usually not obvious, is the problem. >> like in december. >> i think that earnings will start to grow. they'll come to a point where they'll stabilize, they'll start to grow. and market will start to go up and it will be -- you'll have two multiple year run and be able to -- >> thank you, sir. great to see you. >> thank you so much. make sure you join us tomorrow right now time for "squawk on the street." ♪ because i'm happy clap along if you feel like a room without a roof ♪ ♪ clap along >> good wednesday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber. stocks look to build on yesterday's move as the s&p closes above the 200 day first time since december 3rd. treasury secretary says so far so good on china trade talks europe is green, january cpi up 16 year on year. ten year at 27 we get more fed speak on the way today. road map begins with political progress, a budget deal and talks continuing in congress stocks look to open higher after

yesterday's rally. >> plus, a stupid broken arrogant industry. >> what? >> that is how t-mobile ceo john ledger will begin his congressional testimony this morning with the ceo of sprint that begins in less than an hour. >> and higher taxes, howard schultz saying he needs to pay more as they debate over who pays what wages on. a possible deal could avoid another government shutdown and optimism over china trade talks. alibaba's co-founder and executive vice chairman making comments yesterday on "closing bell". >> the government made a commitment to import $30 trillion of goods and $10 trillion of services over the next 15 years. >> the chinese government. >> the chinese government, yes so, you know, it is really kind of interesting people are focused on tariffs but over time, this structural issue of the trade deficit will

reverse itself and china will be buying a lot more from the rest of the world >> yet another report today in the south china morning post that xi himself could meet with mnuchin, lighthizer on friday that would be symbolic. >> i think the problem is really has very little to do with the influence. that's the old school. that's the mnuchin school. he's not -- he's very good treasury secretary, but he's not in charge. we keep coming back to chinese hegemony, about funding what i regard as the belton road plan that vice president pence said is incredibly pernicious, it is about funding the ability for them to be able to take over a huge part of venezuela because of the moneythat venezuela -- i think it is about trade. and with intellectual property added and the idea that -- >> geopolitics and the -- being able to project power. you're never going to reach -- >> i think that the strategic

notion of trying to stop -- trying to get a level playing field and not funding those is something we can control >> but don't you think that talking point in a sense, that tsai just mentioned, the idea of eventually this -- it is going to become much more of a consumer led economy, one reason why people still love alibaba, for example. it is going to result in numbers that are going to look a lot better, feel a lot better and be a lot better ten years from now, five years from now. >> we need specifics we need to hear, look, we're going to buy american goods that are made here, witness apple we need to have something they're buying besides speakers and coffee and starbucks sells well i just keep seeing these -- i agree with you, david, not going to come out and say, listen, we're done stealing your intellectual property. but the intellectual property is stolen through joint ventures. s&p global was invited in and a nonjoint venture only 35 people. but they were invited in the to rate chinese bonds, and there

was not a chinese affiliate that was attached to that that was a good move >> too small >> worry about all this? >> why do i worry about it >> crisper and ai and robotics, they're going to create a super ace anyway of emerging human beings and robots. >> do you mind if we don't fund it let somebody else fund it. >> okay. >> do you know why we're mostly still making goods there that's the only country that has the infrastructure to get into ports. the other countries don't have the infrastructure hasbro is trying to pull out of china as fast as it can. >> used to be about low wages and that changed the times try towns loies to unt of the puzzle today. one of the sticking parts is that we're looking for a process that would automatically raise tariffs if exports to the u.s. continue to rise and the chinese don't like that at all >> you know, how are the chinese doing? how are they doing do they need us more than we need them? their economy is on -- really it

is decelerating. >> we all need each other in some fashion >> can we all get along, yeah. they're lucky. i do think that we are misinterpreting the people, the hard-liners. lighthizer is the man in charge. he'll come in there and say, look, here's the deal, guys, we want visa and mastercard and american express to have their own businesses, we want jpmorgan to have unfettered access. we're tired of every single jv, micron, and we want apples we want apple. >> the market will be up in part because there is a belief of more positive tone, belief that they're going to reach agreement on some if not all of these things >> how about that mar-a-lago, they floated that. >> isn't it more that the president said i'm flexible on march 1? >> look what they do president likely to meet mar-a-lago do you trust any of these storys really >> the percentage is that march

1 was going to be a step up to 25% were small and they have gotten smaller >> look, there is a betting line on these things. i'm saying every day it changes. there are two camps that love to pick up this, and tell you what the story is mueller is not picking up the phone. i find one thing that is really disabling is you'll get a call, hey, you know what, talk's on, talk's off, why did you say talk's on? >> is this why we take almost every headline with a big chunk of -- >> and the tweets. we got to go with the tweets what is it going to be like when the wall deal is done? a call every seven minutes >> that could happen soon if we get a vote today or tomorrow we'll see. >> do you think the people at home know this is what occurs? >> no. >> they should know. i don't care i'm not saying what they're saying i'm saying that you'll get a call and then get a call i don't want to confuse people at home. this is, like, when i was a judge at the apprentice and i got to tell you, the guy from

kiss, gene simmons, he said we're going to win, he said we got to lose because i got to leave. gene simmons-like analogy is the only thing i know. he's a smart fellow too. >> i got to lose because i got to leave. >> i got to lose because i got to leave. >> you can't throw it. this is the apprentice. >> live shot of the house commerce this morning, in just under an hour, t-mobile's john ledger and sprint will testify and defend their $26 billion merger the two will argue that joining the companies will not hurt competition or jack up consumer prices for wireless service. but rather do the opposite as they can better compete with at&t, verizon and cable companies they say earlier this morning, ledger who appears to be on a treadmill tweeted this out >> in two hours, i'm looking forward to going to congress and having a great discussion about the sprint and t-mobile merger it is critical for america and great for competition. for now, i got to work out i got to get in shape.

>> so we'll see where it goes. plenty of lines of questioning within even in the opening statements >> yeah. the china situation. we don't want the chinese ahead of us in 5g. >> they're focused on that as we have known they have been focused on that since day one of the announcement, last year. if you want to do the math, 9.75 sprint shares for each t-mobile share or you can reverse it. but the question has always been, 4 going to 3, in an industry, will that be something that the department of justice, the staff of doj can allow typically in our country that is not something, particularly when t-mobile has been the price leader and since at&t was prevented in 2011 from buying it, many at the doj would say, hey, look what we were able to do, we were able to drive prices down as a result of not allowing that deal to occur, t-mobile had great success over that period of seven, eight years, driving

prices down, forcing verizon and at&t to go to unlimited. forcing so many different things that were beneficial to consumers. that's what they're trying to overcome with as jim said the idea of national security and 5g and opening statement here, ledger is all about delivering 5g and significant value and benefits, does say rural customers, how important being able to service them and how much better they're going to service they're going to be able to receive as a result of this deal and goes into the idea of not just delivering broadband via 5g, but cord cutting, enabling people to say i don't need and we'll get to dish numbers later. i don't need my satellite, if they have cable in those areas, i can cut it, because i now have a 5g alternative that brings me video as well at a level and a price that i like. so he's talking about savings for people at home, particularly rural areas, as a result of 5g being able to compete, not just

with broadband, but with video and, of course, on the national security front and saying that prices and service will actually be better. >> stock is signalling that the deal does get done, which is rather different from what it was two months ago my favorite line, because john is so funny, he said, let me be clear, we do in the use huawei or zt network equipment. well, was someone saying that? >> no. i don't necessarily believe so but they want to make sure people understand that they're talking about job creation something else that they know is important. but, listen, you're going to still continue to have people that just say your numbers three and four, we got four players going to three, how can that possibly be anything but bad for consumers in terms of the price they pay for conceivably what smoe is the most important bill they pay every month. >> remember the cable conference, where at&t launched the bid for sprint everyone in the room in the back room was saying, this will be

the most anti-competitive thing i've seen and they go out there and say, not bad this is very anti-competitive. >> wireless services have not been the focal point of inflation to begin with. they have been the opposite. yellen called it out. >> we know that it is -- you can't get in a room and fix price. can't do that. but i do think that you can signal, remember the airlines when they signaled, i'm concerned about signaling. >> another point of -- point that they -- i don't know they made it specifically is what will -- sprint, will sprint be in financial jeopardy to allow -- if it is not allowed to it will never obviously be the company that masa when he bought that controlled position years ago thought it would be because he thought he could engineer this t-mobile deal then. but it is unclear whether it is going to -- they did do a lot of things positive there.

>> he tweets like a nobel prize winner it is good i have to tell you, my principle reason why i would favor this is 5g versus the rest of the world. the second is you can't let sprint go. that would be a disaster that would be three -- that would be three players the wrong way. >> we're going to watch that on the hill later on this morning when we come back, mulling a bid, former starbucks ceo howard schultz taking on the wealth tax and if he would sell his starbucks shares if he made a run for the white house. premarket, off the best day of the month. plenty of news on teva, on trip, on activision, free port, tesla and more don't go away. this is huntsville, alabama. aka, rocket city, usa. this is a very difficult job. failure is not an option.

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internet that puts you in charge. that protects what's important. it handles everything, and reaches everywhere. this is beyond wifi, this is xfi. simple. easy. awesome. xfinity, the future of awesome. howard schultz takingq&a from a live audience at a cnn town hall in houston, texas, last night here is what he had to say about the wealth tax. >> i should be paying more taxes and people that make this kind of revenue and of means should pay more taxes. >> are you talking about you should pay 2% higher, 10% high, 20% higher federal income tax? >> i don't -- poppy, i don't know what the number is. i think what i'm saying is we need comprehensive tax reform.

>> ballpark it for people. it makes a difference, would it go up to the rate under president clinton or talking about significantly higher >> i think what is being proposed at 70% is a punitive number and i think there are better ways to do this. >> so what's not punitive? >> i don't know what the number is what i'm suggesting is i should be paying higher taxes i think people across the country are willing to pay higher taxes but there is a caveat there. and the caveat is this >> is it higher than 2% more, for example? >> i think it is >> schultz was also asked whether he would sell his starbucks shares if elected. >> i will do nothing whatsoever to have any conflict of interest between my investments overall or my interest in the company that i love because i will put the role and responsibility in and the accountability for results first if i run for president and i'm fortunate enough to win. and that is a promise i make to the american people.

>> have you not decided if you would sell all of your shares? >> i don't think that's the question i think there is multiple ways to do this i'm not evading the question there is multiple ways to do this to set a blind trust, to do lots of things, to remove any conflict of interest >> a lot of discussion this morning about whether there is room for a centrist, washington post front page, how the democratic party is unnerved by a lurch to the left in recent months >> the list of people who are running are certainly i would say heavily tilted to the left i do think that there are a lot of people in the party who are concerned about schultz and he's got a lot of firepower firepower does matter. i think that there are people -- there are 300,000 people working starbucks, starbucks has not been able to, i'd say, untangle the situation with howard schultz to the satisfaction of a lot of people who work at starbucks because no one wants to see those 300,000 people be

hurt by what would be perhaps a punitive action by the rest of the party. >> yeah. we're going to spend a lot of time hearing about taxes over the next 18 months which is maybe a worthwhile debate don't hear an idea of increase in capital gains taxes, something we talked with jim stewart about. >> others believe it is not about income -- sorry, not about annual income as much as it is about the already -- the wealth that already has been accrued to a certain extent i do hear from people close to schultz that if he doesn't believe he's in a position to win, to actually win, he will not stay in the race now, it is a long way away he hasn't even made a decision as to whether he's going to run. but they, you know, they make the point that he will not play that role of spoiler so to speak unless he really believes that he actually has a chance to win. >> i've got to tell you, there were people -- i speak at the higher level of the party, the more i get the sense this will be genuine antipathy. >> genuine -- >> antipathy toward schultz.

they don't have -- they don't have a lead candidate. >> that's a long way away. we'll see. >> he has news he was too old. but got an older gentleman as president, and it is kind of -- >> they're all really old. >> well, speak for yourself. i take offense. >> you should. youngster in this -- >> just coming off a birth day too. >> youngster, a spry young man compared to bernie sanders trump, biden >> when your tax person says can i speak to you about medicare, i'm in favor of medicare, you ought to be, you're almost on it. >> it is coming up yeah, coming up soon we're going get cramer's mad dash count down to the opening bell in a couple of moments look at the premarket here as the s&p above the 200 day, and we're coming off the best day of february back in a minute imagine traveling hassle-free with your golf clubs.

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uh, the beethoven festival. pure. love your insurance. ♪ it's a beautiful day time for a mad dash on this hump day as we like to call them here it is wednesday. >> yes, it is, indeed. >> weeks go by fast. j&j a fairly large deal, not large for j&j, but overall, private company, i believe. >> right, auris. >> could go up to $2.3 billion in incentive payments.

>> this is a competitor, some people would say, intuitive would not say -- i had this -- i used this, unfortunately had to use it, it is digital surgery, which is really the way of the future medtronic is doing digital surgery too. what is going to happen is you're seeing this new war about the way surgery is done and surgery is no longer doctors will guy but not necessarily doing things it is like precision surgery fda advisory committee said good things about esketami, a suicide drug reuters, the plaintiffs bar, no, right here, we heard that --

they started talking about the st. louis case, multibillion -- it is not recovered from that, david. not recovered at all and i think it is a shame because i think that there were two articles back-to-back, if you remember, reuters investigation, new york times, and it -- i had alex gore ski come on here and say, look, be careful, we're announcing $5 billion buyback on the darn show i think the show is a great level of confidence. i think jnj will get through the situation. we know anything -- i read all the plaintiffs bar stuff and all the defense and i think it comes out solidly on the side of the defense. plaintiffs bar is very precipitous. >> we'll watch jnj today, $3.4 billion in cash and conditional contingent payments for auris. opening bell a few minutes from now. stay with us on "squawk on the stay with us on "squawk on the street."

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you're watching cnbc's "squawk on the street" live from the financial capital of the world. the opening bell in just over two minutes. busy morning as we continue to watch developments on u.s. china trade in beijing and a border security deal in washington, d.c. we got january cpi, goose egg month on month, but year on year, 16 we'll hear from bostic and harker later today >> i thought it was fine consistent with the idea that the fed can wait, which is all i think we're really weighing. i don't find it to be something that is on -- in the equation in part because a lot of the different logistical costs that bedeviled the consumer price index are coming down. i hate to be sanguine. we have a great payroll number i thought it was consistent with the fed chair's last comments. >> the jolt yesterdays with a barn burner again. >> if you want to monitor this, i like the look in stocks to monitor things

the stock you need to monitor, krech sentas, maker of uniforms. they're coming back after really being kiboshed by what powell did. if you want a stock that monitors the other one to use is adp, that's one that has worked for me and adp is off the charts. it is back those are just two indicators that people want to monitor stocks >> so much noise because of retail sales that we're going to get friday, december number. the shutdown delayed a lot of this the other dynamic yesterday on the macro fronts with all the debt concerns. national debt at 22 trillion household debt at 13 trillion. record highs. >> i think the balance sheet on corporate america has never been as good. the borrowing by corporate america of debt, in the fourth quarter, we're down high single digits there was some bank debt but it

is really pretty good. i want to ask about a particular piecethat seems national debt size the at&t deal. >> buy market. >> it is $171 billion that they had to refinance here is the problem, david there is a very -- not a lot of high debt. high yield debt. >> high coupon debt. >> it is possible that it actually gets done because of -- not of much debt. >> an awful lot of people to come to the market with -- >> s&p had such a -- a lot of different businesses, but the toughest business they had, they didn't have much to rate it was really ncredible. >> for the fourth quarter, yeah, dead. >> 19% decline worldwide. >> but the debt markets are wide

open to your -- >> exactly >> not just for at&t for high yield as well they are open right now, which is why you continue to hear a lot of murmurs about potential lbos and the like. >> are you serious >> yes trying to work through to various degrees of success but it is open wide open right now. with the ten-year, below 27. >> we get -- from all the major banks we had, a big decline in the number of defaults there may be a lot of debt, also a lot of money to service the debt the corporate tax giveaway, as some people say, has really been an amazing boon for not having to borrow any money. and i just think small, medium, paychecks doing well, automatic data. >> big board today, citi, celebrating the fin tech innovation challenge at the nasdaq network equipment company extreme network celebrating its anniversary. >> you mention debt. it is interesting because it does relate to one of our movers this morning which is teva,

which is leveraged over five times on its balance sheet the debt becomes more of a problem when the ebitda is not going the right way or not increasing enough. and at teva, it seems the guidance for 2019 that was below what the analysts had anticipated. they're looking for sales between 17 and 17.4 billion, many expected as much as 17.9 or $18 billion overall. operating margin implied around 23%. you can see teva is selling off almost 10% this morning. but, again, they're levered at what, 5.1 times 12 months and when you're ebitda is not going up as much as anticipated, that's when debt loads become an issue. what do you do to deal with it >> there was an interesting discussion between becky quick and warren buffett we don't know about his current holdings you know how hard it is to get the current holding of something. this took place in february

2018, becky asked why he became such a large shareholder in teva, that would be the last thing on my mind, but teva is not a stock i bought, one of the other two. and becky quick said todd or ted. and he said i've never talked to them about it. becky quick said, so you have no idea why you boughtteva. he goes, no. >> so has nothing to do with the position other two guys want -- >> i bring it up because there are a lot of people who think -- we talked too much about hedge funds, we don't really know -- sometimes within a big firm it not the person you think and love who bought the stock. they run too much money. let's -- i think warren buffett is the great est investor of or time for a little position, it is not his. we got to make that point over and over again when you speak to somebody, that's not mine. >> shares down 11% the problem is just not selling quite as much of their stuff as they had previously thought they were going to, right >> yeah. >> pretty simple.

>> well, teva is part of this industry that -- >> known as a generic maker, they moved into brand. >> jim, a ton of news on hotels. hilton is one of the s&p leaders, trip is a s&p laggard, their hotel bookings were down 11. >> yeah, i mean, they -- i think they're an inefficient -- this is not first time they have obviously have scaled against it there is a definitely a positive undertone here wynn hotels and resorts, interesting, wh, they had a short fall revenue forecast well below what people were looking for to and the stock is up. that's a level of optimism stock is up. they had a short fall. >> journal ran a chart yesterday of occupancy rate growth going to zero in 19. what they said would be the worst stretch since 09 make any sense >> no. no doesn't. but, again, speaking of

optimism, louisiana pacific, they missed the quarter, very big. the stock is up. so there is kind of -- you hear those things and get anybody doing a number that is not that -- >> stock is going higher. >> this is what i say is warped into a bull market, you have short falls. yesterday i had shopify on they were down 12 and finished up here it is up another 3. twilio, an excellent company, down really, really badly last night, down about 7, it is now up a dollar. by the way, the twilio quarter was beautiful. you have this initial, people who don't do their homework and then further they look at it and say upon further review, that one is going to be a touchdown >> you did say last night bobby kotick did it again. >> he did mention a multiple gain, he did not use the term battle royale, did not use the term royale once in the conference call, but said multiple, multiple will be up in

the fall. >> activision, blizzard, layoffs but will be hiring more developers to try to get games out more quickly too >> yes and got to understand is that this is an industry that is so rapidly changing that you could have electronic arts have a huge bear market and then bull market within a few minutes they do have the best battle royale games when we had strauss zelnick on, he didn't think you could replicate fortnite >> worldwide phenomenon. >> he was right. electronic arts beat fortnite. >> though, jim, from the peter lynch style of investing, if a lot of people watched their kids behavior, year, year and a half ago and watch them become obsessed with fortnite and shorted ea or activision, you did very well. >> we do not have enough powerful machines to play fortnite you need the fastest running

logictech equipment and there is a shortage because no one saw this coming. >> deere will have earnings friday and today b of a takes it to neutral. outperformed cat by 3,000 basis points since april highest premium to cat since 15. and we got all kinds of china trade uncertainty. >> trade deal, you're going to be bush whacked by that. i thought that -- that is the kind of call, that's a good hedge fund call. maybe downgrade it, maybe they report some number that isn't that good, but then you got to cover because even if the mnuchin/kudlow factor, that's the farmers. >> that could be a new show. the mnuchin/kudlow factor. >> that would work mnuchin is better than kudlow and cramer >> could be. and the factor in there. >> the factor. yeah we could make it the -- it could be the kudlow/mnuchin report. >> could be.

coming soon. >> yeah. >> coming soon. >> how about the committee >> after the profit. >> you could do the -- the profit >> yeah. >> love the profit. >> deal or no deal. >> let's go through every single program and talk about how great they are can i talk about dish? let me do that. >> dish? >> yeah, dish. charlie ergan. >> i saw mike white last night. >> who >> mike white. he's looking good. >> the sale he made to at&t, directv, he comes on we see mike. haven't seen charlie in a long time they'll have the call at noon. look at shares at dish they're down about 4%. they reported more sublosses than had been anticipated. revenue kind of came in line with what analysts estimated ebitda, a bit better than expected but it is worth looking at these sublosses over time. and also the lack of growth now in their sling service, which is around 2.5 million subs, the ott

service. >> why is that not doing well. >> directv lost a lot of subs. youtube doing well google may be helping that because they're pricing it very low. there say look overall that's including sling, by the way. that gives you a sense this quarter, included -- they went dark on hbo as many as 2 million people among their subscribers have that in battle with univision too that's typical stuff that doesn't help. but the big pictureis, you kno where it is going. look at the testimony from ledger this morning who says, by the way, you know, across our mobile network, many t-mobile entirely and save hundreds of dollars a year the industry will have to respond and prices will drop even more. so when conceivably if he's right and 5g comes to your home, it is turn out the lights for these guys entirely.

no directv, remember those sub losses look overall, where we are not cable getting the brunt of it it is the direct broadcast satellite companies, direct owned by at&t. and dish look, i think we have that one for you if we haven't already showed it to you in terms of overall sub losses fourth quarter they were up a year ago, 17 versus 18. so you can see the real changes taking place >> you can see why some -- our parent company, comcast, those numbers will look rather dramatically when sky comes back. >> they're building out their spectrum which they happened to start to do under the contracts they have. >> how is the balance sheet? >> the expense of that, getting clarity on the network investment plans is sort of a key. we'll see if charlie ergan says anything on the call. >> this is remarkable, just how quickly -- that's another thing. like fortnite, there are things happening, the cord cutting happens so quickly

and as that millennial -- that cohort grows, it is like -- it is just not in the cards they don't even -- the household information is down. and we're really seeing numbers that nobody i think predicted. that's why i keep coming back to the disney meeting the upcoming disney meeting. and whether they can make this incredible transition. just incredible. and by the more people they add, whose names you might want, this is really a case of, like netflix, this is developing quality programming that we will all want. >> we all know where it is headed the question is -- your broadband provider will be key for you. and then do you sign up for netflix and disney and hbo -- >> warner media. >> and/or youtube tv or hulu how do you make your choices that's the world and the question that is price and what you need and how much you need and what you want. also there is ease of -- it is not like calling your cable

company and possibly arranging it you can do it. >> your cable company might let you do it. big screen you can switch back and forth. the one that is mystifying to me, the one with the most programming and in many i was the most exciting program is the one that is the cheapest i don't understand the pricing of youtube >> youtube tv. >> yes. >> not premium >> $39.99 i believe. six devices. >> i think we were talking about the price of spotify. >> you don't have the ott product. you're talking about youtube. >> i'm saying that i think that it is -- there say lis a lot of exciting programming coming too and adding it and adding it and adding it. what happens if they bid on some football >> hulu this week, catch 22, george clooney, scorsese and dicaprio, devil in the white city, it is a land grab on

content. >> i watch -- look, i spent the weekend watching fyre fest hulu, netflix. and this is my birthday weekend. my wife is working at the restaurant hey, i'll put on fyre fest did you get that magnises card >> you love that i did not get the magnises card. i was not aware of it until i watched the netflix one. >> look what we talk about >> exactly. >> it is incredible. isn't it >> it is >> we're dow 256 to seema mody on the floor seema? >> 180 point gain for the dow. worth noting we did see strong momentum going into the close yesterday. a 4 to 1 advance decline ratio since the december 24th low, the s&p 500 has risen 76% of the time in the last hour of trade the big factor, rising optimism ahead of tomorrow's high level trade talks in beijing, following president trump saying yesterday he may hold off on

raising tariffs if the deal with china seems close. and this morning, chinese president xi jinping will meet with u.s. officials including secretary mnuchin in beijing so in the run-up to tomorrow's trade talks, a number of chinese related stocks have been outperforming, caterpillar, deere. china trade index up 17% since the december 24th low. and take a look at the outperformance of faang stocks, led by netflix, now 45% from the recent low, facebook up 32%. amazon, alphabet, up 15 to 20% and let's also pivot the discussion to travel interest in hilton there was concern because of the softening in the economy, consumers will pull back on travel. but hilton's reports suggesting otherwise. nice beat on top and bottom line it is expanding its luxury portfolio. on the flip side, trip adviser seeing a decline in its hotel business that's more due to the rising

competition from expedia and booking. worth noting trip adviser's nonhotel business which includes experiences, tourism, restaurants, 38% year over year. i was on the conference call for trip adviser's earning stephen coffer emphasizing this growing trend of consumers prioritizing experiences when they travel and providing more bookable options. the question is if trip adviser can grow that business fast enough to offset the weakness it is seeing in hotels, looking at trip adviser shares down 5%. but it had a pretty nice run-up call going into yesterday's report, up 65% over the past one year the dow up 189 back to you. >> thank you very much as seema has been talking, levi strauss and company has filed paperwork to go public >> oh, chip, i always thought he would do that. >> at the nyse, ticker would be levi. >> oh, boy >> levi strauss, ride sharing company, no cloud company? >> scooter company.

>> scooter stop it. >> what do they do >> stop it >> they make -- >> by the way, vf corp. is spinning off jeans people like the jeans business right now. >> we're going to watch that dow is up 180. coming up later, an exclusive you don't want to miss, david solomon will join leslie picker at 3:00 p.m. eastern time. as we go to break, a look at the movement in treasuries today

we're increasing the amount of social validation or feedback you're getting and that feedback is getting tighter and you're getting more addicted. the product was designed to be addictive, but designed to be addictive in a world where, you

know -- >> people had something else going on. >> you were only allowed to do drugs in your bedroom at home. now it is pervasive. it is -- you're taking it with you everywhere >> that was sean parker at the i speaking with our hadley gamble. the former facebook president went on to make questions about privacy and security saying it's against tech companies' own financial interest to police themselves as facebook has been -- as facebook has been flirting, jim, with some highs going back to september. >> stock is up 25% for the year. the advertisers, i interview -- actually virtually all the consumer product conditions, and this was the quarter, the tipping point quarter where a lot of them went over 50%, and it's facebook. it's facebook. it's actually, of course, stories because that's how they can reach the unreachable. soy know that the stock is up a lot. i know that there's a seller that comes in every day at this level, but it is -- the adoption

is very quick. you know, amazon, facebook, goingle with the three -- that's abc, nbc and cbs when i was growing up or all the newspapers and radio stations combined. >> out of all the newsered, gavin newsom's office about a data dividend where consumers -- >> you would pay essentially for your data broadly speaking. >> highest bidder, russians, chinese, can anybody buy it? >> the russian and chinese, who can buy if >> your data is your own and you should, therefore, be compensated when you give it up in some fashion. >> what do you give up >> what you like, your preferences. >> give up your social security number, your phone number, what do you give up >> you're tracked all the time. >> i know i'm tracked all the time. >> you're happily being tracked. >> i don't mind being tracked. i have nothing to hide i'm out of here every day. >> i love those ads that follow you everywhere you go. >> what do i have to track >> everywhere you, are because i

looked at a pair of shoes once online. >> it's minority report. >> have you ever noticed you can talk about something and it hears you. my daughter did this it hears you, and then your ads change she said, listen, and i said that can't be. so we kept saying shoes with heels, shoes with heels, and, like, something like jimmy chiu shoes. it's scarey. >> wlletste' g "op trading" with jim in a minute. dow is up 163.

let's fet to jim and "stop trading. >> some irony, two days ago morgan stanley was talking about the recession in earnings, remember, we're not in a recession and this morning morgan stanley questioned a wide research firm. they recommend upgrade freeport fcx. if you think there's a big earnings recession, this is your short. there's a deficit in copper. don't worry about a big ramp-up in 2021, and it will be well received by people who generally believe there's nothing wrong with the economy holy cow, is this levered to growth, levered to it. >> yeah. going overweight on freeport. >> yeah, big call. >> interesting. >> i have two of my favorites on

tonight. i have iff, and then i have tableau data adam is from amazon. we really have to figure out what the heck is going on. iff is one of the great unknown companies that really is responsible for some of the great smells diamonds, by the way, is the greatest selling perfume in history. >> white diamonds? >> elizabeth taylor. >> wow. >> she was a titan, and i always like to refer to her, butterfield 8, okay, range-free county and then the best movie ever if you like horses "national velvet." >> donna shalala wool . >> virginia woolf, what a titan she was. i did not see us ending the hour this way. >> one of my heroines. >> really.

>> the pioneer of pepsi, a great idea of sustainability for what companies do and for companies, not enough ceos. >> we'll see you tonight "mad money" at 6:00 p.m. we'll take you live to the t-mobile spring hearing on capitol hill as the ceo gets set to defend their merger dow is up 137. our new, hot, fresh breakfast will get you the readiest. (buzzer sound) holiday inn express. be the readiest.

♪ good wednesday morning welcome back toes on the street. i'm carl quintanilla with sara eisen and david faber at the new york stock exchange. the market continues to leverage above some critical levels on the s&p. >> reporter: 2758 as we got optimism about a border deadline. >> congress also works to come up with a budget and border security deal that the president will sign. >> meantime, the treasury secretary arrives in china for the next round of trade negotiations as the march 1st deadline draws closer. >> plus t-mobile john ledger and sprint ceo are testifying before the house senate finance and commerce committee as scrutiny into the merger between the two

grows. >> in fact-to--mobile and sprint ceos are facing congress as lawmakers are going to press the two companies to defend their proposed merger. scrutiny effort to $26 billion deal increasing in the last few weeks as democrats took control of the house expressing concerns over job cuts and price hikes. t-mobile's john learning and sprint's ceo are testifying. we'llmonitor you that and brin you the highlights throughout the hour. >> a busy morning on the political front. representatives of the u.s. trade team, including secretary mnuchin, are in china as the latest round of negotiations continue our kayla tausche joins us for a closer look, but, first, lawmakers in washington reaching a budget agreement, unclear whether the president will sign it at this hour. ylan mui has more on the looming shutdown from washington ylan >> reporter: sara, there are several reports that the president is expected to sign this deal. democratic lawmakers have been getting briefed on the details this morning house speaker nancy pelosi told reporters as she was walking into that meeting, quote, i think we're in a pretty good

place. republicans are also going to be conferencing this morning as well, but the caveat here is that the final text is still not ready. we're expecting the bill to be something like 700-plus pages so folks want to withhold judgment until it is public however, the top republican negotiator, senator richard shelby, did speak to president trump over the phone yesterday, and he sounded pretty optimistic after that conversation. >> i think that we're off to a good start with a lot of people, especially the caucus and i hope they will file this bill and we'll debate it and vote for it and send it to the president and let him evaluate it the in the context that it's only a down payment. this is not at panacea. >> president trump is still getting hammered from the right for this agreement however. the head of the house freedom caucus tweeted that $1.4 billion for physical barriers is not enough he said that congress is not doing its job. guys, we did speak to him off camera last night, and he said

that despite this opposition, he does still expect the president to sign, it so some acknowledgement there that maybe they are not going to win this fight. back over to you. >> ylan mui, thank you now to kayla for the latest on the trade talks happening in china right now. kayla, good morning. >> good morning, sara. >> according to the treasury secretary, so far so good. that's what he said briefly upon arriving in beijing. secretary mnuchin and the u.s. trade representative ambassador robert lighthizer will begin later this evening or thursday morning china time to hammer out a framework to build upon talks that happened earlier in this week and last month to try to reach some sort of formalized deal that the presidents of each country could sign at a meeting that could happen within the next month we are hearing. according to two sources who were briefed on the talks, china's president xi jinping is expected to meet the u.s. negotiating team fwhil china this would reciprocate president

trump's meeting with china's number two when he visited washington last month. if it happens, it will indicate a further willingness by china to notch a deal in the near term as president trump said yesterday. in those remarks to a cabinet meeting, he said if the talks continue at a good pace he'd be willing to extend the trade truce and withhold any escalation on tariffs. >> the 10% or 200 billion goes up to 25% on march 1st and so far i've said don't do that. now, if we're close to a deal where we think we can make a real deal and it's going to get done, i could see myself letting that slide for a little while, but generally speaking i'm not inclined to do that. >> reporter: that specific comment that moved the market yesterday, something that we had been reporting for at least a week, but the fact that the president said it on the record sort of underscored his commitment to reconsider that march 1st deadline it underpins this sense of optimism in the market right now. guys, we should note that the thornier issues behind the

scenes still remain unsolved, and we'll see what negotiators come out with this week. >> kayla, is there a sense -- we've talked so much about the march 1st deadline is there a sense that we truly want to get a framework written in china this week is this week sort of a soft deadline of sorts? >> well, it certainly would seem so, carl, because if they build out a framework this week, then they would have several weeks, call it a month, to then put some fine print behind that, but the fact that negotiators were going into this week without agreement on some of these big-ticket issues, like, for instance, how this deal would be enforced that has been discussed a lot behind the scenes, but i'm told that going into this week that wasn't agreedin po now, that to some has made people critical of the likelihood that a real deal would have these enforcement mechanisms that the administration would seem to want, but certainly they are going to try to put as much meat on the bone as quickly as

possible whether that happens this week or next week as these two sides continue talking, unclear. >> kayla tausche, thanks for the late forest washington on those trade talks. joining us with the take is ubs floor director art cashin. certainly there's optimism in the air around a budget deal, a trade deal how much of that is fueling this rally after a big surge yesterday? >> well, i think those are the two things that have been moving the market for days at a time. this morning when the south china post indicated that president xi might join the secretary of the treasury, the markets became very encouraged the gossip around is that this is both parties want a deal and want a deal badly, and if they can put something together, not only might the president delay the tariffs, but the rumors are that he's going to call xi to

mar-a-lago, and they are going to have a big overhyped press presentation this will be the beginning of the 2020 election. >> why, he can use this politically? >> if he's got a deal, yeah, i think so. >> the market likes all of this, art. the question is how much of a catalyst is it at this point with the optimism and the hope getting baked in >> i think you probably put close to 50% into the market already. if there was some further certainty, then i think you'd still have some more to go this morning was important we took the s&p up above the 2750 area. 2745, 2750, right around the 200-day moving average you broke above it last night but only by a point. this was far more conclusive, so the bulls have the ball and the momentum, and we'll see where they can go. this is in expiration week, so

tomorrow could be highly volatile the thursday before expiration they often are we'll keep an eye on it. >> it was said that u.s.-china trade makes the one biggest market trade that we've seen since the beginning of fed buying buying, it's argued, because correlations are also close together and all pinned on what happens what we get out of this, mar-a-lago or beijing, wherever it would happen. >> i think that's clearly correct. i think you want to be a little careful about how that goes as much as we would all like to see foreign trade pick up again. often when you begin to get what looks like a loosening up or a resurgence of foreign trade, conversely people start to buy foreign markets rather than u.s. multi-nationals because that initial burst of trading provides some competition for where we are

>> so if you sort of zoom out and look at this tremendous rally we've had since the beginning of the year, where all the major averages are out of correction territory meaning they are all off less than 10% from recent highs, what was that in december looking back was that just an overreaction to some worries about recession, or was it the market telling the fed this is how you're going to do it, or is there a reason for investors to still be alarmed about that sort of action? >> well, i think it was a combination of a variety of things it was some rather intense selling and shifting between institutional investors and others, and there was the growing feeling that we might be healed to an earnings recession, that earnings would go rather sharply. >> that's still out there, isn't it >> it's still out there, but it was far more intense in december, and when you came back in new money for the new year started going in, and then we turned the tide, and now it's, you know, people -- there's a

tendency to just follow the tide, whichever the way it's go, and you can see that, the number of optimists in the polls coming out. now that the market is turned up, they believe in the market again, so it tends to feed on itself a little bit. >> you get home construction today. the etf above the 200 day. all these home builders, furniture, right, semis, industrials. do you see that leadership flipping for any reason? >> i think some of it has to do with the tempering of the outlook on interest rates and the fact that mortgages have for the time being stopped going up and moving back. even the inflation data that we had today was not inflationary, so, you know me. i've been had a long-term bear on rates, and i think that they are going to keep a cap on them. you're seeing europe is beginning to slip into recession, at least in several

of the members, and so they are going to keep pressure on interest rates down there, so i -- i don't see any spike in rates coming that's got to help the home building and domestic industry. >> art cashin, always good to get your take. thank you. >> my pleasure. >> when we come back, presidential hopeful howard schultz taking questions at a town hall in texas on cnn weighing in on the wealth tax debate, and an interview you do not want to miss goldman's david solomon with leslie picker coming up at 3:15 thisafternoon. s&p, 275 take a look at some of the top performing names on the index. we're back in a movement so with xfinity mobile i can customize each line

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customize each line by paying for data by the gig or get unlimited. and now get $200 back when you buy and eligible smartphone. click, call, or visit a store today. time for our etf spotlight mike stoly is at post nine looking at a big topic this year, share buybacks. >> it is a big topic it's heated up recently, and one of the criticisms for a lot of companies that do a lot of share buybacks as opposed to buying into their business or paying more somehow it's an automatic way to get their stocks higher. look at a couple of etfs that do track companies that do have buybacks, the pkw, the inves co-achievers buyback and also an s&p spdr buyback etf this is over one year. the green line is for the s&p 500 itself both of those having trailed the s&p 500 over a one-year basis course the s&p buyback is pretty close.

it has lagged over five years, lagged by even more. the s&p 500 has beaten the pkw by ten percentage points in total over five years. so what's going on here? it's not necessarily that the market hates buybacks. there's a lot of financials in these buyback etfs and a lot of other mature companies so they may not have outperformed, but if you look at companies that do heavy cap "x" and r & d, they have had periods when they have done a lot better than the buyback, so the question is if ceos do what the market rewards, you know, maybe buybacks, that game is going to cool off a little bit, because for one thing debt financed bye backs are on the wane, and you did have a huge bulge last year when you had the windfall from the tax cut that did see a lot more aggressive buyback activity so at least when the market is concerned it's not necessarily an automatic that the stocks go higher when the company buys them. >> easier to explain what companies like rubeos have week have proposed? >> i don't think it's specific

enough, right? if he's talking about raising capital gains tax rates coming closer to other tax rates, it's weird to consider that as a way to target buybacks buybacks don't seem to be a central mechanism for either, you know, uniequal distribution of wealth or anything like that, but, yeah. if you want to even things out between labor and capital, higher cap rates do it. >> this is what tudor jones meant when he talked about shareholder privacy. >> exactly. >> that's basically they have gone too far in that direction i also don't know if companies lean more towards buybacks versus dividends specifically because the investor tax treatment is more favorable for buybacks i know, that's one element of it, but in general it seems to serve of their purposes. >> when some ask why some of the tax savings were spent on buybacks and not invested in their business, what do you stay >> just because you have a lot more cash at the end of the day if you're a big company, doesn't mean you have better ideas with what to do about it, there's a little bit of a misapprehension that there's a zero sum game and

other dollars spend on buybacks would be put to other productive uses. >> the lloyd blankfein way of thinking about it via a treat last week. >> ceos think about things and boards. >> good stuff, mike, thanks. >> former starbucks ceo and potential presidential candidate howard schultz answering some questions from the audience at a cnn town hall in houston last night. here's what he had to say about the idea of increasing taxes on the wealthy. >> i should be paying more taxes and people who make this kind of revenue and of means should pay more taxes. >> are you talking about you should pay 2% higher, 10% higher, 20% higher federal income tax >> i don't -- pope, i don't know what the number is i think what i'm saying is we need comprehensive tax reform. >> ballpark it for people because it makes a difference. would it go up to the rate under president clinton, or are we talking about significantly higher >> i think what is being proposed at 70% is a punitive number, and i think there are

better ways to do this. >> so what's not punitive? >> i don't know what the number, is but what i'm suggesting is i should be paying higher taxes, and i think people across the country are willing to pay higher taxes, but there's a caveat there, and the caveat is this. >> but is it higher than 2% more, for example? >> i think it is >> jumping on the bandwagon there, saying i should be paying high taxes didn't spell out specifics also didn't say whether he would sell his shares in starbucks which a lot of people took note of if he became president or ran for president. >> although he indicated he would do whatever it took to avoid conflict of interests, blind trust. not sure why you wouldn't sayyaf, i would. i mean, over time. >> because that could be very negative for the stock it could call into question -- >> i mean, he's got a significant holding, but i don't know if it's large enough -- you could probably get rid of it in a few days >> the stock is at an all-time high had week. >> that's a high-class problem for him, as we like to say. >> i thought it was interesting

also that he came out pretty hard against the green new deal. a lot of people want to know why you're running as an independent. here's one reason because he's not getting on board with that and really took some jabs at it. i don't know how you're going to give a job to everyone, give free college to everyone, how you're going to create clean energy throughout the country and every building in the land and tally it up with $3 it trillion with medicare for all and it's on the same day that we learned our national debt just topped $22 trillion for the first time unclear, whether this will resonate with voters but he certainly made that a part of his issue, that we need to fight the unsustainable sglebt running over $1 trillion. >> heading towards over a trillion which is worrisome so we're in an expansion so it raises the question of what happens when we get recession and how will we get stimulus and tax cuts and the kind of necessary spending when things turn >> good question >> when we come back though, we'll have an exclusive interview with bmw's north month

ceo bernhard kuhnt on president trump's auto tariffs, and next the very latest from the t-mobile/sprint hearing on capitol hill "squawk on the street" will be right back if you're turning 65, you're probably learning about medicare and supplemental insurance. medicare is great, but it doesn't cover everything -

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