a final check on the markets after that much stronger than anticipated jobs report that came out with a gain of over 300,000 jobs up from the 170 the market was expecting dow futures indicated up by 90 points s&p 500 up by over 4 the nasdaq down by 22 thanks to amazon. >> feel great about december and we can do it again. >> good-bye, everybody see you next week. >> january's great ♪ good friday morning. welcome to "squawk on the street." i'm carl quintanilla with david faber and jim cramer way above expectations, despite a downward revision. that plus amazon, cigna, exxon, making for a busy first day of february ism on the way in an hour.

rollout begins with what shutdown impact. payrolls smash estimates futures are higher >> amazon shares under pressure this morning there was an earnings beat and record holiday sales, but weaker outlook for 2019 increased investments prurg t s pressurine stock. >> and elizabeth warren tells jim why she's calling for the wealthy to pay more in taxes january's 304,000 nonfarm payroll number came in better than expected. the unemployment rate ticks up to 4 average hourly earnings, jobs data after the best january for the s&p since '87. overall, it was the strongest month for the major indices since 2015 nasdaq leads the way of about 9.75%. as for the jobs number, you talked to joe about it a moment ago, and we heard what bullard said, right?

>> he's so spot on you talk about very good employment growth, not a lot of wage inflation to me, when you grow up, you thought america could create a lot of jobs and not have a lot of inflation these are very -- these are throwback numbers. to when we felt we could have a 3%, 4% growth. it is a little odd that a country at 318 million people can put these numbers on but a lot -- we became used to the idea we're a 2% growth country. maybe we're a greater growth country than this. in just in terms of where the market is, december was one of the worst markets -- we have been able to say that december was great recession, great depression-like numbers. so the stock market had a nice rebound. but i look at these numbers and say, hey, pretty good. nothing in that was saying, hey, pretty good. no >> and you said this a moment ago on "squawk box" too, we did better than 2%, we got a benefit of the tax cut, other things

that seemed to recede this year as opposed to 2018 what gives you any hope we're going to be able to exceed plus, over 2% as so many economists are looking for a number at that if not -- >> great question. i would say there is two economies. the economy that is putting on jobs and that gives me hope that things could be good and then there is the economy i would say are the international companies like dow, dupont, a great company, that had a terrible number. the only real secular growth part of the economy is aerospace. you look at the different divisions and where people are being hired. i say unfortunately we're back to health care i say unfortunately because health care is not added to the economy. we're seeing good signs here we see manufacturing okay with professional and business services okay. retail surprisingly up 21,000. i just think this is a perfect number to justify jay powell's

let's wait a little. >> you don't think it makes them look ridiculous. >> no. >> biggest beat in ten year. >> that's not the fed's job to try to have fewer jobs created it is to be sure we're not having a runaway inflation i could argue there was a lot of deflation in this system >> that's true we got a 12-month average now -- we have a 12-month average of 244,000 jobs added, best since 2014. >> maybe the participation rate, which is skewed, is -- maybe we got to go back to where we were in terms of labor participation. and we have a lot more people that can be hired, a lot more slack than we realize. i am not seeing other than restaurants to some degree little less than retail, tremendous increase given how we

restricted immigration and birth rate 30-year low i see a lot of things to like .i don't see autos good i don't see housing good i don't see chemicals good anymore. not that good. walmart versus amazon is keeping prices down. i'm using that as a metaphor. >> everything you're saying points to what some believe was behind the fed's pivot, it is all about china and to a lesser extent about europe. >> union pacific, very good operator you can see a lot of the actual goods made were pulled through ahead of the tariffs you're right in terms of annualizing a good thing, tends to -- it tends to -- we should tail off but there are parts of the economy that are very, very strong and parts of the economy that are subpar. you speak to an ed breen, you listen to the call, housing is bad. it is just a bad business right now.

autos, no pickup whatsoever in autos. none these are big parts of the economy. >> talking global sales, though. >> u.s. sales just not increased. u.s. sales when i was talking to all the different people with inputs into vehicles, the truck input is good. the auto input is not good i'm saying it is a balanced economy. i had john donahoe on the other day, from service now, one of the best performers out there, when you install service now, you do two things. allow your employees to have more time with the customers, but also lay off people. workday is about laying off people corporate software marc benioff talks about the fourth industrial revolution, what do we do with all of the people that we're going to lay off because of the phone, because of -- >> because of. ai. >> there is a lot of shoddy

research and discussion about amazon this morning. i know we'll get to it amazon, people say what a mistake, whole foods whole foods was up 6%. they moved the good part to online they kept the bad part okay on the brick and mortar. whole foods was a -- they're doing great there. what i'm saying is we better be careful that we have to keep creating these jobs because we're about to have a wave of unemployment from technology that i think is going to make us realize, wow, i wish we created those jobs >> what is mckenzie's numbers, 40% in service, something like that. >> you look at ge. >> shocking numbers. we started talking about this here, a couple of years ago, these things take time it is happening. we may be heading into it. there can be a period of dislocation that extends for 10, 20, even longer years before wee

figure it out. >> ge is laying off a large number of people >> i know. the chorus on ai is yes. but every other technology ends up creating more jobs than are lost you always hear that >> i think it is true, it ends up creating jobs like the amazon jobs, which are being created. automation at warehouses, these people who are warehouses, they are going to be out there getting jobs i hope there is more jobs created. and i think that this is a shocking wage growth number given the fact minimum wage increases.ers in nu have to pay them a huge amount it used to be just tips. >> jim does mention amazon, down in the premarket company beats estimates on the top and bottom line. record sales during the holiday

quarter. gives this weaker than expected outlook and said it would step up investments this year, specifically about q1 revenue, 56 to 60 billion estimate, almost 61 billion. >> i talked to a couple of people last night who own the stock. the negative read is pretty simple in 2018, they banked a lot of the efficiencies they created from the investments they made in 16 and 17 but that flow-through has ended. 19 will be a year of investment again. so they were concerned about that they're concerned about india. where you've got this new law. by the way -- >> walmart, not a single negative -- i would read through the downgrade. >> that crushed the flip cart. >> it did. thank you for mentioning that. >> i would like to get your take on this, if you go become and look through the filing back to

subscription services, they never tell us how many people actually are on prime, but what you can see is a deceleration of growth in prime from 52% in the third quarter of 26% gain in the fourth quarter there are those who wonder whether is it possible that prime with the price increases is hitting a level where it is not growing as fast any longer and -- >> look, i think you could tier prime. a lot more optionality we have been talking about how great amazon web services were this reminds me of netflix before the price increase. maybe they can for prime, tier it, doing more video this stock was up 48 down 75. can we net those two? their conference call is probably the most truncated hey, how are we doing, conference

call >> compared to facebook. >> i give that -- i gave that a five like shaw shank redemption if you're really basing your selling of amazon on a slowing, maybe you know more than bezos that conference call, i like it, congratulated, sent him an e-mail india is not capitalist. >> how do they deal with that. the law specifically says no longer foreign entities not allowed to hold -- and sell it how do they work around that >> i don't know. >> walmart with the -- what did they spend on flip cart? >> flip cart was going to wipe out the moms and dads the way walmart did in this country. i want to talk to doug with bill now about do you write down flip card wouldn't that be something wouldn't that be something

>> i know. >> i'm looking to try and remember how much they paid for it. >> you're dealing with law in india. i don't -- >> this is apple's problem apple is trying to figure out -- tim cook, why not do a deal with flip card? >> i don't know. >> 16 billion for 77% of flip card >> what do you think of that what do you think about flip card >> speaking of apple, statement just coming from apple just now, we have fixed the group facetime security bug on apple servers and will issue a software update to reenable the feature for users next week. we thank the thompson family for reporting the bug. we apologize to the customers who were affected and, by the way, brought to their attention by this family who was trying to group facetime and realized you could hear someone before they picked up. >> apple has been doing all these things to emphasize

privacy. apple stock is now up about 16 points from when tim cook had me over to say, listen, i think the times are best, the analysts have been reluctant to like it i think if you listen to the trade talks, you know -- look, now, when i speak to behind the sk scenes, i have suggested that when we see president xi, okay, having a cup of starbucks, while he eats a piece of kentucky fried chicken as he's on his apple iphone and wearing nic sne sneakers, everything is better than good. i wouldn't be surprised in the end if we don't get two out of five the chinese numbers remain horrendous versus ours they would kill for our number >> gdp growth three times ours, don't they >> they want to be the apprentice to us >> we'll see we're going to hear from the

president later this morning, mostly about human trafficking, but maybe additional comments on trade. when we come back, senator elizabeth warren's blunt message as she pushes her well tax plan. plenty of news still to come we'll talk about exxon and cigna, auto sales on the way, ism at the top of the hour don't go anywhere. i know that every single time that i suit up, there is a chance that's the last time. 300 miles per hour, that's where i feel normal. i might be crazy but i'm not stupid. having an annuity tells me retirement is protected. annuities can provide protected income for life. learn more at retireyourrisk.org

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♪ ♪ wake up, wake up wake up, wake up ♪ ♪ get up, get up senator elizabeth warren who has formed an exploratory committee for a 2020 presidential bid stepping up her push for a wealth tax on the richest americans. listen to what the democrat from massachusetts told jim last night on "mad money. >> -- put something back in and we're asking for a little fairness in the system you know that top .1% this year, taxes all in, you're going to pay 3.2% of their total worth in taxes to help keep everything running around here. you know what the 99% is going to pay this year they're going to pay about 7.2% of their wealth. that's more than twice as much what i want is i want the

billionaires to stop being freeloaders. i want them to pick up their fair share that's how we make a system that works not just for the rich and powerful, but for all of us. >> pushback from chris christie who said, look who pays the majority of tax in new jersey. >> mayor bloomberg, i have tremendous respect for, saying this is what they do in venezuela. which was a little bit extreme i do think that what senator warren is about is returning to the days when the ceos don't get so much money. she was not as articulate about this issue as previous so much more money than the rank and file. >> over 400 times the average. >> look. i think that billionaires have a right to be billionaires not russian oligarchs, we pay the government off and get things may

mayor bloomberg is trying to make it so everybody can go to college. i wish they weren't on the firing line with her warren buffett will give away and people take the pledge i think -- i think that what she is saying, if she had more time, let's put it that way, a little truncated, talking about tim sloan, in the old days in this country there wasn't such a disparity between -- >> there wasn't and people point to the fact we had marginal tax rates higher than they are now as much as 80% or 90%. the issue is -- it undergirds the political debate in the country, right or left, and what you can do to try to deal with it before it becomes an overwhelming issue. >> i think her base, she has a base it is about trying to have redistribution at a level that i think we're not used to in the

country. the president tweeting, best january for the dow in over 30 years. we have the strongest economy in the world. he means the s&p best january for the dow and almost 30 years. over 30 years for the s&p. >> glad he's using the right index. >> how about december? i think he's selective about what he flags. selective. >> but it was actually accurate. that's something. >> okay. you one of those guys that does that accuracy test >> no, just saying it was actually accurate. >> pretty close. >> you no he whknow what he wouy right now, i like your blazer. >> probably would. >> i like your blazer. >> where did you get your shoes? that's absolutely right. we come back, cramer's mad dash, count down to the opening bell the jobs number comes in strong. 340,000. back in a moment ♪

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technical patterns on charts and helping you understand what they mean. don't get mad. get e*trade's simplified technical analysis. ♪ we made it it is friday last trading day of the week too if you care about trading as well i care about a mad dash. >> thank you for that. i'm glad you're on that side and i'm on this side feels so much more at home david, honeywell is a standout today.

no one is talking about it they should though why? aerospace, ge, aerospace, boeing aerospace, united technologies aerospace and honeywell aerospace? do you see a pattern >> yes, i do that is dependent on china. >> only one out of four. and they're -- >> don't they all sell into boeing >> yes, kind of. airbus has that plane i love that has the showers and, david, the bar, and it is free. the drinks are free if you pay $5,000 for the ticket. one thing not called out enough is the 15% growth in a division that is warehouse automation and that's amazon. people don't realize the warehouses -- it is the technology is honeywell's technology this was developed starting by david cody

darius has taken it to the next level. this is another industrial that is doing so well, but i put it in the feet of aerospace and ingenuity, innovation -- >> if you went to a facility of amazon's ten years ago and now would look totally different in terms of how much automation. >> that's important. when we look at the job number today, which is terrific, you have to understand honeywell is doing its best to lower the cost of a warehouse what do you do to lower the cost you get rid of people. >> thanks, jim >> they're not billionaires. >> no. no we got an opening bell coming up. five minutes from now, other stocks to watch thisorng st wh ayitus mni

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♪ ♪ each day, brings new possibilities. that's why you need a partner dedicated to helping your company reach its goals. u.s. bank -- the power of possible. you're watching cnbc's "squawk on the street" live from the financial capital of the world. the opening bell in just about 90 seconds busy friday morning as the jobs number comes in above expectations at 304,000. 100 straight months of job creation, longest stretch we have ever had. >> it is okay to celebrate

say good thin things a lot of times we're too down. these are good numbers politically i don't care they're just good numbers. how it is happening is really one thing i like about it is this base, all these different industries, manufacturing, industrial there, some mining, there is -- for services, it is not just government, by the way. don't have the government number i just think, okay, let's take a page from ken langone. capitalism is working. you have the flip side, if you listen to elizabeth warren and a lot of people do i got a lot of negative heat for having her on. >> of course of course you do given the actual -- of our industry, our audience >> i want to point out i had her on because tim sloan, the ceo of wells fargo, said that he didn't care for her view and she wanted to respond we don't do one side.

>> different points of view. let's get to the opening bell and the cnbc real time exchange with a look at the s&p 500 at the big board, element solutions, launch as a new company. we'll talk to the chairman in a few moments. at the nasdaq research frontiers, a developer of spd right control film technology. amazon though trying to remain in focus after pretty good -- after the bell and then the call took place >> i think we're all kind of -- we have to look at where it ran to we have to recognize that the conference call doesn't tell all. we also know that there are a lot of people who had high expectations the thing i'm not as concerned about the margins as i was by india. blind sided. i didn't see that coming i didn't know that india was going to make it so if you sunk a lot of money into india, it is

not that good. it is interesting. india wants to do -- i think wants to preserve the mom and pops india doesn't want to do that. they don't want necessarily lower prices for their people. they want to employ -- they went from employment over lower price. >> walmart used to be the poster child for being criticized for rolling over the mom and pops. india is rolling over them, pat $16 billion for a 17% stake in flip cart in india >> i think it is a little insane that walmart is only down 35 cents. >> it is to be fair 275, $280 billion market cap company. >> i've been wanting to tell people about to buy walmart, waiting for a break, i got up this morning, i said that will knock walmart down, maybe that's

your chance. the amazon wall is one of those where you saw the stock start trading down, traded down to 1625 in the overnight markets. we're going to hit that again. and then let's see if it bounces. >> aws up 46 16 quarters of 40 plus growth. >> nobody cares today. >> facebook in their ak names all their competitive risks in the ad business and add amazon this time. >> they should i think it is amazing that you'll have day after day of how people like amazon web servers and then they run, they run and hide when amazon reports a quarter where they reinvest. that's been amazon's stock and trade. now suddenly reinvest is bad i think you're right to talk about the margins. >> he always attaches his 1997 letter, bezos. >> yes. >> so to remind people about his

mantra, i'm always going to invest now for future cash flows. and that's worked. >> i thought -- >> people are focused to some extent on the deceleration and prime subscription growth, we think. we're assuming it is largely -- and the fact that investment means just that, margins not what they were. >> facebook did an investment and it crushed the stock penny saver had an article about facebook recently. and then you look at what sheryl sandberg is saying, you can't read people otherwise. it is driven i think that amazon is going to have an ad business that is going to end up being better than everybody it is point of sale. right there. you google or go to amazon and you get it and you hit a button and you bought it. >> right. >> that's -- >> amazon video. how about if amazon decides we

want the exclusive nfl is that the problem? facebook has a lot of money. they can do it. >> they could. >> i'm thinking about the nfl and the rights that will come up and cbs in a few years what is going to happen there. >> you know, david, the nfl ratings are up big. >> that will cost them, if you do get an amazon or facebook competing in a meaningful way, which is still very hard to say. >> alphabet. >> amazon went in with the yankees to buy a yes they didn't make a bid for the overall. that will be interesting on cbs, they had their bord meeting yesterday. many people thinking okay, when are they going to start their talks. they're likely to re-engage. hasn't happened yet. hasn't happened yet. we're waiting again. does seem to be most likely first quarter phenomenon which will be cbs and viacom returning

to negotiating table one more time to try to see if they can get something done but nothing yet. >> how do you feel about the nonnfl tv numbers these days >> they're not good. >> that's the problem. that's the problem >> you have seen children's television, linear viewing over the past five years. just straight down >> video games are down a little what are people doing with their time now are they thinking? >> no. >> i wanted to to be sure they're not thinking they're on instagram my wife -- i hate mark zuckerberg did you see this have you looked at this? >> she is really good at instagram. >> my daughter, emma, reinvented herself entirely >> i don't have an insta, i don't have a finsta. >> how do you live >> i don't know. >> we'll get him on his way to

burlington when you do your retail. >> so strong, david. good t-shirt for $3. >> good week for the oil producers. exxon beats on revenue, beats on profit, beats on production. darren woods talking to becky about how he anticipating a slowdown in global growth. >> that's the truth. one thing to take away is the integrated model turned out to be pretty darn good one, refining is a good business. exxon, the cheapest i've ever seen. >> energy had a great month. >> yeah. >> boy i just think that when you look at exxon, and you tell people you bought some exxon, i'm knowing to say that's -- of the fossil fuels, tough business i think the next generation is going to be regarded as tobacco. that's what i worry about. >> this is what woods told becky on squawk. >> as we were coming into 2019, we anticipated some economic

slowdown still expansionary, slowdown there. frankly we don't run the business or try to build it on a projected demand or projected oil price. across the portfolio, we're looking at developing resources at the lowest cost of supply the industry and let the prices go where the prices go and where the supply and demand balance is taken. and make sure we're successful irrespective of the environment we find ourselves in. >> we talked about shell's good numbers. >> chevron, the yield. they never stopped drilling. one thing that slumberge, chevron is an incredibly well run company. and i think you're going to start seeing -- i they will you'll see drilling again, deep water drilling, very good for larry culp and ge. people are still excited about what larry is doing.

when you speak to people at ge, what you do get a sense is health care is better, they can use a ge company there are a lot of tailwinds as we like to say in the business. >> yesterday, a feature up very strongly, moving past 10 i think best year in 15 years. >> that stock goes higher. >> ge up again this morning, up another 1% on conference call, investors seemed to walk away from happy. >> i said to myself, larry culp, did not make any false promises. he has a handle on what's good and what's bad he's a joy to listen to, by the way. people want to listen to a conference all can poise he may be lawrence olivier lawrence olivier culp. >> i think that's interesting thought. >> quite a thespian. >> i'm not talking about the olivier in marathon man.

i'm talking about the olivier of old. >> we got a proxy on this deal this morning, celgene. >> 400 pages where are you? >> stubbornly large spread on the deal, continues to confound some people who wonder why it persists what did we learn? not that much. came quick the vote in april, but they started at 110 a share ifrt enga first engaged in 2017. celgene contacted party a. had no interest. took 24 hours for them to say no came back and agreed to the deal, 50 bucks a share and 50 bucks a share in cash and one share of bmy not much drama to share there. regional sports networks, amazon, bidding on the yes network. wanted to get more on that auction we have been following

closely here on the faber report disney forced to sell. we talked about this not going well as much as raising enough money as hoped initially bloomberg reported, major league baseball stepping up to make a bid in the second round. second round bids due yesterday. they're in there now none of this is binding. go to the next round it is interesting to note that mlb steps up don't know what the bid number was. sinclair has interest. would they get together with sinclair i don't know if they have in some fashion sinclair a very small company would need to raise enormous amounts of private equity money to mount a bid for all but the price in question that i'm hearing, may come in at a multiple below 6 1/2 times, 1.6 billion in ebitda these things

produce without yes as part of it that will be a disappointment to some what it comes back to is the programming of sports beyond the nfl here, which is if you don't have leverage with the cable companies, the nvpds they want to drop these regional sports networks to a lower tier it makes their bundle much more expensive. how do you go into a negotiation with leverage if you own these thin things fox had leverage, they're no longer part of this. very interesting. >> this is not reflecting -- it adds to the overall cost they really paid for the assets they end up having acquired from fox. and adds to the multiple that

they paid for those assets based on the cash flow they will have obtained once they have done the divestiture. they pay over 20 bill for the rsns you add that number back in. it puts more pressure on them to make sure the strategy is going to work. >> it is no charter. charter, yesterday, one of the great performers, moved up parent company, this network, comcast. >> a billion less in capex yesterday. that was a surprise. up again this morning. >> big, big surprise the payments are good. cable is good. aerospace is good. what can i say >> few sectors working this year let's get to the bond pits dow up 100 rick is at the cme in chicago. >> good morning. i'm still smarting from that really robust jobs report.

and obviously analysts and economists could say lagging, i. i say it was a good number we're starting to catch up with new home sales yesterday and a litany of numbers coming out still yet today to catch up. maybe we will get a better gps it was a solid report and employment seems to be okay. wages might have been a little light, up .1% on a weekly basis. on a monthly basis, but year over year, 3.2 solid i love seeing labor force participation go up. that means more of you out there that weren't counted as being unemployed but weren't working making a positive difference all yields are up a couple of basis points on the week, getting tagged. 13 basis points lower on 2s. there is a little bit of a curve bias there

not that much considering. if you look at one week of 10s, you could see it let's open this chart to the beginning of january we remember we had 16 sessions in a row where we closed in the 270s you see that big breakout on the right side where we left the range and now trying to get back up to it there is no doubt. the treasury complex is different than it has been most likely part of it is the central bank ours and all the rest with the global slowing dynamic and the domestic economy measurements, interesting to see if the long end responds by its yields rising a bit the dollar index, if you look at it since beginning of october, when everything seemed to go haywire, you see that it is rounding and it definitely for the most part is softer but in a slow measured reversal the hyg also from the volatility in october look at the way it covered the

canyon the v on the right side of the screen we have gained back most of the price structure we lost during the volatility moments back to you. have a good weekend. >> you too stay warm. hopefully will warm up a little bit. rick santelli joining us martin franklin rang the opening bell his newly named company elements solutions celebrating the closing of the sale of the agricultural solutions business. he joins us here at post nine. this is the old platform tell us why you changed the name and the deal that you did in order to do that >> so we sold a company called life science it -- we sold it for $4.2 billion in cash. we used that money no tax leakage from the deal we paid off $4.2 billion of debt we repositioned inour industrial and electronics

operations and chemicals what would have been the old om group combined into one organization now called element solutions. it is a great business, very high cash flow, free cash flowing business the most underlevered company i've been in for a long time less than 2.5 times leverage we're going to return some money to share holders in the form of buybacks over the course of the next few months. we're very excited >> i number of your investors had great faith in you given your track record. they're not that happy about what happened to platform, though look back, the stock was higher a few years ago when you initially came out what do you tell them now in terms of what your expectations are and why they should stay with you. >> as you know, some have different levels of success than others, same investors, people who are in restaurant brands,

they're not unhappy about that same with other foods. the reality is everybody made money in platform except a few timed purchased. but witness is very healthy. a lot of upside to esi as a company. it is a great business and want to hang in there and make money. i've been buying a lot of stock over the last couple of months over $20 million in buying shares we own over 30 million shares in the business we're very focused on the upside of the company. >> you mentioned no mad, this as well you have j2, yet to do a deal. time is running out. will you do something on that one? >> plenty of time. i'm not at a place in my life where i do deals for the sake of doing deals. i think having a billion cash

today is worth more than it was six months ago there are more opportunities out there that we're looking at, taking our time. >> i saw the jocelyn sale for less than what you paid. i understand they have debt issues i can see why they would have to sell some things there are big issues about who is on the board. what is the next move there? you're a shareholder not in management but it has been a dead stock. >> so let me be absolutely clear. i haven't been a shareholder of kn newell brands for almost a year. it is in my rear view mirror i care about the people in the oil company, but i have no shares the day i announced i was withdrawing myself from the battle between the activists, i sold every share i had left. i didn't have that many shares left to be honest. but i sold whatever i had. i want them to succeed but it is the same thing that i

said all along, you cannot m&a your way out of it you have to have good operations. >> when you were running jardine, one thing you did was you talked about on shoring. could you tell us how difficult it is to get out of china and go to mexico where you said it was cheaper. >> cheaper for some things and not for others it is hard to get completely out of china in the businesses that newell is in it is really not their fault the nature of some of the products but i think you to -- if you like keep diversity an optionallity if you can have facilities, the plants and the like in mexico, if you can bring back on shoring into the u.s. and make it cost efficient, you should do it. we were big advocates of it. there are certain products you always can bring back in an efficient manner. >> your comment on leverage made me think, you know, corporate debt concerns, relative to gdp,

is leverage going to be a dirty word in the next couple of years? >> here is the reality you got to think about where we are in the cycle i don't know if we're in the seventh inning, eighth inning or ninth inning of this long expansion we had it looks like a softer landing at the moment, which is moment news, and you're still seeing some softness in some markets and we've seen this in elements and in markets like electronics. >> you talked about the macro economic environment as well in terms of pressure. is that still the case macro economic environments? >> it's definitely slower than it was six months ago, nine months ago, but it's still growing. the american economy is still growing 2%, 2.5, you know, on gdp so do i think it lab dirty word i think if things really slow down, companies that, have you know, run with high levels of leverage could get caught wrong-footed i'm just happy that the businesses that i'm in have really delevered and positioned

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some moderate changes in faang though a moderate influence outside of amazon is f f the early lows othe session. dow is up 55 s&p and red. s&p and red. back in a minutelp you with tha. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step until you're comfortable. .i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy. what's the hesitation? it's just complicated. step-by-step options trading support from td ameritrade endla wealth of oil........ and riches beyond your wildest dreams. there's a place where you can find all of this.

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and the army taught me a lot about commitment. which i apply to my life and my work. at comcast we're commited to delivering the best experience possible, by being on time everytime. and if we are ever late, we'll give you a automatic twenty dollar credit. my name is antonio and i'm a technician at comcast.

we're working to make things simple, easy and awesome. jim, what's on "madd" tonight? >> one of my favorite execs is carlos rodriguez does great things at automatic data what a winner he is. >> good weekend. enjoy the game. >> you, too. >> tonight at 6:00 p.m., when we come back more on this morning's jobs numbers don't go away.

welcome back to "squawk on the street." a litany of catchup news, breaking news. let's start out with maybe the most important of all, ism the national number for january. expecting 54.0 bonanza 56.6 and a positive revision last look, but here's what's interesting about this number at 56.6 it is basically the best number just only since november because, of course, last month it dipped down a bit, but it is solid. let's look at employment, shall we 55.5 that is down a bit from 56

prices paid. actually breach the 50 mark and goes into contraction at 49.6. remember, that's important especially with strong wages today and new orders at 58.2, a nice jump from 51 and change all right. university of michigan this is our final january. we throw away the 90.7 mid-month read and we improve here, too, 91.2 so 91.2, and even though that's a good number it's still on the soft side considering the last several numbers have been higher with the four months ago read being over 100 let's go through the expectations at 79.9 that's higher, and inflation, this is very important one-year inflation, 2.7. that's a lateral move, and on five to ten, 2.6, also a lateral move construction spending. this is november some of the catchup numbers. we're expecting two tens, up

eight. wholesale inventories a catchup from november. we were expecting up half of 1%, this is the first miss up .3, not a huge miss and gained a tenth of that with a e revision from .8 to .9 down li a little sponginess on wholesale side, but all the other numbers are solid after getting a better glimpse of the economy after a much better employment report. carl, all yours. >> that's a lot to take in, rick thank you. rick santelli. good friday morning, everyone. welcome back to "squawk on the street." i'm carl quintanilla with sara eisen and david faber at the new york stock exchange. market holding on to the gain on the dow, s&p down about a point. it's not just the data but also the jobs number we got earlier amazon, of course, all a big friday. >> our road map for the hour, going to start with jobs the 100th straight month of jobs growth employers adding a booming 304,000 jobs in january.

we're going to dig through the report and find out what it means for the markets. >> as we said, amazon slumping after raising the red flag on costs and what the company said about the future that has investors worried. >> very much ron and exxon reporting results that beat estimates amid concerns of a slowdown and oversupply. >> let's begin with january jobs steve liesman has all the details for us and what it means for policy steve? >> reporter: yeah. sara, really interesting report. the jobs market is very strong and you may want to know how strong so strong you've got the 300 plus for this month. when you lop off 100,000 jobs from the month of december through revisions you still end up with payroll growth of about 200,000. non-farm, 304. much better than expectations, almost double. november and december revised down 70,000, but december still above 200. average hourly wage is a little weak, but take the two together and november and december, and it's still pretty strong unemployment rate 4% a lot of folks came into the

workforce, that's good and can you see it in the labor force participation rate they will hopefully get jobs in the months ahead now, an exclusive interview right after the number game out, st. louis fed president suggested the strong numbers should not prompt markets to price in a fed hike. >> people talk about tight labor markets, but my point is that the feedback from tight labor markets to inflation is extremely weak right now, and it has been weak over the last two decades. >> jim is on hold with his rates. look as these numbers. some of this perhaps flattered, if you can believe it, by warmer than normal temperatures during the month of january that was during the survey week, not afterwards leisure hospitality very strong an education and health services very strong but construction also really strong you get those kind of anomalies when you have stronger weather retail doing well and manufacturing. that's a good number 13,000 over at pantheon they disagree with bullard they see no support with the fed shift and if wages rise as much

as they have the past year the idea that the fed won't hike further will turn to dust. when i look at the really good ism numbers, the construction numbers, rick does a fabulous job of bringing those all to us, that boat load of data right there, but overall they look strong, and least there's not the weakening in the january data that we can see so far. >> my only question, steve, what are you hearing and what are economists saying about the lack of wage growth, that there's so much demand for workers, i mean, a voracious 300,000, double of what was expected in high-paying sectors and industries why aren't workers getting paid more >> well, i mean, you did have pretty strong wage growth in december there could have been a job composition one in january wages are inching higher, and i think the key is looking at the productivity growth rates and in general wages tend to keep pace

with productivity gains, and it should be something that happens over time. you have employers that tried desperately to keep the line on wage costs to maintain their profitability, and they only raise rate when they have to, and i think maybe we have some people coming into the workforce that weren't in the workforce before, the starting wages there may be a little bit lower so there could be a compositional aspect to it as well, sara. >> all right, good steve, thanks. steve liesman. for more on this jobs number and the market impact we're joined by grand thornton and chief economist dine swan and global strategist gabriellea santos the dow is up a nice 167 points. got a further boost by that recent data, it looks like the s&p goes positive. how do you read the market reaction to jobs what does that tell you? >> well, sara, i think in the huge listch events and data that we had this week, i think really et jobs data ranks a little bit further down the list. the market had already reacted quite strongly to the dovish fed dilt as well as to the progress

or seeming progress on the trade talks front so i think perhaps it's a little bit of fatigue already for this week in terms of the market reaction really the jobs just confirmed some of the data we had gotten, strength on the consumer side. >> so the very strong jobs report does it didn't at all the dovish fed tilt that the market has been celebrating >> i don't think so, and i think what they really emphasized at the meeting on wednesday is that they are much more focused now on the inflation side of the mandate rather than the labor market side, particularly on consumer price inflation, so at this point the wage growth we're seeing is good, right, but it's not spectacular and it's not enough to rush the fed into thinking that consumer price inflation is going to spiral out of control. >> conference board just puts out a statement saying the jobs number and the probability of wage hikes and inflation may force the fed to make yet another policy shift in its policy around mid-year and start raising rates again. you don't buy that.

>> i think we have to actually see that play out. we have so see much stronger wage growth and see energy prices stabilize or move higher. we have to see actual consumer price inflation move up as well as a reduction in risk which they emphasize, right, so i think the fed at this point with rates where they are, they can afford to be more flexible. >> diane, how do you read today's numbers as it relates to fed policy and the market? >> i don't think there is going to change the fed's policy right now. i think one of the most important things is the distortions we did get from the shutdowns, and there was some double counting down there a lot of workers, half a million workers in a month forced to take on part-time from full-time jobs, that increased the participation rate and many workers were furloughed workers not paid, government workers not paid, make ends meet during the month or contractors who are not paid, so that really is a distortion in the data we also had 175,000 workers on temporary layoffs that jumped during the month where the furloughed workers who weren't

looking for those part-time jobs in the unemployment rate, so i think the participation rate got a little extra lift from some of the double counting. we saw the actual acceptance of jobs, many employers who might have been looking and wanting for workers, saw them temporarily in the month of january and that helped them to buoy the payroll numbers as well, but a lot of the jobs in these part-time sectors, lush you're and hospitality, trucking, retail, were all the leaders, and as steve pointed out the big gain from construction, i'm in the middle of the polar vortex which is now melting away, but during the survey week we had unusually mild winter weather which was helping construction and many of these other sectors. >> diane, you are way ahead of everybody in predicting that the fed may cut next i wonder if anything in the last month or two has changed your view in anyway i had the fed actually raising rates in juan and then cutting at the end of the year so now i've washed it out for the year and had them on the shrines. much of the year, what they are

going to do is really wait and see and this data -- they want a strong labor market. i think a lot of the wage gains, it's important to point out, more than what steve said on composition, we've seen much of the wage gains at the lower end of the wage scale. we're not seeing them on the higher end of the wage scale, even among college-educated workers and people getting new jocks, and that's something that i'm kind of concerned about is that the composition of job gains remains not as high skilled as we like and there's a lot of underemployed mainly y z millenials out there. >> what if we don't get any fed action for the rest of the year? does that mean we just revert back to higher across the board, gabrielle? >> i think it's a positive for risk sentiment, right. i think the fear at the end of december, the extreme despair we had gotten into, part that have was driven by fears that the fed would overtighten and cause a recession this year, so the fact that they are a little bit more cautious, they are on pause,

perhaps not raising rates anymore, that actually prolongs the expansion which is good for risk assets, so equities it's good for things like credit, high yields, and i would add it's very good for emerging markets, right, because it has been leading to a weaker dollar which traditionally is really, really good for that asset glass. >> everybody loves emerging markets right now. >> despair went too far on the em side. we're due for a bounceback. >> diane, you know, there is still a recession debate out there, and i guess numbers like this proves that there's still a lot of confidence from employers that they want to keep hiring. my only question is how much of a lagging indicator is jobs. i mean, when you think late cycle, think about a tight labor market >> well, and i'd be worried about this if we had weakness in december or weakness in november which i do think we're going to get. if we don't get, that then we've got lots of momentum got a lot of paychecks that we're jen rate miss some paychecks, offset it and a little bit of noise in the month of january but the willingness to hire is still there and that's very important

and the fact that we can still pull people in, though this month is a little bit of an overstatement because of the distortions from the shutdown. i think we're still on solid footing, and i think it's really important to go back to where jay powell sort of laid things out, that they are forecasts for the baseline of solid, not strong but solid growth in 2019 now depends on the fact that they are taking into account the cross-currents we've seen emerge which are weaker growth in china, brexit, concerns with trade tensions, europe weaker, and that means they are stepping to the sidelines to allow for the economy to keep growing at a solid pace if not strong pace in 2019 >> how much do you think the market has priced in a trade deal between the u.s. and china? >> so i think it's tricky to say the word trade deal because i think it can mean so much things i think the market has priced in that we will not condition escalating tariffs further, right, so come march 1st tariffs won't increase to 25% and we won't see additional tariffs on $200 billion worth of goods?

i think that's priced in at this point. what's more interesting and an actual upside for the market would be the actual removal of existing tariffs because that is would make this deal seem a little bit more permanent and a little bit more long lasting and remove some of those cost pressures for certain companies. >> are you surprised, diane, i mean, you had a government shutdown we're in the middle of a heated trade battle between the u.s. and china and u.s. companies are still hiring more than 300 workers per month. are you surprised at the lack of an economic spillover effect from some of these policies and some of what we're getting out of washington? >> it suggests the underlying economy is still resilient it is in contrast to the what i'm hearing from so many manufacturers, concern about not only the persistence of tariffs as gabriele laid out i think the other issue is that we have to deal with now is now we have zero tariffs between japan and europe they have gotten to a trade deal because they moved forward with the tpp and that trade deal now leaves us behind because of our pursuit

of bilateral trade agreements, so there's a lot of concern out there that said that the concerns -- the manufacturing data wasn't overwhelmingly strong this month. the manufacturing survey ism up a little bit but not as point as it has been. that's all good. still solid, but you don't have that euphoria on top of it, and i think that's where you're going to see it creep in first, but the good news is we are still spending the consume verse money in their pocket to spend and we're still spending of course, we don't have retail sales data yet. >> true. >> but the resilience has been remarkable, especially in jobs diane swan, thanks gabrielle swan, thank you as well >> record-breaking holiday sales and earnings but investors are not too impressed. stocks are down almost 4%. we'll tell you why and more analysis of the jobs number. jan hatzius is with us all three major indices in the green. take a look at some of the top performing names on the s&p.

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and the army taught me a lot about commitment. which i apply to my life and my work. at comcast we're commited to delivering the best experience possible, by being on time everytime. and if we are ever late, we'll give you a automatic twenty dollar credit. my name is antonio and i'm a technician at comcast. we're working to make things simple, easy and awesome. it was the world's most valuable public company yesterday. today shares of ampson down despite delivering record profit for the third straight year. the question is why the selloff. joining us at post nine today is citi's senior analyst mark may and simeon segal great to see you both. >> good to see you. >> all the information floating, india, margins, revenue

guidelines, what is creating today's action in. >> india is important but only 1% of the international revenue, a billion in revenue not all that material. i would say slowdown in advertising. if you back out some of the comps, it grew about 38% in the quarter year on year which compares to 50%, 60% growth in recent quarters. the one thing i would note here is law of large numbers. on a dollar basis they still added 650 million in ad revenue year on year and the quarter before 500 we're facing a little bit of law of large numbers hard to keep growing at 60%, 70%, expenses as well. they weren't prescriptive on that -- on that count, but i think some of the qualitative comments from the cfo started, you know, making folks a little bit nervous on that front. >> your thoughts on that, and is the investment cycle -- we've been through this before with these guys. >> to oversimplify a company that's anything but simple they are growing pains. we're looking at the day by day whether it's the largest company in the world or not and what that means for investors and for

the company is figuring out are we looking at an addressable market, is this a margin opportunity? neither of those are going to be seamless, but the reality is at the end. day it's probably a little bit of both and probably a little bit of neither and what i mean by that is what we're finding is the conversation is shifting i felt like the first time in a long time i started analyzing amazon as a company last night not as this infinite being, but the interesting thing as analyzing as a company then i look at the valuation and the valuations are not that aggressive and that's a crazy thing. >> why is that not aggressive in. >> if i'm looking at 2020 and '21, retail side trading inline with nike. i like nike a lot. we talk about it a lot, but putting it into perspective what have this company can do as the margins grow and the sales come down let's say into the teens. gross profit still grows above that. >> what do you make of this deceleration in prime memberships or should we make anything of it obviously not everybody can have a prime membership, but the

price increase perhaps mitigating some of the -- some of the additions. >> we're probably at 70 million, 8 a million prime members in the u.s. you tack on another, you know, 30 something million outside the u.s. we're going -- we're at the upper end of the "s" curve here in the u.s. so not surprising that you'll start to see prime sub growth slow. on top of that though they have got a lot of pricing leverage, so what we did see is, you know, a 20% price increase in the summer of last year, and on -- and despite that, you know, the company said last night that they added the most prime subs that they ever had in q4 so, you know, i think, yeah, we probably will shift a little bit to pricing in sub pricing going forward and that's inevitable when you have the sub base that they have now. >> think about it as a discounter, right. discounters, if you think about the bjs and cost co-s of the world, you raise prize pretty steadily and get a churn in the first year and get a lack of renewals and it gets back up

a general process of getting people comfortable with that food. >> like whole foods, where are investors and where's the company with what they want to do with whole foods? >> probably to be determined it's the first quarter where can you look year over year and that first quarter came down. they attribute it had to two different things with a little bit of nuance but on a reported basis that business did not grow, and there's no way of getting around that. we have to watch to see as amazon brings in the fixed costs and as amazon enters this brick and mortar world, the physical store line item was negative, so that's something that i think we definitely have to keep watching, and to mark's point about magnitude and context, it's not that large, but as we think about where the growth avenues come from, it's definitely something to watch. >> your line about how the first time your value -- there's a big debate today about what shareholders want it to be you know, do they want to buy it because of moon shot, or do you want to try as a discounted cash flow company what's the answer there? >> i think we're in the middle

ground right now the company, a you know, tripled earnings last year and tripled free cash flow you know, we're now generating over 10 billion in free cash flow, probably 15 this year, you know, on the path to 30 billion in free cash flow and $50 in gap earnings at the same time, you know, we're -- growth is slowing, so you're kind inform this weird middle ground. i think that's part of the thing that people are grappling with a bit. >> i think we'll get three times the free cash flow number three years out. >> yeah, but it's also growing 200% year on year. >> to that point, when i brought up the idea of valuation, dave, your response was something along those lines. i think if you're looking out as we rotate our numbers and if we think these numbers do get there and we're talking about a ten times ebitda company not that far out, it becomes a little bit of a different conversation and we start saying, okay, maybe you don't want infinite sales. look, the india conversation, ultimately marketplace is the best margin, so there's sort of a guardrail there where if you

have to give up sales does that come through at a higher flow-through there's question and it's in flux to your point which one the right one, the best one? they both might be good. >> i don't know if the call has any impact, if it was a hedge fund manager we'd be worried about distraction, maybe not that, but it is a big deal though. >> i'm not surprised it didn't come up. this kind of topic tends to be left -- >> more for us in the press. >> they have a serious stake in the company. >> 16%. >> and his role is pretty critical i would think that it should come up. >> it's a good question to ask, but maybe not in that setting. >> we had a big debate this morning about whether journalists and analysts, how they think about questions on conference calls. >> they should let journalists request questions. >> they do have a call for you guys now so you can ask those questions. >> guys, thanks. >> good to see you, mark and simeon. >> when we come back, exxon and

chevron reporting results today shedding light on the sector after oil's wild swings coming off of its best january though ever getting a check on where the major averages stand at this hour, higher hey cross the board and it's really been lifted as we go the new economic data at the top of the hour. the dow is up .75%, 180 points and s&p up a little less than half a percent we'll be right back. to have a hundred percent renewable energy goal. if we don't make this move we're going to have changes in our environment, and have a negative impact to hawaii's economy. ♪ verizon provided us a solution that lets us collect near real time data on our power grid. ♪ if we can create our own energy, we can take care of this beautiful place that i grew up in. ♪

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>> tyke for etf spotlight with brian sullivan following better than expected earnings from exxon mobil and chevron. a sector you follow closely. had a very good january in the stock market as well. >> if you were smart enough or lucky enough to buy at the bottom you've made a lot of money. you had sectionon and chevron earnings ironically both of them coming out on the same day. let's do exxon first, they are bigger quarterly, up 70% year over year, eps 1.41 if you wanted to nit-pick exxon revenues, a little bit light of

the estimates and the market is still pleased. their downstream revenue upstream what you pull out of the ground and downstream what you sell back to the people. downstream revenues well in advance, 2.73 billion and the estimate 1.4 billion big beat there and they benefitted from a lower tax rate, 32%, that was lower than the 40% average tax rate in the first three quarters, the tax cut helping a lot. now on to chevron. eps beat there, 1.259 and the consensus 1.87 both production and sales did beat estimates on chevron. a lot of growth in the permion one of the oldest and longest players as well. they also announced a $25 billion buyback with no set term limits replacing the old 2010 buyback. both those stocks are up and that's helping the xle etf, the biggest energy etf those two stocks are 40% of the ele. the other 29, make up the other 60% so those two stocks really drive the whole bus to your point, david, if you were

smart or lucky enough to buy on the december lows at xle, it's up 20% from december 26th, unbelievable another etf to watch the iye, ishares u.s. energy. exxon is a skoshe larger the key for exxon mobil remains in keeping costs down. >> as we're coming into 2019 we anticipated some economic slowdown, still expansionary but some slowdown there. frankly we don't run the business or try to build it on a projected demand or projected oil price. across the portfolio we're looking at developing resources at the lowest cost of supply to industry and then let the prices go where the prices go and where the supply/demand balances take them and then make sure we're successful i respective of the environment we find ourselves in. >> both exxon and chevron did have strong cash flow, guys, but i want to keep this in mind,

okay crude oil started the quarter at 75 a barrel and it collapsed all the way to 45 so the average was about 60, okay now i know oil popped in january, had a great month, but we're still below at 53 bucks a barrel, the fourth quarter average so things could look a bit different in the first quarter. from an analyst perspective chevron the better bet, price target 1.34, they have an overweight rating and the exxon consensus rating is hold with 10% upside seen on a price target of 82.42 so analysts say chevron is the better bet right now. >> all right brian, thank you. >> of course >> report okay on the energy gainers today. now let's send it over to sue herera for a cnbc newsupdate. >> good morning, sara. good morning, everyone here's what's happening at this hour another democrat is announcing a presidential bid >> in america we have a common pain, but what we're lacking is

a sense of common purpose. >> that is the beginning of a two-minute youtube video released this morning in which new jersey senator cory booker says he is running for president in 2020. booker becomes the fourth democratic senator to do so. secretary of state mike pompeo says the u.s. is withdrawing from a cold war era nuclear deal with russia. the move was expected since russia has not been in compliance with that accord for five years the 1987 deal was designed to keep ground-based nuclear weapons out of europe. and a california restaurant owner says customers who wear make america great again hats which were used by trump during his 2016 presidential run will not be served. in a tweet the chef called the hat a symbol of hate and intolerance. you are up to date that's the news update this hour carl, i'll send it back downtown to you. >> sue, thank you very much. when we come back, job growth in january shattering expectations despite the longest government shutdown in u.s. history

we'll check in with gomaldn's chief economist jan hatzius in just a minute.

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restaurants come to you. delicious at your door. download doordash. first order, $1 delivery fee. despite that partial government shutdown fur logue federal employees, 304 jobs were added to the economy for the 100th consecutive month. here to take a closer look at the number and what it means for the economy we're joined by goldman's chief economist jan hatzius here at post nine. >> good to be here. >> a lot of noise to strip out help the viewers understand. what is trend based on this latest number? >> if you just look at the jobs number as you probably see something like 200,000, the average of the last couple of

months was well above that, but i do think there was quite a lot of weather in that, especially in the january number, weather was very mild and you saw a big increase in construction employment and other sensitive sectors. even with a reasonably generous subtraction it's still a very solid numbers. >> others are pointing out the labor force. are you seeing a trend there that we've been waiting for for several years? >> on the household survey we also did have obviously an increase in the unemployment rate which was actually not driven by furloughed workers, but -- but really by an increase in labor norse participation, and we're now just above the top end of the range that we've seen over the last five years, despite the fact that the structural demographic trend is still downward so, you know, i do think it is encouraging that we're pulling more people into the workforce and we're also paying them somewhat more, even though the latest wage growth number was on the softer side,

generally the news on that has also been more encouraging, so, you know, i think the labor demand is feeding into that. >> why wasn't there more high-paying sectors? >> we had two very strong numbers. so having a little bit of two steps forward, one step back, that's not surprising. year over year earnings 3.2% and other factors a little bit stronger than that, so i would say that's a glass half full kind of story on wages over the last several months as a whole. >> i know it's just one day, but we get this barn burner of a jobs number. we get a contraction in ism prices paid. i mean, that is as good as it can get, this is pretty good overall? >> you mean low inflation and strong employment? >> yes

i think the numbers are definitely supportive of that favored combination. if you take the month-to-month numbers onaverage earnings, it's also less inflationary. i think over time core inflation, i think it's still likelying to above 4%. >> and you've been reigning in your expectations for hikes. >> and the main reason for the tightening in financial conditions, and i think that had a big impact on the fed. it came in two steps one step was in december and there was another step and obviously in this week that's changed our outlook for fed policy quite a lot, and bewould longer look for

quarterly hikes and think that one hike in 2019, but it's a very different outlook at this point and for now they are clearly on hold >> you went from four hikes in 2019 to one hike in 2019 the mark is at zero hikes in 2019. >> looking for some cuts if you go into 2020 for sure. >> why are you not there >> because i think the economy is still doing pretty well i think we're still growing above trend, not by as much as we were in the middle of last year but still above trend so i would still expect the unemployment rate to the come down over time despite the latest increase, and i think the inflation numbers are low now, but by the end of the year i would still expect them to be above 2% on a core basis, and in that sort of environment you -- you'll still get maybe a hike, maybe two hikes. i mean, they could be done, certainly possible, but it wouldn't be my best guess. >> have we moved away from recession risks and fears after

what we saw at the end of last year and a noise comeback for the market in january? is that off the table? >> well, i think the market view was that it was a very clear and present danger a couple of months ago and markets have definitely taken those down. if i go around and talk to people there's still quite a lot of concern about recession my own view is we don't really have the sort of imbalances that have created recessions in the past inflationary imbalances, you know, for the time being don't look particularly threatening, and in particular financial imbalances, which has really been the driver of recessions in the last 20, 30 years, private sector looks in very good financial shape so i don't think we're in a bubble economy the way we were. really prior to both 2001 and obviously 2007 and 2008. >> finally, goldman works to put probabilities on at least short-term china trade resolution, but i've been i think arguably largely non-committal, right odds are not way off at 50%.

we've been reluctant to move too far away from 50%. what do you need to see to move either way >> right now we're expecting a resolution but not with a great degree of confidence, and, you know, you'll have to see what the -- you know, what the outcome is i would say that the most recent indications have been consistent with a resolution, but i think there could still be twists and turns, so we're -- i wouldn't count my chickens quite yet on this. >> we're getting awfully used to twists and turns, but thanks for the help on jobs today, jan. as always, good to see you >> thanks. >> when we come back, stopping quote, billionaire free loaders, senator elizabeth warren on why she's calling the wealthy to pay more in taxes. plus, countdown to kickoff super bowl sunday. the biggest competition may actually be off the field. we'll have that story coming up for you. "squawk on the street" wilbe ghbackl

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for time to get over to seema mody with a quick market flash. >> papa john shares are falling on word of session lows after bids received from private

equity firms to take the company private did not meet its intended value expectations, that's according to people who are familiar close to the matter right now the stock is down 8% one to keep an eye on. sara, back to you. >> seema, than >> thank you. super liii will be sunday. pepsico taking over atlanta, putting up billboards, vending machines and mass marketing blitz. just this week,pepsico asking coke for a truce, building statues of both company's founders holding drinks for a celebratory cheer. joining us, chief marketing officer from pepsico and jennifer signs from frito-lay, part of pepsico as well. nice to see you both greg, what are you trying to do by invading coke's hometown with a marketing blitz?

trying to stir up some rivalry >> thanks for having us. no, we're not trying to start a rivalry, just having a little bit of fun we're thrilled to be here in atlanta. we appreciate our hosts. as you said, we are trying to paint the town blue. we have 350 pieces, 500 recycling bins, a couple of visits to the world of coke. we're just trying to celebrate how great pepsi is and it just happens to be in coke's home turf. >> you really think you're going to win over people, die hard fans in atlanta for coca-cola and the hometown team? >> yes i do think at least some people we'll win over with the fun we're having here in atlanta >> let's talk about the ads that you're doing jen, you're working on a dorito's ad with chance the rapper, one of bubbly, one for

pepsico. i ask you this every year, but we should talk about it. apparently cbs is charging 5.25 million for 30 second spots in the game. how did you tell whether it is worth it >> for us it is a great investment we look at all of our spend deeply when we think about roi the 30 second spots are important, but there's also in store components that we think about as relates to return for pepsico. so many consumers out there are going to be eating frito-lay snacks, drinking pepsico beverages during the game. nine out of ten people are actually going to be doing that, so it is a great time of year for our eating and drinking and those occasions, and it is something that is actually very popular. so we're really looking forward to the game and showcasing the great ads that we have. >> how do you think about what kind of impact you want to make,

guys, when it comes to advertising? i'm thinking about ones we talk about on tv lately, the gillette ad, the toxicity of men ad, and colin kaepernick ad from nike. you're going more celebrity entertainment, but how do you decide whether to go into sort of the culture wars with an ad that might resonate like that versus something fun >> yeah, i think ultimately what you have to do is be true to your brand and what your brand stands for we have brands that are really about entertainment and enjoyment, in the case of dorito's that's what we leaned into we want to take a moment to remind people it is great to smile and have a little levity the super bowl is a great stage for that that's something that we look to within our advertising, that entertainment factor. >> finally, half time shows

obviously almost as big a draw as the game itself how does it go, the process of selecting the performer? over the years, beyonce, the stones, madonna, prince, what are you trying to get through maroon 5 >> well, it is not just maroon 5, it is travis scott and big boy. we're thrilled to have the pepsi half time show and tried to get someone as popular as possible that multiple generations will enjoy when they watch the show, and i was able to watch rehearsal last night and this show will be epic. we feel so good about it >> to that point, "the washington post" put out a story saying it is one of the high profile has fallen down in favor, weighed down of political implications appearing to support the nfl or kaepernick. jay-z, rihanna said no this year because they don't want to look

like they're going against kaepernick was it difficult for you >> yeah, it was a little bit more controversial than normal this year but again i feel great where we ended up. i think the show and the collaboration of the three artists is going to be just perfect and i can't wait for everyone else to see what we saw last night it's just going to be awesome. >> well, we're excited to see it half time show is always a highlight for me over the game greg and jen, thank you both for joining us >> thanks for having us. dow up 113, s&p is positive as well. interesting, the 52 week high list is getting longer, as we add gains. young, proctor, . >> a slew of earnings this week.

merck is up 3.5% on strong numbers, in contrast to others in the sector. what a week for earnings, positive tone created and ending with the jobs report this morning. >> january marked a big come back for the market. best month for the s&p since back in 2015 but it wasn't spread across evenly and wasn't necessarily the winners of the bull market it was more stock specific, selective, based on earnings reports and individual stories, despite that we had this big tail wind helping us out. >> it is the last day of the week which makes me sad, the last "closing bell." have to wait for monday for the next one >> first, you can watch today at 3:00 p.m. eastern. speaking of stock movers on earnings, we have the ceo of cypress semi, and also john tailer of the taylor rule, noted economist to talk us through the jobs report, what it may mean for the fed and the administration and for the

markets. both of those coming up. then you have to wait until monday >> long wait >> see you in a bit. "squawk alley" is up next. we'll talk about amazon approaching bear market territory, why the stock is wndo despite that beat last night that's coming up next. ♪ ♪ move to the enterprise-grade cloud that's built to handle all your apps. ♪ ♪ the ibm cloud. the cloud for smarter business.

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good morning, it is 8:00 a.m. at amazon headquarters in seattle and 11:00 a.m. on wall street and "squawk alley" is live. ♪ ♪ good friday morning. welcome to "squawk alley." i am carl quintanilla with morgan brennan and jon fortt. >> shares of amazon falling on a weaker than expected forecast for the current quarter, despite beats on the top and bottom lines in q4.