dow looks like it would open down about 88 points now nasdaq up about 43 points. s&p 500 up about a point i want to make sure everybody joins us tomorrow. we have a big show ahead really big show. >> a big show, ed sullivan. >> "squawk on the street" begins right now. ♪ good thursday morning. welcome to "squawk on the street." futures easing off of that 400 point rally on wednesday, big earnings day facebook, microsoft, ups and more as the market nowlooks to china trade headlines. europe is mixed. gold continues its climb and the two-year yield is near a three-week low the word of the day, patience. the fed leaves rates unchanged and the president touts china

trade talk progress but still no deal futures are mixed coming off a big rally. >> ge shares surging this morning. the company did post better than expected revenue. >> facebook soaring as it crushes earnings despite the swirl of negative headlines, record profits, strong user growth numbers as well stocks are looking to extend gains a day after the fed said it would take a patient approach toward rate hikes. it's been a strong january for stocks three major indexes are on track for their best monthly performance since 2015 the nasdaq is leading the way, up more than 8%. i think we might get the best january, guys, since '89 we'll see what happens today. >> look, when you go over what i'm hearing about december in this country, whether it be visa, whether it be the disaster that is dow dupont, whether it be a lot of the banks that we had, the credit markets, the

equity markets in the last four weeks of the j. powell december where he really cratered business i tell you, he gave us a launching pad. yesterday was the j. powell we were looking for, the one who had done the homework, the one who realized he was wrong. i say he knows something and i think it was a dramatic turn based on the fact -- we can't ask the guy to say, listen, i was dead wrong we can't ask him to say i hope i didn't take business down too horribly in the last weeks of december this is a good j. powell he's calling for prudences s as opposed to recklessness. it's exactly like "some like it hot. his description of what happened in december in this country was some like it cold. an

he's not sanguine anymore. >> tom lee, good friend of the show called it one of the worst monetary policy errors ever. then he says what if they have to pivot back to a hawkish position whats s thappens to credibility then >> i agree with him on the first part it was incredible how stupid it was. shoot, that wasn't very diplomatic it was mistaken. it was ill-advised but i disagree with him entirely if the economy picks up, then we're ready for a rate hike. you don't put a rate hike in for deceleration that you caused, by the way. china's mentioned repeatedly i think the chinese are going to capitulate the president is deeply rooted in things like steel so anyway, i feel like i like what i heard from powell >> we're going to find out a lot more about the market's reaction to the fed

there's another school of thought that says, all right, wednesday could not have been scripted better, but we still have half a trillion of quantitative tightening this year there's a debate about how much tightening that is on a basis point basis. >> no. i mean, that's just inside baseball look, we're going to be fine i actually need some long bonds. there's plenty of liquidity. bob swan was named permanent intel cfo. one of the things that microsoft blamed -- >> he wanted the job. >> he didn't want the ob can we run the clip where he said no? >> this was not necessarily what we expected. >> no. i had the best quote i asked him, would you like to be -- he said no i don't know if he let me finish the sentence i think bob's a terrific guy microsoft actually blamed chip

shortages on one of the reasons the intelligent cloud wasn't as strong as i liked. microsoft if it had been at 98 it would have been at 104. intel is down a dollar david, you just mentioned to me the other day you thought they were about to find a permanent guide. >> they did. >> i don't want to slam intel. but it was like william tecumseh sherman, i will not run. >> they indicated they were very close. they were not able to do it prior to earnings. they gave themselves a little more time. >> it's a shocker. come on. >> if he wanted the job, it would have been his. people were quite happy with his performance, at least the board was. >> what does it say? >> i don't know. >> nobody want that job? take larry cole. that's a guy he wanted a job that nobody wanted and he's

doing a great job. that's a segue to g. >> swan does say when the board approached me to take on the role permanently, i jumped at the church. >> how could he do that after what he said on "mad money"? there's someone who wanted this badly. take a guess he was on the show yesterday in the form of a question. >> in the form of a question who is lisa sue? >> 500 you got that. >> thank you. >> look, no knock on bob, but if a guy doesn't want the job and he gets the job and he jumps at the chance after he told basically he would not take it, i don't know that seems a little half hearted to me. let's get bob on we can get bob on. he's a good guy. if we could run the clip of when he said no to me -- are you

texting him? >> i'm trying to find out what happened >> that's good let me know when you get that back. >> i will. >> ge shares are up helped in part by the performance of aviation and health care earnings did come inside a consensus. they're announcing a $1.5 billion settlement with the doj. chairman and ceo larry culp said to do this we are improving execution, customer focus and how we set priorities agross cre >> health care up 7% organic, what a gem of business they're getting the board together it's going to happen sooner than you thought. >> important on health care, on the conference call they had just told us they're going to be spending more on health care than we anticipated. >> that's why we're going to

have a board of directors. >> i think we actually have this he talks about their debt ratio as well and the plan to significantly increase what they had been guiding towards in terms of how much they would sell of health care in a potential spin or split-off from the company. >> in industrial we are targeting a net debt to even our ratio of less than 2 1/2 times over the next few years. our health care, transportation and bhte is separations can provide sources of roughly $50 billion toward that goal our health care team continues to prepare for public company separation and that is progressing very well. we expect to monetize just up to just under 50% of our health care business. >> there it is that is the first time they've used that. >> boy, do people want that piece of paper

they still need capital. now they're going to give us long-term care but not going to give us the statutory numbers but i think people are going to feel a little bit better about long-term care aviation is absolutely terrific. he has still not gotten his arms around power >> there was another $800 million write down in power overall. most of it not related to this blade issue but i'm hearing that they're working through that and the customers are dealing with it and not exiting when will you see light at the end of the tunnel on power >> we don't know. >> and they still don't have the answer yet. >> no, they don't. i think because of that, you're going to conclude that they need money. where's the money going to come from when we talk to some people at ge, you're right, they've got to do like a billion shares to get the money. they're not going to do that

i think the health care decision is a wise one. i don't have a catalyst. i beyonder wonder if they're up morgan for some of this business. >> they may very well be. >> i think tuss ca can work wit this and turn ge around. >> i think tusa is a big man i think he's bigger than his job. >> he's trying to be. >> i begged the other day to get him on. >> well, you've given him enough publicity. >> you just cut me to the quick. i think you slammed me against the wall you were down there giving me the business all right. i'm going to facebook you if you

don't watch out. >> 400 million dollar in tariff headwind by the way headed into next year in the company but not seeing the weakness in china. the health care business up 14%. >> versus what dow dupont saw. >> yeah. >> it's like a chicken bone stuck in my mouth. david, need the heimlich on the dow dupont. >> not good. we were a bit surprised. >> surprised no like blown away. >> jim mentions this intel announcement that bob swan's been named the permanent ceo and he has talked to us about whether or not he wanted that job. here's a couple of sound bites from the last couple of weeks. >> our input to the board is take the time necessary to get somebody great and in the meantime we have a wonderful management team and 107,000

committed employees that are extremely focused on delivering for our customers. so we're going to be just fine in the interim but i do expect and hope that in the near term -- i don't want to put a time frame on it, but on the near term we'll have a wonderful new ceo. >> my day job as the cfo we're very excited i think the board has been working very aggressively. we believe this is the best open job on the planet. and the management team has told the board, take your time, find somebody great in the meantime we'll be just fine it's a very exciting time for us. >> okay. people are entitled to change their mind. >> absolutely. j. powell changed his mind big that was a big change. kind of hit a lot of people, even the reporters know that things were really strong. yeah, intel. look, it's a shock he came from ebay. he's doing a great job i would not be so apoplectic

it was as shocking as facebook was good. >> facebook is having its best reaction to earnings in about three years. we're going to talk more about it as it surges in the premarket. the company posted better than expected results after a year of facing criticism surrounding data and privacy policies, this is what zuckerberg had to say about the path ahead. >> my approach here is to listen to the critique first, to work on addressing our issues, figure out what we believe are the most important principles to uphold and then go engage in the debate i feel like we've come out of 2018 not only making real progress on important issues, but having a cleesher sen clearf what we believe are the right ways to move forward we now have a clearer sense of the path ahead

>> jpm today says back on the offensive. more confidence in its efforts in terms of new products and services. >> it's funny. i was talking to some of the people at apple about the most recent transgression at facebook the transgressions were monum t monument monumental it was a powerful call because the costs aren't going up. so the leverage is going to be magnificent here we went back to february of 2018 to look at what the analysts were looking for for this quarter. it wasn't that different if that's the case, it goes to 200. >> they reiterate 40% operating expense growth. >> we thought that expenses were going up and revenues were going down expenses are going down and

revenues are going up. this is back to the old model. i didn't know anyone who felt they would come through this thing unscathed. if you look at before all this negative stuff happened, there were only a couple of firms using more than this quarter i don't want to say facebook is back because there's got to be some long knives out there because it's a really disliked company. it was a really good conference call facebook has leverage. >> with the advertisers? >> when the revenues go up -- i mean, with the model. >> oh yes. >> going up without increasing ad load necessarily. >> look, the costs look like they're going -- they're not out of control the costs have been out of control. so facebook deserves to be the star of the day. it's going to be up more than 15 there's analysts who are really

worried that people -- i mean, they didn't count on instagram stories being so -- the advertisers love stories that was the theme of the conference call. advertisers are coming -- never left and many are coming back because they have 2 billion people who are on this thing every day. 2 billion people, david. >> that's a lot of people. every month. >> 2.7 billion every month 2 billion every day. it's 26% of all humans on earth. >> i'm not one of them so right there. >> you're not one of them? >> no. >> my wife's on there every night but the dog is >> a little bit of background. >> you cut me short again. >> i thought you wanted an answer on this. >> i do. >> apparently they were far down the road with another candidate and it didn't work out it wasn't that he was their second choice necessarily but he

never thought he really was in the running for the job and the board decided he had been doing a very good job. this other candidate it doesn't work out with, they turned around after earnings and said would you take the job and he said yes. >> it's the best job on the planet they couldn't find anybody outside they wanted? this is intel for heaven's sake. >> i don't know who the candidate was that they were far along with and it didn't work out for whatever reason. >> this is an unbelievable corporate story. >> that he didn't really put his hat in the ring because he didn't think he was in the running for it, but didn't actually never want it does it make any sense >> he's a finance guy. >> he's a permanent ceo of intel. >> but he's a finance guy. do you want a finance guy running one of the great chip companies? don't you want an engineer don't you want a scientist

when you're going to be sued in 50 states, you want a lawyer a finance guy? this is a company that needs someone who knows how to build a chip, for heaven's sake. i'm not talking about a potato chip. >> i don't know. >> qualcomm had a nice quarter they talk about 5g being pretty good they lost a case last night in germany to apple >> that ftc case. >> it's not good are they rolling the dice? >> i think they are. >> they're betting on double zero doesn't come up that often. >> that's hard to roll >> people thought they were betting on red and apple was betting on black by the way, swan was double zero who was the guy? tell me. >> i don't know. >> you know.

>> no, i don't i would tell you, believe me i'll find out. >> i cannot believe zuckerberg pulled this off without any changes. >> the game goes on, jim this is not tend. >> we had zuckerberg-gate. there are a lot of gates. >> there are people who still believe legislation or something will occur. >> it's all over >> okay. >> it's like the doors song. it's all over. >> i was never a big fan >> when we come back a ceo hat trick on a business earning thursday stay tuned for interviews with the heads of ups

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acan echo throughout ane entire community.nge that's why we proudly support, invest and volunteer in communities like yours. because the changes we make today... can you hear me? ...shape the possibilities of tomorrow. u.s. bank the power of possible. we're counting you down to the opening bell here. about five minutes to go before we get started with trading on thursday let's get a mad dash in ahead of that market open i want to talk a little tesla. >> what's worse than the cfo suddenly quitting? >> i don't know. >> a cfo quitting a second time. that's tesla the king of comedy elon musk

said the inhibitor is affordability. the demand is insanely high. the inhibitor affordability. it's like people don't have the money to buy the car it has nothing to do with the desire there you go that is the kind of thing that happened on this incredibly funny call they have a huge amount of cash, 3.7 billion in cash. i know they're going to be people who sary, wait a second, this thing is a disaster because of the cfo they have 80% market share of the ev market. i thought it was a great call. >> you did >> i thought he was serious. he had some funny things he was clearly sober it was a good call and there are going to be bears. i understand it because there are still issues, but the guy may have pulled it off, especially when you look at ford and gm. >> they have a bond payment, 920

million bucks soon. >> march 1st. >> yeah. >> i think they will i'll have my bond. >> merchant of venice. >> this was a good quarter now the bears are going to say forget it. he's a charletan my excitement for this situation is that the model 3 is a huge win. it is. we can't cut it any other way. i guess what i was thinking about was the more binary is it going to go bankrupt i took that off the table. >> that's a different story. >> i took that off the table >> this thesis that the balance sheet bought them the quarter. >> exactly that's what i should have said

from the get-go. the balance sheet versus the cfo quitting -- right now because we see a cfo quitting a second time that is not exactly what we see from corporate america this guy is not part of corporate america. he's not he's king of comedy. >> jerry lewis >> no elon musk. >> robert de niro. >> we are going to get u.s. auto sales tomorrow for january that might fill in some of the auto picture for the month. >> did you see all the ford sales running in china, down more than 50%? ford is having a winter of discontent. >> the tariffs were in place for a lot of the quarter makes it very difficult when you're talking 40% up from the price. >> if you go over the visa quarter, visa is a great

company. they said u.s. government shutdown, brexit, big equity swings and trade dispute with china are starting to have an impact on consumer sentiment mastercard saw none of that. mastercard had unbelievable cross border numbers, 17%. visa had 7 mastercard was the winner last night. i'm going to throw in paypal but mastercard is the blowout. >> that's a good indicator of how people are viewing consumer sentiment. >> the guy is a power house. >> from mastercard. >> he's fantastic. >> the ceo. >> was he in the running for the intel job? >> not as far as i'm aware. >> how about somebody from general mills? >> i don't think so.

>> lisa sue, congratulations >> you are just -- i don't even know where you're going with that. >> where am i going? i'm going with a guy who told me he didn't want the job got the job. david! if elected, he will not serve. nope >> that's the opening bell the big board. the president has been active on president talking about china negotiators. we expect an oval meeting around 3:30, maybe a read out after the market closes. some worry you get the dow back above 25 k, he gets a little more recalcitrant when it comes to trade. >> he does i had the ceo of new core on the other day and he was talking about the sheer huge number of jobs that he is creating himself

at the best run steel company pause of t because of the tariffs intellectual property stolen like there's no tomorrow i think there is a hard line developing but the china numbersother tha the pmi service, they're terrible really china is having a slowdown, the likes of which -- look, samsung had almost identical slowdowns as apple did. apple, by the way, we've got to talk about apple i'm watching dan d'amico on twitter. he is adamant that the tariffs have been great. he's adamant. >> you've seen u.s. steel's guidance today. >> they're second rate that was suboptimal. a level playing field has really helped he's building steel mills around this country and creating jobs

so there you go. >> there you go. >> there you go. >> so many earnings to choose from this morning. dow dupont is worth coming back to stock opening about 4% lower this morning the planned separation of the company is moving along. you're going to get dow run by jim fitterling overall not a number investors are happy with. >> you can't be happy with it, because 75% of the business was good, but 25% was bad. it turned out that oil going down was terrible for them bargain hunters will come in because of the split they will come in because the organic growth -- there was some organic growth there's not as much negative reaction as i thought because they know there's a split

coming china gave them a little deal in the last couple of weeks i was disappointed because housing was bad, autos were bad and plastic was bad. the last four weeks was a j. powell bonanza if he had called ed breen, he would be cutting >> understood. >> right >> yeah. >> he's going to be retiring. >> yes >> now, he has a business that's involved with semiconductors what do you think? was he the guy who turned it down, the intel job? >> stop with this intel job. >> no, i'm not stopping with the intel job. >> fine, don't stop. >> i'm not stopping. >> don't stop. >> because i am blflabbergasted. >> my understanding on why mr. swan took the job is that he didn't really feel he was actually in the running initially and therefore took him out of the running only to find out that he actually was in the running after earnings when they

approached him and said would you take it, he said yes >> i'm flabbergasted i'll get over it by the time i interview elizabeth warren in an hour she was a fan of tim sloane and then howard. >> howard schultz. >> she's not a fan of billionaires she doesn't like oligarchs. >> she does her mad money stop pretty regularly. >> she and i maybe we agree on the fact that i was once a resident of massachusetts. >> you were. i'm sure you'll talk to her about her potential plan to tax above $50 million. >> 2%. we need a super irs is what we need i lived in the people's republic of cambridge cambridge analytica, hey, what was that we all forgot that

if you take six pictures of pizzas you get a free pizza. i had dominos on my wife made 20 pizzas at the place. we get free pizza coming i'm going to order the tomato pie. you can do the no cheese, keep your trim nature there. >> i will eat pizza anyway you make it. >> materials down almost 3%. is this china doubts >> yeah. it's china china is just terrible i don't know china is just bad. that's cell phone related, by the way. they make materials for cell phones at dow dupont it didn't come together. but there are a lot of big institutions looking for a stock that's down, thinking it can rebound now that j. powell came to his senses. he was in that trans he was the

>> microsoft is aname we haven't mentioned this morning and we should. amazon is number one right now revenue, 29 .1 billion, up 19% operating income 10 billion. this is a quarter, of course 29% increase net income up 34%. stock down 1.5%. people were not happy with the call either, i guess. >> no. the intelligent cloud i think decelerated a bit. it went down to 17 i didn't like the blaming of bob swan, the chip shortage, intel chip shortage cited for weakness the stock was upcoming into the quarter not unlike paypal.

stock was up in the quarter. apple and facebook were going down in the quarter and it's a go for them. i don't mind microsoft but it wasn't goa good call. paypal wasn't this bad they're blaming ebay it's not the ebay deal the separation does ebay need a new ceo >> i think elliot might argue that of course elliot is amongst the firms that are active in the stocks, starboard is another one. we'll see what actually transpires there they're obviously pushing the company to separate out its classified business. >> makes sense i love stubhub what did you think about service now and your friend john donahoe. he did an unbelievable job this is service now. service now is going to make it so that you have a problem with

your penalty kic, you take a pif it, you send it to i.t. and they can fix it it was a great quarter it's one of my cloud kings it was the best quarter of the night. that company is on fire. can you imagine if you took a picture and just sent it to i.t. wouldn't that be great oh my. apple i think is going to be involved in that that's going to be apple in the enterprise for those who have been they snaysa saying apple. facebook is nowhere and apple is nowhere. what is that about >> you see some of these severe pessimistic stories peeling away. >> yes, i do. >> on apple, on facebook >> i think that they'll screw it

up again it's worth so much that when they stop trscrewing it up, it's going to be unbelievable amazon is tonight. i'm a little nervous about it because when i look at amazon the expectations have gotten high that said, i think you own it right through this they had a decent -- not a great. ups had a great number to me that's a read through to amazon. >> we're going to talk to david abney next hour. >> congratulations to david. he put it together this time remember all the doubters? have you seen the rumor that amazon is going to buy fedex shoot that down. >> that one i didn't even hear. >> some have argued fedex is so cheap they have to. >> that's about as dumb as a bag of hammers how can you say a company is so cheap it has to be bought? >> i don't know. >> then it comes into the newspaper. reuters runs it and then you have to shoot it down? >> a lot goes into an idea to

actually make an acquisition of that size, period. >> first double digit print for ge since october 31st. >> larry is giving you a lot of encouragement. you just feel he's got gravitas. >> there's a bit more detail in the conference call, in the script on the conference call. they've been in q & a for a while. may be concluded by now. >> if he gets his arms around power -- what did he say about the aviation deal that everybody is saying is no good it's okay. >> yeah. i mean, there is -- listen, deleveraging is a focus for them the market does want to hear that. >> at the end of the year they were rating it down. >> that said, we're still not getting the guidance forecast for power for example. it's not ready yet. >> no. because it's terrible. he's got to get his own people

in there do you think that snapple was a worse acquisition than alison? alis . >> cyrus >> i could give you a long list. >> oh come on, this was the worst. >> aol by time warner was terrible >> there's bad m & a for where you are in a cycle. >> yeah. >> those conceivably helped to ruin countries. >> how about baker hughes? >> no. that wasn't. >> maybe there were some mistakes there were some ill-advised decisions there. >> a series of fails that also were done at particularly poor times. >> maybe that was hyperbole. >> if you're not acquiring assets that are contributing the cash flow they were supposed to,

starts to add up and not in the right way. >> can we make sure that harry culp had nothing to do with any of those >> staying with oil, i can see chevron is one of the few dow components green. >> what happened to the bad oils shell should make acquisitions right now. i remember a couple of years ago when they made that bad acquisition, they said they would come back and they did. >> shell is good. >> good numbers out of shell >> tequila was strong. johnny walker did well we need the banks to come back comcast is making a move here. >> comcast yesterday was hurt in part because of those directv numbers, both really the directv

itself losing 391 subs in a quarter. directv now opened a lot of eyes from at&t when it lost 267,000 subs. >> make at&t is just a not great operator. >> with directv now i think a number of people tell you, look, hulu is doing well maybe it has to do with the technology itself as to way they lost so many sub thers there. >> this morning charter reports earnings that were very strong i haven't had a chance to go through them in any detail given the avalanche of earnings. if you take a look at charter the stock is up over 12% and that is adding fuel to comcast as well. >> you think disney can make a comeback it was dumb. the disney read-through from at&t

that was dumb. his feet are in the fire you know that. >> overall revenue is 5.9% for the fourth quarter and again did not have the losses that people have come typically to expect in terms of video and the like although all those media stocks are down since august of 2015. you know what that was that was espn day, remember? >> he's got it they trade like u.s. steel remember wh remember >> we did get an intraday high on the nasdaq going back to december 4th as for data today we've got claimants of 53,000. that's the biggest jump since 2017 good morning, rick

>> yes, we are waiting for the january read on chicago bmi. one week of tens you could see we dropped out of the 270's closing range. yesterday would have been 17 it wasn't meant to be as you see on this early january chart of tens we look at the same early january chart of 30s they are now on day 18 where they're closing between three and 310. that's 16 basis points the dollar continues to drop lowest level since july. many are thinking the more that d drops the more confident in the deal with china. chicago pmi 56.7 56.7 is the lightest read since -- wow, this really goes back it's the lightest read since january of '17 hey, we can call that two years. and the interesting thing about

that is that january read was also the last time chicago pmi was under 50 so we're comping to a 49.9 what that tells me is that it has been so elevated that even small drops now go below that kind of crowning process when we were superlative levels with regard to this data series 57.4 isn't a bad number. just look at europe. just look at other economies but in the context of where it's been, yes, it drops to that two-year low >> that's a lot of info. thanks, rick meantime dow is down 150 >> dow is underperforming because dow dupont and to a lesser extent microsoft on the earnings situation were getting what i call lumpy earnings, very uneven big material and global

industrials had some rather poor 2019 guidance. that's what we care about. they're rolling out the 2019 numbers. you see dow dupont, northrup drummond a number of companies have affirmed essentially metrics for 2019 or roughly in line. that doesn't necessarily mean your stock is going to go up on anything you couldsee very uneven response a lot of it depended on the past quarter comments or comments on the global markets in general. the trends right now, we're in an up trend on the s&p folks highest level since december 6th. emerging markets are in an up trend, bond yields are in a down trend. the dollar's in a down trend gold is at an eight-mont high. markets are getting pricey if you want to have something to

worry about, these are the things i think about we're at 16 times 2019 earnings. that is great last year if you're trading on 10% earnings growth in 2019 the debate is zero percent or 5% it's hard to argue that 16 thims is a good multiple we've got targets that already close to a full year for a number of strategists already. they're at the 2800 level. that's a problem we've got optimism on the fed, optimism on trade and even the global economy but the global slowdown hasn't gone away. i think dow dupont had a bland but right in the middle statement here we expect global economic expansion to continue in 2019 at a moderately slower pace than 2018 we continue to closely monitor macro economic and geopolitical developments that's sort of what most corporations are saying. not horribly weaker but you saw

comments from caterpillar indicating the slowdown is very real last day of the month here and what a january it's been this is the best january we've seen since 1989. if we close at these levels, we're up almost 7% seventh best january since 950 we finally got an i.p.o. new fortress energy should open on the nasdaq. the important thing, guys, this is the first real ipo of the year we're expecting about 160. we could do 2000 numbers we could raise a lot of money this year depending upon how the economy goes and the stock market goes. >> waiting for that window to open for a few weeks now. still to come, the home of oreo and chips ahoy. dow down 147 back in a minute

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let's get to jim and "stock trading. >> a lot of times it was the best of times, the worst of times, dave, it was the age of wisdom and age will foolishness. epic of belief and incredulity i think the snack business is really on fire for them, not the chip business. not taking the intel job despite her work with frito lay. one person has better candy, one guy is a better snack store. >> one wanted to buy the other don't forget that. >> that was the spring of hope, david. turned out to be the winter of to spare at hershey's. >> yeah. that's not been a good quarter what's on "mad" tonight? you mentioned elizabeth warren. >> i've not paypal, maybe they can tell a better story and senator elizabeth warren she's not a fan of wells fargo not a fan of howard, so we've got some work to do. got some wood to alcohol i wonder if jpmorgan stock is down because i have her on

tonight. >> consider herself a capitalist >> she was in line for the intel job. >> jpm down about a percent. we'll see you tonight. "mad money" at 6:00 p.m. eastern time when we come back, the ceos of ups, modelez and diageo. dow down 135, but the s&p is up.

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good morning welcome back toes on the street. i'm carl quintanilla here with sara eisen and david faber at post nine at the new york stock exchange let's get to rick santelli and news on homes. >> reporter: this is actually november read because we're playing catchup with the data points, and it will continue well, we're expecting a number around 570,000 for our november read on new home sales hey, finally in housing we get a surprise to the upside 657,000 seasonally adjusted annualized units that is nice, and if you look at it the in percentage terms, that's almost a 17% jump from an unrevised 544,000. now the last time we had a number this big, i have to go all the way back to march when

it was 672,000, so a big positive number for new home sales, but the problem, it's a november number. what's happened between then and now we'll be sure to find out as we play more numbers catchup sara, back to you. >> yeah, it's going to be a little messy for a while rick, thank you. rick santelli on housing it's the busiest day of earnings season the ceos of ups, modelez and diageo are all with us don't miss their takes on trade, the consumer, the economy and, of course, their results, all coming to you this hour. straight ahead. >> we'll begin with the markets. dow slipping back below 25k. markets digesting better than expected corporate earnings, dovish fed and cautious optimism about china trade talks. the president tweeted a few moments ago. looking for china to open their markets not only to financial services which they are already doing and also to manufacturing, farmers and other u.s. businesses and industries. without this a deal would be unacceptable joining us at post nine today,

did i felt investment's macro strategist the president feels like he can be a little tougher and hence a trade deal gets pushed out perhaps, you buy that? >> a little bit. it's the same with the fed could you argue that as the market recovers the fed is going to get less dovish though yesterday certainly that was not -- that was not the case you know, my assumption is that this is a very long-term containment strategy by the u.s. and that we shouldn't celebrate the individual wins too much because even if there is a deal, quote, unquote, the next day there could be something new happening. that kind of takes the punch bowl away again. so my base case assumption is to have low expectations, and if they are exceeded, great maybe we boost earnings a little bit, but earnings growth is slowing pretty dramatically actually, and i think part of that has to do with trade and the fact that a lot of orders were kind of front run in

anticipation of tariffs, and now we're going to see the other side of that. >> so what is your expectation for march 1st? i mean, is it sort of this we're going to buy soybeans and then we'll talk about the tough stuff later. >> my guess is yes it will be some sort of detente, but it's certainly not going to be the end of the story. i think this is a very long-term story that's going to continue to play out over the coming several years probably. >> what's been your take so far about a third of the way into the quarter, not on results themselves and beating, mission, but the guidance. >> yeah. so the guidance i think is okay. it's kind what have we would expect you know, earnings peaked last year at 24%. the third quarter was at 26% and the fourth quarter which is now being reported it's looking at around 13% seven out of ten companies beating by 1.5 percentage points on average but the calendar year 2019 estimate, you know, is falling pretty rapidly it was at 12% in terms of year over year growth a few months

ago. now it's down to six it's falling down by half a percentage point a week, so we'll be lucky to get kind of zero to 5 this year at the rate that that estimate is coming down now, it always comes down, right, because the expectations always start too high and then companies guide lower and then they lo and behold beat the number that they guided lower, so we're seeing that same game play out, but it's looking to me like a low to single mid-digit year in 2019. >> back to the patient fed for a moment, you think they will raise interest rates at all this year >> my assumption is that the fed is done. if -- if growth lives up to the fed's expectations and the economy continues to grow above potential which is certainly where it was last year, then maybe they put another hike or two back on the table, but my assumption is that the fed basically is saying we're neutral. maybe we go up down the road maybe we go down, and that

really the balance sheet is the key ingredient and that i think is what the markets were cheering yesterday and what the markets were during back in december during that press conference so it comes -- still comes down to what is the value of quantitative tightening. if that's a surrogate rate hike, how much is it, and is the fed still too restrictive? my sense is that it's not, that the economy is in good shape led by the consumer that there's no recession in sight for the u.s. and that the fed could possibly go a little bit more, but i think for the next six months we shouldn't expect anything from the fed. >> are you in the school that says there is quantitative tightening coming, even if they don't hike or cut? there's a form of tightening, or as jim said last year, is that too inside baseball? >> it's a little inside baseball, and it's poorly understood and poorly explained as well by the fed and by others in terms of what this actually means. nobody really knew, right, i mean, ge was uncharted territory

and qt was as well maybe it's not a linear thick in terms of what quantitative tightening takes away and what easing gave us in terms of the market, and nobody really knows but as long as it's slinking the balance sheet, i think it's some form of tightening how much and what it means is a different story, but it does presumably reduce liquidity in the system and that by definition it's a form of tightening. >> that's a tough nut to the crack. people still working at that jurgen, we'll touch base soon. >> thank you. >> one of the day's big movers today. facebook shares are surging after crushing earnings easing investor concerns over increased spending on privacy and security-related issues. our julia boorstin joins us now with more. hey, julia. >> carl, facebook is growing its earnings and revenue far faster than expected as it generates more ad revenue per year i asked acebook's ceo sheryl sandberg if this means facebook doesn't have a financial incentive to invest and protect

consumers. she says this can improve the safety of the platform and serve advertisers with targeting. >> we're going to continue for expenses to outpace and that's hurting our profitability. what that means is that we believe very deeply that this is important. i also think that the incentives are aligned here it is in our not just long term but short-term business interest for people to feel safe and secure on our platform, and that's certainly the environment advertisers want to be, so i don't think there's a tension between these two things. >> with increasing calls for regulation around data privacy among other things from senator warner and representative ocasio-cortez among others, here what happened when i pressed on the regulation. >> we're very supportive of comprehensive regulation in the u.s. and also not waiting for it, doing things like the gdr flows and building ad transparency even for bills that

haven't yet passed but these things are aligned >> reporter: analysts are largely bullish on the company's results and its prospects for moving on from its scandals of the past year. we've counted about nine price target increases this morning. speaking of scandals we'll have sandberg's response to the controversy over apple pulling its data tracking app. that's coming up in "squawk alley. guys, back to you. >> thank you, julia boorstin reporting on facebook for us. shares of ups up this morning reporting better than expected quarterly volume boosted by the record holiday season revenue and 2019 forecasts coming in a bit below expectations joining us first on cnbc ups chairman and ceo david abney always good to have you have let's start off by taking about tailwinds. internationally you guys had a very strong fourth quarter when you take currency out of the equation, your operating

profit was up 10%, your operating margins over 20% internationally. what is it that you're seeing there that has led to what i believe was maybe the best performance you've had in that part of your business. >> thank you, david, and it absolutely was the best performance that we have seen, and it's just a verification that our transportation -- that our transformation initiatives are really on track, and we're focusing on europe we're focusing on emerging markets. there are opportunities out there. they are in select markets but that's where we think that we can focus, and we had very good success, and we think that that will continue right through 2019 when we talked about having double digit operating profit margins in '19on top of '18. well, you've talked about 2019 as a pivot point, and it was

mentioned in the conference call as well. certainly maybe something that investors are focusing on this mornings sending the stock up. explain why it's a pivot point and how the leverage in your business is working to make it a pivot point. >> i think it's the timing of our transformation initiatives it's the investments that we have made in the strategic imperatives that we're focused on, so the small and mid-sized customer, e-commerce, global growth markets and healthcare and life sciences, so it's those four areas we've added a lot of investments to make our network more efficient, our global smart logistics network, and all of those coming together with our strategies, and we're implementing the way that we thought that we would. >> all right let's talk a bit about the domestic economy though and what you're seeing here in the states in terms of trends i guess that's a question in and of itself, but specifically in

terms of the drivers of domestic package volume right now what are you seeing >> e-commerce in the small and mid-sized customers would be the two areas that we think are driving most of them we had record volumes this peak system because of investments we had made we were able to provide best in class service, and we take that momentum into 2019, but the u.s. economy is solid right now, and it's certainly providing opportunities for us >> david, there's a lot of angst about the global economic slowdown we lost the synchronized global economic recovery. from your vantage point how slow is it getting? how would you characterize it for the rest of the year >> oh, i would say it's a slight slowdown i was at the world economic forum last week, and if you

listened too much to people you would think that we're getting into a recession or getting into a drastic slowdown, but everything i'm hearing and seeing is it can slow down slightly but there's still good opportunities. there are trade concerns no doubt about that, but also trade opportunities like the u.s.-mexico-canada agreement we believe it's really going to benefit small and mid-sized customers, and we'll be able to help them deal with that >> david, what about disruptions from the weather i mean, you and competitors amazon had to suspend all sorts of deliveries because of the frigid temperatures in the midwest. how big of a deal is that going to be, and how much of a delay >> you know, it's -- it's not as big a deal as you would think. now certainly a big deal that as cold as the weather is and in -- and our people have just dealt

with weather for years and years, so we have a pocket full of zip codes, you know, a couple hundred maybe that we're not going to be able to reach because of weather, whether there's curfews set by the government or something, but overall our network is running and it's running quite well so we'll be okay getting through the next couple of days. a real testament to our people though my hat is off to them for what they are doing >> david, the debate continues to rage about the effectiveness of last year's tax reform, tax increase significantly capital expenditures in companies like your own you've made significant capital expenditures you also benefited obviously from a lower tax rate, but i'm curious. is there anything that you've done over the last year or are planning to do this year that you would not have done previously as a result of tax reform >> what the tax reform has allowed us toss do is really accelerate some of the re-investment in our network in

technology, in buildings, things that we've wanted to do all along, we could have done to a lesser degree, but with this tax relief we were able to accelerate earlier into this year and next year we did exactly what we said we would do when we were advocating for a tax reform that we would invest back into the business in the u.s. and in other places, and we've absolutely done that >> and what about returns to shareholders what are your plans there. obviously the company is going to be generating a significant amount of free cash flow as well this year. >> yes we had a significant free cash flow in 2018 we'll again in 2019, and the good news for our investors is the 10% plus so the low teens operating profit improvement that we're forecasting in 2019

in all three of our business units, so it's very balanced, and, of course, our investors will get the benefit of those efforts. >> all right well, david, stocks are having a very good day today, though still down 15% over the last 12 months certainly appreciate you taking some time as you often do. david abney, ceo of ups, thank you. >> thank you, dave when we come back. modelez, the snack giant, reporting solid results in line with wall street stocks up more than 3% says though it's raising prices though in the u.s. to help cover rising costs we'll talk to the ceo about all of this. dirk van de put next plus, legendary fund manager bill miller weighing in on big markets and his bet on facebook. it's the last trading day of january. it's been a good month for the markets. take a look at the dow leaders and losers on the month. i don't know what's going on. i've done all sorts of research, read earnings reports, looked at chart patterns.

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you'd cry. look, look, look, look, look, look, look,. maybe even laugh while crying. what the fertilizer? sounds pretty great, right? riiiiiiiiiiiiiiiight! just say, "add epix" and it can all be yours. it's easy to upgrade. and you don't want to miss out on everything epix. it is official bob swan has been named the ceo of intel he's been serving at intel's interim ceo for 12 months and cfo since 2016 he's also elected to the company's board of directors his appointments marks intel's seventh ceo in 50 years and as we talked about last hour, david, interesting path to this job having said that he wasn't necessarily gunning for it >> yeah. still trying to make sense of it all given that he did say pubically he wasn't interested in the job, though perhaps we

were misinterpreting his lack of interest in a sense, and he may not simple police have thought he'd be offered the job. they were down a path with some other candidates it appears one in particular came back to him right after earnings and said, no, we like you. we think you've done a good job, and he said, okay, i'll take it. >> kind of a muted share price reaction down almost 2%. >> yeah. >> looking at amd. always that competitive. they had a good day yesterday. modelez is having a good day today out with a strong quarter. revenue and earnings in line organic revenue growth of 2.5% and we'll see pricing increases in 2019. joining news an exclusive interview to talk about all of this from very chilly deerfield, illinois, interim ceo dirk van de put nice to have you here. >> thanks, sara, and it is very chilly here. >> thanks for braving the weather. trying to figure out what all the results say about the global economy.

you guys have a great global footprint. 2.5% organic revenue growth. does it tell us that everything is fine, or is it more of a modelez specific story >> well, i think if you think about what we are doing as a company we're a snacking company, and snacking is a category worldwide that is growing quite nicely, different from global food i would say, and -- and so we -- we have some momentum in our category itself, and then as we talk about how the consumer is feeling in different countries around the world, we're a basic type of requirement and, in fact, when consumers are feeling a little bit less good, what's better than a bar of chocolate or a nice biscuit to sort of help you through the day so we don't tend in general to be affected that much by slowdowns, and i would say also we have a very good portfolio of products that can

cover any needs that the consumer might have. >> why don't you dig in specifically on the chinese consumer i saw on the call you said six consecutive growth in chmpt ain. all categories were up tell us about what's going on in the u.s. and the slowdown in the chinese economy. >> again, we look at our categories and look at snacking, and the snacking categories in china are growing well we are growing our market share in chocolate, in biscuits, our online, online e-commerce is quite big in china it's growing over 70% in 2018 for us, so we don't necessarily experience in our categories that slowdown of the chinese economy, and, again, i think that has to see with the fact that we have a basic commodity as it relates to what the consumer wants to eat on a day-to-day basis, so we don't tend to be affected that much by

it >> what about this issue of pricing? in the u.s. will we be paying more for snacks like oreos and triscuits, and how much pricing power do you think that you have >> well, yes we're going to be paying a little bit more i would call it because what is happening this year is that the commodities, the input costs that we, have packaging, dairy, they are going up more than in previous years, and we have to reflect that in our pricing. now, it's not out of this world. it's not a huge chunk, but we will pay a little bit more i do think that we have strong brands our main brand is oreo as an exam it's growing 7%. in 2018 in the u.s., we see a lot more repeat buying from the consumer in oreo, so oreo has a brand as an example, and several others like ritz and chips ahoy that are doing quite well so we

believe that there's a momentum, there's a consumer interest and there's a connection to our brands that they will accept a small price increase in our product. >> you know, i know that you don't characterize yourself necessarily as a food company because snacking does better than food, but even among some of the snacking peers it looks like you're outperforming in terms of sales, kellogg and hershey results today. are you taking share and if so how? what's the competitive environment like >> well, i assume you're talking about the u.s., and, yes, in the u.s. we are taking shares, largely in the biscuits category we have what we call a dsd system which allows us to go directly to the stores, so we're in contact every day with many, many stores across the u.s., and that gives us a competitive advantage and that allows us to -- to execute better in those stores as i said, i think our brands are having some momentum

oreo is one of the best beloved brands by millenials so i think that's another competitive advantage that we, have and then we offer quite a range of different products so that we offer the consumer quite a bit of choice, and i think it's all those elements that allow us to do quite well in the u.s. environment at the moment. >> dirk, you know, there's a school of thought that applies mostly to package good companies, but the idea goes input costs are either coming down or not going up as much as they were before, and in the meantime a lot of these pricing increases at retail have already happened, and that's going to spell a good story for margins in the here ahead. does that apply to you >> i see that slightly different to be honest what i see is that the input cost this year, they go up every year, but compared to 2018, our input costs are clearly going up more than -- than it has been, and as a consequence we're

pricing just to maintain main slightly increase our margin, but it's not going to be a story where because input costs are lower than expected that we will see a big boom in our margins. that's not what we're seeing at the moment. >> you have a big business in europe, dirk how do you even prepare for a no-deal brexit mean, there's not a deal on the table, and i note market is not expecting that the uk crashes out of the eu, but if it does, what sort of disruption and cost pressures are you going to face? >> well, it -- it is quite important, and the difficulty about it is that you can't really tell what's going to happen it can go from a hard brexit to a more softer or a postponement of brexit. what one thing is for sure whatever happens, the flow of products in and out of the uk will be affected, so we have to prepare for that which means we need to rent more trucks we need to rent more warehouses. we need to build up inventories

of raw materials and packaging materials, so all of that together has extra cost, and we're already prepared for that. but if we would go to a hard brexit as an example, that could be accompanied by a devaluation of the british pound that could be accompanied by tariffs being put, and like any other company i would assume we ship products in the uk and we ship on the mainland or we ship products out of uk which have to be sold on the mainland, so if it would be a hard brexit that has a number of collateral effects, we're preparing for that, but that would be quite substantial. on the longer term i think, i'm talking about short-term and mid--term effects, i think on the longer term that will stabilize and consumption will come back to the normal level. so longer term i don't think we'll see major effects. short term very dependant on what type of brexit we are going to see the effects could be

wide-ranging, and -- and after yesterday's vote i -- i have high hopes that we will go to a softer brexit and an agreement and that it will all not be as bad as it potentially could be >> finally, i hope you won't mind one fun question, dinchlrk we talked about oreos earlier. >> i don't mind at all. >> i saw a study that oreo double stuff is not necessarily double the volume of cream filling of a regular oreo. is that true >> what? >> well, i -- i can't really answer that question i don't know exactly how muc double stuff is in there, but we're at the moment launching a new promotion which is oreo, the most stuff ever which is double the double, and i can tell you that is the most stuff you've ever seen in an oreo >> personally i prefer the dark chocolate stuff. finally, dirk, 2018 was your first full year as ceo, and you

opened up to us at the investor day and had all sorts of ideas and strategies that you would put in place, investments that you were going to make and staying local, for instance, when it comes to snacks. where are you in the transformation right now of modelez? >> first of all, we delivered a good year. as a new ceo that was quite important for me deliver what i promised we would do, and we kind of overdelivered, and so i'm pretty happy about that secondly, we developed this new strategy which was done by the middle of the year, and we started to implement all the things that you mentioned, and -- and we ended the year well in our industry we looked largely at organic growth which was 2.5% which we haven't seen for a while for our company. what's more important is we want that growth to come from volume. we want people to eat more physically of our product, and that was one of the first years in a long time that we've seen

that on our products we are activating a number of things, new ways of innovating we are playing more with all the different brands that we have around the world we've increased our investment in r & d, and all of that is happening. we're executing the strategy as we planned, and so far the second half of '18 is showing the results of that, and we're entering '19 quite happy, quite excited. it seems like this thing is going to work, and so we have high hopes that '19 will be an excellent year for us. >> dirk, thank you for joining us so talk about all of that >> thanks for having me and stay warm. >> yes >> from deerfield, illinois, modelez headquarters with the stock up. >> shares of ge up better than 15%, up 1.17%, the most in nine years after posting better than

expected revenues, settling some of its legal issues. shares of microsoft slipping after mission on revenue dow session low was down 172, and we're down 57. don't go away. with tempur-pedic, it doesn't. enjoy our most advanced pressure-relieving material for the deepest sleep you've ever had. this presidents day, save up to $500 on select adjustable mattress sets. find a retailer at tempurpedic.com. i'm brad castillo. did you know that americans who bought gold in the year 2005 quadrupled their money by 2012? even now experts all across america predict the real gold rush is just beginning. u.s. money reserve is the only precious metals company led by a former director of the united states mint, and is one of the largest u.s. gold coin distributors in the country,

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hi there i'm contessa brewer with your cnbc news update people in the midwest suffering through one last day of arctic cole record setting low temperatures blamed for at least nine deaths in the region. meteorologists say today's windchill in chicago will make it feel like negative 40 degrees. hope you can stay inside today cold weather is forcing gm temporarily to halt operations at 13 michigan plants. the company says it's suspending operations after receiving a request from the local power utility to conserve natural gas. smoke is still billowing from the ashes of a new jersey paper mill more than 12 hours after the fire began the factory was destroyed by a seven-alarm inferno. all 200 workers on site got out safely what sounded like a hollywood script when authorities

responded to a small hole. they got a surprise. they realized the two-foot wide hole actually was a tunnel someone had been digging to a local bank are you kidding me so if this is a hollywood script, it's got to be for a come dishes right? that's a cnbc news update for this hour. i'll send it back to you, david. >> okay. and i will take it thank you, contessa. up next, facebook investors legendary fund manager bill miller is going to be with us, and it's the last day of the month of january if you care about days here's a look at the best and worst performers on the s&p.

less get over to brian sullivan live at the tiger 21 conference in florida sitting down with a big, big legend. >> hey, brian.

>> hey, carl listen it's 65 degrees here in boca raton but somebody's got to do it you know, i was happy to suffer through this assignment. bill miller great to see you in person thanks for joining us. >> good to be here. >> you're smiling because, a, it's warm, but, b, you're a big facebook owner facebook is soaring. what do you think of the quart, and are you adding to your facebook position? >> no, we're not adding right now. added in the 140s twice, a year ago when mark zuckerberg was getting raked over the coals in front of congress and then recently when the stuck -- suffering from a gloomy consensus, let's call t.trading around 14 to 15 times earnings this is the worst quarter that facebook has had in terms of revenue growth and 2.2 billion users. hard to find fault with the economics of the business. >> except how much bigger can it get? >> well -- >> how much growth is there? >> well, there's not a lot of growth per se certainly in users. i think there's still monetization of the users and monetization of instagram and things like that, so, again, the

company with that kind of global scope has an enormous moat around it and with the new money being spent on security it will be tough for anybody to push them aside. >> going into the commercial break, david faber showed a face of the best stocks xerox up 30% and ge up 30% this money. ac, after the worst december since 1928, what do you make of these insane market and stock swings collapsing and then -- is that a healthy market >> it's a market that can be exploited. i think you can monetize the volatility in the market which is what we try and do. there's been 23 corrections of 5% or more in the last ten years, so two per year and corrections go deep enough to scare everybody out and also then the market -- i guess market structure has been changed in my opinion by the combination of money in etfs, quant funds and risk parity products so they all tend to

move together. >> are they harmful? >> they potentially are harmful. a friend of mind said that the etiev thing and the passive money is a potential threat. i don't think it is now, but it could be down the road. >> we talked a lot with you about amazon and facebook. i want to ask you about a totally different name because we're so concerned that housing is -- i don't want to say it's collapse, but it's slowing down. one of your biggest positions is rh restoration hardware $4,000sofas, bill. what makes it attract sniff. >> part of why it's attractive now is they have kind of taken over the high end of that market with their 40,000 square foot stores, and so it's -- it's a company that we started buying in the 20s when gary friedman, the ceo started buying a lot of stock. they bought back 50% of their shares last year and probably an average cost of around $40 to $45 so it's not as attractive at 130 as it was at 30 but it's still a dominant company the average furniture store in

america is 7,000 square feet. >> i'll wrap it up with this. >> what's the last, most exciting new stock that you've added? >> avon. >> avon? >> avon. >> avon? >> avon was at a 70-year low. >> makeup company. >> $1.59, yes, something like that brand-new management all up and down, a couple hundred million of free cash flow. the proper strategy for the first time in years if not decades, and -- and we really think it's a company that could be a ten-bagger in the next three five years. >> avon is a ten-bagger? >> could be, could be. >> cody offered 10 billion for the company in 2014 and 'is a. has an 800 market cap. >> this is a company, you know, tv, fake news to say there's people worried about avon's long-term sustainability as a company. >> well, that's pretty well reflected in the price of under $2 i think, but we -- we think it's a very interesting risk reward on avorngs and i think

that -- i won't say worst case, but i say it's going to be tough for you to lose money in the stock over the next few years given how much it's down in the past couple of years alone. >> and you're -- avon is moving right now. the stock is up 14% on your comments is this a long-term hold you're a value guy, you're a long-term guy and even you would say if i go from "x" to "y" and it's this kind of a percentage move i've got to rethink my position, no how long would you hold at avon? >> we'd hold as long as we think we can earn an excess rate of return by holding it. >> still right now. >> oh, yeah. >> it was $2.50 i think about three or four months ago, so it's kind of making a home here between the $1.57 a75 and 2.20 if it breaks out around the $3 level it tells us the strategies are working. we'll know by the end of the year. >> david faber, you've talked a lot about avofnlt the bank h

i don't know >> tell bill the stock is up 19% in part on mr. miller's comments i remember when they were turning down a bid from cody that they absolutely positively should have taken without a doubt. i want to come back with you on amazon i think we'll be hearing after the close. i remember you paused on the stock in the good and bad and particularly in tough times where your opinion ended up, of course, being the correct one. what are you looking for after the bell what should we be focused on overall in terms of both the earnings and on the conference call >> you know, it's an interesting situation. i tend to focus on the advertising business and on awfs and then the mixed shift where the third-party sellers are now more than 50% of retail. you're not seeing the sales growth in retail that you're used to seeing you're seeing good margins, and i think international is still losing money, and in the next couple of years that will turn

and amazon is doing so many different things and it's so dominant and it's about 20% below its high so it's very attractive in here >> why is it very attractive in here >> because i think that the business itself on the top line is probably going to grow around 20% to 25% a year for the next three years, and so -- and the margins should continue to expand, so if the valuation doesn't change, and i don't think the valuation should change, then in terms of ebitda and price and that sort of thing, the stock will double in three year, and the market is not going to double in three years. >> i wanted to talk about apple. i don't think you own it in the fund but you've talked about it in the past and few it favorably. an alp quarter was well received by wall street but also showed that iphone salesare declining is that a big bet after the big selloff that we saw from the last quarter

>> el with, we sold -- we had bought and sold apple well i own apple personally and have owned it for a long time if you want a company with a fortress balance sheet that's dominant, that is i would say safe, that generates 50 billion free cash flow, then apple looks knock here. >> i want to jump back in. we talked about avon and you reference it had and david referenced it as well that cody, the cosmetics company had made an $800 million bid. you started adding to coty >> that's a personal position of mine started buying it around $8. >> that's a stock down 50% in a 12-month period. is that a similar story to avon? >> coty is pretty highly leveraged. jab, you know, the private equity firm. >> that's buying everything. >> controls it, but they bought every share that was available in blocks around $8.50 the new ceo just came in and

bought $15 million worth of stock at 8.5, 7% yield on it i think most of the damage has been done. >> on coty. >> most of the damage done on coty and personal position for you, not in the funds at miller value partners. >> correct. >> apple tonight, amazon, facebook, you're a happy guy avon, stocks moving. bill miller, real pleasure got to stop meeting like this or maybe we don't have to stop meeting like this. bill, thanks very much. >> thanks very much. >> guys, we'll send it back to you from this terrible assignment down here in boca. >> yeah, yeah. brian, thank you nice talk with bill miller up next, a rare event this earnings season. diageo getting a sales boost in china sending its sthirs an aha all-time high. you'll hear from the ceo next. me 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

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move to the enterprise-grade cloud that's built to handle all your apps. ♪ ♪ the ibm cloud. the cloud for smarter business. amazon reports earnings after the bet. find out what to watch for on tradingnation.cnbc.com more "squawk on the street" is coming up.

shares of the world's largest spirits company diageo surging today after reporting earnings this morning. the company that produces brands like johnny walker, smirnoff attributing them to gains around the world. india announcing more than an $865 million share buyback i asked him about the strength particularly in china. >> both those businesses are growing double digit, and in part because the trends towards private consumption and people wanting to drink better and in the case of scotch discover new special whiskies that trend is strong, and we benefit from it, and so as i look out, the consumers, we're not immune from an economic or

consumer confidence slowing down and we're better positions because our business and it's company specific, we've got very good businesseses that are on trend. >> on the u.s., we've seen increasing signs that this is a good consumer environment but it may be as good as it gets for now. consumer confidence recently slipped. can you look into the future, the rest of 2019 and into 2020 do you see evidence of a slow down for the u.s. consumer >> hard to see a sustained shift yet, but as you point out, we're watching it closely. people are moving to spirits and cocktails in a bigger way from wine and beer, and people are trading up for more premium brands that trend is very strong and continues on a secular basis so while there will be some impact from an economic slowdown, we're not seeing it yet. >> pretty optimistic upbeat take

on the u.s. consumer the u.s. is a big source of their business, it is not growing as fast as china and india, but he doesn't see a shift or downturn in the consumer as far as trends that are working now, two words, tequila and gin, especially in the uk, gin is hot >> why you shaking your head at gin? >> they love to drink in the uk, no offense to our friends there. >> millennials like spirits. i had one i liked, i asked the ceo about it, he said i had very discerning taste told you i was a whiskey girl. >> they bought the george clooney -- that one is going

>> they've got good exposure love their brands. "squawk on the street" will be back in a minute. dow is down 77 points. hope that was helpful.

sara, you know i count down the hours to "closing bell." >> you count days and hours? >> yes, i do >> coming up today, we have a biggie all over the biggest day of earnings season. we speak with international paper ceo mark sutton, company beat on earnings, always a good tell there on theeconomy and instant analysis and reaction to amazon which is a head liner, reporting results. >> talking about that earlier. couple stocks to keep an eye on, best performer in the s&p and crazy earnings day with so many different companies reporting and their stocks moving. but charter communications under the spectrum brand and the like,

haven't focused on it much, almost 16% why, residential customers decreased and 289,000 internet customers fourth quarter, and appears with 23.6 internet customers, they're pleasing the street, answering concerns overall about disconnections on video but even more adding more than anticipated helping our parent company -- >> bad day yesterday directv unit losing so many. >> between charter and facebook, communication services at the top of the market. >> ge having a strong day. >> ups, monand others saying upt things about the consumer. >> that's the theme of january, the come back from the worst december since the great depression maybe it is not as recessionary

as people feared that and you have jay powell, the news appears to be better. we have to wait until we get a clean read on economic data because the shutdown is messing things up. >> the result of that, it collides with new home sales nice month beat. >> for november. >> "squawk alley" is next. talk about facebook blowout numbers and microsoft's miss logg lies beyond the tech sector. it's about technology transforming every sector. ♪ at pgim, our bottom-up approach uses a technology lens to identify long-term winners. from energy... to real estate... to retail. finding such opportunities for alpha is the true value of active investing. and around the world, you have a partner in that pursuit. pgim: the global investment management businesses of prudential.

good morning, it is 8:00 a.m. in menlo park, california, 11:00 a.m. on wall street and "squawk alley" is live ♪ ♪ good thursday morning. welcome to "squawk alley." i am carl quintanilla with jon fortt at post 9. morgan i