others about this very issue. >> efforts to try and fight that and reverse it a quick look at the markets as we hand things off to "squawk on the street. dow futures indicated up by 181 points the s&p indicated up by 17 the nasdaq indicated up by 51. join us tomorrow, right now time for "squawk on the street. ♪ i just got played good tuesday morning welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. the dow looks to avoid a fifth day down today, something it has not suffered since june, getting help from reports that a tentative deal has been reached on border security opec production cuts reportedly sticking and powell speaks in the noon hour, eastern time road map begins with a deal reached tentatively. lawmakers compromised to avoid another shutdown stocks rally on the news

will the president sign it >> under armour on the rise this morning after reporting better than expected earnings we're going to break down the numbers. find out why north america is still a weak spot. >> and shares of apple are up today after three days down, coming up, tim cook's new comments about lower priced phones in china. first up, stocks pointing to a higher open. congressional negotiators say they have reached a tentative deal to fund the government and avoid another shutdown a source tells cnbc the deal includes about $1.4 billion for physical barriers at the border. not the $5.7 billion that the president was looking for. the bill could be introduced as soon as today or tomorrow. it is unclear if the president will sign it if it passes in congress we'll see. less than a quarter of what he originally was asking for. >> i've got -- i'm waiting for him, the last tweet, 45 degrees outside this was the overflow crowd. i'm waiting. i think that this rally could dissipate if he tweets it is not

enough and talks about crying chuck. >> crying chuck? >> yes one tweet and this guy sends this whole market down >> you've been saying it is more about china than the shutdown. >> you can take this gain away with a tweet chinia china is everything to me. >> the market went up during the last shutdown. >> it is a modern importance versus the leaks by the -- leaks by the mnuchin team saying the lighthizer team is more important than the mnuchin i don't trust a single story about this thing >> it is a lot of cross currents on china trade speculation that the trade -- the deadline could be delayed. reports of whether they could meet in florida, could they meet somewhere in asia, it is a mess. >> i read the story today front page of the journal about how weak china is, i see the bulk

freight numbers are really bad you're seeing a lot of -- i have brian goldman on last night from hasbro, he said if he could get the logistically get the toys to come out of another country, it is a lot of the problem, it is not that they make them great or -- it is how easy it is to get out of china because it long has been established you solve the logistic problems from other countries china is going to have a gigantic problem. >> how about this op-ed bloomberg op-ed by kyle bass when it comes to trade talks, the president and negotiators have more leverage than any u.s. administration has ever had. and they say that leverage gets even more powerful once we pass march 1. >> i think that -- i think it is happening. whatever they do seems meager. two weeks ago they led s&p global to rate chinese bonds a big breakthrough doug peterson on last night. he was talking about this is

great for us was it a give, was it a give by the chinese? he said, no, not really. i find the chinese are in trouble in the sense that they don't know how to signal that they would like to be a little more compliant we have seen -- i was with the najarians yesterday and they were talking about how there say lot of people saying that xi is in more trouble than we think. i say what matters is they don't want to have a declining pmi and they want to get auto sales up and have to get industrial sales up and it is just a problem right now. >> i don't think there is a great deal of transparency about xi's standing or anything else no, i don't. >> you don't have a direct line? >> i don't have a direct line. we all try to speak to him, but it is unclear to me how well informed anybody is. which goes to your original point. that said, i think the majority

of investors believe that there is a very high percentage, you're going to get something that is another least positive to neutral and a very -- the percentage who -- the actual end percent of something bad occurring is seen as fairly small. which would be a surprise to have some thing blow up entirely and go 25% on everything that would be very bad what is that 5% chance? >> kyle has been saying this for a long time. >> yes. >> very aggressive he was with me on a number of interviews we have done, a long time ago he's obviously -- he's spent a lot of time trying to understand the chinese economy, had a fund specifically dedicated to being short the currency and/or banking system in different ways doesn't mean it is wrong. >> he's been wrong and you should take -- what you

have to do is listen to people who felt it was really important we didn't have the upper hand and now feel like we do. i keep coming back to navarro, 2025 plan of world domination is what he thinks is on the table he has the president's ear that's the man you got to pay attention to he wants a deal. but only on our terms because he doesn't think that the real issue is -- it is about stealing intellectual property. i agree with him david, i agree with him because of the stuff you've done remember you said you wouldn't use your phone over there? >> you can't >> why you use burners, right you're like the wire when you're over there. >> i am. >> use it and drop it. >> likes the wire. >> like the wire >> a lot of earnings movers. under armour, beat the street, getting a boost by apparel sales and growth overseas, but u.s. down 6, international up 28,

accounts for 28% of total revenue. the headlines on the conference call, we expect the revenue to be slightly down inventory levels to be down mid-teens. a lot of discussion of how nike is growing way past the guys at eight times the size. >> i saw the stock up early. i said why is it up? north america -- >> up until these headlines. it was looking up 5, 7%. >> you don't have revenue growth here nike got -- nike missed it mark parker missed this -- the whole kevin plank revolution i was on the -- on the fourth floor of the nike building on fifth avenue you couldn't even get near it, it was so crowded. >> i went in there i did. i didn't like it i didn't like it >> is there any shopping that you do -- >> i don't know. there is people roaming around to take if you want to buy something, then they're, like, come over here

i was trying to buy a gift for somebody, they had no boxes, they had no bags, they had nothing. walked out -- i said, you know what, reverse that >> david, you know who i have on today, your worst nightmare, shopify. >> we should -- we should mention that shopify with under armour. >> 53% a lot of people want -- under armour is problematic, under armour stock moved up a great deal i think kevin is doing a good job. it is what have you done for me lately this is not -- north america is better than estimates. the quarter panel did finish hot. we're in a market where when i go over the nike quarter, it is just one area after another that is doing so well

nike was a sleeping giant. they woke up they're shoe dogs. >> they are. >> great book. >> one of the best bad blood, shoe dogs, we should do a -- an hour long thing about our favorite business books. they're much better than -- >> quite good. >> i was reading the book on russia too worth a read also. read that one. it is pretty good. >> all right >> you know, ua, uaa, under armour, sg&a up 4%, same as revenues, up 4%. >> thank you >> no margin increase. >> no. you need to have something go -- i don't think adidas is doing nearly as well as it was again, because mark parker the personalization of shoes is such a big business. and the nba, china, mentioned it yesterday, i got to tell you, i feel kevin plank is in an industry where you have one company that is dominant

and they're not going away nike just has the great players, they have got the real momentum, it is just a tough business to be in the same cohort as nike. >> nike amazing, $132 billion market value, under armour is 9, going down today. >> the fact that noike decided o offload, how strong can you be the strongest in the world. >> the stock keeps slipping as you can see. one additional headline, expects midsingle digit decline in north america revenue in q 1. >> north america, that's -- north america, that's where we live >> you have a keen sense >> yes >> striking again. >> wow >> we'll keep a close eye. not the only name we're watching when we come back, what apple's ceo is saying about the china trade talks and lowering phone

prices later we'll talk live with ibm's ginni rometty, the conference, and the exclusive with the ceo take one pour look here at the free market. coming off four days down on the dow. we look to reverse that today with futures up 190. don't go anywhere. i don't know what's going on. i've done all sorts of research, read earnings reports, looked at chart patterns. i've even built my own historic trading model. and you're still not sure if you want to make the trade? exactly. sounds like a case of analysis paralysis. is there a cure? td ameritrade's trade desk. they can help gut check your strategies and answer all your toughest questions. sounds perfect. see, your stress level was here and i got you down to here, i've done my job. call for a strategy gut check with td ameritrade. ♪ so, servicenow put your workflows immhm. cloud, huh? your employees must love you. [ chuckles ] thank you. you could say that. i love you.

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shares of apple slightly higher today has fallen for three days strike tim cook talked to npr

commenting on the chin ka trade negotiations he said both sides are talking and i think that is essential. the essential thing to reaching an agreement the local currency devalued over the course of the year, our prices did go up there, more so than they did in regions that are u.s. dollar denominated. as for the strategy of pricing phones lower in china, he said we'll see how that works out for us. >> people spoke with tim at the time of the last quarter, look, he is incredibly candid, look, there is the patriotism trade, the strong dollar makes them not less competitive, there is a slowdown in china. he was the guy that -- he did say january was better worldwide. i think that tim, into apple yesterday saying, you know, you got this big va contract for the watch. you don't even tell the story

the way it should be they are triangulating america to try to cut health costs they have so many things going and all the narratives entirely controlled by china. there are so many good things that they're doing about the service revenue stream, doesn't matter >> down 20%, it is going to get investors attention. that is far more about loss of market share than it is simply -- >> yesterday, reports that iphone is down 19 in china, stock didn't move. >> that was that fourth quarter again, before the preannouncement. look, there is no denying it the stock can't go up if china is bad i'm saying if you think -- if you go to 2021, if they did service revenue stream, if they bought a dex con, developed health care in a way that google may be or amazon with jpmorgan and buffett, you'll be able to

charge $15 a month for your watch. you have to do that because if it is just going to be constantly about units, it is just a nonstarter. people don't want to know anything other than -- >> that's why they got rid of giving you all of the information, right >> you think that was a -- how about the fact they were trying to make is so you thought about something else. >> focus on other things we talked about the service revenue. >> i'm not done talking about it i'm in the done talking about it. >> the stock is up basically the same as the market for this year trailing by 60 basis points. >> 230 to 142 and i had tim on at -- i had him on at 149. goes up to 170 he said it is not over it isn't over. it is not over >> not until you say it's over. >> thank you it is interesting.

there is no nike competitor so the ministry of fitness, ministry of fitness, how is your ministry of fitness is doing it is a line with nike there is no ministry of apple. this is important. i just don't want to dwell on it forever. if they were to start telling -- the va contract was big. they don't even talk about it. i was the only person talked about 9 million people from the va how can this be? how about the doctors they have been hiring very -- health and returns, trying to get -- >> told you, he said your last interview that in the 30 years, we'll look back on apple as a health legacy, not a -- >> i'm trying to make it 30 days, but that's not going to appease you. no it is not. no how about a molson coors, if you drink 50 million -- >> would that help >> no. that was one of the -- just in

terms of releases that were bad, they had to restate 2016, 2017, this is a disaster that one is a disaster it is. that one is the -- ea was the disaster until they released your favorite, apex legends. >> yes. >> have you been able to get -- 20 million people signed up during the course of the show. >> 2 million concurrent, right >> yes i look at the twitch guidance, that's an amazing short squeeze. molson coors, the beer category is awful. >> they admitted to material weakness in financial controls >> that's what we need. >> you don't like that stuff. >> you had the numbers up. >> beer is just not -- >> beer is flat. constellation is the only growth in the area. beer, in one wants to admit it, but cannabis is -- you get -- cannabis, they tell me it is -- obviously great tasting, less filler >> that's what i hear. >> aurora isn't up today talking about them.

>> yeah. >> cramer's mad dash, we'll count down to the opening bell, keep your eye on futures, which remain green back after a break

all right, about eight minutes to go before we get started with trading at the stock. we spent a lot of time on recent sessions talking about the video

game companies, also nvidia itself, which had a slowdown, china, it sided with video games and then ea, we had atvi. >> reports today, reporting today. >> that was a report yesterday and take two in the middle of it all which seemed to have reported a decent quarter. str strauss zelnick. >> rowrote a book about how to look 37, he's 68 i think he's great today, they take two, downgrade to sell. to sell. concerns on red dead re democratidemocraredemption they're saying that on twitch, which is the way it is -- that's the metric you use, things have fallen off a cliff >> wasn't a sell here? >> it was. >> it wasn't a sell there. >> it is -- in terms of whether

it fell early or late. >> now it is a sell here i got to tell you, the average concurrent twitch viewers over the game's launch weekend was more than 300,000. at this point, rdr 2 has averaged about 800 concurrent views over the past seven days >> look at twitch. amazon property, where people watch people playing and judge the popularity of the game from that. >> it was eaf y if you go back to ea, the quarter was up, they talked about apex legends no one thought that strauss talked about the idea that the original fortnite may not be able to be replicated. i never want to write off this company. a very good company. grand theft auto, whatever, but, david, you got to have battle royale is everything it is everything and people felt, well, it is a free game, but you upsell with the different trinkets

but you can't -- you have to have a multiple shooter game >> multiple shooter. >> fantastic. >> it is >> do you let your boy play? >> he played very consistently for a period of time, starting a little over a year ago when it first came out, then and then nt this year at all. >> he won't get a scholarship. >> other stuff going on. cut that out. >> good for him. get outside. remember your mom said get outside. >> he's a three-sport athlete. >> how's his arm >> good. thank you for asking we have an opening bell coming up next. don't go away.

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♪ -find your certified financial planner™ professional ♪ each day, brings new possibilities. that's why you need a partner dedicated to helping your company reach its goals. u.s. bank -- the power of possible. you're watching cnbc's "squawk on the street" live from the financial capital of the world. opening bell in two and a half minutes. we talked about this tentative agreement on border security oil is the other big story you're up $1.50. opec does cut their demand forecast for the year, jim but a lot of the influential

reports on production say they're actually adhering to last year's production cut. >> yeah. and one of the things i think, i happen to like mr. dudley who runs bp, and, you know, he's saying things are getting tight. i keep warning people, before you think things are tight, he's saying 50 to 65. i don't think that's wrong i think it is probably -- i've been thinking 45 to 60 i'm probably being a little bit maybe too -- every time it goes up, the permian floods the world with oil and it is hard to get traction without a deal in china, it is a very financial market, oil, not as much as you think it is supply and demand. the hedge fund algorithms are set. i think that's a fallacy but it is -- the market is a little tighter than it was

but the chinese are not the swing -- it is not that the chinese is a swing buyer, the united states an incredible producer we keep misjudging that. in one can believe how much. every month, i had norfolk southern on yesterday, jim squires, the marcellus natural gas is insane how much we're producing. no one talks about that. >> ohio and pennsylvania. >> that's true >> had norfolk on. are the transports giving you any kind of all clear on the economy? >> i was going to write a piece this morning about that. norfolk southern said every single line of freight is good which is coal, auto. union pacific says almost all line but then the truckers have been not so strong. that's because the spot rates for trucking have come down. fedex not that strong. so it is mixed and the airlines are mixed they just don't have -- there is too much capacity.

so the rails are not a good indicator, all about precision railroad, they're going to be on time, lay off people they do have -- >> it is one signal to watch of many there is the s&p, cnbc real time exchange, and the opening bell at the big board it is olin corporation flexion focused on the treatment of muscular skeletal conditions. piece on amazon, hiking prices at whole foods hundreds of items, a couple of different rounds, by an average of almost a dollar. >> i thought that was great news for walmart. walmart is the biggest grocer in the country. up nicely on that, i believe but walmart suffered from the -- whether they overpaid for flip cart when the government changed its view on that walmart is a big winner. if whole foods raises prices,

the big worry for walmart had been will whole foods come in and just blast them? it is the opposite and it is something to watch because we all kind of felt that food costs would be kept down. walmart is a predominant grocer in this country. good -- sara eisen talks to kroger and i would love to hear what rodney has to say people felt kroger would be eviscerated by amazon coming in aggressively this is a change of pace and something worth watching. >> another name we're watching this morning, guys, cody, beauty company. this is the holding company for a lot of brands, you may have forgotten how wide and vast their holdings are three main categories where they make their home, beauty, coffee and fast casual. they own panera, with a lot of other fairly well known brands they own keurig, dr. pepper.

they also owned for the longest time decades a significant stake in coty, which has had a rough go of it this year in the stock market look at the last year, the stock was 21 bucks, not that long -- less than a year ago, roughly a year ago it is nowhere near that. but this morning, they come out and say, hey, we want to buy as much as 150 million shares and we're proposing to pay $11.65 a share. that's a 21% premium on the price yesterday. and a much more significant premium if you look at the 90-day volume weighted average, share price 38% to that. as much as 51% to the volume-weighted average price over the last 30 days. this is going to be the independent directors of coty to step up and say yes. it would take jab to about a 60%. so a full control position right now they have de facto control at 40% this would take them to real control. they wanted to buy up the rest,

premium to do so we'll see. it is being responded positively in the marketplace jim, you had raised the possibility of coty issuing shares itself. this is going in the other direction. financing that jab is putting in place if it needs it to buy these additional shares. they also have their consumer fund that they use significantly for the panera deal. and conceivably used as well here that's outside money that they put together, permanent capital also though. >> they just seem to -- they have accumulated a lot of really household brand names in this country. and they have been -- i was worried about whether they would come in and be a threat to starbucks. i know that when mr. shake sold panera to them, panera is on fire in more than 24 million infinity members, ron loves them, they're very, very well -- >> and it was 12 days ago that

bill miller mentioned coty positively to brian sullivan stock is up 50%. >> nice. >> it was also avon that he mentioned, wasn't it >> he likes avon >> yeah. but it is up strongly now. trading very close to the $11.65 offer. it is going to require the directors of the board to actually sign off. >> it is 9:34 and faang hasn't rolled over yet. what is that about is it going to happen at 9:37? faang rolls over every day around 9:34. it hasn't happened yet >> you think that's been -- has dollar been a suppressant? >> on google, yes. i think so google turned -- sorry for the loss of luke bryant's father, a great man, i encourage people to look at that obituary, what a force that man -- force of life

that man was there is just to me this group versus sales force versus workday, the cloud kings are the cupa service now then i look at these -- at these -- the faang stocks and i think are these going to be eclipsed by uber and by reddit, door dash, i cannot believe what is going to happen when lyft comes public and airbnb. how do we handle this onslaught? they take elie may out. >> glad you mentioned elie may i thought -- elie may clampett is what comes to mind for me i don't know about you. >> donna douglas, great donna douglas. >> it is actually a company and jim knows this, but i didn't, that is trying to automate everything automatable for the residential mortgage industry. that is a quote from the

president and ceo jonathan coor who also -- also had this to say. as we enter the next phase of our digital mortgage journey, we are thrilled to provide immediate value to our shareholders 99 bucks a share, that is 47% premium to the average closing price. thoma bravo, the well known private equity firm that focuses primarily on software, on cloud, on technology, about $30 billion overall is what they have in terms of capital commitments, and you go through their name of holdings, a lot of them are not that well known, jim, but this is what they do. blue coat systems, dell tech, digital insight, front line, global health care exchange, island software, click, riverbed, on and on, are some of the deals they have done this is a large one. $3.7 billion again for a company that you know well

you've been taking that digital mortgage journey with them. >> i was there when journey was inducted into the rock & roll hall of fame but ellie mae had a 21% short position coming in this morning. people said it was the proxy to be able to short housing short ellie mae. you need software to be able to do a lot of mortgage work. we know from wells fargo the mortgage business is down and we know that when you were telling us that jay powell decided to wreck the housing market, i didn't modify your thinking. >> i would point out the stock is trading above the price >> the short position. >> yes and there is the $35 go shop, which is what we typically do see in many of these private equity deals which does give the company the opportunity to initiate or solicit and encourage potentially engage with any other possible bidders that are out there should they exist. don't know have no insight unfortunately to offer on that at this point. we know there is a deal worth

$3.7 billion for thoma bravo >> the only shop you like is go shop go down fifth avenue, i don't see a single bag, no shopping bags why? direct to consumer you go and you look and other than cardio, don't really -- that's not a kind of burlington i like, but you do not see shopping bags. this is extraordinary. every single place is a showcase >> particularly there. madison avenue -- >> you used to see people with -- >> hard to explain to people too young to remember, 20 years ago, you couldn't move because -- >> bumping into people with bags, get out of my way, remember that? my mom used to wear white gloves when she walked down fifth avenue. >> colgate -- >> that is that? new ceo? >> yeah. effective april 2nd. stock is up 1% the s&p is up .76.

>> ian cook not going away. >> ian cook will stay as executive chairman for one more year i believe he's been running this company since 2007 or so. >> they had a not great quarter and that stock is up, just up huge from when they reported the quarter last week. it has been an underperform. >> people want to believe there is at some point some -- with 3g, somebody stepped up there, with j & j or somebody step up pure speculation. >> want me to shoot that one up so youcan shoot it down. i have people that will do that for you if you want to go there. >> i'm just say, that's been behind some of the move. >> jim, we're going to talk to dan rosen later today. this was a $3 stock. >> came on "mad money" at three bucks and said you got to believe. like the mets. the mets, you got to believe i try to keep him from crying. he was going to cry. i said don't cry

friends with zach erts and he was very kind to say i was the inspiration to -- i had him on because my kids all use -- at college. it is a terrific way save a lot of money. and he's done a remarkable job is he coming on here or -- >> he is. >> he is coming on here. >> he told me he was going to come on my show. >> in the 11:00 a.m. hour. you're welcome to stay. >> no, he was going to come on "mad money". >> that's not going to happen. >> all right, the heck with him. >> he's "squawk alley. >> credit me and go on s"squawk alley," i'll put on a helmet and get in the tank that was it. that was our best footage this year didn't you love it >> i did enjoy that, yes >> the only tank factor in the whole country, we used to be a country of tanks >> true. abrams is a big machine. >> almost every dow component in

the green led by goldman and cat. jpmorgan coke is the only laggard this morning. >> in reports this week. >> that's right. to seema mody on the floor >> notable strength in tech, nasdaq out of correction territory. triple digit gain for the dow. up 223 points. here is what's moving stocks right now. stocks higher on news that the congress has made a tentative deal to avoid another government shutdown trade optimism providing support for now. but the dollar's resilience, that calls into question as to how far stocks can go. i should point out that slightly lower today. earnings a big factor in focus beating expectations, driven by a 34% boost on subscribers under armour benefitting from higher sales, fewer discounts. shopify a loss, shares down 6% company set to report tonight include groupon, activision, blizzard, and trip adviser they expect the hotel revenue to

increase only 1% though nonhotel revenue is expected to jump 24% year over year as consumers use the site shares of trip adviser up about 11% this year following a 56% gain last year want to point your attention to some of the luxury names on the move kering, strength in china, similar to what executives at lvmh, cartier, among others have said over the past couple of weeks. when we dissect what tim cook said about weakness in china, it seems like the consumer is spending, but it depends on what you sell back to you. >> thank you very much. to the bond pits as well, rick santelli. good morning, rick >> good morning, carl. if we look at ten-year, over the last four sessions, it is basically ended last week at some of the lower end closes we're very close to 260. and it moved up a bit. we hover on the north side of

265, hovering to 267 the ranges are very compressed the important issue is that global sovereigns are moving lower. and it is going to make it very difficult to get back in that range that we populated for so long on a closing basis in the 270s or 30-year bonds, which have avoided some of that being the long skater on the yield curve. they are holding 3%. if you look at a year to date of bunds, you can really see one of the issues, europe in general, whether you look at the policy, the structural issues with their economy, they are slowing on a number of fronts, and there is many articles lately that it is going to be very difficult to reignite europe. there you see the yields, they traded basically at levels at the end of last week, haven't seen since the fall of 2016. now with brexit really being a topic as we get ever closer to march, let's look at what ten-year guild yields are doing. hovering at some of the lowest yields since september of 2017

fairly quick reversal there. weaker currency, weaker interest rate s these may be big policy tools should brexit be more nasty than many suspect. the dollar index as much as i enjoy looking at it, it is over 50% euro currency, which means it is hard to escape the circular pool of the relationship in that index to really value the strength. so with dollar strength lately might be more function of the following euro weakness predicated on everything we just talked about look at the summer of 2017 trade on the euro versus the dollar as it hovers in the zone once again. if you flip it and look at the dollar index, we're very close to breaking out the levels that we haven't seen since the 2017 and finally let's look exactly at what i'm speaking to, let's look at a multiday of the dollar index. we had 8 positive sessions in a row. today it is down a bit about an eighth of a cent.

will it make it and be number nine we have to wait and see. if you want to understand the dynamics, pay more attention to europe back to you. >> good advice, thank you very much coming up later, the exclusive with ginni rometty live from the conference as we go to break look at this morning's top performing names on the s&p, up almost 23 points, dow up 232

♪ listen to my story about a man named jed ♪ ♪ one day he was shooting at some food ♪ ♪ up through the ground came up a bubbling crude ♪ what a short squeeze holy cow the show was -- my folks didn't want me to watch that show they thought it was stupid they were willing to let me watch f troop. >> f troop, another good one

>> yes i think the guy ended up being on the -- >> different guy that guy comes on with us. >> maybe -- >> we love having him. dow is up 250. nasdaq is creeping out of so-called correction territory i want to ask you about morgan stanley yesterday, arguing that the earnings recession is essentially here earlier and more powerfully than they predicted. >> i like the morgan stanley research very much i can't go there i just think that when you have norfolk southern and csx and union pacific doing great, you mention the transports, good when you see -- look, there is a mixed picture. some guys are doing not as great, some guys are doing terrifically but it is not an earnings recession. geez i -- >> you would want to see a second quarter some of these revisions -- >> you get -- look, most of the weakness has come from

china-related. united states has been very, very good. and it is employment i'm not going to go there. i see too much strength. i was surprised that that was such a downbeat call didn't seem in sync with what their analysts are with what their analysts were saying other than their newfound negative call in the semis which is not working at all semis are very strong here two companies have downgraded. micron or said micron, be careful. the stock keeps going higher everyone is dumping on nvidia. i'm just not -- i see issues i see pockets of weakness and pockets of strength, but that's not enough to make me think -- >> the news point was tutor jones in -- with pisani saying bullish on u.s. stocks but worried about shareholder privacy on buybacks and dividends. social consequence >> senator rubio, too. >> the comment from him. >> it's been the case for quite

some time but is once again being brought to the floor by the conversations a lot of people are having in terms of what the place is for a corporation in society and what its responsibilities are, whether they extend beyond really -- >> marc benioff is a business of the -- is the business of the world. marc benioff was trying to change the world with salesforce a co-ceo keith block that stock has been on fire. >> it really has >> all these other semiconductors, microchips have been good. advanced micro is done going down >> salesforce has got a market cap of $125 million. remember when there was talk it would get taken out? who can buy it nobody nobody it's too big >> i can think two of companies. >> microsoft and -- one other. alphabet >> but they are friends. i don't think that's going to happen >> let's pay close attention to twitter. is twitter too low >> twitter is it too low? >> it's too low.

>> i have no idea. >> good stuff. that's what we ask you >> you're welcome. the answer is yes. >> crm twitter, yeah >> remember that >> a few years ago a long time ago. >> your buddy won't even look at me >> my buddy? >> i'm seeing him tonight. i'll tell him you said hi. he's not a fan of yours. >> no. >> we'll get stop trading with jim after a short break.

time for cramer and stop trading. >> under armour, good things coming out on the conference call inventories are down 12% that turned the stock around my worry had been they'd have to discount so this is a call that is going to leave people feeling better about under armour because if you can clean that inventory up, it's very good kind of like the semiconductor inventory. micron, you clean up with nvidia you get that group so i'm -- i think the bears are going to be wrong on some of the over inventoried parts of the economy. >> reminds me of nfib was weak again. >> yes, i know >> and it was down on employment plans and inventory plans. people trying to work some of this off >> i think this is a story to watch because you really could

be at a -- this is -- people talking about a rally out of nowhere and it's based on the fact maybe a lot of inventory has been worked off that we had a lot of obviously, versus, say, what's happening in china retail is going to go up on this under armour the targets of the world it's going to go up on that. those stocks have been hammered. >> listen to the calls >> rigorous. what's tonight >> i got -- i just feel bad for david because, you know, to have shopify on is just a genuine insult is that ain sult to you. and deb cafaro, private pay and she's going to come back so, david, you and i will go on shopify and etsy and make some comparisons. >> got it. ready. >> maybe we'll do that on saturday your free? >> sounds like a great way to spend my time. oh, yeah >> we'll see you tonight "mad money" 6:00 p.m. eastern time stocks are surging stephen roach will join us as

the s&p makes another charge he at e reth200-day. don't go away.

♪ good tuesday morning welcome back to "squawk on the street." i'm carl quintanilla with david faber and sara eisen markets having a nice day. up almost a full percent on the dow and s&p as it makes another attempt to get past the 200-day moving average they announce a tentative border security deal that could avert another government shutdown we'll hear from the president later this morning under armour shares on the rise stock has been bouncing around a bit. we'll dig into the numbers >> and goldman sachs lead industry analyst joins us. see where she finds value in the beaten down technology sector. a possible deal in the works in washington to avert a second government shutdown this weekend. our ylon mui is in d.c >> they are calling this a deal in principle they still need to sell this to

rank and file members and make sure the president does get behind this as well. now there is no official text just yet but two congressional sources have told us what is in this deal. on the border wall, there is $1.375 billion for physical barriers that includes 55 miles of potentially new construction, you can call it fencing or steel slats depending on what side of the aisle you sit on on immigration, the number of detention beds is being phased down from 49,000 to 40,520 there is no cap on the number of beds for undocumented immigrants detained within the u.s. that had been one of the sticking points democrats demanded over the weekend. they've backed off from that also six other unrelated spending bills that need to be passed as part of this deal. lawmakers were still hashing out the details late into last night. we are expecting a formal roll-out to happen on wednesday, but conservatives are already coming out against this deal

representative mark meadows who is the leader of the house freedom caucus tweeted that this is not a serious attempt to secure the border. it just kicks the can down the road once more guys, there is not a plan b here on capitol hill. and there is also not a lot of appetite for another government shutdown so that means there's going to be a lot of pressure on lawmakers to get behind this new deal back over to you >> ylan, we'll see what the president says if nything, about this ylan mui in d.c. that optimism driving stocks higher joined by jim paulson who says u.s. stocks lose if the u.s. wins a trade war and david zurvos who is bullish on this rally. good morning, guys good to see you. >> good morning, carl. >> david, let's handle the shutdown element first we've been discussing whether or not it matters to stocks given the s&p rallied through the last shutdown what do you think? >> david

>> i don't think he can hear >> i don't think he can hear me. jim, i'll pose that question to you. >> well, i think that the political pressure here is becoming so great, carl, that they're going to have to resolve this one way or the other. i think it is going to be a nonevent from the stock market perspective at least and hopefully doesn't fall into another shutdown period, but i think the odds strongly favor that some kind of resolution will be done and we'll move beyond this sort of fear of another government shutdown here pretty soon. >> you've done some work on the trade war with china and the implications for stocks. talk about what you found. >> well, you know, it's interesting. we're all hoping that president trump can win the trade war against china and others and there's sort of the unwritten assumption that if we, do that will be good for us. it will be good for stock market and the like but if you look back historically to 1970 and you look at the relative performance

of u.s. versus foreign stocks, there's a really close relationship of that with what our trade deficit does and it's almost the opposite of what you expect. that is to say u.s. stocks have outperformed foreign stocks when our trade deficit worsens historically most of the time. but if our trade deficit improves, usually international stocks outperform the u.s. and so careful what you hope for. if the trump wins the trade war and improves our trade deficit, there's strong historical evidence to suggest you should be tilted away from u.s. stocks towards international stocks >> is that offset by -- the trade deficit is one element of a deal perhaps, but what about all the paths to make it easier to do business in china? wouldn't that be an offset >> i think so. to some extent, longer term there's a lot of good things about renegotiating the trade, carl i agree with that. but to the extent that it

affects the trade deficit, i think that it would improve it i think it would cause international stocks doesn't mean u.s. stocks go down but it might mean that recently emerging markets have been starting star ing to outperform the u.s. market and international stocks in general that could be signifying that international stocks are coming into their own as a market leader in part because we're getting close to the point where u.s. trade is going to start to improve. >> david, i think you can hear us now wanted to ask you about small business sentiment which actually slumped to lowest level since donald trump became president. what does that indicate? >> well, sara, i think we're still feeling a bit of the hangover from what happened in q4 with all the miscommunications from the fed a lot of that sentiment is reflecting some of the negatives we had october, november, december and into the early parts of january i wouldn't read too much into

it, although i would say we have, as we've discussed on the show, a lot of monetary tightening in the pipeline that the fed has put in, whether it's qt that's continuing or the 250 base points of rate hikes. all that still coming into the system and that monetary tightening is still weighing a little bit on sentiment out there and will continue to weigh a little on sentiment out there. >> what i'm trying to figure out, david, the sentiment numbers turning over and some of the weakness in the surveys and more and more calls for an earnings recession where you see profit contraction two straight quarters and whether that's all built up from the december performance that we saw and the numbers are catching up or we have more down side ahead that things are slowing and getting worse. >> you know, i think there is some truth to the it's slowing a bit story. i don't buy the kind of -- the major slowdown story but i do think that we have some demand side headwinds coming from the monetary tightening that are going to be significant

this year and probably make it harder to compete with 2017 and 2018, particularly with the impetus of deregulation and corporate tax reform which were very positive. so the comps are very positive doesn't mean we're going into recession.ness in earnings, but i don't think it's a sign this economy is rolling over as long as the fed keeps the pivot alive and keeps the idea alive that if things do turn somewhat nasty, they are there to pivot completely the other way. >> that's a good point to throw to you, too, jim i'm looking at q1 consensus i think is down 0.8 in terms of earn,s 6 of 11 sectors in negative terrain. are these calls for earnings recession that out of the ballpark >> i don't think so, carl. i think earnings this year could be flat or even down slightly. there's a lot of pressure, to david's point. we doubled yields, crossed the

field curve over an 18-month period of time flattened the curve. money supply fell in half from almost 8% to 4%. gas prices, energy prices in general, commodity prices went up to three-year highs there's a lot of pressure on the economy as well as just profit margins. that's a lagged impact it probably comes home to roost this year. i think the good news also, to david's point, is we're already reversing this the cavalry has come to the rescue here. money supply was under 4% in late last year it's now up over 5% or around 5% year on year the yield structures dropped anywhere from 40 to 60 basis points from their highs overall. gas prices off 25% at the pump the fiscal deficit is a percent of gdp is 1% greater today than it was a year ago at this time there's a lot of now calorie stimulus coming to the rescue.

and i also think the dollar will come down soon, which could help take some of the pressure off. so i do think we have disappointing earnings yet to face, but i think there's a window out there in the future where they get better again as well >> we'll see coming weeks will be key and we'll have some powell news to chew on after 12:45. david and jim, thanks, guys. >> thank you let's get an update on trade. robert lighthizer arriving in beijing earlier this morning ahead of this week's high-level trade talks. kayla tausche is following it from washington. >> good morning. it's radio silence from the team on the ground in beijing, but there is optimism that is rippling through corporate america as well as lawmakers here on capitol hill i just got out of a meeting with senator rob portman, a former trade representative himself who believes the administration is making progress and that he hopes they make enough progress to delay that march 1st deadline without any escalation of tariffs. he says the enforcement will be

key and he expects any deal would see a purchase that would right size the trade deficit and potentially even continue relaxing joint venture rules we'll look for that. apple's ceo tim cook told npr last night he's also optimistic. he said both sides are talking, and i always think that is the essential thing to reaching an agreement. it's in both parties' best interest to come together. the president didn't talk much about a deal or talks with china in his rally in el paso last night. but he did highlight the fact the administration as of late has taken an even tougher stance toward china listen >> my administration has taken the toughest ever action to crack down on years of china's abuse and practices have been unfair and i have a lot of respect for president xi but he's representing china, and i'm representing the united states >> the united states is teeing up a slate of executive orders that could continue targeting

china. as for how china feels about this, an op-ed says all that matters is what president trump and president xi agree on. guys >> kayla tausche, thank you. u.s. companies mentioning china over 200 times in earnings and investor calls so far in the first full week of february. with 60 of the biggest u.s. companies generating 10% or more of their sales in china. clearly getting a deal done before the march 1st deadline is critical joining us is an expert on these matters, stephen roach, current yale university senior fellow. longtime china watcher do you share the optimism out there in the markets, and as kayla outlined in d.c. over a potential deal >> good morning, sara. look, china's facing some cyclical pressures on the economy that are likely to remain intense through the spring before stabilizing and showing improvement in the second half of the year.

i don't think we're going to get china to give on its key structural issues of industrial policy and innovation in response to cyclical pressures in the economy so i think the optimism which is looking for china to cave because of cyclical pressures is probably going to turn out to be wrong. >> you are talking about the use of subsidies, protection of intellectual property, forced transfers of technology. is that what you mean with the structural issues? >> yeah, the structural issues, as we know it, deals with the idea of forced technology transfer through joint ventures. i was abouted to hear, i guess it was kayla who said there may be something that lighthizer is trying to reach agreement on with the jb issues but intellectual property,

state-sponsored industrial policy like made in china 2025, the cyber issues, those are all really tough issues. it doesn't look like we're going to reach agreement on those by march 1. most likely that means that the tariffs that were slated to increase significantly march 1 will not go up until trump and xi jinping have a meeting later in march but they could go up if they don't reach a meaningful agreement on those tough structural issues. >> you say that the chinese aren't going to cave because of the cyclical weakness in their economy. what do you mean how slow is china's economy slowing down because if you look by the markets and economic data, it's going from bad to worse and it's a lot worse than what we're feeling here as an effect of the trade war. >> i guess what i'm trying to say, sara, is there's a cyclical

story and there's a structural set of issues. a cyclical story by definition means that the economy will slow for a relatively short period of time the structural issues are lasting issues that really depict many of china's core economic priorities. so the mismatch between the cyclical pressures on the economy and the structural imperatives that china faces is not likely to be resolved in the form of a chinese capitulation due to the temporary weakness in its economy. >> interesting, stephen. a lot of people have been looking at this multidecade process of trying to integrate this giant economy into the world community, whether it's the wto or what have you and they point to examples where china has essentially tried to do things ad hoc on their own.

belt road just as one example. so you think that's a signal they're unlikely to sort of join the club, so to speak, whole hog? >> well, look, carl, i mean, china's now the largest exporter in the world or the second largest importer in the world, so i think they're in the club what the u.s. is objecting to is that they're not playing by the club rules that the u.s. wants to set and, you know, clubs can be filled with disputes and arguments among members and that's what we're seeing right now. but whose rules are going to define the way that the world's trading organization proceeds? that's clearly under negotiation right now in beijing >> what would you tell a ceo of

a u.s. company and we just showed a number of them that get a good chunk of revenues from china. if you don't expect china to make these major structural changes the u.s. is calling for, then what? where does this all go >> well, sara, it's a period of heightened uncertainty and that's what this tabulation of ceo mentions and earnings disappointments related to china cited by companies like apple and caterpillar tractor and others so heavily reliant on china. i can't tell them to pretend these problems are going to go away in any short period of time because i don't think they are and i think the relationship is going to remain a front relationship ffraught relationship for some time even if we do what the trump administration likes to call a deal a deal doesn't necessarily mean

that uncertainty is going to vanish into thin air and i think these problems that ceos of multinationals are facing are likely to remain enduring for quite some time. >> stephen roach, thanks for sharing your perspective >> thank you >> former chairman of morgan stanley asia now with yale university let's get over to rick santelli in chicago with the latest on the job openings and labor turnover survey. >> yes, and the reason we're bringing this up it was out a few minutes ago. it's historic. this data series started in 2000 and this is the highest level ever 7,335,000 job openings that means we've now had five numbers, 7 million or higher we've never had one until last year never had a 6 million until the previous year. these numbers are skyrocketing granted it gives us only a partial picture of the job

market but that partial picture is awfully powerful based on the december jolts read. david, back to you >> rick santelli still to come -- shares of under armour are bouncing back after being down as much as 4% nearly the session find out why, next and then why the ceo of one of the largest oil companies in the world is warning of a supply crunch later, a cnbc exclusive. ibm ceo ginni romety is going t join us. "squawk on the street" is coming right back the future of technology investing lies beyond the tech sector. it's about technology transforming every sector. ♪ at pgim, our bottom-up approach uses a technology lens to identify long-term winners. from energy... to real estate...

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never a boring one shares of under armour now in the green bouncing more than 5%. they've been all over the map this morning lower by a few percentage points after being high or the initial numbers. here are the takeaways from the quarter. better margins and inventory levels continue to clean up. those inventory levels now down 12% from where they were a year ago. that's important where's the disappointment north america, the key market for under armour, continues to decline down 6% on revenues. that was expected following tough comparisons from a year ago. also footwear is not growing that's been a key growth spot for the business and the outlook for growth for the year kind of lackluster when

it comes to sales growth just growing a few percentage points the company is trying to engineer a turn around what under armour is proving is that it is becoming a more mature business and it is executing. you can see that in the margin expansion and better profit picture. but the question investors have about this stock is their real demand for the brand now the company and ceo this morning on the earnings call called out hover, the new footwear platform growing fast russian recovery apparel and what overall they're calling louder brands. moving toward franchises instead of just growing in different product areas. also internationals a big bright spot it continued to grow about 25% which is a little less than it had been growing remember i spoke to kevin plank and the president back in december they told me this is a company moving from a north america cent rick model to a more global brand. here's a refresher >> we say becoming a global

brand. we have to do that in our largest market north america is central to that and so we want to do that through innovation, energy and excitement it's things like stephon curry wearing the new curry 6 last night he debuted in toronto. the hover upgrade that we have so innovation will be the name of the game. the financial mess ritrics are a byproduct. it's a show me story to see whether the new innovations are pushing through into higher sales growth the stock has worked it actually has outperformed over the past year both nike and adidas if you zoom out into a longer term chart, five years, you see the challenge this company had from hyper growth to a big-time slow down. it's the only one of the three that's down over that period of time >> i was pointing out earlier the discrepancy in market caps nike is enormous and this is a $9 billion company >> which is why it gets a 65 times multiple for next year's earnings which is almost double what nike gets

partly because it's small and just has different growth prospects. it always has traded that way. >> it was interesting morning of trading. premarket it was up. then they said some things about the guidance for north america that seemed to be taken as a negative and then the inventory numbers that were seen as a positive and now it's at the highs. >> plenty to like in this quarter. the inventories, the margin expansion and the fact they are getting their costs in line. but you still have to see sales growth when you have a valuation like this. and they are being conservative with the outlook they expect to pick up in the later half of the year and expect some of these new franchises to start working in the marketplace. but that remains to be seen. >> your point, though, about nike/under armour. five years, nike that's winning. one year it's under armour that's winning keeps flipping back and forth. >> longer term story, no question about it. goes to nike and even the momentum right now if you look at the north american results, also goes to

nike nike grew 9% sales north america this past quarter where under armour declined. a much wider distribution. they are in foot lockers and all over the place but it shows you some of the challenges and the competitive landscape. crude is surging this morning as bp's chief warns of a possible supply crunch we'll get you his comments coming up. oil is up almost -- more than 2% finding some value in beaten upaa fng "squawk on the street" continues in a moment. 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,

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oil surging again this morning up nearly 2% on pace for its best day since january 18th. this as bp pays ceo bob dudley said a flurry of intensifying risks could trigger an energy market crunch. >> the markets feel tight to me and we planned bp on this fair way between $20 a barrel to $65. that's good for producers and consumers. so we're 62 today. so we're within that fairway i think what's important is when

the prices are too high or too low it leads to all kinds of unintended consequences. >> always good to hear from the majors on their price forecasts. and, clearly, a lot of them are bullish. so far oil has had a pretty good year but if you add it all up over the last three months, guys, still down 11% 21% over the last six months >> yeah. all right. let's go to our etf spotlight. we're going to send it over to bob pisani he's not here. oh, no he's live from the world's largest etf conference in hollywood, florida bob, take it away. >> bring jenny on down and the kids you'll like it down with us. the etf conference the biggest etf conference in the world right now where roughly 2,500 investment professionals are gathered to talk about the most important trends in 2019 in investing. among the big trends, renewed emphasis on socially responsible

investing. >> we've seen a lot of esg, environmental social governance based funds. a lot of product launches. not a lot of flows yet but with the number of products coming out you have to think that's going to come. the second thing is smart beta we talked about smart beta for years. that factor weighting, multifactor weighting. sometimes their timing strategies which get in and out of the market. a lot of variety there some of those funds have been successful a lot of new launches there as well it's kind of anything but market cap. >> and in another sign of the ongoing fee wars between the etf providers today, schwab and fidelity both reduced commissions to zero on hundreds of etf products. this is continuing a war that was begun a long time ago by vanguard but the big issue at this conference right now, slower global growth and the impact on the growth of the etf business while many have downgraded their forecast for growth here in the u.s. and abroad, a few, very few believe that a recession is

imminent >> no, we upgraded our risk of a recession in 2019 because of policy uncertainty from 30% to 35%. we see the risk rising as we go into 2020 where we expect it to be somewhere between 40% to 50% chance of recession in 2020. >> and, david, the big discussion yesterday, paul tutor jones had a very well received reception for his arguments for more social justice in consideration for stock price valuations a lot of people scoffed at that a few years ago. he said it was a mania and we see what happened with senator marco rubio's proposals today to consider changing the tax structure around buybacks. all coming up here back to you, david >> all right, thank you, bob here after known as hollywood bob pisani let's send it to hq and sue herera >> and he had to do that live shot with the beautiful backdrop acting defense secretary pat

shanahan meeting with iraq's prime minister in baghdad. shanahan is in iran to consult with american military leaders and iraqi government leaders on the future of u.s. troops in iraq british prime minister theresa may urging lawmakers to be patient and give her more time to rework a brexit divorce agreement with the european union. britain's departure from the bloc is only 45 days away. >> we now all need to hold our nerve to get the changes this house requires and deliver brexit on time by getting the changes we need to the backstop, by protecting and enhancing workers' rights and environmental protections and by enhancing the role of parliament in the next phase of negotiations, i believe we can reach a deal that this house can support. katie couric is writing a memoir currently titled "unexpected. she plans to share details on her prize-winning 40-year career publisher little brown and company says the book is scheduled to come out in the

spring of 2021 you're up to date. that's the news update sara, back downtown to you >> thank you, sue. see you later. when we come back, goldman sachs on the impact of u.s. trade tensions then call it truly high end retail barneys jumping on the cannabis bandwagon. the dow is up.

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welcome back to "squawk on the street." i'm sara eisen with carl quintanilla and david faber live from post 9 at the new york stock exchange one hour into the trading session. let's get a check on where the major averages stand pretty much higher across the board. in celebration of potential shutdown aversion deal and some optimism around china

trade talks going on in beijing. financials, energy, communications services, consumer discretionary, all groups within the s&p rallying more than 1% the only losers are the defensives like utilities and real estates as we see treasury yields move low are. stocks are surging dow up 210 just off the session highs. faang helping s&p tech nasdaq up more than a percent exiting the correction territory as well. joining us from goldman sachs' technology conference is heather belini heather, great to have you back. good morning >> thank you so much good morning, everyone >> it would be great to getti yu take on all the hand wringing regarding faang as a group since the beginning of the year. i wonder if you think there are any dynamics keeping it from being as much of a torrid group as it was in the middle of last year >> well, and you're right.

it has been -- it's had its ups and downs so far this year it's been a lot more idiosyncratic than we've seen in years past so i -- look the advertising trends are still really strong. you saw that with google's top line results in their ad business, with facebook's results. there's certainly been concern over things like privacy and regulation for that group that i think has been responsible for a little bit of the ups and downs but there was also fear that we were going into a slowdown in spending that we just haven't seen, whether you're looking at comments from amy hood at microsoft or companies like facebook and google. >> the facebook element is really stark even the title of your note recently looking more like its old self coming off the q4 results. talk about the degree to which you think they're back on offense now. >> well, i think they are back on offense and i thought mark zuckerberg's comments on their conference call this time, they were much

more front footed than they were throughout 2018. and he basically came out and said last year was a year we had to fix a lot of issues this is the year we're going back on the product defensive. you've seen instagram stories really take off in terms of ad unit acceptance, increasing ad load it's another vehicle of ad load for them and if you look q4 was a really impressive ad revenue beat and they had a much bigger currency headwind than people were expecting and beat by a really large amount and that was the first time they'd beaten ad revenue since the march quarter of last year so i think they're on much better footing than they were a year ago >> are they your favorite in the space? >> so we've got google on our conviction buy list. we like facebook as well we've got a buy on that also google, we think you've got a little more optionality. we're getting ready to have

thomas curien, the new head of google cloud speak at our conference he's kicking off the conference this year. we think there's a lot of optionality here in regards to gcp and weimo that aren't fully reflected in the stock we'd probably be picking that one at this point. >> interesting what do you tell clients who have either questions or concerns about cloud in general, how it's affecting some of the big players. how it played in microsoft's quarter? >> yeah, so we've been researching public cloud since aws started. and it has obviously been a phenomenal growth tend and will be to come we've written quite a lot about the resergeanten enceresurgencee spending at the end of the day if you ask cios, they'd tell you it's really hard to replatform

existing productions to the cloud and that's going to take longer than people first anticipated. we're in this really good sweet spot you've got better trends in on-premise things are still moving away from them, but public cloud trends continue and in our view, microsoft with their azure product line is probably in one of the best positions because they can cater to both of those groups >> what about salesforce with that recommendation you have a buy, but that's one that's approaching your price target and certainly not as cheap as some of the other names on your buy list how much of that growth is already built into a stock that's risen about 50% over the last year? >> right so i think what's actually under appreciated at microsoft right now by many in the market is their earnings growth power. so our numbers are considerably ahead of consensus, if you were to look at our calendar '19 and calendar '20 and even calendar

'21. i'd say most people when we talk to them think this is a 10% type earnings grower. if you look over the next three years, we think the number could be much more in the mid to high teens. and what we really think people are missing is this position that they have where you can bring your own microsoft on-premise infrastructure licenses, move them into the cloud and to the gross profit expansion that you're seeing in intelligent cloud. >> i was asking heather about salesforce and sort of how those bullish prospects on cloud are playing out in terms of the stock price that's already moved so far up and a price target that is approaching your 168 level. >> right so we're still valuing these on calendar '19 we are getting ready to roll these forward to calendar '20. so that always helps when you've got a company like salesforce that's growing its free cash flow and its billings growth as fast as it is. but salesforce, if i had to pick

one company that sits in the heart of transformation, and i'm talking about from an application standpoint, not from the infrastructure standpoint, but salesforce is sitting in the world where anyone who is trying to reimagine how they work with their customers or their suppliers or their partners, they are at the heart of that digital transformation so you're seeing deal sizes get much larger for them increasingly and it's hard to imagine because they're already so large as it is. and their strategic importance continues to go up year after year that's one where we think is in a great position, and we recommend people continue to just hold on to that one >> fascinating we were just talking about this earlier this morning finally, i wonder in terms of macro dynamics impacting your universe, trade, fx, obviously, coming off of this quarter, are there any that rise to a level where you'll have concerns or will change your model based on them >> so, you know, there's been a

lot of consternation in the market, especially, obviously, with the market volatility we saw in october and november and december but when you look at the results that people posted for the fourth quarter for the december quarter and in companies, no one really pointed to signs of weakness in spending no one called out a big impact related to the government shutdown now it will be interesting because we've got a lot of companies like sales force for example with january fiscal year end where we're going to start getting more data from them related to what happened in the month of january and whether the government shutdown had any impact but if you listen to microsoft and in speaking to amy hood, you definitely get the sense that even the consternation over china that's been going on just has not been impacting enterprise spending levels, especially for an industry that doesn't have much exposure to china. >> heather, you always bring a lot of clarity to the conversation really appreciate your time today. congratulations on the

conference we'll see you next time. heather bellini of goldman sachs. >> thank you have a great day when we come back, the new hot spot for all your high end cannabis needs it's all about barney's new bet on the space "squawk on the street" will be back in a moment with the dow up about 200 points ♪ ♪ our new, hot, fresh breakfast will get you the readiest. (buzzer sound) holiday inn express. be the readiest.

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shifts in culture and lifestyle and cannabis is no exception guys, it doesn't actually sell cannabis so it's not a dispensary, but expect a lot of high end products at the store this is a shop within a shop like gold rolling papers, custom glass pipes, leather ash trays and more goodies probably at very high price points >> i would imagine i would imagine. well, it's legal in california, right, so it's widely used what else? what other -- >> it's also wellness products that contain cbd which is now all the rage >> let's see if it transfers to other state. let's go to cme group in chicago. rick santelli with the santelli exchange >> i'd like to welcome my guest, phillip. >> it's a pleasure >> i was reading articles that came out very recently regarding how china's gdp is going to look the only issue is we're a couple

months away from our first look at first quarter gdp in china. china's gdp last look in january was 6.6 for the end of the year, fourth quarter other than '09, anything under 64 would be the lowest in years. this global slowing is starting to get to be serious business, phil even if we fix trade and brexit turns out after the initial whatever result is, it gets better, how are we going to impact all these slowings that are coming across our borders in the u.s. >> yeah, i mean, to me, it's the major risk in the economy in the outlook is china now now that we've taken care of the shutdown seemingly on the other hand, it provides a really big incentive not just for us, for president trump and for the chinese to deal with this i think we understand their data are partly real, partly phony,

based on a true story in some sense. and what -- they are showing that their economy is slowing. i think that's good. both leaders have a huge incentive to get a deal. >> now another issue, february 12th, th 1999 japan introduced the world to a zero interest rate policy 20 years can you give me a post mortem, how much damage it has done to japan if not the world >> yeah. you know, what's interesting is that i would say in some ways it is not the zero interest rate itself that's done the damage in japan it is their lack of supporting policies. if you have zero interest rates, that means the economy is super weak and time to do everything, fiscal policy, deregulation, all of the pro-growth policies we've seen the last two years, that's what japan has missed, relying only on zero interest rates and

not doing the other things look, it is a better approach in the u.s. because we supported the fed with fiscal policy and deregulation and other steps >> you know, i was reading some articles written right after the credit crisis when ben bernanke had the notion to consider or ponder negative interest rates he's a lot more polite about the words he spoke back 20 years ago when he thought it was really a bad idea do you think the u.s. would ever, should we go into recession, use that tool in our tool box to not only go to zero, phil, but maybe go negative? lot of research says it is a good thing. >> yeah, there's interesting research from san francisco fed saying it would be effective, i'm just doubtful. i look at the european experience, maybe it helped them some, but i don't think anyone looks at europe as the engine of the global economy if things get bad in the u.s., instead of zero interest rates, do more qe, we can do more, do

things on the fiscal side. >> we're out of time i like the ideas, if we could get both parties of congress to ever think they can come up with one. david, back to you >> thank you, rick santelli. let's send it over to jon fortt. we're sending it a long way today. he has a look at what's coming up on "squawk alley. >> hey, david, i'm in san francisco at the think conference we're going to have the ceo here, a lot of talk about the cloud, hybrid oucld, multi cloud environments that's coming up on "squawk alley. ♪ you should be mad they gave this guy a promotion. you should be mad at forced camaraderie.

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stocks are surging, near the best levels of the morning the dow looks to snap a four day losing streak. one of the things to the up side, the financial sector that group of stocks gained 16% since lows of christmas eve. among individual names leading that sector higher, big banks like wells fargo, morgan stanley on the investment side, and insurance providers, asset managers, t rowe price, worth

noting, despite the rally, financials are one of the three s&p 500 sectors trading in what call correction territory, still down 10% from recent highs march of last year david, back downtown to you guys >> okay. i will take it, dom. s&p up roughly 1%. as dom said, a broad rally at this point what have you got coming up on "closing bell" today >> we have a good interview coming up later in the show. albuquerque vice chairman joe tsai here with us, 4:00 p.m. eastern time an important read on the chinese consumer and its economy and also the state of play with the trade talks going on in beijing, what's the level of optimism from china is it as strong as it appears to be on wall street. another really strong day. >> see you this afternoon. sara, thanks. shares of chang surging after results. the ceo is with us

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it is 8:00 a.m. at the think conference in san francisco and 11:00 a.m. on wall street. "squawk alley" is live ♪ ♪ good tuesday morning welcome to "squawk alley." i am carl quintanilla with morgan brennan and jon fortt he is in san francisco at the think conference more from jon in a few moments, including an exclusive sit down with ginni rometty back at home, shares of apple af