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. ♪ good morning it is 5:00 p.m. at the world economic forum in davos, 11:00 a.m. on wall street. "squawk alley" is live ♪

♪ morgan brennan, jon fortt at the new york stock exchange. first up, breaking data on eia inventory. leslie picker has that >> hey, carl that was delayed a day by the monday holiday oil inventory shows a build of 8 million barrels compared with estimates of 750,000 barrel drop gasoline inventory up 4.1 billion barrels con sense us called for a build of 3.1 million barrels. gas spiking up 3% on that news, natural gas. >> thank you for that. moving to the big story, wilbur ross telling cnbc that the u.s. is miles and miles from

any trade deal with china. take a listen. >> there's been a lot of an ' s anticipation, but we're miles and miles from getting a resolution, and frankly that shouldn't be too surprising. trade is very complicated. there are lots of issues, and structural reforms that we really think are needed. >> and this as goldman, sachs ceo david solomon sends a warning that chances of recession in the u.s. next year are about 50/50. joining us, u.s. investment strategist at and shawn matthews, capital investment founder. thank you for being here on one hand, the trade issue is hanging over us.

on the other hand, jobless claims numbers how is an investor to play it? >> i think what we're seeing is the overhang that's not only in the u.s. where we are getting day 34 of the government shutdown, it is the china u.s. trade deal and brexit what's the fundamental driver, the earnings has been positive it is impressive that the best performance during any shutdown period we were down in december on the s&p, some of this is a rebound off overdone levels. despite that, we're getting solid earnings results if we get any resolution from either the government shutdown, trade, or perhaps globally brexit, et cetera, that could spur a next rally upward that's what we're hopeful for.

>> what's the investor to pay attention to, earnings numbers, fundamentally some tone about how these geopolitical risks are effecting the companies. >> projections, ti had a good announcement, lamb had a good announcement, they're up big it is a trader's market as well. you have to make sure you take your chips off the table at some points of time in reality, total return on a yearly basis is not going to be projected out, that 15% return every month. you're talking mid single digits returns for the equity market this year, credit market will have some issues you're supposed to look at what's going on here and now and look at the projections going forward and make sure you're allocating money correctly that's the key to making money going forward. >> to put a finer point on it, in terms of looking at it from here and now, based on everything you know about earnings here and now, looking

to this year with all of the uncertainties from a macro level playing out, are stocks still too expensive? >> i think they are okay as of right now because the fed is on hold that's the projection. that's why the market rallied. fed on hold, risk comes back on. this is a risk on, risk off market with high volatility that's associated with it right now they look okay i think the second half and going into 2020, they don't look okay. >> your thoughts >> we came in with growth estimated down to 8%, now closer to 6% s&p growth this year i think that's more in line with realistic expectations perhaps a couple of percentage points on the down side. if markets are pricing that in, i think we're getting to a point perhaps they priced in the negative expectations.

this is barring shocks from any events we talked about earlier. >> how are you feeling about financials outpacing faang, through the inverse of what we talked about last year >> financials are okay, markets are low. you have a flat yield curve, loan losses aren't an issue as of now again, they look okay. you want to be in places where balance sheets are strong. certainly banks are not levered that much, they used to be levered 25, 30 times now they're levered 8 or 9 that's helping but i think you're supposed to look at the world from the sp perspective where are we going the next 12 to 18 months i think the consumer, who is leading the marketplace at this point of time is the inverse of the last cycle the consumer was highly levered last time and they were the ones that blew up right now, corporations are highly levered, governments are highly levered that's the problem >> let's talk about geography.

you see opportunity in china and emerging market, you say the u.s. in terms of developed markets strongest. what about europe and this brexit thing playing out >> we typically talk about a barbell approach one hand of that barbell is the u.s., still probably the best on the block from a developed market perspective parts of china and selective em on the back end of that, especially if we get a resin trade and if we see some stabilization in the dollar. in no man's land is europe, and partly looking for that resolution in brexit we got weak numbers in europe. seeing down side to growth risks there. on top of that, i think valuations while attractive, there are value traps still in europe what we say to investors longer term europe becomes interesting from a dividend perspective. we see the euro stocks, for example, as 4% dividend, the ftse even higher compared to 2%

in the u.s at some point we get interesting opportunities in europe, but we're not there yet. hopefully by midyear we are there. >> shawn, back to the point on companies and governments being highly levered now, is that a bubble is that the next potential cause of recession >> i think so. if you look at the next three years, there's $2 trillion that has to roll incorporation debt that used to be about 8 or 900 billion. so the economy has grown over two times in the last four, five years to justify the amount of leverage put in place. why did equity prices go up? because ceos borrowed and bought their own stock. i think that's the next bubble that will occur sometime in 2020 >> even if there's no more hikes? even if there are cuts >> i don't think it matters. you still have to roll that debt we have been in artificially low

world with tight spreads eventually people look at coverage ratios and what's going on and that's going to be the problem. >> what do you think, should investors steer clear of credit now? >> i agree with shawn to some extent that the credit crisis may be the next crisis to come, but i think we're a bitterly because we don't forecast recession the next 12 months, risk of default has lessened given that the u.s. numbers are stable, we think we're okay for now. we're okay taking credit risk. we have become more offensive. some passive efts in high yield offering daily liquidity are worrisome. >> come back soon. coming up, we head back out to davos to hear from ceos of

coke and pepsi and later, former yahoo ceo carol bartz joins us the dow is down 13 points. from the market ike oe when it might be time to buy or sell? with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today. this round is on me. hey, can you spot me? come on in!

find your place, today, with silver sneakers... included with many medicare plans. call the number on the screen now or visit getsilversneakers.com 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. the ceos of coca-cola and pepsi cospeaking at davos on transformation of the plastic economy. sara eisen has more on the comments and what it means for two of the world's biggest

brands hi again, sara >> reporter: hi, carl. it is clear that fighting the rise of ocean plastics is becoming a huge business issue, driven by consumers demanding change and governments taking action, like all of the bans on plastic straws we have been seeing it is also so urgent that the ceos of arch rivals coca-cola and pepsi co did something that some would think unthinkable, sat together and talked about how they were working together to fight a problem take a look. >> it is not just a problem for coca-cola, which it is, it is a global challenge we set ourselves a simple goal the way we look at it, we have to look after things that injure the products, the product itself, the water or packaging it is a doable thing we have countries where 90% of this are solved, we need to take it to a global scale.

>> everyone is signing on, making promises. when do we start to get the action behind that >> first it is great that everyone is coming together. there are plenty of issues in the world where you don't see this level of collaboration up and down the valley stream. >> no ocean plastic deniers. >> no. and it is not just that plastic gets into the ocean, plastic waste in the soil can be a problem too. we see the stuff in the ocean. the stuff in land fills is also a problem. we need to get it back i think what's happening is there's a lot of momentum behind pledges, we are moving to the stage of not just individual action and individual country successes, we're moving to success at scale. >> how much of these efforts are driven by demands from the consumer and what is the consumer telling you >> the consumers in some parts of the world with some levels of education and some wealth, they're very concerned about this many other consumers, unfortunately they're not. i think in this case, i think

the companies are ahead of demand we're seeing brands with purpose grow faster. so it is a broader topic, not only plastics. we're seeing brands that have a purpose, that want to have impact on society and have a role in making society better. >> james, how do you think about this in terms of the overall profit picture >> we work on recycling facilities and collection systems around the world these all cost money of course if you do it over time, it is more absorbed, but it costs money in the end if you believe it is right and needs to be done, it is better to embrace it and get on with it than wait for the train to crash >> what makes me very optimistic about this process is i think there are real beliefs from all of the leaders of most consumer goods companies, personal beliefs, beyond organization, it is personal beliefs that we need to solve for this.

invest in soda stream, we have freestyle machines, machines you bring your own cup, dispense water or pay money to add something. this is completely possible. >> a lot of cohesion among the beverage giants. doesn't mean anything for the cola wars, but this will be an issue in board rooms and an vermont f -- and for investors. when i hear the ceo of coca-cola point out his competitor's acquisition of soda stream, it takes you back to company stories, earnings, why they're making strategic moves for the purpose of sustainability, trying to change consumer behavior and appeal to consumers demanding change he said he has the freestyle and working on dasani machines on college campuses, get away from plastic bottles and work on recycling plastic bottles. an issue i think will get more attention.

beyond talk of the global economy, guys, was the number one hot button issue for ceos, members of the government here and for investors. >> sara, we'll see how it plays out at the cash register people get emotional about their soda and how they're delivered other beverages too, not all sodas as you pointed out many times. sara, thanks. when we return, billionaire ken griffin bought another house. the most expensive ever sold in the united states. we take you there next. first, a look at the gainers in the dow so far in today's session. intel leading the way ahead of earnings this afternoon, up better than 3% on pace for the best daily performance since january 4th. a lot more "squawk alley" is ahead with cvrheon and goldman, sachs. don't go anywhere. your employees must love you. [ chuckles ] thank you. you could say that. i love you. servicenow works for you.

with a $500,000 life insurance policy. how much do you think it cost him? $100 a month? $75? $50? actually, duncan got his $500,000 for under $28 a month. less than a dollar a day. his secret? selectquote. in just minutes, a selectquote agent will comparison shop nearly a dozen highly-rated life insurance companies, and give you a choice of your five best rates. duncan's wife cassie got a $750,000 policy for under $22 a month. give your family the security it needs at a price you can afford.

some federal workers are

going to homeless shelters for food >> i know they are, i don't quite understand why as i mentioned before, the obligations they would undertake, say borrowing from a bank or credit union are in effect federally guaranteed, so the 30 days of pay that some people will be out, there's no real reason they shouldn't be able to get a loan against it. we've seen a number of ads and institutions doing that. >> commerce secretary ross on "squawk box" saying he doesn't understand why furloughed government workers are going to food banks and homeless shelters speaker pelosi shot back on that on capitol hill. take a listen. >> let them eat cake kind of attitude, call your father for money, this is character building for you it is all going to end up very well, just as long as you don't get your paychecks

i don't quite understand why as hundreds of thousands of men and women are about to miss a second paycheck tomorrow. >> so the comments getting some attention in washington today. hard to say if it is going to move the needle in terms of whether we get a path to a compromise or not. >> the path is healthier our producers at cnbc have been doing work, calling major banks about exactly this issue and what is available to federal workers. there are multiple programs offering relief from major banks if federal workers are clients it helps if they do direct deposit into banks but they've had to do a lot of leg work themselves. there's a number to call you have to call the number, go through a process, it is on a case by case basis, but the commerce secretary is correct, there is relief out there. i'm not sure it is being talked about enough that's what we do. we communicate in the media. we're telling you, there are numbers to call to get this kind of relief, but it is on a case by case basis. >> even paypal is extending not

much money but even they are extending money with an announcement when you go on that app as well. >> finally, the president responds to pelosi saying nancy just said she doesn't understand why, very simply without a wall, it doesn't work. our country has a chance to greatly reduce crime, human trafficking, gangs and drugs, should have been done for decades, we will not cave. we're going to keep our eye on the senate, voting on a couple of proposals hopes for those are not very high >> we'll see fingers crossed for all of the folks that are effected by this. meantime, a big month for citadel's ken griffin. the hedge fund manager purchasing another home this week, only the most expensive one sold in the u.s. off central park robert frank has more on the recent real estate shopping spree and a look inside. >> ken griffin buying four full floors of condos off central park for 2$238 million

most expensive home in the united states. he closed to buy 24,000 square feet near the top of the 79 story tower. 220 central park south works out to under $10,000 per square foot. the apartment is just raw space. he is going to have to spend tens of millions more to build it out it is one of six homes that griffin owns his main residence is in chicago. there he bought the most expensive home sold in that city for 59 million he also bought the most expensive home in miami for 60 million. and building the most expensive in palm beach, paying $250 million just for the land. this week, it was announced he paid 122 million for a mansion in london near buckingham palace all in, he has spent over $700 million on real estate in the past few years the new york deal was signed

three years ago when the tower was starting construction. the way these things work, buyers close when the building is finished. that's why it is just closing now. but the market has weakened a lot since then with manhattan seeing the biggest sales drop since the financial crisis citadel is preparing to move to new corporate offices in new york they signed one of the most expensive leases ever, 200,000 square feet of office space on park avenue and 56th street. about a ten minute walk for ken from his new penthouse to what will be his new offices. so he won't have to take the subway guys, back to you. >> another example of extreme wealth robert, thank you. european markets will close in about four and a half minutes. seema mody has today's action. >> carl, a choppy day of trade started in negative territory, inching into positive territory. after the ecb left a benchmark interest rate unchanged at zero, but changed the assessment of

risk from balance to the down side, citing geopolitical factors, political uncertainty related to brexit, the trade dispute. sticking to a plan to assess raising rates after summer of 2019 however, a number of economists expect that to be delayed to the end of 2019 or even 2020 if the risks persist. take a look at the currency. euro hitting a 2019 low during mario draghi's press conference. data shows another sign of more we weakness germany manufacturing, pmi hit the lowest level in four years in response, seeing a flight to safety with german ten year down more than 20% over the past one week more economic head winds out of france as well business activity falling unexpectedly in december, dropping at the fastest pace in

more than four years, due in part to anti-government protests worth knowing the french equity market is trying to rebound from two year lows, higher by seven-tenths of 1% technology, boosted by strong earnings from apple supplier sd micro electronics. morgan, back to you. >> thank you. let's get to sue herera for a news update. hey, sue. >> hello, morgan hello, everyone. here is what's happening at this hour nancy pelosi reacting after president trump capitulated to her request to postpone delivering the state of the union address in the house chambers until the partial government shutdown is over. >> glad we have that off the table because it was about the least important thing we have to talk about what we have to talk about is opening up government, to recognize the pain and unfairness of the shutdown to america's working families north korean leader kim jong-un is praising what he

called president trump's positive way of thinking in negotiations this ahead of a planned second summit meeting pyongyang releasing photos of him visiting with the vice chairman the democratic republic inaugurating an opposition leader the first peaceful transfer of power since independence 60 years ago. the 55-year-old says he will soon release all political prisoners. back downtown to you guys. still to come, the government shutdown continues, now in day 34. the latest on negotiations and what it means for your money dow is down 45 and the s&p is down 1.5 alerts -- wouldn't you like one from the market

when it might be time to buy or sell? with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today.

the shutdown now in a 34th day with competing bills to end the shutdown set to hit the senate floor this afternoon. ylan mui is in washington. going to be watching that. >> reporter: none of these proposals are expected to pass, but it is a way for senators to take a public vote how they think the shutdown ought to end. the republican proposal is border wall funding and extended protections for young undocumented immigrants.

it includes some things for democrats, disaster relief, extension of cash aid benefits and extension of violence against women. it would keep funding levels unchanged. they've put disaster relief money in there as well we'll see how the votes end up fairing. there could be defections on either side. meanwhile, growing pressure on nancy pelosi in particular to start laying out the parameters for some negotiation in the future some house democrats are calling for her to set a date certain for a vote on border security and immigration in the house, once the government is eventually reopened. there are also democrats that are calling on her to start a bipartisan summit where leaders get down, hash this out amongst themselves, and dare the president to veto whatever plan they come up with.

all of this is still percolating amongst members. we don't see a lot of progress at this moment, but as for the public spat between president trump and house speaker pelosi, she mentioned in her weekly press conference that she's glad the president's acknowledgment he will no longer be giving the state of the union, that that's off the table now, she said it is very unimportant in the lives of american people back over to you >> thank you busy afternoon ahead for you and a lot of us. meantime, morgan stanley's chief joining other business leaders, warning on the impact of the shutdown. take a listen. >> it is extremely negative if the shutdown goes on much longer firstly at a human level you have 800,000 families effected by this this is not the way the u.s. should be working. and i truly hope the leadership of both sides come to some way of resolving what seems to be a relatively straightforward

problem. you know, if it goes through months of this year, it will have an extremely damaging effect. >> joining us with more on the impact of the shutdown, chris krueger and ernie trajeski move past the senate votes today. some argue regardless what happens, it might carve a path towards compromise do you agree and what might it look like? >> i don't tend to agree with that we're basically, these are very much sort of show votes to release pressure out of the balloon. at the end of the day, this will be trump with pelosi, schumer, mcconnell in a room, hashing something out. the state of the union was always a soft deadline for us on the 29th now that that's been postponed, absent economic pain with a second missed paycheck on friday, you don't have a lot of

catalyst in february, outside of the super bowl taking place in atlanta with potential tsa problems, but then until you get to march 1, when the snap program for food stamps and then the debt ceiling comes back into view, you don't have too much in february to force compromise >> are you sensing the same lack of urgency on either side? >> i think i generally agree with that. they are show votes today. on the other hand, it is nice to get beyond them and show kind of where the pieces are right now on the political chess board i would add to that, too, that high frequency of real data and survey data is mixed some data is actually strong we had another good claims number come in today but high frequency consumer comfort numbers are down i think all in all there's been a mild deceleration in activity. doesn't look now like it is

anything like the 2013 shutdown, but the down side is enormous because as federal workers sort of reach their liquidity constraints, max out credit cards, something has to give eventually. >> from an investor standpoint right now at this point in time, is the biggest concern gridlock over appropriations of 25% of the government assigned that it is going to be even worse when it comes to bigger negotiations like the debt ceiling? >> i don't think so. i think that if they can get over an issue like this, and they can sort of figure out the way washington will work with a democratic house and republican senate and republican in the white house, i think that there will be hope to avoid this sort of fiasco again. >> ernie, what's the legacy of the shutdown going to be i mean, it's already the

longest. seems to me what it is about is pretty unique. does it depend how it ends where we go from here, whether shutdowns become more or less common, longer or shorter, or is this another blip? what do you think? >> i think two things. number one, it is obviously going to define the political dynamic the first two years between nancy pelosi and senate dems and republicans in congress and the white house. i think number two, the thing that worries me more as a former federal employee, it will be harder for the federal government to get top talent going forward. top scientists, top statisticians and economists why would you work for the federal government if there's always a risk looming over you of 30 days without pay >> indeed. especially when the labor market is receptive in other circles if you need to find a job somewhere else i don't want to make more than we have about the wilbur ross

comment. we played it a couple times. it is trending on twitter. the speaker referenced it a few minutes ago. to what degree does this accentuate that extreme of wealth and some would say out of touch executives versus the plight of families that don't have 30 days emergency savings in the bank. >> exactly like i said, i was furloughed in 2013 rules are different for the middle class than they are for wilbur ross. you can't walk into a bank and say hey, i'm not getting paid, can i get a bridge loan. they're going to laugh at you. as was mentioned earlier, there are some financial institutions with special programs set up for federal workers, but a lot of those programs have limited loan amounts that they give out they require that you have direct deposit or they're limited to specific employees of specific agencies that are eligible for them the other thing too, federal workers have a 401(k) equivalent retirement program, but if

you're not getting paid, you're not allowed to take a loan out of that. loan repayments are done through payroll. you can take early withdrawal, but you incur 10% penalty. there are no options for the typical middle class federal worker. >> got to find a way to disentangle the shutdown element from policy dispute. that's going to be key in years ahead. chris, ernie, thank you. talk to you ysoon coming up, what the presidents of the new york stock exchange and nasdaq say about the shutdown impact on ipos. first, rick santelli, what are you watching >> i was watching mario draghi, listening to his words after the break, let's discuss major themes and headlines of mario draghi as once again, they're policy unchanged as the globe slows. all after the break. more teched out than silicon valley? with a cockpit fit for aspaceship.

hang on. radar that senses things the human eye can't. busted. and the ability to make a thousand decisions before you even make one. was all this, really necessary? what do you think? ♪ ♪ ♪ our new, hot, fresh breakfast will get you the readiest. (buzzer sound) holiday inn express. be the readiest.

♪ 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 that i grew up in. ♪ welcome back let's get to rick santelli at the cme for the santelli exchange >> thanks, jon today in my opinion is an important day, not a huge day. you know when a huge day is going to occur, a huge day is going to occur when central banks of the world get more in line with u.s. central bank. the problem is if they're prudent, that might not be possible now missed opportunities can't go back in time. it is what it is

when i look at some of mario draghi's headlines this morning, i just can't wrap my arms around how this is going to end to me it most likely will just exist in its current form and slightly less for a much longer runway, similar to japan for maybe different reasons, but ending up on the same course nonetheless. here's a few of the big headlines that i wrote down to talk about when it comes to inflation, we have several interesting headlines. he was confident inflation would move to the target but headline inflation is most likely to fall in the coming months inflation expected to rise in the midterm. that makes sense underlying inflation remains generally muted. the problem is they haven't had their hand on an accurate forecast of inflation in a long time but that even isn't the biggest point. and the biggest point connects

all central banks because the '70s and '80s did central banking the greatest disservice ever they distorted what most likely is the anomaly of inflation in those decades, condemning the notion that if you don't try to always keep it at a certain level, and try to control it, that it is going to consume you. what's consumed countries is doing the wrong things to stoke inflation that doesn't appear. how can you get good inflation without good underlying economy generating horsepower to create that inflation negative interest rates have been very effective. now, i don't know what the economists of the world at the top of the pyramid think of that from what i read, most of them agree. this is the craziest thing i've ever read.

strong banks key what is current conditions doesn't turn to recession. it is hard to make money with minus 40 deposit rate. i think we need a redo, not in policy as much as general principles about how much reach central banks have in a globally connected world where not every economy is on the same page. morgan, back to you. >> rick santelli, thank you. up next, former yahoo ceo carol bartz is with us on her latest venture "squawk alley" continues after a quick break. why are you so good at this? had a coach in high school. really helped me up my game. i had a coach. math. ooh. so, why don't traders have coaches? who says they don't? coach mcadoo! you know, at td ameritrade, we offer free access to coaches and a full education curriculum- just to help you improve your skills.

boom! mad skills. education to take your trading to the next level. only with td ameritrade.

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. joe montana and carol bartz, only some of the investors betting big on the cannabis market this morning. aditi roy is in san francisco with more on the latest funding round and newest board member. aditi? >> good to see you i am joined here by carol bartz, newest board member of a california can business company. >> very pleased to be here. >> you're a familiar face having been the ceo of yahoo many years. why cannabis, why now? >> i programmed my first computer in 1968 and i've done the tech industry, enjoyed it. when i saw this opportunity, i

said this is the new world here. it is like being back in tech 20 years ago. so much growth potential, so much ways to change people's lives. so i'm in. >> the new tech you're calling it it is a pure cannabis company. a lot of people bet big on the cbd industry saying it is a better bet, given the farm bill, retail poised to get in. do you agree >> i agree cbd is a very important part of this industry. however, i also believe because i'm a user, my knees, bad knees, that the combination of thc and cbd is very good it is much better than pure cbd. as people, as it is legalized in other states, people will have the opportunity to understand how important it is to have that combination. and that's what we do, it looks

at the opportunity for customers and delivers the best product. starting from the plant. they grow the plants sort of from seed tosale >> in new york, good to see you again. interesting to hear it you compare cannabis to tech i wonder, you personally, are you taking a portfolio approach investing in different companies at different levels? do you see this as a big platform important or is this one specific investment? >> this is one specific large investment and that's because as i wandered around looking at apothacaries and finally toward caliva and saw the difference and quality of management, there's this sort

of idea that marijuana companies are led by marijuana people. but caliva has the strongest management that, frankly, i even see in tech. so this is a bet on caliva >> carol morgan here, i'm curious about your thoughts on the cost of doing business in particular where cannabis is concerned in a state like california some people are arguing it's bookkeeping a case study how not to legalize marijuana right now, given the red tape and also the high taxes >> well, you're certainly correct about the red tape and high taxes the red tape you have to actually look at carefully one of the reasons that i like caliva is because it actually pays angeles to the quality of the product, passes all the different tests that the government's requiring, and i don't think they're onerous at this point they are expensive

but the test itself is posh and caliva is on top of that, want to be the most trusted brand because they take care of their product and customer knows what they're getting. now, taxes in san jose, for instance, by the time you add up local and state taxes and taxes for spending, what's that called, it's 37.5% so if you have a $50 product all of a sudden it's $67 and people go what? so that is not the way to enhance a new market to come to life by overregulating and overtaxing > speaking of the black market, california is the only stateoff you've seen legalized recreational cannabis and black market sales have gone up. how much of a headwind are regulations? >> it is regulations because what happens is there were a lot of smaller cannabis growers and

therefore, sellers before. and they have course, were thinking there was a huge opportunity when it became legal. they couldn't afford it. so they went back underground as a term and their customers can followed them because of the extra money they had to pay at the real apothecaries. >> how close do you think we are to full legalization of kanas businesses >> i don't think we're close there's still too many boogiemen out there that assume that will bad things are going to happen if marijuana is legalized. i'm here to tell you, the other thing that caused me to get excited about this industry is i use it i'm not a smoker but i have artificial knees. i put those creams on multiple times a day on my shoulders and it is magic. it is absolutely magic

and that -- that's really what sod me i use those products every day i use a variety of them to help test for the company i'm sort of having fun it's better than testing a new piece of software. you rub it on your body and see what happens so you know, i don't think it's going to be legal that soon, but i do think those states, california being the largest marijuana potential market in, frankly, bigger than canada, it's bigger than anything in the united states, so we're going to learn a lot here that hopefully will help other people decide to legalize. >> a lot of people say whoever wins california as far as the company wins the world. >> it was already won in california. >> thank you so much for joining us this morning. back to you, john. >> thank you, aditi, as well meanwhile, news on apple thi morning. sources telling cnbc the company plans to lay off more than 200

employees from its autonomous vehicle group labeled titan. some will be moved to other areas within the company it's been a it up multiious five years for apple's self-driving project as the company had to scale back from building the car itself to only building the underlying system before partnering with vehicles wagonen. meanwhile, in a statement apple says "we continue to believe there's a huge opportunity with autonomous systems." hard to know exactly what's going on beneath the surface here you don't want to connect dots that shouldn't be connected. but apple shifted around multiple times. >> so many people have been asking the question, what will be the next major thing for apple that will drive it into another industry and world ohio changing endeavor. it would seem, based on this potentially that is not going to be a car. >> i didn't ever think it was going to be a car. you don't sell enough unless you

own the entire car market and you can price them super cheap people don't appreciate how huge the iphone has been. >> happy birthday to the original mcintosh. dow is up 12 duncan just protected his family with a $500,000 life insurance policy. how much do you think it cost him? $100 a month? $75? $50? actually, duncan got his $500,000 for under $28 a month. less than a dollar a day. his secret? selectquote. in just minutes, a selectquote agent will comparison shop nearly a dozen highly-rated life insurance companies, and give you a choice of your five best rates.

duncan's wife cassie got a $750,000 policy for under $22 a month. give your family the security it needs at a price you can afford.

so, servicenow put your workflows immhm. cloud, huh? your employees must love you. [ chuckles ] thank you. you could say that. i love you. servicenow works for you.

with the government shutdown now in day 34, ipo market has frozen with sec unable to approve any filings. the presidents of both the nyse and the nasdaq spoke at davos on the i packet of the shut down on ipos with major tech unicorns, uber and lift expected to go public this year. >> there are a number of companies lined up and we have roughly 160 companies on file with the sec it's not yet having a major impact if it extends a few more weeks, it will, especially for companies looking to raise money because they have to choose a different path. >> we have a very important relationship ec. they make sure the disclosures are accurate and complete and we do our work to evaluate them in

accordance with the littings standards. it's hard for us to completes our work if they can't do theirs. >> we make it a case study as soon as tomorrow there's change in the language that would allow some companies to go public after 0 days, new for theress energy might try tomorrow. >> we'll watch that tonight as long with intel and starbucks. let's get to the judge. >> thanks. scott wapner chip stocks are surging. it is 12:00 noon this is the halftime report. >> rally off the old chips they're booming today. all the big names up big plus, the man who nailed ge's fall is out with a new call. receive what stephen tusa is saying about the stock now and we're all over the airlines after several big carriers report this sector has really taken off in 2019. up 11% the halftime