tv Squawk on the Street CNBC February 11, 2019 9:00am-11:00am EST
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the nasdaq looking to open 31 points higher. the s&p 500 looking to open about nine points higher big show, fun debate >> i need to take a nap. >> it was a good debate, though. >> tired and need some soup. >> tired. >> lots of big numbers coming out. join us tomorrow, "squawk on the street" begins right now ♪ new york i think i know what dreams are made of ♪ good monday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. green open on this monday as there is optimism over u.s./china trade midlevel talks in beijing. m&a, upgraded tesla and more we'll get a fair amount of fed speak this week with inflation data, ten year around 266. road map begins with u.s./china trade talks taking place while the clock ticks. if no deal is reached by march 1, we may see another major increase in tariffs. >> racing against the clock,
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u.s. lawmakers, another government shutdown looms if a deal is not reached by midnight friday. >> amazon reportedly reconsidering plans for its hq 2 in new york city after local backlash we have the latest on where both parties stand. plus, another city that is waiting with open arms futures pointing to a higher open on the street today trade talks resuming in beijing. china striking a relatively upbeat note overnight. the u.s. and china will hold working level discussions until wednesday. and higher level talks on thursday and friday, which will include the treasury secretary and trade rep robert lighthizer. if no deal is reached by march 1, tariffs on $200 billion in chinese imports could increase from 10 to 25, though we have been told, jim, a lot of this is relatively fluid. >> i think so. i think both sides within the white house, many ways more important than -- the lighthizer navarro camp they want a deal they want it on terms that are, i think, not palletable to the chinese, you got to stop the bogus joint ventures, can't use
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steel and technology routinely got to -- i think, look, mnuchin and kudlow want a deal they want a deal they think would be good for the economy, good for everybody but not really as hard-line on this stuff i kind of feel like there will be something, but i don't think it can be this soon. >> no way, right >> can't be. it is too hard >> to get a full deal with the chinese. i think the market is firmly expecting at least you'll get a extension of the tariffs not going up. >> for more time i agree with that. >> scheduled to go up to 25% tariffs and what is currently 10%, if that were to be the case, that would be unexpected, i think for market participants. we saw that ratchet up. >> if you're going to be in a world where that happens, where it goes to 25%, there is a lot of numbers that will be cut. i think people have to recognize, you look at emerson, a really fun company, kind of the company i use as a company that says, listen, china is a
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worry, they put it out there for you. what you say is, look, i got to take numbers down again. great american companies even united technologies not up nearly as much as you would expect with the splitoff because otis is a big problem. those are the companies, you listen to paul krugman, you get a recession, those companies are going to -- the numbers come down substantially. >> axios has a report that some white house advisers have been talking about a mid-march meeting between the president and xi, maybe in mar-a-lago. if we got news on something like that, what would be your first bid? what ticker symbol would you enter first? >> okay, i just did analysis of that and what you would do is you would enter nike nike is already in favored stat ous, already work with the ministry of health and fitness and so rather than go for cat, you can't raise numbers anyway, boeing, which has been immune so far from china, i would go for the company already in the love of china and secondly i would go after apple.
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secondly because tony was on "halftime," last week, he said, listen, the numbers have to come down there that's different from what tim cook said to me, january is good maybe he has new intel you may have the numbers go down either way i don't want that. but if we can hear that they're not enemies, then apple could maybe start taking stuff from xiaomi, i mean huawei. they're all -- huawei stuff today -- the huawei stuff is big. >> apple orders in china. >> that was still the last quarter. but i put a guy in that courthouse in brooklyn, where this -- the huawei suit is, you know, they're an outlaw. they're circling -- our president is circling the wagons against huawei everywhere in the world. there is an article about how eastern europe hasn't bought in yet. >> merkel might be getting to it. >> that would be something i think huawei versus apple is the story to watch
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but nike is the one that goes to 90. >> haven't made your china etf yet have you >> i have an idea for one, but i figured what would happen is i become part of the problem of our market, which is the high speed trading that would seize the cramer etf and the anti-china -- >> it could be volatile. >> navarro leaks to his people white house leaks to one of our people it is very hard. you would be in and out on the etf every day. it would be so great for a program. we should call it the broker annuity etf. >> surprised it hasn't been put together yet. >> huawei, howwow, how about a huawei apple etf i'll charge you a fortune for the commissions. >> that's one deadline to watch. the other, of course, is in washington shorter term, the clock is ticking toward another government shutdown. some are warning that
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negotiations stalled over the weekend, and that another shutdown could be on the horizon. it is a friday night deadline. take a listen to mick mulvaney on "meet the press". >> we cannot definitively rule out a government shutdown by the end of the week. >> you cannot and here's why. >> okay. >> let's say for sake of this discussion that the democrats prevail and the hard core left wing democrats prevail, a democrat congresswoman who put out atweet yesterday about zer dollars for dhs. let's say that the hard core left wing of the democrat party prevails this negotiation and they put a bill on the president's desk with say, zero money for the wall or 800 million. absurdly low number. how does he sign that? he cannot in good faith sign that >> on friday, shelby and tester were saying we could have something on monday morning. shelby says i'm not confident. >> the president tweeted the note about how, listen, i looked into this emergency, and i can do it, i just, again that was the signal what he's going to do >> apparently discouraged from doing that, not just from democrats, but from republicans
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as well. >> why did he tweet that >> he said this morning he's the hardest working president in history. i don't know >> well, james brown presidency. >> take it for what it's worth. >> reaction to the six hour story he watch tv for six hours, which is really a lot. you keep that guy away from the battle royale game battle royale could wreck the presidency can you imagine? watching fox, playing battle royale it is a detectivive. i' i'll send some dominos to him did you get your magnesis card i got one this weekend it allows me to do absolutely nothing. >> he's also seeing that documentary -- >> also. >> i only watched netflix. i'll go for the hulu >> i only watched the one on netflix. i didn't watch the -- >> i'm saving that for
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valentine's day. >> shutdown, though, are you banking on this actually happening again? >> no, i'm not i just think it is too -- there are some talking about, like, containment camps. what is it >> spilled coffee? >> you should always carry a handkerchief that's what we're taught at goldman sachs. all cotton. >> as for the week, guys, we'll get names on earnings, under armour, lilly, nvidia, by the way, downgraded today over at bernstein. >> all right i was with someone who runs a place called helix, a fabulous, trying to be 24 hour gaming, battle royale without the apex legends and he said something very interesting to me, he said none of the really big video game companies, which is like really what you want this for, are writing for the new touring. it is too far ahead. you have this gap. and also, of course, you still
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have a crypto overhang they'll admit to that. and against that, do you have a data center business that is good if you want to own the good parts of nvidia, and not the go for amd. they price that big block of stock. it has been sloshing around. but the nvidia, this stock should not have advanced as much as it did. i was quite surprised. >> i'm looking at activision, by the way, cut in half since september. >> they don't have a battle royale like -- look at ea. look at the short squeeze in ea. >> reporting there are going to be layoffs also, reuters reporting layoffs at tesla and some of their -- their production interesting we're hearing about slowdowns and layoffs. >> i'm not going to disagree with that. i think nvidia has china issues though and activision blizzard just doesn't have the new games take-two, softness in grand theft auto, but it is ea. >> not seeing a slowdown.
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>> no, he's not. he has nba2k is there anything hotter than basketball even preseason games are sold out there. >> b of a upgrades ea. with when we come back, facing opposition, is amazon reconsidering that new york hq 2 site details on that. take another look at the premarket here coming off that late day surge on friday in fact, the last hour of trade has been positive for at least the last seven sessions. "squawk on the street" is back in a moment. alpha seems more elusive today. is it because so many go after it the same way, chasing after short-term returns? instead if getting caught up with the crowd, the investment managers at pgim take a long term view. uncovering opportunities for alpha across public and private markets, while anticipating unforeseen risk,
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[ ding ] show me fish on youtube. say it and see it with the x1voice remote. from netflix, prime video,youtube and even movie tickets. just say get "dragon tickets". amazon is said to be reconsidering its plans to open a new campus in new york city's long island city neighborhood after facing backlash from local resident, that's according to "the washington post." friday andrew cuomo spoke out against opposition to his deal to bring amazon second hq to the city >> we incentivized amazon to come as we incentivize every big business to come you know where the incentive package was? we get $27 billion in revenue,
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they get $3 billion back we get $27 billion, they get $3 billion back i would do that all day long for the state senate to oppose amazon was governmental malpractice. >> over the weekend, anti-amazon activists rallied in queens, gathered signature for a petition aimed at derailing the plans. and today in queens there will be a pro amazon rally. whole nation watching our city go through this. >> it is -- my wife is in real estate, lisa, and everything has been done -- anything near this area has gone up dramatically in price. you can understand there is some tension. at the same time, those of us who favor growth are puzzled at -- >> most people puzzled, i think. i think majority of new yorkers are supportive
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i can say that i can't prove it i can assume it is the case. the mayor of new york, of course, is very much supportive. you heard the governor there amazon chose to go about doing this in a way that is different from some companies. google has added thousands and thousands of jobs in new york quietly. but amazon did a national competition as we know we all bought in we all followed it very closely. and the competition was between many cities and municipalities to try to meet their demands new york won and it is governor pointed out, 27 million in revenue over 25 years, $3 billion in incentives against the tax revenues for a city i would point out has a $92 billion fiscal year 20 budget, $63 billion of that that comes from property taxes, sales taxes, income taxes. and the like i don't understand how it is that you're going to be able to maintain a budget of that size, which is one of the largest budgets in the country after state of new york, state of california and maybe one other
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state, how you maintain it by saying no to a business like amazon coming and creating 25,000 jobs, enormous economic activity and the revenues that come from it >> yeah. i mean, i keep thinking, i deal with a lot of professionals in the university business. and i hate to use the term business, but you have to do it. this is is the -- this would be the single biggest leap for new york city in terms of attracting silicon valley people. we like to call it silicon valley cornell, cornell could be stanford >> cornell which has this campus on roosevelt island, which started under mayor bloomberg and now starting to produce students and graduates, that's one reason why amazon may have wanted to come. >> computer sciences excellent it is really a big deal. >> also dealing with the negative externality of this debate, other companies that might still be thinking of
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coming to new york saying, do we want to go through this headache as well? >> no. >> why would i do that >> as a philadelphian, i know people from philadelphia are trying to bring it there and, you know it heart breaking but there is, for a lot of cities i feel like after atlanta, after what happened with sun trust, sun trust did -- bbt, sun trust, sun trust has the headquarters in charlotte said they'll maintain a presence you got georgia tech and emerson there. that has been a jobs magnet, sun trust. >> these are the ways you create jobs and create economic activity, sustains the cities. i don't completely follow -- there is an anti-union element, i should say pro union element here that certainly feels that amazon is not. you had the city council speaker of new york city excoriate the amazon representative a couple of weeks ago for their lack of support for unions but i don't know how you -- as somebody who grew up here in queens, in the '70s, really don't want to go back there.
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>> one last point on amazon, journal puts on page one a piece about bezos and basically how he went from as they put it private family man to hollywood party magnate and i guess there is some takeaways in terms of how apparently close bezos is emotionally to the studios, to amazon studios and how he reached out to the tolkinest state. >> and transfor natimation and whether or not it is distracting. >> full disclosure, i'm going out wednesday call, saying, look, let's face it, this is most competitive guy we have ever met, i would go into amazon just because he's reading this, also, by the way, the weekend press about "the national enquirer" versus him, he's look a guardian of truth.
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wow. >> it got enormous amounts of press. >> on secured bscured my birthd. >> it did? >> people didn't talk about my birthday. >> we'll spend the rest of the show talking about your birthday. >> i thought people would say happy birthday >> i want it to be our lead today. bezos overshadowed it. >> put me in my place. >> we'll order you a cake on amazon right now. >> it will get here in 20 minutes. >> cramer's mad dash, count down to the opening bell. one more look at the premarket, busy week ahead, don't go anywhere ♪
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started with trading here. eight and a half let's get to our first mad dash of the week. want to do quick serve >> yes, i like the symbol qsr, it emits that burger king, restaurant brands is a quick serve series of burgerking, ti hortons, beautiful numbers today. we do not talk about this company enough daniel swartz, 38, ceo, he's excellent. it has a 3% yield, now committed to $2 in dividends tim hortons up 1.9, they'll put 1500 of them in china. 1.7 comp stores for burger king. here is what is interesting, david. that's not as good as mcdonald's just nowhere near mcdonald's and nobody cares why? because this is a quietly well run company that generates a lot of capital for shareholders. i salute them. and they are -- they got good ag campaign with burger king and it is drawing people in. >> interesting during the super bowl, people remember it.
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>> yes. >> this is a 3g related company. >> yes, it is. i guess ackman positioned, i don't know what he still has i like the fact that this is the winner because it has the better yield than mcdonald's. and people want growth with yield, i'm putting this on the list of a company that has good growth with -- >> even though same storesyou pointed out is not as strong as mcdonald's. >> no, they're not mcdonald's is decelerating them. a lot of people felt that the american number of, like, 2.3 was not good enough. but there is a serious remodeling going on at mcdonald's you don't hear about these guys because they don't come on air dunkin' bra in' brands wasn't g. these guys are, wow, tim hortons is a great growth vehicle.
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starbucks had really good numbers in china a lot of people forget that. that was the alibaba tie in that ketch johnson, by the way, kevin johnson is the ceo of starbucks. >> he is >> i point that out because some people are confusing who runs starbucks. >> kevin johnson does. >> thank you >> you're welcome. all right. let's wrap up a mad dash, get you ready for the opening bell as we start trading for a new week at the nyse we're back right after this.
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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 "squawk on the street" live from the financial capital of the world the opening bell in three minutes on this monday morning we already discussed some of these deadlines regarding u.s. china trade talks and border security other thing involves sort of global growth. uk, gdp, .2 for q4 and china came back to work and their lunar year retail sales, although up 8, is the slowest pace since 2011. >> look, i've got to tell you, i was watching brian sullivan this morning, saw the numbers on worldwide exchange, i saw the china numbers and she did say
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can't necessarily see a slowdown in china if you're there, she's in beijing, very wealthy, but feels it statewide it is so funny because it is hit or miss. hong kong had -- was strong. we know that from estee lauder which is china buy, but capital goods is the weakness in china that's the theme if they don't get this trade deal. they are being hurt in capital goods. so i think if you're listening to, say, peter navarro, or lighthizer, they say, listen, why are we -- we don't need a deal we're winning. it is a little more zero sum with it. >> something we tend to keep an eye on as well, given its influence on the market is wti crude. down again we're talking 50 -- well, 52 level. last week around 55. >> that seems to be the upper limit. the long-term curve for oil was, oil dropped just precipitously in the last -- >> you got the dxy at 97 today
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isn't this santelli's like magineau line. >> china has become a proxy for oil, oil a proxy for china even though oil, understand, please, everybody, we are the swing producer and we determine what price i'll does not the saudis anymore and there has been a big ramp up, big rig count ramp up on friday we're not quitting we're not quitting and the permian is just gigantic and not running out, despite what bears say i had rusty brazil on, rbn, i think the best guy on oil. a lot of people don't agree with that the oil curve is still 50, 55, out five years, but, oh, my, just a production, it is insane coming from the permian. >> the bell here, the s&p at the cnbc real time exchange and the big board this morning, low cost carrier spirit airlines,
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celebrating its first listing anniversary. we'll talk to the ceo ted christie in the next hour. over at the nasdaq, california-based east west bancorp celebrating its 20th haven't touched on this upgrade of tesla over at -- >> big, big. >> says any concern you might have had has been allayed. >> $15 a share in fiscal year 2020 they're talking about having, you know, they got a giant amount of capital under -- they're not worried about any balance sheet. and they mention -- i thought this was interesting, they referenced how ellison joining the board created a quieter, more calm elon musk. >> a number of other stories that aren't necessarily positive for the company in terms of repairs and in terms of deliveries and the backlog no
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longer being significant >> there is issues look, i think this is the kind of thing, we can't forget there are a considerable number of shorts, very smart about this. and are looking at this and saying, like, for instance, what i said by even reading the note, legitimize a position that they think is completely illegitimate given the news flow. i'm saying there is back and forth about the model 3 and there is good shipments to the eu and china now, then what you hear from the bears is there is good shipments but huh abo but how about the buyers it is the ultimate battleground versus amazon. >> they have that payment potentially coming up at the -- >> balloon. >> yes, did not hit. i don't believe it is likely to hit the level that it needed to. though i'm not remembering exactly what the number is but they do have the money on hand to pay it >> they have a lot of cash >> but it is likely they will need to as opposed to being able to need it with shares.
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>> but it is sometimes the firepower, the intellectual firepower say of the shorts has historically exceeded the longs, be honest about that but it is really -- this canaccord note said they're the only auto company -- >> there is a line in the note that says the company has an insurmountable lead in autonomous driving and their target goes from 330 to 450. >> there is a couple of things happening this market. still a considerable short base that has built up on any mistake. electronic arts, a terrible conference call, and they do apex legends apex legends, 10 million players in three days, again, just kind of i guess it is like -- the fury of what people play, this multiple shooter game, and a single shooter game and then boom come out with this multiple
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shooter game and so perfectly timed to destroy the shorts. even they didn't understand the propensity for people to want to play these games >> short for any length of time, still has gone quite well. >> true. that's absolutely true >> tesla's bond payment just on march 1st it is, $359.87 is what the stock would need to hit. >> it is going to be gamed. >> otherwise, it is 920 million bucks. they are a ways from that and not a lot of time to get there >> clock is ticking on that and trade talks. >> journal also, we mentioned the bezos piece on the front page of the journal. the other one is about consumer staples stocks rising -- raising prices to keep up with commodity costs. >> the theme that -- the continual theme, i had clorox on, referenced in the piece and procter & gamble everybody put through price increases and now the prices are coming down. you -- the article should have the second part, which is the profit margins for these
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companies going to expand rather dramatically because the costs are not going up anymore freight costs, uber freight told me that the fright coeight costl be 20% i would have laughed about that. after what uber did with the eviscerating caps, who is to laugh at uber freight? so if you get reduction in cost of trucking and reduction in the course of resin, you're going to get explosive profit margin at procter which is why that stock is at 97. >> not only at 97. the high as far as our data goes back, right? >> yeah, no. procter is the big winner. that article should have had that a recognition, like, for instance, frank is going over the resin cost going down, so you just had this -- if you can keep -- if you can keep -- norfolk southern has a big meeting today, talking about -- about how the rails are catching up to the -- all of the business that they have and i don't think that, you
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know, you have spot -- that's going to cause spot rate trucking to fall so the two big really price punishing moments for the last year for these is trucking and resin and look out, trucking and resin are going their way. could procter go up dramatically i guess so it could >> we do have some m&a to play with today morgan stanley buys a stock plan manager. >> i was going to ask david. >> it is an ft story, out late friday, i guess. >> no confirmation and many analysts saying it is not happening. but the stock is up big. >> i have no -- unfortunately no insight to share on that but the stock is up from the ft. morgan stanley stock not up on the $900 million acquisition of a ca nadian company, significant premium to help as carl just said with their stock plan
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business for companies, many of them are not even public yet, but the idea being you're going to get people in the fold for the morgan stanley brokerage universe as they gather affluence over time. >> people want fin tech and fin tech period so you continue to see here is mastercard that stock is such a juggernaut. square continues to do well. pay pal inching up once again. and what you're having is no one wants banks. pay pal is points from cut what happens is -- i went over the sun trust deal, it is so positive and so accretive, and the market liked it for about half an hour. >> 20 minutes. >> yeah. really rather amazing. they just don't want anything that has loan risk loan risk, the problem with loan risk is that the paul krugman argument, if we have recession, we're going to see a tick up in
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bad loans. it hasn't happened at all. been the opposite. been the opposite. >> and loans have stayed very, very low reserve releases that have helped >> you can argue the banks are well in front of whatever may be coming down the road >> right. >> the other big story involves taxes, "squawk box" did a lot on tax today. but we're going to get retail sales on friday. and the question will start to bubble about whether or not 8% trending year over year lower in refunds to date is going to have an impact on what people buy >> we know that -- there was a second leg in retail where they went down and they really haven't bounced like a lot of other industries other than the tjx, burlington, last week we had a short squeeze in capri, so some apparel is looking well but you have to be aware they have a china cost, how quickly can they move from china
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i have hasbro tonight. >> hasbro tonight? >> yes >> they make -- a giant business where they make their toys is in china. >> yes >> they have to move that. they're trying very hard to move restoration harbor, rh, has 40% made in china and no real desren to move because they don't want to sacrifice quality you're talking about dollar trade, moving furiously from china, there is not as much of a quality issue as rh. >> can't remember going to china and seeingfactories of dolls being made that's where the north pole really is. >> yes, shouldn't they skip the who process and put them right into the land fills. why do they go to the consumer, talk to the consumer and land fill. >> right into the land fill. >> go right to the land fill. >> now back to china, to be recycled >> they're not taking anymore. waste management -- >> that's what they told becky and joe on friday.
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>> yes mr. fish has done a fantastic job and we're stuck with all this news print. newspaper. the -- >> the stuff you think is being recycled is not. >> it is not >> it is unfortunate. >> our country, i got -- someone stopped me to make a citizen arrest in brazil because i put a brown bottle into a green bottle container. they grabbed me and it is, like, you know -- >> recycling, you could argue, is a good thing to do. incredibly expensive >> hugely expensive. >> hugely. >> exactly. >> it is, something else the city of new york is trying to do and would be able to do better -- >> you're mr. amazon. >> taxes from new jobs >> is your house next to it? you can sell it for $4 million >> i have no real estate in queens, none >> what were you thinking? >> when i was growing up, long island city was one day, one day. >> would david not make a great city councilman? >> amazing you would have to shop -- do you know the price of cereal
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>> yes, i do i do i do >> the chairman emeritus now >> chairman emeritus -- >> would he know what? >> the problem is that it is buy one, get one could have said five bucks for two. kellogg had a terrible quarter. >> i don't want to spend time on the city council >> no? >> no. >> okay. >> you can be here >> yeah. >> what can i say, david you would be remarkable. because of your -- you would be a curmudgeon, say, listen, i want to swim in the gowanus. >> i would like to swim in the gowanus. >> it is green right now. >> in the chicago river, at least in the movie "the fugitive," they make it green on st. patrick's day, it is green every day. it is every day, st. patrick's day the g owanus. >> let's get it seema mody on the floor. >> decent start to the week. dow up 45 points
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the strong session in asia set the tone with the chinese markets reopening after being closed for the lunar new year, up 1.4% for the shanghai composite. that is a two-month high just as the trade talks commence with secretary steven mnuchin and trade representative robert lighthizer going to beijing for the talks to commence. the trade dispute cited by the imf as one of the factors that could accentuate this global slowdown fears, economists there citing china and europe as the big trouble spots. speaking of europe, uk, posting a slowest growth rate since 2012 further evidence of this slowdown and the negative impact of the brexit impacting business confidence but there is this underlying expectation that central bankers will continue to be accommodative, not just in the uk, but the ucb, the fed, that's why this week's data in the u.s., inflation retail sales will be of importance. earnings also, this is the last big week with 61 companies on
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the s&p 500 getting set to report earnings that will be of importance include trip adviser, hilton, pepsi, coke, activision, blizzard, among others, going to round out the week q 1 guidance, earnings expected to climb to -- to decline by 0.1% that will be a big focus for these earnings as they commence. the technical picture, that's something that is being cited by traders here on the floor it improving. the s&p 500 getting close to breaking above its 200 day moving average a level that it has broken above before back in october, november and december but each time it only stayed there for exactly two days and then rolled back so the question is can it break above 2742, that's the 200 day moving average and maintain that level. that could be the path of least resistance for the s&p 500 back over to you. >> seema, thanks to the bond pits as well, rick santelli in chicago good monday morning, rick. >> good monday morning to you, carl you know, rates really started
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to dip last week they are a little bit higher, not much you can see it on the three-day chart of tens, maybe year to date is more enlightening. you look beyond the first week, when yields were more upside and volatile, what we see is it really is spikes to the downside as we now hover in the mid260s three day of bunds yes, friday, we traded down to eight basis points, currently trading in 11. open the chart up to september of 2016. we haven't closed at these levels, especially friday's '09 basis point close since october of 2016. and the dollar index, it is up a little less than a third of a cent now let's look at a nine day chart i pick the nine day chart for a reason because as you see on the left, that was the last down day, the very first start we are now working on day 8 where the closes are all higher and granted in the very beginning there was one set of
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closes that were just about to touch. but still was a bit higher the point is, we're dabbling with a 97 handle, we're getting very close to highs we haven't seen since july of 2017. so we want to pay very close attention and also the dollar is giving up ground while the dollar index is doing better against the chinese currency and that's very enlightening because it seems as though when the news is generally good, the dollar starts to weaken a bit, that would make sense think about it from china's perspective as an export economy. carl, jim, david, back to you. >> all right, rick, we'll talk to you in a little while rick santelli. when we come back, the ceo of spirit airlines is with us, up 56% for the year will that momentum continue? look at this morning's top performing stock on the s&p, which is up almost 6 points. back in a moment
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chipotle launching a new series of documentary style digital and television ads behind the foil. shot by documentary filmmaker giant errol morris it will feature behind the scenes footage in the chain's kitchen. it has been one year since former taco bell ceo brian nichol was named ceo and the stock is up 129% going full transparency on this one. >> it is great kay rogers reporting last week on this one. i got to say this nichol, he's smart, i followed his career, he did turn around taco bell and this is just a magnificent effort one thing he's done is that i think people in the industry said over again, people get through chipotle, get through,
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it has been 18 months since the last incident, which has been historically when these things turn, that's how long it took for taco bell and for the jack and the box. i think this is a welcome turn i have to tell you, jack hartung was the ceo throughout this and held it together get get enou doesn't get enough mention because he's low key >> 587, remember when 400 through 300, you were wondering how low. >> because when it had that twin incident of virginia foodborne illness and the rats falling from the ceiling, which was a suboptimal moment. >> suboptimal. >> it has been good. >> we give a lot of well deserved criticism to bill ackman, but on this one he's done quite well. >> one thing that jack been, jack hartung, he put 4 million shares back during the downturn. you had this -- this is a good
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example of a buyback that worked and treat their employees very well there has never been an issue about employees. but this stock can go much higher because anything that accelerated comps as opposed to decelerating, mcdonald's, keeps getting mcdonald's. >> there's news on mcdonald's adding doughnut sticks as they try to invigorate the supreme court fast day part. breakfast has been a trouble united states versus the rest of the world. on the call much more time spent about international, and i think it was misplaced in people wanted to hear about the turnaround, and they did not get the turnaround story. >> meanwhile, carl, is nothing sacred, earl morris doing ads? >> we were talking about this one of the great docume documentarians in the world. >> every celebrity does ads now.
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>> everybody courtside at the 76ers game against the lakers yesterday is a celebrity. >> i know you're very excited about the celebrities going to the sixers. >> more excited about the fact that they may go all the way. >> here we go. >> we're going to get "stop trading. >> number one draft pick. >> see you at the knicks game. >> when queens has a team, will you still go >> brooklyn has a team it's the nets. >> i'm going to that protest today in favor of amazon. >> it got the other aspects of bezos' life off the front page for a few minutes. >> we'll get "stop trading." dow gains fading here. we're up 12. had a coach in high school. really helped me up my game. i had a coach. math. ooh. so, why don't traders have coaches? who says they don't?
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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. tame for cramer to "stop trading. >> they are really unveiling their overnight version of railroading. when csx got the team from canada, canadian pacific went down, i mean, to csx. >> yes. >> and then they grabbed a canadian -- what, all the canadians seem to be in pacific
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railroading. for knock southern jim squires is on "mad money" tonight. the company will become more efficient and has all the trappings of precision railroad. don't short that one holy cow >> hasbro you said as well. >> i've got hasbro one of the best fintech companies nobody talks about, s&p global doug has done a re, maable job take a look at that company. even though the issuance was down, he's not stopping. fintech is so strong >> given relatively flat action last week, do you think the december move has come to a close? >> yes, because -- and i can't stress this anymore than people at the network would stress it otherwise. jay powell really screwed up it was a screwup, he didn't do enough homework. later kind of revelatory that he didn't when he started talking
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to companies he real used, holingy cow, he's going to put us in recession. you have guys who still think he's -- that's not true. when he switched, the day before christmas bottom will end up being legendary and i don't like the october 8th 1998 bottom put in by greenspan after the october 3rd speech when he felt he should be tightening. he loosened on october 8th so there you go. >> there's the story right there. wti down again >> the algorithms, the best we can tell. >> the algorithms, this morning oil had gone -- at 330 oil was down about 30 cents. it had been down about 80 cents, and the futures are really nice, and then they came down because of oil it's just a tracking stock it's a tracking stock. >> as you said before, jim we'll see you tonight. "mad money," 6:00 p.m. >> and again on halftime with
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scott. >> nice. >> jimmy van bramer is here and takes on amazon and the new nyc fq the dow is negative. session high was up 90 points. back in a minute this is decision tech. it's screening technology that helps you find a stock based on what's trending or an investing goal. it's real-time insights and information, in your own customized view of the market. it's smarter trading technology, for smarter trading decisions. and it's only from fidelity. open an account with no minimums today.
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good monday morning. welcome back to "squawk on the street." i'm carl quintanilla with sara eisen and david faber from the new york stock exchange. dow is down, border news, security talks, a lot more. >> the red map for the hour starts with u.s. stocks searching for direction on renewed hopes of a china/u.s. trade deal ahead of the march 1st deadline washington scrambling to avoid a government shutdown. top lawmakers needing to revive stalled border negotiations. >> and one new york city council member to say what he says is an unprecedented act of corporate welfare. >> we're talking about amazon's proposed headquarters in queens. >> first up, top u.s. trade negotiators are preparing for
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another round of face-to-face meetings in the face of the march 1st deadline as a second federal government looms if lawmakers fail to reach a deal by friday. got team coverage this morning our kaylle l.a touchy and ylan mui. >> reporter: there's a return trip for deputies after talks in early january, and now they are trying to lay the groundwork for treasury secretary mnuchin and lighthizer's arrival in china on wednesday to further these talks. the u.s., we'll remind you, is still looking for formal concessions on structural issues, and the u.s. wants to agree on how the deal will actually be enforced that's key here. the outcome of this week's negotiations will determine the u.s.' next steps and whether president trump will hold off on doubling tariffs on march 1st. higher tariffs have impacted trade flows. that's according to the
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institute for international finance. the import of chinese goods that are subject to that higher 25% tariff, those imports have slowed while the lower 10% tariff on $200 billion in chinese goods has not caused a meaningful decline in part because chinese producers have been lowering prices to counter the costs paid by u.s. business eds. that's data that would seem to appeal to the president's gut instincts on trade, but indications from two administration officials and three people briefed by the white house is that there's still a desire to get a deal, even if the u.s. needs a little bit more time to do so carl >> kayla, we're going to watch that closely thanks very much, kayla tausche. meanwhile, five days until another government shutdown and things looked so optimistic on friday. >> they did, carl, but right now there is a stalemate, and it's over two very separate but related issues the first, of course, is funding for the border wall. sources say the democrats have been willing to offer between
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$1.3 billion to $2 billion for a physical bearier, less than half of the $5.7 billion that president trump originally asked. democrats seem to want to cap the number of beds available for illegal immigrants who are captured inside the u.s. they wanted that cap to be at 16,500 republicans said no way. that could result in potentially criminals being released back into society now, meanwhile, over at the white house, kevin hassett is saying if another shutdown does occur because of an impasse over those issues the economy could still take it. >> the economy has moved far with all of this uncertainty we certainly hope it reselves quickly but, you know, i think we've seen what happened before and, you know, hopefully we won't have another shutdown. have to think about it, but we've gone through the math of shutdowns already. >> reporter: kevin hassett said
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retail sales due out would likely be lower because of the impact of the shutdown back over to you. >> all right thank you, and we'll see if any deal, made in the next few days. meanwhile, stocks are flattish the dow and nasdaq are coming off their seventh straight week of gains and the s&p up six of the last seven despite the recent rally the imf chief warning of a slowdown saying, quote, the bottom line we see an economy that's growing more slowly than anticipated we have no idea how it's going to pan out and what we know it's already beginning to have an effect on trade, confidence and markets. brian, this all adds up into weaker growth. how high are the expectations for this year? >> if you take a look at how earnings have dropped since the beginning of last year is we've
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seen 400, 500 basis points come out of the earnings growth rate for 2019 which is pretty big it's cut in half but i also think, too, that most investors are kind of running under the assumption of the three rs of 2019, so number one is regret. number two is the retest and number three is recession so let's talk about the earnings recession many people are scared about, sara. we need to see two negative quarter of earnings to have a true earnings recession and we don't think the math adds up, that you can actually see the two quarters there's no doubts that earnings on a relative basis are going to be slower meaning less positive, but under that environment that creates an opportunity to be a stock picker to find those names that are not only growing stronger than the market but have valuations less than the market, and i think we're entering into a period of where you want to own fundamental stability in u.s. large caps we believe will be at home for stability. >> when we get a pre-announcement on current quarter revenue earnings and they say they are going to make it up for the year, you buy if
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>> i do, because ceos have learned, carl, the last ten years, that defense wins championships, right so ceos in america have ratcheted down their numbers to underpromise and overdeliver so we're setting up for we believe a second half that could surprise people just because we're playing so reactive defensive policies with respect to fundamentals and what we're looking at in terms of forecasts. >> what's your level of optimism, mark, as you look at all of this during an economic lens with so many policy uncertainties like trade and the shutdown. >> well, i'm -- it depends on how those uncertainties resolve themselves if you take the working assumption that they resolve gracefully, that the president can figure out a face-saving arrangement with china and get out of the trade wars and there's no shutdowns and they don't take it off the cliff with regard to the debt limit, a lot of assumptions, just assuming that they all play out reasonably well it should be an okay year. you know, fundamentally we're creating a lot of jobs, and when
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you're creating a lot of jobs, unemployment, wage growth is strong we're in a very strong virtuous economic cycle so it's pretty hard to break. we're doing everything we can to try to break it, but i think assuming that solity-makers and lawmakers get it together and don't go off the rails, the economy should be okay. >> how much do we determine how much things are priced in with regards to china >> so many investors were tried to the synchronized growth scheme last year and it really by the them at the end of last year this is all that we know i think in terms of priced in for a china deal, i'm not so sure that we've priced in had a china deal because i still think that there's so much doubt and so much ill will with respect to the current administration and how they are dealing with this i think, again, this is going to be a reactive type of market that will quote, unquote react to when we finally see a deal.
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there's so much untrust in the market no one wants to make a longer term call. still, when i talk to my portfolio managers around the world, the amount of turnovers we're seeing in portfolios is all-time highs, no one is sticking with stocks trading in and out, very short term so let's call their speed dating stocks. no one is really owning stocks. >> mark, how do you think about the economic benefit of getting a deal done with china i know you said it could go well and we could have an okay year does that mean that the pain, for instance, in china stops and that could be a turnaround for u.s. corporate earnings that are feeling that slowdown? >> yeah, i do think a trade deal any kind of deal is a positive for the u.s. economy, the chinese economy and global economy. i think this trade battle, this uncertainty is doing damage. clearly to china and also here in the u.s., i think it's weighing very heavily on business confidence. i think you can see it in the business investment numbers. business investments has essentially gone flat line since when the trade war really got
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going about a year ago so this is doing real damage and if we can settle it then i think the economy should get a bounce. having said that, i'm very skeptical that the administration is going to be able to figure out a deal that really changes anything of substance. you know, just like the north american free trade agreement. you know, that deal really was much ado about nothing really no change there, and can you remember back last summer we struck a trade deal with the european union and, you know, that was much ado about nothing and that's what i expect here. let's get it behind us so that the economy can get back in groove, but, you know, i don't think it solves any long-term fundamental issues with china. >> it's interesting, brian, that you like large caps because small caps have been the place to be, so far up 12%, s&p up 8. >> we like mid-cap over small-cap, sara, but, remember, small cap led the decline in the fourth quarter, right, and they just got crushed. >> you're still wary >> yeah. you have the snapback, and i do
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think some of the m & a activity will help small and mid-cap stocks and there's the original bid that people aren't thinking about but with respect to ball sheet strength stick with mid-caps dividend stocks have seen cash flow that we've not seen in a generation primarily we want to be in stable growers that have very strong balance sheets and that points to u.s. large caps and i think that given the fact that em and europe has so massively underperformed miss lagarde came out to talk about weakness, we think there's rotation back in the u.s. as the rest of the world becomes reluctant buyers of u.s. stocks. >> finally, mark so much noise around tax season this year given the shutdown and we have the tax bill in place. are you doing any work as to how it might impact consumer retail demand this spring and summer? >> yeah. i think it's having -- you know, obviously a negative impact. i mean, these refund checks are
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coming in very light relative to last year about 10% smaller this year compared to last, at least so far a lot of script to be written here still in the early days, but that's pretty significant, so that -- that's real money and i think it will hurt retailers, at least over the next few months when the refund checks are pretty important to a lot of lower and middle income households so, you know, unfortunately, it's going to do some damage to growth in q1 and q2. >> does that move you at all >> no. i think the consumer is still spending money, but they are just being so much more confined and concise with how they are spending money remember, 70% of our economy is the consumer so we're neutral the consumer just because of the strength of amazon and there's a lot of great companies there and we do think the consumer is in very good shapes >> tax cuts, is that feel-good effect wearing off or is it not? >> oh, yeah. i think that's already long gone i mean, that really juiced up things this time last year, right? i mean, the peak in growth was q2 of 2018 we got over 4% growth. that was all juiced up by the
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deficit finance tax cut and they are gone so there's no more stimulus left. maybe a little bit of increased government spending because we had a spending bill passed last year that should translate into more government outlays this year, but that's really on the margin, so we've got a temporary short-term boost from that tax cut. that's gone, and, unfortunately, now we're left with massively larger budget deficits. >> not necessarily the answer you'd hear from kudlow or kevin hassett. >> no, you definitely wouldn't hear it from them. >> mark zandi and brian belski >> when we come back shares of spirit airlines on a tear in recent weeks goldman even turning bullish on the stock. a first on cnbc interview with the company "e! news"ly minted ceo next and then stacey cunningham joins us and why one
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member said defeating amazon's plan for nyc's hq would be a victory. you're looking at the top rfmi sckonpeorngtos the s&p "squawk on the street" back right after this obvious. sometimes, they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group - how the world advances. ♪ when yowhat do you see?itical issues facing our world, we see a billion more people breathing free. we see access to fresh food being the global norm, not the exception. we see homes staying cooler, without the planet getting warmer. at emerson, when issues become inspiration,
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airlines, having rung the bell this morning at the nyc. >> thank you. >> great to see you. >> great to be here. >> framed it as a shutdown story to begin with, but i wonder how painful was that >> well, i think there were operational issues we were trying to add aircraft to the certificate and new destinations and that was delayed a little bit, but beyond that we really couldn't see any demand impacts or anything like that. >> so compare it to say weather or anything else that airlines go through in a given year. >> i think weather is clearly more of an issue because we deal with that all the time summer, winter, whatever that might be, so i would say it's much more muted than that. i hope they reach a resolution soon because we're constantly growing and constantly adding new airplanes and constantly adding new destinations. >> is it fair to say that the trend remains consumers being comfortable with sort of fee-based service. >> well, what we love about our product is it's about value at the end of the day, and, you know, what we -- what we deliver
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is a very low fare quality service with one of the best on-time performance records in the country, lowest mishandled bag rate in the country and when you reduce fares and allow people to pick and choose what they like. that's how they deliver an even lower fare for themselves and that's what we do every day. >> i was looking at the stock price. it's done really well over the last 12 months up over 60% and one of the reasons is because of the ancillary fee business and how you've increased the revenue per user how are you doing that are you charging for more stuff? >> no, there's not a lot of issues you can make from an unbundling perspective we're much more optimized as to how we prize the price to consumers. when consumers pick whether they want a checked bagged or carry-on bag we're picking that based on the season.
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>> do you still have to pay for bottled water? >> we offer that on board if you would like to buy a bottle of water, that's correct. >> i always bring my hone water whenever i fly so it makes sense that you might want to charge. expansion. looking at some cities that you have on the list here in terms of news service, what do the new markets have in common what are you looking for >> we're looking for high growth markets and looking for opportunities to stimulate new travelers? remember, the model is a very, very low fare entry point. what the that does is brings more travelers back to the market so what we're doing is trying to create more demand. >> are we taking business from the legacy carriers or people who would have otherwise driven? >> we don't believe so it would be people who otherwise drove. we're not traveling as frequently, to be honest, and this gives them more of a chance to do that. >> so -- looking at -- what are the cities here, austin? indy, raleigh-durham >> right. >> top three >> those are the next coming,
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austin on valentine's day and then indianapolis about a month later, and then we're doing raleigh the beginning of may these are all high-growth cities, austin and raleigh being some of the higher growth cities in the country and we think there's a chance to come in again and deliver the high value quality product and stimulate more travelers. >> what does the demand picture look for 2019 versus last year which was a pretty strong year from growth? >> we think it's really good demand is very strong. our performance indicates that we've had very good unit revenues which is a good reflector of how demand is going. our load factors are up year-over-year so we see strong demand right now and don't see anything on the horizon that would change that. >> we've asked a couple of executives in the industry about -- "the journal" did a piece saying load factors were getting lower. do you see that as true? >> we're full and continue to
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fly where we can as i said earlier, demand seems to be very strong. it's supportive of that throughout really most gearing physical because we have reached throughout most of the major metropolitan areas in the united states and we have 26, 27, latin american destinations as well and we're seeing good international strength we're seeing good big city strength and large leisure destinations like orlando and myrtle beach and new orleans also very, very good. >> how are you thinking about oil right here tough day for oil. >> we like stability in oil. we'd rather it just kind of hang out. and i think that's the best answer for us long term. the big thing about our product is because we're so efficient with the aircraft. we actually burn less fuel and in rising oil virnlts we cenvire can use to that our advantage. >> you mentioned you operate a single fleet, in other words, aircraft, but you do have an rfp out there, and there are those
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who wonder are you going to go to a different model or support two different models will you and what are you looking at and how many are you expecting to order >> well, we do have an rfp in the marketplace. today we have 130 airplanes, by the end of 2021 we'll have 175 and our plan is to continue to grow beyond that so we owe it to ourselves and share holders to make sure we're making the right buying decision and duel fleets can increase complexity to your operation, but you also pay for the airplane up front so you have to balance the cost of the aircraft along with the operating expense. >> finally, just the logo, the name. >> you love it, don't you? >> it's huge >> what do the marketing people? it speaks to happiness and sunshine it sticks out at the airport any time you guys go to an airport you see a lot of white and blue but not when we're showing up you'll see something different and we're proud that have. >> disruptive marketing, really nice.
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>> ted, please come back. >> thank you very much. >> joining us here from spirit >> straight ahead, we're going to take you live to the world's largest etf conference with the new york stock exchange president stacey cunningham. her take on trade, volatility and the markets. then, a bungle since day one that's how one new york city councilman is characterizing the city's negotiation with amazon over its proposed hq-2-. we' and we'll talk to the owner of starbucks and waste management they are both hitting all-time highs toy. resqwkn the street" coming up. - our markets are currently experiencing
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>> now for our etf spotlight let's send it down to hollywood florida and bob pisani with a special guest. good morning, bob. >> stacey cunningham, president of the new york stock exchange is speaking later on the important thing is i'm hearing a very clear message here the theme is global growth and trying to figure out what's going on with global growth. now you're job is very -- it's a wonderful job. you get to speak to ceos every single day you just got back from davos what are you hearing on the
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subject of global growth what are the ceos telling you. are they concerned about it. is the u.s. going to outperform. give us an overview. >> first of all, i want to to take a step back and this is the first time i've attended the etf conference, and the energy is amazing. to answer your question when i talk to ceos, they are cautiously optimistic. you know, i think there's a lot of unknowns out there. there's a lot of talk about trade and a lot of talk about the geopolitical issues unfolding and how those unfold and when they unfold is i think contributing to what overall success looks like. >> global growth is the number one issue down here. trade i think is number two. the fed is number three, but a lot of people feel the fed is not the big worry right now. it's the global growth global growth concern is the u.s. is essentially the only real engine of global growth right now. look what's going on in europe we just had a presentation from vanguard we'll talk to them, slower china is down an estimated 6% of
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gdp, vanguard's numbers. global growth will depend on the united states essentially this year, and that's why people think that valuations might be a little high. >> i think when you mentioned davos when i was out there, it was apparent that there was a little more optimism from some of the u.s. ceos than some of the european ceos hand, again, just a lot of issues that are unfolding, and so there -- how they unfold and how quickly they unfold is going to contribute what that growth looks like. >> another interesting debate is the role of public companies here we're going to have a major speech later in the day on environmental social and governance issues. paul tudor jones is going to argue that corporations need to start rethinking their obligations, that it's not just maximizing shareholder profit, that there are other obligations that exist for share -- for public companies where do you feel pubically traded corporations should stand on this whole issue, for example, getting involved in climate change or global warming or making a stand on public issues >> so it's important to
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understand that companies are much bigger today than they were before they have much more of an impact because of such larger corporations the number of public companies, down by over half over a 20-year period, the average company is six times the size that it was means it's much more of an impact the opportunity for a ceo at a company to take a real stakeholder view is certainly something that's being asked of them in today's world and environment. where he think it's important that we not have any unintended consequences is not to put that pressure on a company through a regulatory or legislative regime, so that -- make it based more on transparency and disclosures, so companies can take action and highlight the good work that they are doing and then let investors reward that activity. so just capital is doing that, climate, other issues, let the investors decide one of the things that makes
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this country so great is we can use our own decision making. >> we'll get the outlook on capital later. want to move on about the ipo business got ipos last week 225 or so standing in line this year. >> a lot of companies looking to tap the public markets. >> is there enough buyers for all the ipos you're confident the market is going to fully open in the next few weeks? >> that's a different question i think there's a lot of ipos lined up a lot of companies looking to go but we need to make sure that the government stays open in order to support that. we're definitely very focused on that because it's an important part of -- for these companies to become public there's a lot of companies interested there's a lot of investor demand for companies that are dynamic and especially with well-known brands out thereto. >> we had some that went right on the list that didn't raise any interest, that's spotify
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does a direct listing matter to you at all or is it a real option for corporations? >> spotify really broke new ground they didn't need to raise money but they -- they saw the valve being a public company and they wanted to provide that to their early stakeholders and have a currency to do m & a which we saw last week. that's a unique way to go public and they came to us. we have a really innovative model at the new york stock exchange with the combination of human traders and technology and we were able to support a direct listing. i don't think it's going to be the norm for every company that's coming forward, but there are certainly some that are considering it, and we're here to support them for that, and it's something that's really unique and an innovative way to tap the public markets. >> i know you'll be very involved in that ipo business. i know you're out all the time pitching the new prospects for that ipo and it's a very competitive business stacey, thanks very much for joining us appreciate you being here as always greg davis is coming up from vanguard just gave the keynote address on the global growth prospects. again, that's the big theme here at the etf conference.
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i'll be here all day guys, back to you. >> all right we'll see you later. thanks, bob. bob pisani let's get back to headquarters and contessa brewer now with the cnbc news update good morning, contessa. >> hi there, sara. here's what's happening right now. secretary of state mike pompeo is in budapest for the start of his five-nation european tour to raise concerns about china and russia's growing influence in central europe this culminates with the conference in poland on the future of the middle east. acting defense secretary patrick shanahan met with afghan president ghani in cabual and made an unannounced visit to meet afghan leaders to push for a peace deal with the taliban. he has no orders to reduce u.s. troops in the country. u.s.-backed syrian forces captured 41 positions held by islamic state group militants in the last tiny pocket they held in eastern syria president trump predicted last week that isis will soon lose all territory it once held in syria and iraq iran's president addressed hundreds of thousands of
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iranians who poured into the streets. today marks 40 years ago, considered victory day, in the country's 1979 islamic revolution that's when ayatollah khamenei declared iran an islamic republic that's the cnbc news update for this hour. i'll send it back to you sara. >> contessa, thank you just want to point out shares of tesla moving higher, more than 3% upgraded from a buy to hold. raised its 12-month price target on the stock to $450 all the way up to 330. the new 12-month price target representing a gain of more than 40% here guys, they talk about the last two quarters and the guidance and saying it removes a lot of concerns about the production capability and profitability of that all-important model 3. >> all right well, still to come here, the story is far from over for jeff bezos and his fight with ami ceo david pecker over those allegations of blackmail and politically charged investigations into his personal life
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ami firing back at bezos over the weekend. >> it's absolutely not extortion and not blackmail. what happened was the story was given to the "national enquirer" by a reliable source that had given information to the "national enquirer" for seven years prior to this story. it was a source that was well known to both mr. bezos and miss sanchez. >> got this going on meanwhile, there's also some protests in new york city as amazon reportedly reconsidering their location of its long island city headquarter 2. we're going to speak to one of those rallying against one of the world's most valuable companies when "squawk on the street" tus.rern
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quintanilla and david faber live as always from the new york stock exchange one hour into the trading session. it's a mixed picture the dow is down 23 points. s&p 500 barely positive. the nasdaq is up a quarter of 5% you've got groups like industrials, technology and consumer disregularsry all leading the charge today, but energy, utilities and healthcare are lower. keep in mind this comes off of seven straight weekly gains for the dow and the nasdaq >> amazon reportedly reconsidering its plans after facing opposition from some local residence. anti-amazon activists went to the streets collecting signatures for petitions to derail the proposed headquarters that will employ as many as 25,000 people. today a pro-amazon ram is set to take place joining us now is a vocal critic to the move to queens, new york city council member jimmy van bramer thanks for being here. >> thanks for having me. >> why are you opposed to moving
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the headquarters to new york city >> amazon has demonstrated that they are antithetical to our new york city values and came to our new york city city council and declared not only would they not remain neutral when it came to efforts to organize but they would fight to crush any efforts of their employees to unionize this is a union town and i grew up in a union family and we have to stand up for our values there. as you know, amazon is not really clear about whether or not they are working with i.c.e. and selling facial recognizes technology to i.c.e. we're a sanctuary safety we want to be a safe haven for all immigrants, as well as undocumented ones. how this was rolled out with the mayor is well documented obviously the $3 billion surplus package to the wealthiest man in the world with a trillion dollar company is obscene
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all of us and more fight this day because at the end day it's a bad deal for work >> many new yorkers would say i believe that while you're fighting on behalf of some of your constituents for what you just discussed that you're turning away the prospect of enormous economic activity and the tax prospects that will come with it for a city that desperately needs to continue its budget to deliver services to constituents that they rely on how do you justify saying no to 25,000 jobs or more to 9 most important potentially technology company in the country on behalf of new york city residents who say, hey, we need this, and the budget may go down and the services i want would digs appear. >> i would say this. we're not against jobs no one is against jobs i'm not against jobs but the question is is it jobs at any costs and at all costs? the truth is that we don't need to engage in these kind of pyramid schemes and competitions
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we don't need to throw $3 billion at amazon. i believe they wanted to come here all along and i also believe that this city has thrived for a very long time and will continue to thrive, but we have to stand up for our values. >> it was a national competition that new york city entered into willing will you the governor and the mayor obviously support this the 3 billion in inseptember i was will be taken off largely from the tax revenues that are paid by amazon again, i still have a hard time understanding your opposition, ted. they are anti-union point of view, perhaps, and i don't understand why you would say no. you say you're still in favor of jobs but isn't this holding out a big sign to the rest of corporate america saying we don't want you here. >> i think new york city will be a place where people will continue to grow and invest. >> why do you think that >> it's the greatest city in the world with the greatest talent
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pool -- >> onliful you're pro-union and only if you are i don't know, not doing facial recognition and not selling things that we don't want how many different things are on a checklist for corporations. >> there's a lot of things on this check list that are wrong for me as a progressive democrat, and i believe that if you're a progressive in this city then you shouldn't be be in favor of this company not just saying they won't remain neutral but they will actually crush the efforts of their workers to unionize there are significant worker-related issues at amazon. we would be doing a disservice to our constituents and to the workers of amazon but not raising these issues we have to ask the tough questions of amazon and of the governor and this deal i would say to you, the $3 billion that would come off the $27 billion or roughly that they claim it would generate, it's still unnecessary. you could actually have the jobs and have that without giving them $3 billion.
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i would add this, just one more thing. the truth is that amazon not only doesn't need that aid, but we should be talking about what the cost of amazon is to the city they are going to bring tax revenue, but they are also going to bring expenses this have not been talked about to this point because with 25,000 to 40,000 employees, maybe 100,000 people will come with an increased need for transportation infrastructure, schools, libraries, parks, police, fire none of that has been calculated so you've got a situation where they are talking about what tax revenue would come in, but none of the expenses are being actually factored in. >> that's part of the growth of any city and if you're in favor of growth, we have a $92 billion, 63 billion comes from taxes and most of it property taxes. $29 billion and income taxes after that and sales "total access."
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how do you tell your constituents, no, we don't need those jobs or tax revenue and it's going to cost more anywhere when conceively they will face reductions in services because of a budget that can actually increase. >> first of all, a lot of my constituents are telling me to continue to fight for the values that i'm fighting for, so it -- while there are people who support amazon in my district -- >> councilman, why not have them in and then have this. do you almost have more leverage as a result of them being a member of the community as opposed to saying, no, we don't want you i would argue that the message is right now the problem is the mayor was given a blank check and presented this deal as a fait accompli which doesn't exactly encourage amazon to change their ways or come to the table in any meaningful way this was botched by the mayor and governor from day one. >> others might argue if you really wanted to change their policies on i.c.e. or anything else, that it would be better to do it from almost from within,
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where you could say to them, hey, you're a hometown company now. we have some ideas on how we might change your business practices. >> i've said that to them. we've had -- >> first they got to come here. >> no, no. i would argue that they should only be able to come here if they are going to have that meaningful discussion. amazon -- we asked them this question at the hearing last week remarkably when we said will you at least remain neutral if you were attempted to organized and we stunned, no, we're not going to remain neutral. we'll fight our workers' efforts to organize. >> were you opposed to them before that? >> no, because there's so many issues contrary to our values. >> are they mad now that the market is going bidless? >> some of the folks who own property are very happy with the rise in property values since
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the announcement the amazon effect in seattle with gentrification on steroids has also frightened more of my constituents who live in astoria, sunny side, long island industry and the surrounding neighborhoods who are not property owners but are renters. >> renters >> and they are very, very concerned that with an influx of 25,000 people making $150,000 or more they are going to be priced out of their neighborhood so those are real concerns that i have to be responsive to. >> the economic activity created by amazon in this city will be very, very potentially large, and this will take place over time you're obviously very prounion, new york city, is a union town, but a lot of unions would benefit from this. people need more plumbers and they need all sorts of different workers who are unionized. it would seem to me that, again, there's a benefit from an economic activity you're saying no to. >> they made a deal with the building trades and construction trades to contract out the
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cleaning and building service workers. that's -- that's something that i would be happy about, except for the fact that most of the unions are cut out and no amazon employees, direct amazon employees can be unionized that's really a problem here, so they made those deals with temporary employees or contract employees, but it's amazon's corporate culture, from jeff bezos on down and we were told at the council no direct amazon employees anywhere will be allowed to organize and form a union. everyone should be concerned about that. >> well, we'll see you and i seem to be around the same age remember the '70s in queens. that's where i grew up >> may be a little bit older than i am. >> sorry, it's the gray hair. >> that's a low blow but go ahead. >> i thought it was a fair shot. >> i absolutely remember the '70s i was a kid as maybe you were, too, and -- and, look, i'm hopeful and optimistic and i grew up and i've lived in queens
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my entire life i don't think we have to sacrifice our values and, look, i come from a union family my step-father was a janitor and my mother worked in local supermarkets it's those families that i come from that need to be able to continue to live and afford to live in western queens. >> well, you -- thank you for helping us to trying to understand some of the opposition to this, councilman appreciate it the. >> jimmy van bramer. >> when we come back, recent polling voters want increased taxes on the wealthy and they want lawmakers to take some action we'll take a closer look at that and watch shares of will activision blizzard and goodyear tire lower today dow is down knife. we're back in a minute
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it is the trees tax the rich democrats proposing steep tax hikes for millionaires and billionaires who are getting surprising voters from voters. our robert frank explains this morning. robert >> good morning. the proposed taxes on the wealthy are being called radict extreme by some democrats, rates and thresholds have some precedent in american history. representative alexandria ocasio-cortez proposing top income tax rate up to 70%, almost twice the current rate. between world war ii and 1980, tax rates were between 70 and 91% for top earners. bernie sanders' estate tax lowers it from 11.4 million to 3.5 million. that would bring us back to the rate only in 2009, all of which may explain why the majority support higher taxes on the wealthy. three-quarters of those polled support increasing the top tax rate to the top earners of 70%
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fox news poll finding that majority of republicans back higher taxes on those making more than 10 million n none of them mention that they're paying the highest share of federal taxes, playing close to 40% of all federal income taxes. back to you. >> robert, any definitive studies or economists that can prove any of this works or would have material impact say on our deficit? europe, certain european countries have toyed with these kind of wealth taxes and some of them had mixed results what does the evidence show? >> the recent evidence, france's 75% tax on millionaire earners, that was scrapped pretty quickly. the problem is the wealthy always find ways around taxes if they get too high, so they never generate enough revenue. they're inefficient.
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wealth taxes, what senator warren is proposing, 12 countries in europe had them, now only four. there's also some mixed data on what taxes do to economic growth, there it is more of a mixed picture. >> we'll be talking a lot more about it robert, thanks let's send it to jon fortt with a look at what's coming up on "squawk alley." good morning, jon. >> sara, speaking of billionaires, jeff bezos and amazon will continue the conversation in "squawk alley. hq2, talk to jim stewart about that and the continuing scandal around bezos himself with raka swisher. that's coming up in a couple of minutes.
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welcome back to "squawk on the street." stocks off highs of the day with the s&p 500 barely holding gains ahead of more china trade talks this week. as we drill to one of the underperforming sectors, it is in energy. this as u.s. crude oil prices tumble to lowest level since mid january. up tick in drilling activity along with refinery fire in illinois, weighing on the index. among the names to the down
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side, noble energy and occidental petroleum, chevron. worth noting, despite that rally, it is down 50% from recent highs last july i will send it back downtown to you at the new york stock exchange, david. back to you. >> thank you, dom chu at hq. "closing bell" approaches, but not for a little while still, i'm very excited. >> most important hour of the day. laugh on friday, it made the week in terms of gains we were lower for the week heading into the final hour, things turned around, there was buying you get it it is important. also some big names on the show. paul tudor jones last time he said he was worried about the global debt bubble always good to hear his thoughts on the markets and also on trade talks happening this week in beijing kevin rudd, former prime minister of australia, a country
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caught in the cross hairs of the slow dounlz slowdown in chinese growth when we come back, why kara swisher says jefbes f zois not afraid of total exposure when "squawk alley" starts in a few moments. servicenow put our workflows in the cloud. this changes everything. you're right sir... everything. well not everything, i mean you're still blatantly sucking up to me gary.
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