i would say the longer term concern though is the negotiations that were going on, if they linger, then there could be more and more uncertainty and you worry over time that that could have an effect on business confidence so far the actual amount of tariffs that have been applied both here and in china is not enough to have material effects on gdp either here or in china so the concern is more a longer -- for me a longer drawn-outset drawn- out set of negotiations that could result in zapping business confidence uncertainty is not the friend of business >> nabs cincy marshall from marketplace. i wasn't to talk to you about corporate debt are you worried about taking a pause in raising interest rate, would he have had so low interest rates for so long, are you contributing to a bubble in corporate debt

>> so we have called out corporate debt as a risk more of a macroeconomic risk i think than a financial stability risk. the sense of that is if you have companies that are highly levered and we did go into a downturn, they will be less able to weather that and keep serving their customers and you know may have to do layoffs and things like that. so they can amplify a negative downtu downturn and we also watch the exposure of the financial system to these companies. in other words banks are a arranging a lot of these loans, the question is what is their exposure, do they retain big pieces of the loan, do they build up in a pipeline so we've monitored those risks very carefully and frankly the banks monitor them much better with our support and help than they did before the crisis. so it is a concern, something that we're watching. of course november, december and january were much lower months

for hose sothose sorts of thing. but it is something that we always pay close attention to. >> from market watch financial markets have reacted strongly to the decision and the press conference, the dow jones industrial average is up more than 500 points. there is a sense in the market that there is a new what people call the powell put on the marke markets. are the financial markets wrong in that assessment >> i would point to all the continuity here. ment thing we did on the balance sheet is something that we've been working on for frankly years what we announced today. so we're providing clarity there. i think that is a constructive thing to do. my honestly only motivation is to do the right thing for the economy and for the american people that is it

and the situation i think calls for patience i think it does. and the stance of policy we think is appropriate we see these uncertainties and we see a time when we can afford to, we have the luxury of being able to wait and watch and that's what we're planning to do. i think it is the right thing. i feel strongly that it is >> chairman powell, office of the comptroller of the currency last year completed its fintech charter and one of the questions has been whether the federal reserve will allow such a charter -- or such a chartered bank to access the payment system i'm curious if you think a fintech charter is a good idea in general and what conditions you think might be necessary to allow the fed to allow such a chartered institution access to the payment system >> i'm not going to be able to

help you much on that, those are great questions and those are questions that our great supervisory people are looking at i think we're open to these ideas, but i don't have any news for you on that today. >> steve beckner, reporting for npr. you've echoed the widespread concern about slowing growth in china and elsewhere in the world. but i wonder whether it is possible that slower growth abroad might actually be beneficial to this country in some respects at least for example, perhaps increasing capital inflows and putting downward pressure on long term rates in this country has happened in the asian financial crisis of the late '90s. >> you know, steve, it is

certainly possible ultimately though a strong global economy is good for us. we export and trade to these countries. part of the story of 2017 for example was european growth kept coming in stronger and stronger and that meant the euro was strong and that supported our exports. so ultimately i think that we benefit from abroad. although you point to an interesting case >> as you probably heard, the congressional budget office is projecting the federal debt is expected to surge to about $29 trillion over the next ten years reaching the highest since the end of world war ii. first of all, does that sound like it could be a reasonable forecast with the administration seeming to take plenty of

opportunities to question the legitimacy of cbo and secondly what effect does it have on interest rates and the public if indeed it is close to being true >> so first, it is important -- we don't do fiscal policy, we don't advise the government or congress on fiscal policy. so i'll limit myself to more high level comments and say that it is not a secret, it is a long known fact, that the u.s. federal government budget is on an unsustainable path and that needs to addressed that is driven principally by the combination of health care costs due to our health care delivery system and the aging of the population so -- and there is no time like now when the economy is healthy, growing, people are working, to go after that problem. ultimately we will have to we don't have a forecast, we don't forecast those things.

i have no reason are to doubt cbo's numbers. i haven't actually looked at that report. but my general experienceare to cbo's numbers. i haven't actually looked at that report. but my general experience is it is a professional outfit >> so what does that look like as -- [ inaudible >> first of all, the work that we do relates more to the medium term rather than the long term and so i don't see this in particular as a threat to this business cycle or to the economy this year. it is more in the longer run we'll ebb spending all be sendi on interest instead of the things that we need to be doing for future generations and and you are own generation so it is a certificate problsert nothing that helps or prevents the fed from doing our job today. >> dow jones news wires.

i know where the fmoc estimates for the long run interest rate are. they are all above 2.5%. right now we're between 2.25% and 2.5% so i think a key question right now, is policy accommodative at this moment, are we looking at staying accommodative for some time or has your estimate of neutral come down in light of the recent volatility in markets? thanks >> so the range of estimates on the committee starts at 2.5% and that is kind of roughly where we currently are. and as i've said a couple times, when you get to that range, you know that we can't directly observe the neutral rate, we only know it by its works. and so we have to put aside our own priors of what that rate might be and let the data speak

to us. so we can do that. we're in the range there are a number of committee members who are right around that range and i think that we're watching to see we don't -- and i think that our policy stance today is appropriate for the state of the economy. that is my feeling we'll be watching data to see whether that is right and we'll also be watching data to see how these cross currents resolve themselves and how the u.s. economy performs this year agency france press. among the global developments that the fed is monitoring, how much of a risk for the american expansion would be the prospects of a hard brexit >> so we've been monitoring the brexit situation very carefully for a long time. and for us, that starts with

u.s. financial institutions that have a presence either in the uk are on in the eu or both and so we have worked with those institutions alongside uk and eu regulators to assure ourselves that those firms have plans and havely quid tid a ly quility ana they need to deal with the full range of brexit. so we've done a lot of work on that and generally speaking again a lot of work has been done, we have to be humble and say that this is an unprecedented event but that is the financial system aspect of it if there is a hard brexit, then that would very likely involve disruptions both to the continental economy and certainly the uk economy and we would feel that. the question foris, us, it wout be first order of things unless

you saw financial turmoil. that would be the way that it would reach us i would expect that we would feel some of this and it is very hard to have great confidence that you know what that would be but it would be something, probably not material to our economy. but something that we will be watching very carefully. and certainly hoping that there is a resolution short of a hard brexit >> market news i have a question about the ultimate size of the balance sheet. how will the fed judge what is a reasonable level for financial institutions de3457bd fomand foe when it appears to be rising at a fast pace over the past year and perhaps at a faster pace than can be explained by regulatory changes during that same time frame. would you prefer to err on the side of being more generous or would you try to encourage banks

to hold less reserves? >> let me be clear i don't know that demand for reserves has risk over the past years i think our understanding of demand for serve reserves -- remember banks have more reserves than they need. reserves are still quite abundant so the question is how much of that amount is actually going to be needed in the end after firms adjust to our very gradual decrease so our understanding really of the distribution of reserves and how much will be needed has moved up over the past year. and then there would be a buffer on top of that and then we would want to be -- we would want a buffer as i mentioned in my remarks because we want to be operating in abundant reserves regime where we operate through our administered rates if you operate too close to that points of scarcity, then you wind up having these big ongoing interventions in the market.

we don't want the fed to have a large ongoing presence in the market around this we'd rather just in managing the federal funds rate, we'd rather somewhere it set by the administered rates so that implies that you would want a bit above what that equilibrium demand for reserves is and there is no playbook only way you can figure it out is by surveying people and market intelligence and then ultimately by approaching that point quite carefully. [ inaudible question ] >> we didn't think that we have a precise understanding of this at all i want to be clear about that. these estimates are fairly you been certain so if you think that the level of demand for reserves is here, it probably is -- all i can say is are somewhere in this range if banks want to use reserves for good and sufficient reason,

which is to say hold liquidity as we require them to do,somewhe if banks want to use reserves for good and sufficient reason, which is to say hold liquidity as we require them to do, we won't discourage them. they are a safe asset and we want the banks to be saefe in the post-crisis regulatory regime, we have brand new and quite substantially liquidity requirements which are very good and which have great public benefit. so it is not a bad thing that banks hold on to veefshs or another safe asset we're not encouraging them to hold reserves instead of treasuries they are roughly equivalent for this purpose >> hi, mr. chairman. courtney brown from axios. has there been a prioritization of market data over the economic

data, how do you balance those two things >> i would say that our mandate is maximum employment and stable prices and that is about as hard real side economic data as i mentioned earlier, our tool -- our interest rate tool bra s operates on the economy through financial conditions so financial conditions matter and they matter in the way that i suggested earlier which is to say broad financial conditions changing over a sustained period, it has implications. so if you lower interest rates and they say low, every borrower in the country ultimately has a lower interest rate, that will have an effect over time on the economy. so -- but again, the entire focus we have is on maximum employment and stable prices not on any particular financial

market or financial conditions generally. >> last question to miles. >> thanks. chairman powell, yahoo! finance. i would just ask about the balance sheet in general, are you surprised at how much of a conversation we're having around the balance sheet and how much talk about the balance sheet from yourself and various fed officials have moved financial markets because putting out a statement, clarifying your view on the balance sheet, you know, somewhat surprising considering it is restating what the fed had said all along was the goal with the balance sheet normalization, not having it be a key part of policy so i would just ask are you surprised by kind of how far that conversation has gotten just in the last six weeks >> you know, i'll quickly go back in 2017, we were in designing the normalization plan, we were concerned at not having two active tools of policy we learned during the taper tantrum frankly that that would be confusing to markets. so what we did is we set up the

normalization of the balance sheath in a way that was very transparent so that you could look and know really certainly as to treasuries pretty of the exact amounts and the timing in which we would be returning these assets to private hands. and we put it out there very publicly and in the hope that it would be priced in and understood and we could further the balance sheet to the side and have the interest rate be the active tool. and i think that division of labor was a good one for our policy and benefit of the country. i think that the market is now looking for more clarity around that and i think that we'll be providing it that's what has happened >> thank you >> thanks very much. welcome, everyone, to the

"closing bell. you've been listening to jay powell and his market moving news conference. boy did he sound different then he sounded six weeks ago at the fed meeting in december. he is now signaling the federal reserve is in patient mode when it comes to interest rates taking away the bias for hiking rates that we got last time in december and now there is flexibility when it comes to balance sheet policy all of this creating a rally if the markets. he is now the market's friend. a 500 point rally here, 431, just off the highs but still markedly higher when the fed statement came out and then building through his comments >> and the s&p 500 intra day really points to that jump that we did see in stocks when we saw the statement. and that change of tone. much more dovish there is the s&p intra day, up now 1.5%, the dollar for you intake t intra day which had been flat to slighter higher and now down around about half of 1%

following that news conference not just change of tone in the last six week, but particularly the last quarter six weeks ago there was a sign of dovishness, but two meetings ago to today, a much bigger change >> and the way he laid it out, powell said that global growth slowdown narrative is still ongoing. financial tech conditions have tightened, referring to what we've been talking about the last few months in the markets clearly. and the inflation outlook as l moderated a little bit >> and dow up 430 points, high was 530. graen being green across the screen. coming up, gary cohn, we'll get his reaction to the fed decision and also to taxes and much more. looking forward to that conversation coming up but let's dive into the post-fed discussion joining us, nancy tankler and

a art art, a cashin, and rick santeli kids have all the candy you want do you read into this decision, art, and press skfrconference i similar slight >> very much so. most important thing we heard today is that the cross currents will continue for an extended period of time, which basically says ladies and gentlemen, we will remain handcuffed for an extended period of time. so it looks to be no overt move coming up here and patient is going to be very, we have patient. >> nancy, are you pleased as an investor certainly he is getting a warm reception from the market. that didn't happen last time around >> hasn't happened the last seven times. i think we have the end to the curse of the great fed bambino there were seven out of seven where we had big selloffs. so i loved what i heard.

i haven't hated what i've heard before, just the way it was delivered. so i do think that the market is interpreting this in an all-positive way, but he has left himself a great deal of flexibility as well, as he should >> i didn't give and you chance there to refer to your baseball cap, my apologies for that i always do wonder whether the s&p and nasdaq feel left out you do have a favorite for your baseball caps. but to the point of the 25,000 level, where do you think we go from here momentum-wise and which sectors do you think that will lead the charge >> i think getting back above 25,000 is giving everybody a sigh of relief there was some concern that we were beginning this year in of the same way we began last year, where they had a rocket up in january and then faded rather quickly. i think getting up the zch around t s&p around the 2700 level gives even

the cocktail napkin chartists like me a sense that we have a little breathe aing room here. that having been said, you have brexit and all these other things coming down the line. but on a technical basis, it is a sigh of relief rally >> financial conditions not too significantly either let's bring in steve liesman of course in the room there with the fed chair. steve, what was your main takeaway from the press conference specifically? >>er thought the first words out of your mouth would be about my valiant but ultimately failed effort to get the fed chair to give us a number of where he is going. he did not want to give us a number i was hoping that we'd get one and he wouldn't actually confirm that there is a discussion under way that would reduce the balance sheet but he said part of a whole package of things that will now have to wait for but at the moment the balancing sheet reduction remains as is.

something of a tweak to the policy that governs it i think ultimately his listing and know at a timing of all of the things that are troubling the fed in terms of economic youts look from global economic weakness to the shutdown and that is the reason for the pause, here's what he talked about the case for interest rates right now. >> the case for raising rates has weakened some what the case is to protect the economy from risks that a rise when rates too low for too long, particularly the risk of too high inflation over the past few months, that risk appears to have diminished. >> and it is the other risks that ultimately are animating fed policy right now they are pausing until the smoke clears to figure out next steps. >> steve, thanks very much rick, your take on the reaction in the dollar in particular. because i guess we'd expected a

dovish tone from the fed chair are you surprised to see quite such a move lower given particularly how dovish other central banks have been of late? >> no, and i believe we talked about this exact outcome yesterday on the closing bell exchange, that the more you highlight the balancing sheet and the more the investors get a sense that there is stencil, there isn't a game plan and it is purl based on how they think the tapering is affecting the market even though they have no way to model it, that will be a bearish signal for the dollar. it will accentuate what is going on in china. i don't somewhere any real inside sources in china, but the more i look at the dollar and how it is behaving against the yuan, i think people know more we did and move is fairly aggressive with respect to you will at rest of it, listen, i have great

respect for peter bookfar and i understand the notion of give them candy and let them eat cake, and it all sounds fine and i wish they could be more aggressive, but the markets and investors suffer from stockholm syndrome the fed is the captor and ben if he can tobenefactor and there will be a give and take both by the markets and investors and fmoc committee and jay powell and i think he is doing a very good job of trying to handle that if i had my druthers, i would like peter like to see more normalization. but this isn't like an addict where you just pull the drugs out and lock them in a room. this is a global economy we are a huge piece of it and i think trying to make it work means that you have to give a little more candy than you want. i get that i think that it is a much better scenario than janet yellen or ben bernanke when we get lost in

all the economic jargon. i think he is trying to find the economy that works under currenten conditiocurren conditions >> and thank you to our intern that figures out that powell had the word patient in his speech a total of 80s timeight times. so how is the market who -- investors like to look forward and i guess the market is data dependent a little bit as well, so how shall we think about patient, what does that mean for the fed's next move and when >> it could mean a lot of things and i think one of the things that the fed will be patient for, it won't raise rates until it feels like the market has made up its mind that that is what it wants the fed to do. and i think one of the things that it will wait for then is the market when things clear. and in-that the fed -- it was

probably a 50/50 proposition getting that last rate hike in, but things turn and one of the things that turned was the market itself. and one of the things that we have to figure out is was the market right about that. we don't really know that is the case yet because you've got the kind of adp employment data, expecting strong jobs growth friday, claims number have been very low we really haven't seen at least in the current economic data the kind of declines that really would justify the market's fears that were so present and by the way, am i wrong to say the market is kind of changed its mind about how concerned it was a month ago >> i definitely think that some of those recession risks and fears were blooverblown. you saw that in the jobs reports. but the expectations components and guidance cuts from companies. so i think there is room on both sides.

>> i agree >> in general show, the point is the tone from two meetings ago to today as changed drastically. >> everyone the lan the last meg >> and you can argue that the market pullback can influence the data down the line, but that aside, this is the fed dancing to the tune of investors, not to everyday workers and the economy. >> is that art cashin sitting next to you? i never get a chance to talk to him. is there a danger, art, that the fed is seeing moving to the whims of the market and is not quite so solid talking about what wilf was just saying, that they are here before and now they shifted all the way back as a result of the market moves >> no, no question about it. in fact he actually got a question about that, about the powell put and -- >> he wasn't going to confirm that >> no, he was shrinking away from that. but it is pretty obvious, the mere fact that sarah and wilf

have been going over and over the fact that you look two or three meetin ing ago, it is a completely different fed and that is a reaction to the market's reaction. and they can deny it august they want, but for now, the market is -- >> he said financial conditions have tightened steve, i don't know that it is necessarily a negative thing that they got the message and they got the religion that clearly the market was -- >> i think that the key to this is -- and the thing that justifies what the fed did here is that phrase about the muted inflation. there is nothing that is pushing the fed to make a decision about being right or wrong on raising rates at this meeting today. if it is wrong, it has time to undo it. i don't think that there this brewing, you know, caldron of inflation that will bubble up and start to affect the economy tomorrow, next month or even probably next quarter. in fact the balance of things would appear to be deflationary.

so the fed has time and i think that switch is okay, but i think there is also a danger that the is seen as too malleable to market moves >> and that is a very interesting point and i want to bring rick into react to this thought, which is actually i guess none of this is meant to be in support or defense of what has happened, but the other factor is in you put the market aside to argue that the neutral rate has come down and also what other developed world central banks are doing or not doing at the moment does in fact mean there is no need to rush ahead and really we could look at this another way, which is the fed has hiked a lot more than anybody else and that is a point to pause because there is flexibilities in both directions if it needs it >> quarter, i couldn't agree more with you. that is exactly the scenario.arr with you that is exactly the scenario the u.s. banks talk too little about the other central banks and how their policies have a huge impact on a relative scale. i think that is an important

dynamic that really needs to be opened up and discussed more because you can only do so much when mario draghi and mr. carney are doing so little. uncertainty of global conditions is a major feedback loop now more ever in our history because in many way this is is the first signature global contraction we've had where china's economy is as big as it is and developing economies are as big and potent as they have been but i also agree that certain conditions needed to exist to give jay powell the latitude he is taking and i think steve is right, we've had guests months ago saying that for the cycle inflation peaked, i think that is big >> and i want to ask after having hot chocolate with your traders, what do you think that they will tell you about what they heard about the balance

sheet, is more supply coming their way or less supply or unchanged supply what will they tell you over hot chocolate this afternoon, rick >> is that they look at the balance sheet as a line on a chart. they look at cumulative balance sheets as a line on a chart. global stocks are following the line down as balance sheets get smaller. they are interested in as the shrines separate, they believe that by talking and being more familiar with investors on the wall sheet, not being on autopilot, that eventually that line will flatten out and the market won't only flatten it but start to separate and rise from it and that is the big point that they are trying to speculate on. >> i think jay powell has a tough job. he doesn't look like he is being bossed around by the markets or the president. and i don't know if anybody wants him to be strictly bossed around by models

nancy, we'll give you the final word on the investment inch implications for all of this >> listen, this is a benign environment for investors which is a good thing. we've seen strongish growth despite the slowdown in china spread across many industries. just look at boeing today, a company that sells off every time there is bad china news and they had blowout earning so there is a lot going well in the u.s. economy and there is a lot of companies that are navigating very effectively. so i think with the fed kind of off to the side doing what we think they should be doing which is looking at the data and making decisions according lily and i agree that it is imperative that they pay attention to the other central banks. so i think that we're in a place where all the objections

ex-china trade tensions have gone away and investors can focus on fundamentals. that is good for investing >> guys, thank you very much for our post-fed reaction. up next gary cohn will be here for a cnbc exclusive interview back after a quick break dow is up about 412 points why go with anybody else? we know their rates are good, we know that they're always going to take care of us. it was an instant savings and i should have changed a long time ago. we're the tenney's and we're usaa members for life. call usaa to start saving on insurance today.

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that's how xfinity makes tv... simple. easy. awesome. jay powell saying the case for raising interest rates as weakened and stocks are soring off the back of it leslie has an interview with gary cohn in miami leslie, over to you. >> thanks so much. so the fmoc meeting just concluding do you think that jay powell is handling the economy the right way? >> i actually do look, i i think jay was put in very difficult position but he's handled it very well i listened to the conference >> difficult in how so >> i think jay acknowledged that the united states economy is growing and agrgrowing well but in other parts of the world,

he is having to deal with the slowing economic conditions in other parts of the world so the united states continues to grow and show good signs of strength, but other parts of the world continue to slow he is trying to balancing the equation between domestic growth and global growth and that is a difficult part of the equation and he is also realizing that we do not have a lot of inflation in the united states in fact the only real inflation we hopefully will have in the united states is wage inflation. we've seen wages in the united states get up to 3.1%, so we're start torg see wage growth in the united states. but outside of that, we really don't have inflation in the united states. and i know as chairman of the fed you are always worried about being behind the curve on inflation. so i think that jay and the rest of the committee is doing a pretty good job. >> are you personally concerned about a slowdown given some of the rifrng risks that are out ? some are concerned that a recession is in the near future.

>> i've been teasing you and a lot of your colleagues that cnbc seems to be obsessed with the veegsz i recession i actually thankt the united states is in pretty good shape we continue to see the positive effects from tax cuts, we haven't even seen a tax filing season yet no one has really filed their taxes yet to see what the effect it i think that the effect is going to be quite positive not only on the business side, but equally as important on the personal side. we continue to see the consumer in the united states spend money. yes, we saw a funny consumer confidence number yesterday, but remember that data was taken during the middle of a government shutdown. it is hard to have real consumer confidence during the middle of a government shutdown. so i believe the consumer will continue to spend in the united states we have a five year investment cycle for companies to invest in the united states. we'd like to see more capital investment in the united states. but look at the external factors. the rest of the world is slowing down a little bit. we have a lot of discussion about trade and the price of

underlying commodities, steel and looaluminum that you need t build factories. and when we start to see that investment cycle, i think the u.s. economy will continue to grow >> you have been outspoken about the tariffs, outspoken about the shutdown saying that neither are really what the country needs its. have you lost confidence in this administration from an economic standpoint since you've left the white house? >> i've made my point on tariffs and trade very clear u.s. consumers are paying the tariffs. no foreign entity has paid a dollar of twrif to tariff to th government so when we make goods more expensive, it means that they did buy less other goods or services or worse save less money. so i feel that we need to make goods as cheap as possible so our consumers can consume as

much as they want and hopefully save at the end of the day >> in terms of the tax stimulus, there was a sur ray that came o survey that came out that said about 84% of the people surveyed believed they hadn't felt up of an impact from the tax bill, that they haven't increased their hiring, they haven't increased their capex spending as a result. what is going on, are you disappointed with the results? >> i think there is a couple different things going on. we came out with a great tax plan, a great deregulation plan. both meant to stimulate growth on the flip side, we come out with things that are an stimulus at the same time and you and i both they that corporations, a, take a long time do their capex plan companies can't decide today that they will go buy 100 acre piece of land and go build a factory. they need to buy the land, design the factory, get the permits. that itself will take a year or

two. and that is why we made the investment window a five year investment window. and if you see the price of steel and man machinery goes up makes it less compelling to build those factories. so we need to keep people investing in the businesses. so my view is that investment will come when there is more and more clarity in what our trade relationships are with countries around the world >> is there a risk that it is too late, that the benefit of that stimulus will come to pass by the time the government figures out its way on trade and figures its way out with regard to the shutdown? >> there is risk to everything when you are dealing with corporate decision making, you are dealing with economic growth, are you dealing with jobs, there is always risks. things happen that you can never foresee or foreshadow, things good and bad so there is risk to awful these scenarios. we are hoping that we stay more or less on the path that we hoped to be on

tiffin continue to be competitive, continue to hire more people in fact you see that we have an unemployment rate wl below 4% but it takes time. as i said, we haven't even gone through a full tax cycle yet in fact many of the tax rules were just released by the wrist within the last 6 to 8 weeks not that i'm complaining they had so much rule and regulation to write. the opportunities on regulation just written at the end of last year >> and yet we're starting to see this sentiment really build in this country, whether it is with regard to representative alexandria ocasio-cortez, elizabeth warren, even hourld schul howard schultz is talking about fiscal responsibility. but aoc and warren have bothplad incorporate raising taxes on the wealthy. do you think that is what the economy needs?

>> first of all, the u.s. tax code is very, very complicated i spent over a year almost every waking hour in the u.s. tax code it is very, very complicated so the one thing that i would tell people, before they start talking about the u.s. tax code, they need to understand it the u.s. tax code is really three different tax codes. we have a corporate tax code which i think people understand. we have an individual tax code which i'm not sure people understand but most importantly, we have this tax code in the middle which is the pass-through tax code which is the vast majority of businesses in america, vast majority of people work for pass-through entities which is really part of the personal income tax cut really this high brid. a hybrid. and the relationship between the corporate tax code and the pass-through tax code is very important because people or businesses can always turn themselves into a corporation or a corporation can always turn themselves into a pass-through

>> so you're saying if there was a wealth redistribution put in place, this people would just find ways to skirts i s ts to s? >> no, i'm saying we have to make a level playing field for everyone in the system so if you and i were in the exact same business and you were a corporation and i'm a pass-through, and you were paying 20% income tax on your income and i'm a pass-through and today i'm paying 37% less maybe 20%, but then my incremental rate goes up dwra matsd particularly, i wouldn't be competitive in the world, you would be competitive in the world. i wouldn't even be competitive with you i wouldn't even be competitive xh xhes domestically >> but they are talking about individuals. >> i'm talking about some of the biggest pass-throughs some the united states are bigger than some of the corporation in ts ie united states. >> do you think if it passes it would be harmful or helpful to

the economy? >> it would be harmful to the economy. and i'm not saying that collecting more tax revenues is harmful to the economy i'm saying that we have to compete in a global theater. and when we look at cutting the business tax and also cutting the pass-through tax down, the main driver for that was to allow u.s. companies to compete in a globalized world. so we are trying to tell u.s. companies to compete against companies in other parts of the world who were paying substantially less tax than their u.s. competitor and now we have it more or less on a level playing field. >> and i have to ask you, because you are here at a hedge fund conference, there are headlines about you joining the board of a block chain startup, there are headlines about you joining a harvard fellowship, what are you doing these days, what are your plans for your future >> all of those are true so i am involved in a block

chain business and i believe very much block chain as a business process makes enormous amount of sense going forward. i am continuing in the process i started in the u.s. government former senator heidi heitkamp and myself will be teaching a class at harvard starting next week on what we call the real estate of the union, a policy class of the kennedy school where we'll go through all of the big policy issues in the u.s. government which i'm very excited to do to continue to talk about many of these policy issues that have gotten very important to me. and i'm continually investing in new companies that i think are really important for the united states one of the biggest competitive advantage also we have as a country is very with an entrepreneurial spirit and we invents some of the best companies in the world and i'm having a great time working with some of those great in-vent tbnt

tors >> thanks very much. perhaps he should somewhere added a fourth, to start a tax advisory firm based on a couple of those answers.somewhere added a fourth, to start a tax advisory firm based on a couple of those answers >> he says where he talk a lot about recession, but maybe he forgot we're coming off the worst guess for stocks >> and i think tkey thing is he felt like powell has done the right thing. and also pointing to the enters in a al outlook and that that is something that you have to manage as well not necessarily as the fed rektd reacting to the stock market >> and also lack of spending with the tax cuts and his answer is there a lack of clarity on the trade policies and rises costs on steel and aluminum, something that he has very much separated himself from

>> and we understood what leslie was asking about tax, but mr. cohn didn't address it as yektsly yekt directly as he could coming up next, jim grant and also judy shelton will join us to discuss the fed and later, we are gearing up for a parade of earnings after the bell faek, te facebook, tesla, microsoft and qualcomm, just a few of the names reporting. ♪ 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. ♪

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let's create a plan for what's next. i like that. get a plan that's right for you. td ameritrade. ♪ big stock market rally after jay powell signaled a much more flexible policy path forward for interest rates and also on the balance sheet. joining us to discuss what it mean, jim grant and judy shelton. judy, does this take the heat offal j lof jay powell from pret trump?

>> well, it was a very nice press conference and clearly had a calming effect markets found his words very reassuring chairman powell comes across as a very earnest man he wants to do the right thing for the any. i think he put it in those words. he acknowledged that so many things are going well. no worries about inflation so i think that he conveyed the idea that he doesn't want to mess things up by accidentally having a fed policy that disrupts -- that has an in-ordinain-or inordinate effect on financial markets. and in that sense i think everyone probably agreed this was the right sentiment to put forward. >> jinm, do you sgle. >> i think patience and common sense as virtues are fine, we

ought to have them but not the so far underneath the surface of things, there are big problems with the way we view the central bank. it has leveraged 100:1 it was showing $66 billion in unrealized losses mostly in its mortgage portfolio it will never be market to market, but this is a sign of a disorder in the structure of our finances, other sub signs would be a $1 trillion budget deficit in a year of loom position prosperity, persistent definite sis in our international investment position. and so i agree with judy that it was soothing, it was lovely. more money is more better for markets, right but i think that this is really not reality.

>> politicians are responsible for the deficit. >> i think fed chair powell is given a very difficult job and i think that he is playing it well but he is to a great extent i think a prisoner of the institutions and the historyinh. and among it is a $4 trillion balance sheet which the fed -- understand which the fed has like $39 billion of capital. so as i say, it is leveraged 100:1. and that is a symptom of the overstretched state of our debts and of the dollar as an institution. >> clearly the international picture has worsened and that is another factor that no doubt was considered do you think the dollar move today might be temporary and despite a dovish tone we might start to see a stronger dollar as the year plays out?

>> well, it is hard to predict there is always reasons when it goes up to explain afterwards why it did but likewise when it goes down i was struck today by the humility that chairman powell brought to his analysis. saying we don't know, it will all be data driven and we do keep researching and clarify our thinking about all of this information that comes into the decision process i think we've come around to believing somehow that the fed chairman has to be only nip y-- sure a certain amount of panic steps in, but i've had the luxury of observing from the

point view of someone who wonders about the central banks and wonders if they haven't become too dominant and too big a factor in the performance ever financial arkets >> so jim, what are the near term investment implications of all of this if the fed really is taking a pause here? >> i guess near term would be for a bit are mo more inflation protection of the long end i guess it is good for the stock market, good for the gold market but she said something about the omni presence about the fed in the financial affairs and we're reminded about the referees in the nfl who were mortified to find they were the story after this game this new orleans or at least it was with new orleans. and so the fed -- referees are the fed. constantly the story and i think that perhaps in a better tempered financial world,

the fed would be rather more in the background >> how do you break that dependence >> we get rid of it. well, i think there are alternative monetary systems that we out oig ght to be thinkg when >> this requires a ever longer conversation >> well, judy shelton has written extensively on it. >> and we'll have you both back. but two minutes until the bell, so thank you both. jim grant and judy shelton >> and just under two minutes until the close. dow currently up 420 points. the low was 210. you can see the jump at 2:00 p.m. when we got the dovish tone from the fed that you guys have just been discussing and essentially we've held most of the gains since then. very quickly on to the dollar to

see the dollar intra day move, but in the opposite direction of course, dovish tone leads to solve thor softer dollar down 0.4% having been up ten basis points before the fed decision.thor softer dollar. down 0.4% having been up ten basis points before the fed decision bob pisani, i think everything is pretty much higher with the bullish tone in particular technology, up over 3% now. but everyon financials still up 0.4% >> and look what is going on here s&p, highest levels since december 6 gold, highest level in 18 months maybe. dollar is in a dollar trend. bond yields are in a down trend. all of this sounds positive for the equity markets here is my one worry, a lot of good news priced in, trade call priced in, dovish fed is priced in earnings downward, but still positive the markets very pricey now.

at this level, we're trading at 16 times forward earnings. that is a lot when talking about 0% to 5% earnings growth that is my only concern. >> and pointing to a couple individual big movers like apple and boeing nonetheless at the close we are nicely higher, 1.5% for the s&p. sarah, back to you. welcome to bell." we somewherehave a cheer here gn the floor. here is how we're finishing up the day on wall street earnings drichl s driven at fi then an extra jolt by jay powell signaling more patience on interest rate hikes. not really talking about the

hikes as much as we've heard you see the reaction dow finishing higher by over 430 points a big part of that was boeing and apple off those earning. s&p up 1.5%, all groups closed green. technology and consumer discretionary led. nasdaq up 2.2%, technology gaining all day and russell 2,000 up and now a barrage of earnings. julia bourorstin is following facebook, phil lebeau covering tesla, and deidre, you have are doing double duty. >> surely i have to introduce you. >> no, the best is me getting to introduce a set of boxes and me being in it. everyone stay with us. joining us to talk about the market, kevin o'leary. and mohammad el-erian joining us

as well. a one-two punch and a nice rally. >> ended up with a nice rally. i think the movie will be called subtraction of all fears we've allayed a lot of anxieties. investors are getting what they believe they want, which is an assertively patient fed if this is a thing s syes, it's been a strong period, we've held these levels. and added to them a little bit but i don't think that we've changed the process we're in, which is figuring out after half of the losses we've reagendaed, we're up and away or just in a new range. >> risk on for equities? >> for now investors heard exactly what they wanted to hear. you said it, chairman powell

said patience eight times. so rates are going to be on hold and in addition, they heard flexibility on the balance sheet. so they have heard everything. you know, i would just note not all fears have disappeared policy fears have disappeared. i think people are still worried about what is happening in china and europe >> concekevin, as investor, wha your level or fear around some of what has changed in january is >> i'm going to call today the read indicati reeducation of jerome powell if you compare today to what he did only eight weeks ago, this is a brand new man -- >> six weeksi a ago >> he was leaking stuff when the market was concerned in december he has been tempered by what happened to him in a remarkable way. they beat him up, he is back and he is soft and cuddly, warm

and fuzz city. a fuzzy boeing earning, i went like a child when i saw that. that is my biggests. they delivered for me. >> what about the wider market, can this continue through earnings season? >> my theme is stay with the boeings of the world, the j&js, pfizer, the really boring stuff and you will be rewarded the thing that everybody learned today, if you are not in the market when crazy stuff happens like today, you miss 30, 40, 50 percent of the returns for the whole year this is it an extraordinary day. pick your index. you may not get that again who knows what happens but i'm still conservative but i know have a fed that gets the joke >> big up days on fed days are not necessarily in the shorm term that bullish.

a lot of time you get the tension release and you give back a little after. >> and an earnings alert on microsoft. josh >> microsoft reporting ep f of $1.10. revenue at $ 32 ppt$32.7 billio. revenue and business processes, 10.1 build, an increase of 13% office 365 commercial revenue growth it looks like up 34%. revenue and cloud, $9.4 billion, an increase of 20% driven azure rev new growth. personal computing, an increase of 7%. oem declining 5% the conference call at 5:30 p.m.

eastern. back to you. >> 76% growth in azure >> that's right. >> josh, thank you they continue to post amaze double digit growth in their cloud businesses stock is off a little bit. >> looks perfectly solid i think that is what you did see by the way, we talked about it this morning, starting to see a better reaction to earnings. so just a little wiggle lower. but i think solid on all the line items >> kevin, can you put microsoft into that solid and boring category of stocks that you like or is this a more exciting tech company? >> i can now because they actually made their number there was some concern about slowing growth of clouds services just a couple days ago. they delivered this is has become one of the horsemen to the transition to clouds and it will be considered a must own as you move to the

clouds you have to love it for amazon, you have to love it for alphabet and google and now for microsoft. these guys are delivering. this is an amazing company it has been redefined in every way. this was an old, old tech company. not anymore. >> and let's talk now about a tech company that is getting older but still young ultimately facebook earnings, julia you have that for us >> facebook beating expectations on both the top and bottom line reporting earnings of $2.38 per share versus expectations of $2.19 per share. so showing 65% growth in adjusted earnings per share. so much stronger revenue also beating, company reporting $16.91 billion in revenue for the quarter. that is up 30% from the prior quarter. that is versus 26% growth anticipated. now, daily active users, monthly active userusers both numbers cg

in line with expectations. daily active up 9%, monthly also in line with expectations. and what is growing though is average revenue per user the company's average revenue per user, $7.37. that is up 19% and that is really being driven by the u.s. and canada where average rev theenue per user, $34.86, up 30% in the quarter. and facebook recently started reporting these numbers on the family of apps, now saying that ash around 2ment abo.7 billion use e family of apps mark zuckerberg says our community and business continues to grow. we continue to focus on the biggest social issues and investing in new and inspiring ways to people to connect. but certainly pretty notable here that there doesn't seem to

be any negative impact in terms of advertising on the company. certainly top and about the line growing far better than expected we see facebook shares now up over 7%. back to you. >> julia, thank you very much. come back to us if you dig anything more and don't miss a first on cnbc interview with sheryl sandberg, that is streaming live on cnbc.com 6:15 p.m. eastern don't want to miss that. mike, as for the numbers, clearly a big jump in the stock price. this is average revenue per user more anything else >> and also holding the line on years. so not losing more than anticipated. and the stock has so much ground it make up even after the pop today. so it seems that we will chew into some of the overhead levels right now we're back to october levels so this management team hasn't

had great incentive to put up great financial numbers because of all the scrutiny, and now i think they said it works, the monetization clicked in. >> number one, the quote from zuckerberg, we fundamentally changed how we run our company to focus on the biggest social issues and number two, we got the year end numbers. so for a year where facebook declined, what, 20%? it was about controversy revenues total grew 38%. income 39 brs on t% on the year. >> and i'm beginning to think that all sins are going to be forgiven because they have delivered the numbers even though everybody wrote these guys off saying that they would be regulated out of existence, the model is broken. it still today the only platform for small business where you can geo lock your advertising dollar and that has never changed and people continue to use it. all my little companies in shark tank, this is their number one

spend and their spend is up 40% over last year because they can't find another platform including instragram those that moved off facebook have moved to instragram and these guys may come back 2019 could be all sins for given. >> it is only january, but let's see. >> i'm an optimist >> and earnings alert on qualcomm jon fortt with that. >> mostly in line to a little bl below expect faces revenue at $4.815 billion. nongaap earnings per share at a buck 20. so that is a significant beat. on the different divisions here, qct, the chip business, came in just about in line at $3.7 billion, 3.8 was expected. qtl, the licensing business, just about in line

and street was looking for 4.8, so just about there at the mi mchm point. but chip shipments, they had a range of 150 to 170. stocks up about 3% after hours though prapgs because similar to apple, given all the macro issues and china issues, the overall guide not pessimistic, at least not as much as some might have thought >> thank you very much qualcomm up nearly 3% after the hour mike, your take on this. >> just pretty solid i mean i think the guidance is reassuring in this environment, so i don't think that the market was too far off in expecting this even though the broader semi conduct tore group is having some -- >> and now tesla, phil lebeau has that for us.tore group is hg some -- >> and now tesla, phil lebeau has that for us.

we have the tesla earnings for the fourth quarter per share of $1.93 that compares with the estimate on the street of $2.20 so below expectations there. revenue coming in slightly better than expected at $7.23 billion. the estimate was for slightly over $7 billion in revenue a couple of important metrics, cash on hand has increased by just over $700 million to $3.7 billion. tesla going on to say in its outlook that it expects model three deliveries in the united states to be lower than what they have been previously as they increase production and start delivering more vehicles to europe and china. that is not unexpected, but in terms of total vehicle protection for 2019 at tesla, the deliveries should be in the range of 360,000 to 400,000 vehicles that is slightly below what most

analysts were expecting. most were expecting deliveries to be closer to 400,000 to 405,000. we'll go back, dig a little deeper into the release. but again, tesla earnings coming in at $1.93 a share. expectation of $2.20 a share but a profit for the fourth quarter- --quarters in a row for a profit >> and thank you very much for that we had lower expectations, but this is worse than that. >> it is somewhat worse. expectations were lowered in part because they had cost cutting environments implied that it would be nip and cut, but they were more profitable than break-even so deliveries is what matters. cash on hand, that is enough to pay off the debt maturity that they have coming up, so if it was a question about that, that probably should not be an issue. not that they would prefer it, but the stock blow around 360, it is all cash that they have to

pay back >> and the cash is better, right? profits are better also model 3 protection rate has improved a little about that cost per vehicle continues to decline. so a mixed bag what is your take, kevin >> i've been wrong about tesla i said when they started having real earnings they would be subject to gravity i'm 100% wrong they are enjoying an extraordinary opportunity here they are trading in a stratosphere of pe for reasons i don't understand but i don't have to understand it. if i were elon, i would use this paper to buy everything. everything because he has a cost of capital that is practically zero i mean, look at this, do you think any other car company on earth wouldn't die to get this pment today? >> you mean buy rival or raise equity to pay off debt is this. >> both.

if you believe electric cars will eventually be 50% about of what people make, this company has a head start like no other it has a piece of paper in the stratosphere of pe -- >> how can he raise, where would the stock be >> what i believe now is they do not have gravity they live on another planet. and i've been wrong. i mean they are making money and trading at a kcrazy pe it has four wheels, it is a car. what am i missing? >> but not great cash flow >> it is not financially flush in a long term sense because they will need more capital if they think that they will do something in china yes, they still will be burners of capital longer term >> and we have another earnings out. it is visa hey, dee >> visa beating on the stop and bottom line. eps five cents above consensus

payments processor also reaffirming its 2019 revenue outlook and authorizing a new $8.5 billion stock buyback program and quarter payments grew 11% we will get comments from the cf ocht and we'll bring them to you when we have them. >> thank you and a little pop there after hours. this is one of the beloved stocks >> total steady performer. i think that the story is what it has been. >> and you know you don't comment on name, but are you getting enough good news on the season expectations were low coming in. are you getting enough good news to keep the market going >> i think that the takearou aa clear, that u.s. corporations in general are both resilient and

agile. they are adapting well to both domestic and global development. i was very impressed with microsoft's composition of earnings look what is going on. they are bringing on a new engine of revenue growth and doing so in a very impressive manner so i think that it speaks to the incredible entrepreneurial ability and ag agility of u.s. companies. and what is not to like. great management, strong balance sheet and high cash generation >> we have more numbers to come, we'll get to those in a moment of course worth noting microsoft is down a couple percent after its numbers which was in the initial reaction facebook a big positive in the earnings we've seen so far vee is a isa as we mentioned upl percent. and now paypal >> and some mixed results from

paypal and that is hitting the stock which is down more than 3% at the moment. beating on the bottom line, earnings per share coming in at 69 cents revenue though falling a little short at $4.23 billion 4.24 is what the street was looking for. but the company maintaining its guidance total payment volume a little light as well, this is a key met twr metr metric and paypal pointing to ebay as the reason it fell short on revenue and total payment volume saying that transactions did not grow this past quarter it was flat. and in fact paypal says that venmo payment volumes surpassed e pay in tbay in the second hal year and so of course being targeted by activist investors.

the stock be down likely on the revenue miss, down almost 5% at the moment >> interesting last week on "squawk box," they played down how signature ebay was to their business now. >> appears to be part of the shortfall. let's bring in lisa ellis. laesz, yo lisa, your first take. >> i'll start with visa. what we like about this one is the volume numbers steady at 11%. that is a great macroeconomic indicator. that number steady 11% now for several quarters in a row. also i'll call out second order metric, their u.s. debit volumes are up very nicely this is the fifth consecutive quarter. visa is expanding in to more payment types like venmo and paypal, these push disbursement payments and it is driving up growth

that is a really nice acceleration as well >> any initial takes on paypal >> and that is a little mixed. probably what investors are mostly reacting to right off the bat is that the 2019 guide looks a hair light 16% to 17% revenue growth, street looks for like a 17-20 number so a little light on the outlook. and the ebay impact, the timing of that has always been an uncertainty. so that rolloff impact is happening sooner, that is a negative and also i would say it is an absence of news. everybody has been waiting for paypal to announce new partnerships like facebook for example. or maybe the chinese rkt walmch amex >> might that come on the call

>> if it is really significant, it would have been in the disclosure >> all right thank you very much. and we have another earnings repo report mondel mondelez >> and earnings coming in exactly what was expected. 63 cents per share same with revenue, $6.77 billion. that was exactly what the estimates were if you strip out some stuff and look at the organic revenue growth which people like to do, it was actually better for the snack maker up 2.5%. better than the 1 pp.8% expected you always break down the regions. north america came in better than expected. europe a little weaker than expected not much latin america did better and asia, middle east and africa did significantly better as far as the outlook for mondelez which makes oreos and nabisco, they reiterated their revenue growth guidance, that was unchanged, but they raised

their earnings growth guidance so a pretty macro global story it is also a story of growth in snacks which has done so much better. i mean they hatelumped to get in with the other food producers like a campbell's soup or kellogg's it is snacks which is a high growth area where you don't really see this move into healthier products you see a move into indulgent -- >> snack by definition >> yeah, chocolate, gum. and you where seeing that in the results. and the ceo has put in place new strategies to help unlock some of that growth we'll have the ceo on exclusive tomorrow on "squawk on the street." >> and when we weigh it all up and you see these numbers and the fed today, how much is the sentiment horrific on today than it was yesterday >> it is still in equities because fixed income is not a competitor yet most people managing money are

trying to make 5%, 6% a year that is the minimum if you are a pension. so where do you go right now equities still look like they will give you 2% dividend plus now optimistic that maybe we'll be in the middle range on s&p for this calendar year, maybe 5%, 6%, growth two weeks ago fwe were talking % growth look at how it changes by the day. >> and so interesting, because when stocks were melting down in december, the big debate was is there he recession on the horizon, what is the market seeing that the economic data is not reflecting now that we've seen a strong comeback and maybe better economic data, the conversation has shifted to was december an overreaction or was it signaling something and this is sort of a bounce correction from that. where are you on where the market goes next and how much we should pay attention to warnings of a downturn? >> what happened in november and

december is that three things that really matter for valuations all got misaligned. there were question marks about fundamentals you said it, people even started talking about recession in the u.s. which is absurd for me. and i've said it at the time but they did secondly, confusing miscommunication from the fed. so the policy issue became uncertain. and thirdly, market psychology changed. it was no longer about buy every dip, it was about selling every rally. so we got an overreaction, a technical selloff accentuating a policy and fundamental-led concern. now we're seeing the reversal. we've come back a long way already. anywhere between telepho12% to % so i think valuations are the issue, but in terms of policy, fullfundamentals and technicals, we're in a much

better place >> and that third one that we used to have a buy the dip and we went into a sellthe peak mentality, has that fully changed back again >> it is not clear there was a very severe dip that did finally bring in where the selling dried up i don't know if we can say that. the last two weeks, there was an effort to get the market to pull back almost everyit firmed up so i still think that we were too lightly positioned in stocks coming into the year, we're trying to true up to where we were before in terms of exposure and from here on out, i'm not sure how aggressive people will be >> all right we'll leave it there thank you and i wiyou all very . up next we'll have much more reaction on earnings from facebook are soaring after hours. microsoft also we'll discuss the impact those names could have on the tech sector tomorrow plus a bull and bear go head

to head on whether to buy or sell tesla shares in the wake of their mixed results.

we have an earnings alert on wynn resorts

contessa brewer has the details. >> a big win on the revenues coming in at 1.69 billion versus estimate of 1.6 billion. but miss on eps coming in at 1.06 versus estimated 1.35 here. and you can see wynn resorts is dropping down now a percent and a half in after hours. this is really a tale of two macaus here. we're getting the numbers in and it looks like the operating revenue and ebitda was very good increased over 2017. up 19% for the property ebitda but if you look it the wynn macau numbers, down 5.2% in operating revenue from the year before and ebitda down 9.9% on the call that will get started here momentarily we'll see what he has to say broke the differenc about the differences. >> thank you very much meantime let's get more on

facebook's numbers julia boorstin has been digging into the numbers >> and i think it is important to look at the daily active user numbers for facebook over the past several quarters. there has been a lot concern about both the negative headlines as well as european privacy law having a negative impact especially on the daily active user numbers. especially in europe because of the ghchldpr privacy. this quarter daily active users grew by 4 million, that is particularly notable because over the prior two quarters that number had been declining. so growth in daily active users. also monthly active users increased by 6 million in the quarter. in the u.s., there had been concerns because the u.s. daily active user number had been flat at 185 million for the first, second and third quarter of last year fourth quarter that number increased by 1 million but small, but showing there is growth in that daily active user number in the u.s., monthly active user

number was flat. i do want to point out facebook shares are up by 8%. and you see snap shares and twitter shares both also trading higher in after hours brought ultimate by the facebook resu out by the facebook results. back to you. >> julia, thank you. joining us to discuss is ed lee from the "new york times." and also kevin landis from firsthand capital management ed, what stands out to you here? investors are giving a warm recession. >> really nice numbers top line beat. they missed top line last quarter, so a nice sign for them and i was struck by the average revenue per user figure. the amount of money that they are making from the active user base i calculated on a monthly basis that is about 11 ppts$11.60, so like that, so worth a lot of money.

i agree it is important to point out in the u.s./canada, daily active users have flat lined they have not grown in the past six quarters so average revenue going up but user base, most valuable base which is u.s. and canada, thants th that hasn't really grown so you will see more ads in your time line. and i think that they are probably testing you how far they can go with that. also instragram, i think there is more up side for them in terms how much more ads they can load into that system. so that is where we want to start looking carefully. >> and growth in the up ins in europe is coming in asia and to that point, mike, how do people think about what valuation to give this is stock and whether takes growth stock, does that depend on the revenue or the users >> mostly depends on the revenue and earnings and i think by almost every definition it is a growth stock.

the real question and the reason it is down from over 200 to recently in the 1040s is there something come along it hault the growth trajectory. regular lags regulation, how much they might have to spend in how they handle data so i don't think that it has changed in terms of the financial metrics. just a matter of what the multiple you were willing to put on that based on how long that was going to last. >> so kevin, you are an owner of the shares are you surprised to see lack of more fallout from all the scandals and controversies in the actual numbers given wall street's worries last year >> well, i guess relieved as someone who holds the stock and still a bit mystified as a citizen. but you know, it is a really pr narrative but that is all it is as long as the daily active user numbers hold steady or maybe

creep up right now you have two really disconnected stories business is healthy and growing and it has terrible pr and it didn't seem to be hurting it right now. >> on the topic of that terrible pr, clearly you addressed at attractive things in the numbers, but you put controversy, controversy, controversy. >> or controversy in the u.s >> yeah, you can guys can criticize me >> but the pronunciation we can debate later >> but my point being, is that now done, is that put to bed >> definitely not put to bed i'm also surprised by the numbers in that regard there was this whole campaign delete facebook, right and it was all over my time lines whenever i logged in so people were upset with all the things that they are doing, lack of transparency in terms of shear how we'

here is how we are using it. there was a story about they are paying young users to download an app that gave them access to every aspects of your phone. and it is a way for facebook to figure out what is next, what are they doing, what kind of apps are they playing with >> and also a little creepy. >> incredibly creepy, right? so i think the whole delete facebook campaign clear i did not take any effect in terms of the number esnumbers but going forward you will see more ads, that is a risk factor. i think that is something that they need to look at carefully sure they are trying to figure out what is the right level. >> and kevin, microsoft is down. decent numbers for azure is this a buying opportunity >> it is a buying opportunity if you are looking for a very solid tech blue chip but remember that you are buying if not the most expensive stock in the world, close to it.

and if you buy a trillion dollar company do you think do you have to wait to double your money, maybe a long time. >> fair enough kevin, thanks for joining us ed also. great to see you thanks very much when we come back, we'll debate whether you should be buying or selling shares of tesla after a mixed earnings port stock down about half a percent. who says our bank isn't tech enough?

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house democrats resp reintrg the pair check fairness act. corteocasio-cortealexandria oca the push remains relevant for today's women. >> we recognize as women that the pay gap and the wage gap is an injustice that persists through secrecy. and it is an injustice that persists to the present day. and the only way that we can combat that is through organizing or personal action ourselves. >> tyson foods is recalling more than 36,000 pounds of chicken nugget products due to possible rubber contamination the recall involves five pound packages of best used by date of

november 26, 2019. and as the midwest gets better by record breaking temperatures, some acts of kindness coats, scarves and gloves were tied to fences in cleveland intended to help the homeless, that idea grcomes from a woman o was once homeless herself. that is the news update. back downtown to you >> sigh, than sue, thank you ve. jon fortt just talk to qualcomm's ceo, and we have the highlights and a bull and bear battle following tesla's results. won't want to miss it when we come back. amazon prime video is now on xfinity x1.

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qualcomm earning just released and jon fortt just off the phone with their ceo and he joins us thousan now. >> and yeah, a quick rundown of what they said on china and the global market for smartphones, they are seeing broad based weakness china the biggest contributor. and some slowdown in developed economies as well. and they continue to expect hand sets in 2019 to be pretty flat with '18 but the average selling price is higher, at least for them for the chips that they are selling

their higher end chips so that is helping revenue and profit even though the units aren't as strong on 5 g, they still expect that to ramp in the last fiscal quarter of '19, but a significant contributor in 2020. and then they have an interim agreement with huawei, and that did help and they said they were pleased with the way that the ftc afrktafrk arguments went in court. we'll see how that goes. >> shares up a little more than 2% jon, thank you shares of tesla trading slightly lower after mixed 40s quarter earnings >> and gabe and joseph, if i start with the eps, i guess another profitable quarter, but less so than people would have

hoped for. >> yeah, i think that that is true they are operating basically at break-even at the moment which shouldn't surprise anyone. but what hears here is that they are generating profits and cash. that has been the knock on the company. and if you look at the results as well as the outlook, i thil liquidity and vice ablability cs don't hold up. >> did you see evidence of tesla having a demand problem? >> yes, i believe that q4 was the best that we'll ever get for tesla specifically if you look at their guidance. they guided for mid point of 280,000 model 3s in 2019 that was about 20% below the street consensus of 330, which is also what my friend joseph has in his estimates finally, he would add i believe demand for all teslas fell off of a cliff starting january 1 port st. lucie because of the partial tax credit expiring of

$337 nobody wanted to buy a car and have to pay more there are pictures of lots all over from coast to coast filled with tesla inventory >> joseph, is that fear for you and will you be looking for faid will you be looking for guidance from the company on that particular point >> well, i think to be fair gabe has a bit of a flare for the dramatic but it is absolutely true we wrote that the mix is shifting from the more expensive cars to the 3s i think if you look at the total unit number for the year and dig into that, you discover that there are a whole lot more model 3s there maybe it's going to be 280, maybe it's going to be 300, but that's a vast increase off of where the company was this year. so i think to talk about demand evaporating is a little dramatic but it is fair to say that in particular for the expensive cars, the demand has softened up a lot. also tesla has taken the cheaper version of those cars out.

>> gabe, the question of the balance sheet, at least in the near term, has that been alleviated a little bit? obviously with the cash on hand they have this maturity coming up i do know that they made the quarterly earnings this time with a large decline in capital expenditures it seems. how does that fit into the whole picture? >> the capital expenditures were clearly unsustainable. in fact they were more than 150 million greater than their depreciation but tesla's reduced guidance for 2019 i believe is still unrealistic. they sold about 63,000 model 3s in the fourth quarter. since i believe demand is lower in the first quarter and going forward due to the expiration of that federal tax credit, i believe they'll be lucky to sell closer to 200,000 for the year or 50,000 a quarter rather than the 70,000 to 80,000 that others are expecting. if you run that math through the model, tesla will be burning

once again billions of dollars in cash rather than generating any cash. >> it's amazing you can have one report and such different opinions about what the numbers are showing. thank you, guys. we'll continue this debate many more times fed chair jerome powell sounding very different today than he did six weeks ago. we'll get reaction from frederick mishkin next 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.

fed chair jay powell in a news conference earlier this afternoon saying there's a contradictory picture of the economy and it requires, quote, patience >> common sense risk management suggests patiently awaiting greater clarity. the committee will be patient as

it determines what future adjustments to the target range for the federal funds rate may be appropriate the cumulative effects of those developments over the last several months warrant a patient wait-and-see approach. we believe we can best support the economy by being patient and evaluating the outlook before making any future adjustment to policy we will patiently wait and let the data clarify so patience -- i think we're going to know in hindsight, because the length of this patient period is going to depend entirely on incoming data and its implications for the outlook. my honestly only motivation is to do the right thing for the economy and the american people, that's it. this situation, i think, calls for patience >> let's bring in fred mishkin, economics professor at columbia university, former fed governor. were you expecting eight patience there do you think that was more

dovish than people expected? >> i think there was a lot more patience than i expected but the bottom line is very much in line with what my thinking is, which is they move to a situation where they really want to emphasize that they're not locked into any future path of monetary policy. this idea that a gradual increase every other meeting they were going to raise rates, that's done and rightfully so. the issue is where the economy is heading i think they were quite nervous about two issues the issue of what might happen in terms of trade war and also the dysfunction in washington. this craziness with the shutdown is clearly an example of something that could be very damaging both to confidence and to the economy on the other hand, the economy actually has been doing quite well, is quite strong. so i think what they're saying is that there's a lot more uncertainty because of these other factors and they want to wait and see how they resolve. i think that's extremely sensible but i should point out that the markets taking the view the fed

won't continue to raise rates is a little bit too -- you know, they're a little bit too optimistic about that. i think that the issue here is what's going to know happening in terms of how tight markets get, the labor markets get, and also what's going to be happening on the inflation front. there are actually reasons why in fact the fed does have to worry about the situation, which we are currently projected to be in, which is we're operating in a very high pressure economy where there's a lot of tightness in the markets as a result, that could lead to inflationary pressures that's a possibility and the fed could react very strongly to that if that unfolds so they're keeping their eyes open and that's what they should do. >> the other pbig change was the language around the balance sheet. do you think they'll actually change course on this front? >> i think that the answer is they're not going to change if there's no reason to

so they do want to shrink the balance sheet. they don't want to shrink it as much as many people thought because they're actually very happy to run monetary policy with a lot of excess reserves in the banking system they think that's a better way to run monetary policy than to go back to the old world where we had very little excess reserves they're also saying something which i think is right which is if the economy went really south and the fed had to start cutting rates and the fact that right now rates are not that high, they might be in a situation where they need to use quantitative easing again. they want to keep that option open hopefully we won't get there and they can actually shrink the balance sheet at a steady pace, but there's a lot of uncertainty and they're a little bit worried. >> given that it seemed today's statements put the burden of proof back on people who think they should resume tightening, what is it going to take for that to again be the likely case

we do have to fixate on the inflation numbers? >> i think it's some of the resolution of the craziness we're worried about. the issue of trade war is a big deal, could create huge problems throughout the world and global value chains and disrupt markets. they are very worried about that and also if we get this brinkmanship of the type we've been seeing which makes no sense at all, that could be very damaging so if those things go in a better direction, that will resolve some of the uncertainty. the strength of the economy i think will indicate that they need to go back to the path of raising rates. but they want to see that uncertainty resolved that's exactly what good monetary policy banking is all about. >> we've got to go we'll see you soon, though thank you for joining us with your thoughts on what happened today. rick mishkin, formerly of the pedestrian. >> the president has just tweeted as well. he's been watching the markets today, mike. saying the dow just broke

25,000, tremendous news. >> which it's done before. >> which means i think he's not going to put as much pressure on jay powell actually. >> positive day here the dow was up 434 points. >> earnings boost, fed boost. >> that does it for "closing bell," thanks for watching >> "fast money" begins right now. >> wow. "fast money" starts right now after a major market rally the fed and earnings sparking joy on wall street the dow up more than 400 points today, closing right around 25,000 again top strategist mike wilson says it is a trap he'll be here to explain that massive move followed by a huge amount of earnings. facebook, tesla, qualcomm and more reporting julia boorstin is outside of facebook headquarters, phil lebeau is jumping on the tesla call and deidr