julia? >> comcast shares rising after growth in the fourth quarter it lost fewer pay tv subscribers than suggested steve burke saying the ad-supported streaming service they're launching next year will strengthen the value of their pay tv bundle and generate ad revenue as well as the popularity of nbc universal content. this comes as hulu, of which comcast owns 30%, announces that it's loweringthe cost of its on-demand service with ads, cutting it from $8 a month down

to $6 a month. online ads staying steady at $12 a month and bundled with live tv to $45 a month it's designed to retain customers in the face of so much streaming competition. the ad experience will now cost less than half of netflix's most popular option after netflix just hiked prices last week and this gets ahead of new launch service as well as disney and at&t. >> julia, thank you so much. >> ford is expected to report its earnings ahead of the bell the automaker already reporting that the stock rebounding this year that is in 2019. down about 30% over the past 12 months michael ward is an auto analyst with william research. good to see you. i want to get one question out

of the way right off the top and that is whether the 6.8% dividend yield and the dividend is safe. >> absolutely. i think so there's no reason why it wouldn't be. ford's ability to generate cash, particularly if you go out the next three to four years, the auto business has $5 billion of surplus cash, exceeding debt they'll generate positive cash in 2019, 2020. if you look longer term, they're projecting lower capital spending and capital needs are much reduced from where they were any other point if you look back historically. >> when they report their profits today they've guided down their guidance to the low end of the range $1.30 is the compa hear the ceo saythis afternoon on their conference call? >> i think the biggest question people will have coming out of the earnings release this afternoon is going forward what their guidance is for 2019 and possibly if they make any comments regarding longer term cash needs or longer term

restructuring opportunities. >> they've been a little vague as they look ahead into 2019 what would put sharper points on it >> you know, they disappointed in 2018 because of weaker than expected performance in china. that will be a heavy focus what do they do in china how do they turn that around we go through 2019, we'll probably get more color on the restructuring plans that they announced a few months ago. >> are you shocked, though, that two years into the tenure of the ceo you haven't gotten this much detail and how long does he have to give you detail especially when you have auto stories in the sector that seem compelling right now? >> that's true, general motors story seems a lot more compelling you look at these global restructurings, in europe, south america, you have a lot of constituents to deal with. ford, as a management, owes it to themto communicate with those workery flush with cash.

their balance sheet, they're sitting on $5 billion. it's a tough time to go out and say by the way, we have to scale back and restructure our operations i've given them a little bit of a break on this. the longer it takes to announce to us the investment community, what they're thinking about, the better off it is. >> what do you make of their partnership with volkswagen, given the proportion of sales in this country that are now trucks and suvs >> i think the first alarm that went off is they're going to do pickup trucks? i think when they specified it a little bit more, they're talking about the smaller, midsize pickup trucks from outside north america and some of those commercial trucks. billie ford in particular has been very clear they're at the very beginning stages to work with volkswagen. in south america and europe. and so i think we'll wait and see how that goes. there's nothing definitive certainly in the next two to

three years. i think they're talking about a 2023 time period so it's still a ways off. >> michael, thanks for your insights today appreciate it. michael ward on ford. >> thanks for having me. >> you bet. >> check please is next. what do advisors look for in an etf? i tell clients, etfs can follow an index, but which ones target your goals? it's not about quantity. it's about quality. no trendy stuff. i want etfs backed by research. is it built for the long-term? my reputation depends on it. flexshares etfs are designed and managed around investor objectives. so you can advise with confidence. before investing, consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully. from capital one.nd i switched to the spark cash card i earn unlimited 2% cash back on everything i buy. and last year, i earned $36,000 in cash back. which i used to offer health insurance to my employees.

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we are talking moments ago about how house speaker nancy pelosi is basically disinviting -- >> disinvited. >> you said it's unprecedented in terms of -- >> i can't remember another time when anything like this could ever have happened. >> and what is the date today? because we have many, many more months ahead we've got a lot of things that investors in the markets are hoping for, such as infrastructure and if you think that's going to happen, think about what's going on with the shutdown everybody wants the government to reopen yet there is no agreement on this. >> becoming incredibly personal. we all found -- we like bono, his comments about capitalism. has a right to make a point, has made a good point. on capitolism, bono still hasn't found what he's looking for. there we go. >> i actually kind of liked his point, saying it's amoral not immoral. >> let's talk about sweethearts.

guess what candy will be missing from your valentine's day this year, the sweethearts. you know, the ones with the little phrase. >> that say bite me and stuff like that? >> those are hipster sweethearts. >> only for tyler. >> necco went bankrupt last year. >> that's who makes them, necco? all right. >> "closing bell" starts right now. >> good afternoon. welcome to the "closing bell." i'm wilfred frost. >> and i'm morgan brennan. coming up i'll talk to ameritrade's ceo in a first cnbc interview. >> and jim breyer in davos let's check in on the markets. s&p 500 intra-day splitting the difference from its highs and

lows