tv Squawk Alley CNBC February 1, 2019 11:00am-12:00pm EST
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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. down 18% from the all-time high
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in september, 20% would be, well, bear market for one stock, whatever that's worth. head winds of note heading into the new year include slowing u.s. sales growth, slowing international sales growth challenges in india and up tick in spending. something they noted on the earnings call. >> 2018 was about banking the eve sees of investments in people, warehouses, infrastructure that we put in place in 2016 and '17. i would expect those investments to increase relative to 2018, and we reflected in q1 guidance. >> is the aws beat the most important thing here there's some negatives you could
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pick at. the stock is performing pretty well overall. >> i put them in a list of three. first, aws on tougher comp. maintain 46% year over year growth, that's impressive. also the market leader, running well over 25 billion run rate. that's good growth second, overall growth rates are consistent, if you adjust for whole foods. and the third thing is the turn on amazon stock, third quarter in a row of record high profits, even with investment spend dialogue going into '19, margins are still rising i think reasonably well, so the profitability story is in effect those are the positives. >> anthony, how concerned about the eco am story, third party sellers, not as strong as some might have wanted to see, advertising subscription services also not the strongest.
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>> yeah. i think i would highlight yellow flags on three buckets i didn't disagree with anything mark said but we can't be blind to the fact that tsubscription services has seen deceleration, prime fees, what you pay to prime and that is decelerated. number two, advertising. advertising had been growing we think organically in 70s% growth and now in 30% finally you mentioned it, three piece seller services, that's also seeing a modicum of deceleration those are the high margin exciting areas of growth that we have pointed to on amazon driving better gross profit dollars and higher margins over time we saw this leg of deceleration, like i said, it is a yellow flag don't want to see further deceleration in any of those three very important high margin
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revenue line items >> mark, when you look at core north american retail business growing more slowly, due in part to whole foods acquisition, was that purchase a good or bad one? >> i don't know if we're going to know that for a couple of years. there are other elements in physical stores that i think are interesting to watch, particularly amazon ghost stores i think that's tbd, to be determined whether whole foods works. there are a bunch of synergies to work out, but that's three to five year track. i would highlight gross margins, they came in light, but i think that had to do with things like lowering the thresholds and this was -- free shipping threshold this is amazon device quarter. my guess is sunday we see ads foray le for alexa devices. they're selling them pretty much at cost. i think the market may be overreacting but that's a
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negative and quick point on advertising, i still think you have premium growth here. i think the numbers if you cut them right, it is more like 30 to 40, i'm sorry, 40 to 50% growth for advertising revenues. put it in context. number three large ad platform on the internet, the leader is google, 20%. second, facebook at 30%. and amazon 40% those are three good plays off advertising. it is just that amazon is the newcomer to the space. i don't think this changes at all. >> anthony, you think of echo devices and alexa as loss leaders here, it seems like it is lower end devices selling the most there's no indication that amazon is making much of any money off this is this another version of free shipping that gets people to engage and buy from amazon but is costing profit dollars? >> i think you said it well. i think that's right i think they doubled down on alexa. they see the roi of that voice commerce is an important theme looking to the future of
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buying online. amazon not google has a leadership position in the space, they'll continue to press on this, market the echo, alexa products, build out the number of skus. this is why you pay a high multiple you don't want to see decelerating growth. back of your mind, you know amazon is a company capable of achieving some of the new moon shot high total adjustable market ideas alexa is one, payments could be one of them, health care, and what they're doing with pill pack, maybe further growing out, other verticals in e-commerce. this is a huge growth area, echo, alexa devices, voice commerce and they have a leadership position, so it is something you want to pay multiple for. >> anthony to that point, you look at shares of amazon today, they're up something like 14% year to date
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by many metrics, it is an expensive stock. is that why investors, is that the bull thesis why investors should invest? >> you want exciting legs of revenue growth i believe it is one of the higher multiple names we cover and yeah i think you have been paying for the growth and you want to see the growth if growth is decelerating, you have to say what am i willing to pay on an earnings or free cash for multiple for this name we want the ability to tell that story. for me, why do i keep the buy rating you might ask, it is aws. aws is 50% of the value, growing at 46% for revenue i pay a high multiple for aws, the market leader in cloud it is the exit aws piece that warrants further scrutiny at this time. >> we have been mentioning that amazon is not far from what we
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call a bear market, down 20% from a 52-week high. apple down 27, facebook remains down is that instructive in any way, given the overall performance that we have seen in the index >> i think so. middle of last year, getting to the end of last year you had some stocks that were close to near term fully valued i think that's a true statement. i think there are fundamental issues that hit the stocks, facebook in particular i don't know how many feet a company can have, facebook shot itself in those. tech investors will pay for good product innovation i think the most dislocated stock remains facebook, i don't think amazon dislocated that much, and they haven't had any great execution issues there's one new issue, india even today you're seeing amazon have to take down inventory items off its india page there's an issue
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this is not going to be settled quickly. i don't know if it is months, quarters, years. one hedge that amazon has against this, and it is a huge hedge, india is only 2 to 3% of sales and they're rolling out in other markets. watch it in brazil and turkey. they're top 20 gdp markets they need success in those markets. looks like india will be choppy for the foreseeable future. >> mark, do you think that's baked into the stock at these levels, the risks in those markets? >> probably not. anthony was talking about some of the growth initiatives for the company. as an investor we need to step back, are there bend and growth issues, new areas that are going to allow growth to -- because most growth rates come down over time, they all do. the question is does amazon have enough to stabilize and reaccelerate amazon, alexa devices are interesting. we have yet to see the shopping revenue impact of alexa, that
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requires change in human behavior i think you're going to see it the next couple of years amazon getting into shipping and although i didn't s logistics. that's one of the reasons we're bull on it long term, it is probably the single best fundamental asset in internet land. >> close it out for us you said aws is really the growth driver, the story for you. how long before we need to see something else that makes you believe in the further up side from here before you start to feel like well, maybe the story, the buy becomes a risk >> that's a good question. if you saw another wave of deceleration in three segments highlighted earlier, you're going to need another exciting leg of revenue growth to pick up the mantle of the kind of new business story the other thing that we haven't
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mentioned is the cfo comment about 2019 incremental cost, the fact that 2019 is more of an investment year than 2018. i would argue that's already in the model and street models and embedded in fir embedded in first quarter guidance we don't know where are the emphasis of investment for 2019. is it more aws, is it emphasizing the high margin revenue growth areas, building out tools for advertisers or broadening out the services presented to third party merchants, to be fulfilled on the amazon platform, what is it. is it investing in alexa devices. if it is investing in something that provides an exciting leg of growth that we haven't modeled yet, then i think that would be room for more bullishness. if not, we have to look at the next set of data points on first quarter earnings. >> netflix, facebook, now
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amazon talking about spending more. mark, anthony, thanks. >> thank you have a good weekend. the u.s. economy added 304,000 jobs in january, a month dominated by headlines related to the shutdown. steve liesman is back at hq with more on today's report and revisions. hey, steve. >> i want to give you some fed speak, despite that strong jobs report two saying the feds should do nothing on rates robert kaplan says in the past hour it is very important that the fed get out of the way here and take no action in terms of the fed funds rate for the time being. he thinks they should be on hold until june st. louis fed president in a specific interview after the number, which was 304,000, double the consensus, the fed should stand back. >> normalize rates in an environment where our main competitors overseas have not been able to normalize rates,
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kept inflation close to 2% now it is time to wait and see how the economy develops >> let's wait and see the numbers. 304,000, the revisions down 70,000 that still left december north of 200,000 average hourly wage a little disappointing, maybe a payback from stronger december unemployment ticks up, and labor force participation, highest since 2013 despite comments, some think the fed will be forced to double back again and resume rate hikes. we see no support for the fed shift and if wage gains rise as much as the past year, the idea that the fed won't hike further will turn to dust. we'll see, guys, if the recession shows up in the months
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ahead. morgan >> thanks, steve, for putting that together. better than expected jobs report, better than expected sentiment. >> i run out of hands on one side, then you have to go to the other. >> we'll keep watching keep counting on those fingers thank you. elizabeth warren charge to billion heir billionaires, what she told jim cramer last night on "mad money. the dow coming off the best month in three years, and the s&p had the biggest january gain since 1987 will the hot streak for stocks continue? we'll discuss it after the break. the dow up 122 points. more "squa aeyafr is ♪ (vo) here's a question. was it necessary to create a luxury car more teched out than silicon valley? with a cockpit fit for aspaceship. hang on. radar that senses things the human eye can't. busted. and the ability to make a thousand decisions
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...well almost anything. leave no room behind with xfi pods. simple. easy. awesome. click or visit a retail store today. the chair of the house financial services committee maxine waters sat down with john harwood for the latest in a speak easy series. john has some of the highlights from the interview hey, john. >> reporter: a big point of emphasis for the house democratic majority and democratic party is doing something through the tax system about income inequality, not just elizabeth warren and her wealth tax but oh case i don't see core test and i talked about the idea and reaction to it when it came up at davos. >> i heard what they did at
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davos when this was talked about. i believe in fair taxation i believe that people who make lots of money should be taxed fairly and they should not be relieved of that responsibility because they have the money, the resources and wherewithal to get around the law, to basically take advantage of the law. i just want fair taxation. >> do you think the system could be fair with a 70% top marginal rate >> i know that that would be very different in the way that it is looked at now, but don't forget we have heard stories about secretaries paying more than their rich bosses that's not right based on the so-called tax reform this president did, i know this. i know that the top 1% or so was advantaged and i know that major corporations and businesses really did reap a lot of
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benefits from the tax reform you know what i'm worried about? i'm worried about joe blow that goes to work every day and he is making 50, 60, $70,000 for their family, and maybe they get behind and maybe they owe 10 or $15,000 that they need to work out payments with the irs and they're pounded. and people like mr. trump who won't show his tax returns is able to manipulate the irs so he's never called to task and he's able to take the laws and make sure that he works them in such a way that they're to his advantage. >> with a republican in the white house and republican senate, nobody, including maxine waters, expects democrats to legislate on this issue the next two years. she said even without the president's signature, what we're going to do in the house is layout arguments for that 2020 presidential campaign
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and by the way, guys, you can hear that entire interview in our speakeasy podcast on itunes or wherever you get podcasts >> good stuff. thank you. markets are rallying following a strong january jobs number joining us, the ceo of steefl. great to have you back >> great to be back, carl. >> i want to talk about the quarter in markets coming off the interview with waters, ocasio-cortez, elizabeth warren on cramer's show last night, how much is policy from the dems going to drive trading this year? >> well, the tax rhetoric. first of all, income inequality is an issue and it is an issue we need to deal with many people say you need to grow the pie instead of taxing the pie. the fact is it is a hot political issue. so when you hear elizabeth
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warren taxing assets or progressive rates, it will get a lot of traction politically speaking economically speaking, i'm not quite so sure how much any of this is going to do. >> right is it a liability for shares of financial companies, at least the optics of hearings that the house may hold this year >> it is a discussion we have to have so i don't see any real down side. i think that we're going to have a healthy discussion, but i believe that you have to look through the political rhetoric of running for president and it is very populist, but we'll look at, i think we have to have a good discussion on this issue. i mean, our deficits need to be dealt with >> ron, i want to go back to the point you made from an economic standpoint, you're not so sure how much the tax proposals would do if they were enacted.
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why. i know you're in the business of wealth management, it is a growing business for you what have you seen in terms of these tax policies in the past and how they played out? >> well, i think government revenue seems to, over history, seems to be capped at 30% of gdp, even when tax rates were 90%. i think there's a lot of ways to deal with taxation the real answer is if you're going to look at tax reform, and no one wants to hear this but i'm not running for president so i'll say it, there will be some sales tax. everyone will say that's regress i have and i understand it, but i think raging the marge cinal t will raise some taxes but won't deal with the problem which is huge deficits. i don't see that orking. and elizabeth warren's proposal, great sound bite, not
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constitutional i don't think you can tax direct taxes of ownership i don't think that's allowed >> ron, how do you address income inequality then you say it is important to address. i here from the investor class how not to tax but not about how to address income inequality in a way that's good for the economy. how do you do it >> well, i mean look, it is a great question if i did have the answer for that, i probably would be president, so i don't have the answer for that, but i do believe that we need to grow the economic pie and i think there can be a fair distribution of the wealth i think the real problem today is in many ways technology, and i'm not blaming technology, but technology is eliminating jobs and it is concentrating wealth and people that create great technology but don't necessarily distribute it through wages. it is a valid debate, one that
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we have to have as a country unfortunately, politics is going to make it a little more cloudy to see the real answer >> ron, we're going to talk about the quarter. we have an accommodative fed earnings are looking okay. you have trade talks that were not derailed by the visit to d.c. this week do you think the pain trade is higher from here >> look, i think look what the fed has done first time in ten years we have real interest rates. what that means for the markets is that i think we're having a pe 16 to 17 times. we have a cap on them because interest rates are now positive, positive real rates. so if you think earnings are going to be what's the consensus, 168, that says 2700 to 2850. what we need to drive by that is global synchronized growth i think trade is an important
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consideration. we have to get the trade accords so the rest of the world can catch up with the united states. and i think it is one of the things holding the fed back. i don't think the fed can raise rates into an environment where the rest of the world is not >> ron, looking at shares of stifel, almost 6% on the heels of your company's earnings this morning. we also got a gang buster jobs report what's your take on the u.s. economy and the global economy now? >> i think the u.s. economy is in solid shape i think you look at this very good jobs report i was encouraged by the participation rate i think what you have to look at in terms of the jobs report is watch productivity i believe that's what the fed will look at because we need investment to increase productivity to keep inflation tame if we have investment on this i think that the economy is in good shape
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the rest of the world i'm not so sure right now and i think that's a consideration for the u.s. markets >> so what does all of that mean stifel in 2019 >> look, we just had our 23rd straight year of record revenue. i bet you carl wasn't out of high school when we started this 23 years and i am pleased with our record results. as i look for it, i don't see recession in 2019. i see the fed tapping down i don't see rate increase. so let's get through all of the government shutdown stuff and let's get going on building and continuing to build and i think we'll have a good market remember, january by the way, we had the best january since '87, followed the worst december since the '30s
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i think they balance each other out. >> ron, really quick, is st. louis rooting for the rams >> you know what, i would say that the quiet is yes. i think a lot of people are a little upset that they left, but i for one, patriots fans will hate me for saying this, i think they owe the patriots for 2001 so go rams >> we'll see what happens sunday thanks for the time. as always. >> that's right. thank you. >> see you next time >> one of the joyce s when peop try to guess your age, carl. amazon shares lower by 4%, despite beat on earnings and revenue. we'll tell you why after the break. first, look at the worst performing stocks on the dow so far in today's session united health, caterpillar, walmart among emth a lot more "squawk alley" is ahead. don't go anywhere. why are you so good at this? had a coach in high school.
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welcome back to "squawk alley. european markets are closing seema mody has a look at today's action. >> hey, morgan european stocks closing mostly to the up side ftse 100 up .75% still economic data coming out that accentuates concern of slowdown in europe they had a monthly pmi reading sharpest drop since may of 2013. inflation slowed for the third consecutive month on the back of weak energy price growth that economic data reinforced the idea that the ecb will take on a dovish stance it is one of the factors behind a rally we have seen in european equities in january. france, germany gaining nearly 6%, germany best monthly performance since september of 2017 italy, despite political uncertainty there, it is up 8%
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the german dax holding on to gan gains. deutsche bank falling following an earnings report, even after they had the first full year profit since 2014. revenue shrank for the 8th consecutive quarter, among lingering questions about the company's future they pledged to cut costs. the german government is prepared to back a merger with a rival bank if both fail a sufficient turnaround first half of the year. shares lost roughly half the value over the past 12 months. big moves there. jon, back to you >> thanks. let's get to sue herera for a news update. sue? >> agood morning jon and everyone here is what's happening a new pentagon report reveals sexual assaults at u.s. military academies jumped 50% results of the anonymous survey
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from cadets at west point, naval, air force acad middle east, found 747 incidents of unreported assault for 2017 to 2018 school year. denver teachers rejected the district's latest offer making a strike more likely the new contract would have increased pay by 3 million, and funded two more years of cost of living raises. union leaders called that offer a small iou. after suffering through days of a deep freeze, much of the midwest is about to see rapid thaw temperatures will feel nearly 100 degrees warmer chicago is expected to be in the 50s by monday. and apple says group facetime will be back next week after the company came up with a fix for a bug that let users listen in on someone, even if they hadn't picked up. they thanked the family that first reported the issue you're up to date. back downtown to "squawk alley."
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carl, have a great weekend >> same to you, sue. see you on monday. we go to break now look at the biggest gainers for the nasdaq 100 a lot of familiar names on the list celgene and amd. s&p up back in a minute ♪ hawaii is the first state in the u.s. to have a hundred percent renewable energy goal. if we don't make this move we're going to have changes in our environment, and have a negative impact to hawaii's economy. ♪ verizon provided us a solution that lets us collect near real time data on our power grid. ♪ if we can create our own energy, we can take care of this beautiful place that i grew up in. ♪ when it might be time to buy or sell?
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welcome back amazon is delivering a third straight record profit in its holiday quarter. jeff bezos saying alexa was very busy during her holiday season echo dot was the best selling item across all amazon products globally and customers purchased millions more devices from the echo family compared to last year the stock began a drop during the earnings call. investors worried because of a cloudy bet on india. shares are down 4% now for more on amazon, let's bring in long time tech reporter and opinion columnist for "new york times" and deirdre bosa. one of the things that came off the call was increased spending and investment in 2019 i want to pull up a chart of honeywell. they reported earnings one of the reasons because of
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warehouse automation one of the biggest customers, amazon how much of that increased investment could be around things like logistics and transportation >> that's certainly something they singled out i think you saw exactly what happened as soon as the cfo mentioned that 2019 was an investment year where 2018 they reaped rewards of investments. you saw things drop off. logistics was a high cost last quarter, also things like expanding internationally and getting market share and advertising, new businesses. i think what's a concern for investors is that they have become accustomed to greater profits from amazon. 2018 saw three quarters of record profits amazon essentially highlighting going forward they're going to be spending more, typically like the amazon of the past few decades. >> and your thoughts on how amazon is investing now, even
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the comments around echo dot and virtual assistant piece of this, how much of that is driving continued growth for amazon? >> i don't think it is driving huge growth for the company but it is a key part of the future, the idea for alexa, virtual assistant, for the device range is to keep you closer and closer hooked into the amazon ecosystem. i notice i buy more from amazon because of echo because i can order things, put them on a shopping list. i feel that's the long term goal with that and i think it is working. in terms of the investments, as you said this is the way amazon has always operated. there has been this odd time in the last few years where they have shown profit, but that's not the amazon way the amazon way is to keep spending and expanding and i feel like that's the plan going forward at least for this year
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>> there's a weird dichotomy, weird to me that i am seeing amazon is getting all of the praise for the echo and echo dot and alexa, at the same time admitting they're not making money selling those. yeah, it helps the ecosystem, they're not making money apple being criticized for not having invented echo and it is selling tons of iphones for big profits, but not as many as they used to, and people are saying apple can't innovate how does that go >> i mean the apple watch is another good comparison. i think they sold more apple watches than amazon has sold and they made more money on apple watch than alexa, but alexa is the hot new thing. i think amazon is never trying to make money in the device business, it's always been about tying you into the ecosystem >> wanting to make money on the phone. >> yeah. that's true. apple's business model is to make money on devices, so i
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think it is a legitimate criticism of apple when their hardware business slows down, but for amazon it is all kind of on top of the retail, on top of the cloud business another one of those things, they think of something out of left field and everyone follows and i think that's another reason there's excitement around alexa. >> i mean, i think the reason amazon is able to get away with not making profit on its devices is because they have high growth, high margin businesses like awswhich was strong in th past quarter also, they're building out the advertising business which is growing in triple digits it did decelerate the last quarter, but it allows amazon to get away with things other companies haven't. at the same time, look at the valuations a point analysts brought up this morning on air amazon is valued more richly in terms of pe ratio than apple, yet its margins and it is not
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the halftime report. the bulls break the ice. can you have confidence in the stock rebound? the star analyst that nailed ge's decline has a new warning for anybody getting optimistic on ge and the options market, signaling a big move is coming for a popular etf tracking big caps what is it you have to tune in to find out, carl that's why we call it a tease, designed to keep people around do you think it will work? >> you are the master, brian see you in about 15. let's get to the cme group for the santelli exchange. hey, rick. >> good morning, carl. thank you. i would like to welcome my employment day guest, doug holt sake en. thank you. >> my pleasure. >> 304,000 even though a big revision popped it down to 222,000, that two month average is 263,000 with labor force participation
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rate, best level since fall of 2013 weigh in on this morning's data. this is an extraordinary accomplishment you look at 2018 into 2019, we have been able to draw people into the labor force into work that were previously very detached from that that's a great thing for the country, great thing for those people at the end of the great recession in 2010 we had 1.1 million discouraged workers. 2017, at the end of 2018 we had 400,000. it is an amazing accomplishment what happened last year. >> and everybody is talking about the income disparity, i get it if you look at year over year earnings, this is the sixth month we had a 3% handle in order to find a string that long, you have to go to the back half of '08 into '09, really
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stellar, even though productivity isn't what it used to be, it has to by default be increasing to offset the wage numbers aren't pushing into inflation. >> i think that's exactly right. the biggest thing we do over the long term is get productivity up, see the wage number get even bigger the notion that a tight labor market won't reward labor is long the reward is there for labor, seeing increased total hours out there, increased employment. it is a very strong labor market it really is i think a strong statement against the negative talk you heard about the possibility of the economy going into recession it is just not in the data >> i couldn't agree more >> 70% of the economy is houses. >> and not only that, the notion of the armchair quarterbacks during the absent period of data when the partial government shutdown hit, that could still come into the market, there
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could be more to these moves one final thought on the data that i find very interesting, and that is the generalized notion that employment the way it sits is some kind of coincident lagging indicator, maybe by textbook economics it is, but it speaks volumes that there could be many more innings left for growth, even though some metrics aren't as good as they were a year ago >> yeah. i think if you look in today's report, the place there's softness is in the folks working part time for economic reasons some of it is shutdown, some of it is out there, we could tighten that up. there's still room for that. >> excellent we're out of time. i would like to discuss the fed, we'll keep that for next time. thank you for joining me have a good weekend. morgan, all yours. >> thank you >> rick santelli, thank you. three of four faang names already out with earnings. alphabet is on the way next week is wall street's favorite trade back we have more "squawk alley" after the break.
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unstopand it's strengthenedting place, the by xfi pods,gateway. which plug in to extend the wifi even farther, past anything that stands in its way. ...well almost anything. leave no room behind with xfi pods. simple. easy. awesome. click or visit a retail store today. super bowl only two days away cnbc live on site in atlanta asking the athletes about the stocks they are watching ahead of the game. eric has more on that. >> reporter: that's right. good morning here from atlanta think about this focus group you have young men with
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disposable income. they are between 30 and 40 years old. i asked them about netflix price hike are they iphone or android and are they buying or selling stocks here is what they had to say >> they have to do that in order to progress, go right ahead. >> it's unable they are putting out a lot of good media >> that's not too bad. >> i'm an iphone guy >> can't trust this samyoung guy. >> i use an iphone >> seems like every one everywhere is an iphone guy. >> i am buying what was the question? >> volatility is a little nerve wracking >> i've got excite things in the cube >> i like to put my hands in about every sector >> i don't know or else i'll be doing it you tell me you're at cnbc >> reporter: there you have it win or lose this sunday when they get back to their homes they have a lot to think about they have to think about the
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portfolio and how they handling that netflix price hike. back to you. >> you said between 20 and 40. i guess you didn't talk to tom brady. >> reporter: we didn't get to brady. he doesn't have time to talk about netflix. >> he's too hold you're too old >> all right eric, thank you for bringing that us ahead of the big game. aven record millio70 milli of avenocado to the u.s >> reporter: we have a guac glut most that americans eat are from mexico there was concern we'd have a crisis going into the super bowl
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because of gasoline shortage fake news. avocados from mexico plan to have another super bowl app. >> welcome to the dog show where humans compete for the ultimate prize. avocados from mexico >> four out of five in the u.s. come from south of the border and a record two billion pounds were imported over the last year that's driving down prices for every one. that's impacting american growers. >> in the last two weeks mexico shipped about 140 million pounds of avenue codoe thatocado. >> reporter: in the crazy world of global trade with the domestic market dominated, california growers are asking the trump administration to open up the american market in, wait for it why that >> we're confident at some point the u.s. department of agriculture will give us the access we have been work on for
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so long. we know from the china side of it, they don't see any reason why the access shouldn't be granted. >> continuing enjoying the low prices, growers here in southern california reported a surprising loss in the fourth quarter maybe buy the dip. back to you. >> we love it when you eat on camera maybe i shouldn't have been surprised. i couldn't believe just how large of marketing budget, at least at the game, the avocado growers are. they are like in the top ten, aren't they? >> reporter: the avocados from mexico growers are they are huge. this is not their first time in the super bowl people say isn't this part of nafta. no it's not. one reason mexico has large part of this market is because dem d demand there's huge demand for avocado toast and labor is so cheaper
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south of the border. >> seems like only a year ago they were talking about shortages. what happened? did marks, everybody just started growing more and response to that and now it's an over correction? >> reporter: well, a part of it was whether issues and other things that lead to the kinds of shortages you have now you have the opposite with you have this glut our producers found two avocados for a dollar usually they are two bucks per fruit. these things go in cycles tlilie that but the bottom line is american growers are being overwhelmed. >> we need prices like that in the northeast. always a treat when we get you on our show.
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squawk alley is back in a couple of minutes a luxury careate more teched out than silicon valley? with a cockpit fit for aspaceship. hang on. radar that senses things the human eye can't. busted. and the ability to make a thousand decisions before you even make one. was all this, really necessary? what do you think? ♪
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position to respond, we'll see what happens >> they've been trading along with the other names the cloud. >>. >> we'll see what happens in the latter half of the suggestion. let's get to sully and the half. thank you very much. have a great weekend i'm brian sullivan in for scott wapner after a big january, can stocks keep rolling right into february >> the bulls breakthrough the ice. wall street is on again. energy and industrials leading the way so far in 2019 both sectors have big news today. earnings good enough today to lift chevron and exxon mobile. on the industrials side, respected analyst stephen
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