2019 i'm still celebrating valentine's day, i guess, because every day for me at least is february 14th "squawk box" begins right now. ♪ zpliechlkts live from new york where business never sleeps. this is "squawk box." good morning welcome to "squawk box" right here on cnbc we're live at the nasdaq market site in times square becky is off today take a look at u.s. equity futures ahead of the open. about three and a half hours from now that looks like it would open down about 20 points nasdaq off call it two points for now, and the s&p 500 off about two points as well let's show you what happened overnight in asia as we flip the board around you're going to be seeing a mixed picture there. the hang seng was off, but the nikkei and shanghai composite both up. just marginally. european equities at this hour pretty much in the red across the board with the exception of

the dax, and finally, a quick look at treasury yields right now. the ten-year is looking at 2.664. >> so. >> so -- >> are you going to bring it up? >> i hate when people wait until the end of the show. >> so what >> happy birthday, andrew. >> is that what it was on friday so you are getting a little older, you are -- >> i'm a little -- i'm marginally older this morning. >> you got woke to the woke. it could be a song when i was 42, it was -- because you finally -- it fennel hit home is it going to extend? is that a one-day phenomenon for you? >> a lot of things happened last week we had valentine's day >> we did. >> that was a thing.

reagan said every day is valentine's day. >> with had the amazon news. that was just so -- >> over the top crazy nuts >> wacky now we have the birthday >> now we have the birthday. >> all these things are just -- >> coalessing. >> i don't know if they're idiocyncratic. >> i thought did about it, again. just aoc she really wanted to use that $3 billion for giving raises to teachers we're talking about $25 billion that you would have had somehow in tax receipts at some point. it's gone now, and she's, like, still sticking to that contention that it was -- >> it's a $3 billion that you don't have >> he has an excuse that it's fungible >> no, i don't over the weekend there were a couple of really great columns on this topic saying actually we should give him credit for stopping this because who wants -- >> who did you see >> who -- >> no, no, no. >> so you are back

you are woke to the woke, and your buddy dave -- >> just hear me out. and he made this argument. it was helping everybody i want you to know that is actually not a progressive thought because if you were to outlaw incentives, broadly speaking, you would actually hurt the hardest hit most struggling places. think about that south carolina, where i just was, and other places where automobiles were brought in you will and auto incentives were brought in only economies and educational eco smds would be the winners. it would actually make it lessee kwaul over time. that's not to say i like incentives >> you went to cornell >> i try to make an argument to you. >> no, it's finally occurring to use it progressive means regressive you haven't known this for -- >> i just -- >> what progressive policy that you know of progressive policies are not regressive it's like one of the funniest.

it's like calling a bald guy curly or -- >> >> i think -- >> he is making progress, but there's going to be -- he probably recriminations. you heard from a lot of your twitter followers that said, andrew, what happened? imauto sure that -- mine were, like, ecstatic >> did you >> no, actually. >> didn't you hear a lot of good things that said you are woke to the woke >> i got a lot of great -- sfla that's what i thought. that's what i thought. zroo we got some breaking news >> breaking news is it's your birthday >> happy birthday, andrew. happy birthday >> that took a while >> here's some of the other big stories we're watching for you today. 16 states have filed a federal lawsuit challenging president trump's emergency dengue largs to pay for a wall along the u.s.-mexico border that will set up what is likely to be a drawn out legal battle that may eventually wind up in

the supreme court. starboard value will engage the level of support among bristol-myers shareholders for the company's deal to buy celgene. starboard has not yet decided to support the $74 billion deal that would bring together two major producers of cancer drugs. the u.s. auto industry is urging the white house not to impose steep tariffs on imported cars and auto parts over the weekend, but the commerce department sent him a controversial report that could impose the new tariffs the president has 90 days to review the recommendations and decide whether to act on that. >> all right eunice, i like this time of day. u.s. and chinese officials are headed back to the negotiating table this week. this time in washington. let's find out what the chinese are expected -- what is expected from these trade talks that until they get just called off and everyone gets mad, we have to assume that it's a positive for the markets, right eunice, who joinds us now from beijing. we're moving forward are we not

>> moving forward. yeah the chinese want the americans to get off their back. the skmanz vice premier is heading to washington, and the lower level officials have been preparing him for his discussions on thursday and friday which will be led by a trade representative robert lightheizer. the focus of the discussions are to come up with the understanding that would be used as a framework for a summit, potentially, between president trump and president xi, and sources have been telling me that the two sides have made progress here in beijing that especially on the trade gap, and also on some market access issues. one example was that the idea that china could possibly allow foreign companies to weigh in on products standards before they are set. however, the two sides are still far apart on china's industrial policies china had said that it could potentially make its subsidy

programs compliant to the world trade organization however, the u.s. side wasn't totally convinced that china would be able to do that because beijing hasn't yet detailed all of its subsidies the white house in a statement had said that one of the goals in washington is to achieve needed structural changes for china, and i spoke with one of the sources within the -- on the chinese side, and he had expressed a lot of frustration that the u.s. believes that it could dictate to china how it should govern its economy. he had said you can't ask china to change its nature if we change, we are no longer ourselves. i think then that just highlights how difficult it's going to be to try to get china to really make significant changes when it comes to the structure of the economy guys >> oh, andrew, and happy birthday by the way, all of china is celebrating today, and i'm not kidding because it's a lantern festival it could also be because of your

birthday who knows? >> thank you lantern festival we do lantern on my birthday thank you for that >> they can no longer -- >> no problem. >> trying to think about that, though eunice, you know it just -- stealing intellectual property and just doing all these underhanded things to say that's part of our nature is kind of, you know what i mean it's like -- the things that we're hoping to accomplish are things that when -- if you really are going to be a fair player in global trade, you can't fall back on that this is something that we've always done, i don't think, can you or at least -- i guess maybe that's -- i sound like -- >> from the chinese perspective, joe, the chinese don't -- from the chinese perspective, they don't -- they have want ak knowledged that they are engaged in -- >> this is war >> their argument has been that, hey, you want to come into our market, we have certain

requirements why don't you come into our market, and that they've argued for a long time that a lot of foreign companies do want to have the market access, and they do give up certain technology in order to try to get access to the market their argument fora while has been that they are not engaged in these types of practices. >> certainly china has certainly benefitted from having access to the biggest market in the world, and the united states, and we don't try to extract the same type of, you know, concessions that -- it's unilateral. a lot of these things that you don't see the other countries doing. figure it out. i mean, you know i fland what you are saying, and, hey, i would like to fall back on we've always done it this way and, god, it's working great for us since it's unfair, but i don't know >> well, i think that here a lot of the impression is that it's the u.s. that's being unilateral that the u.s. approach is -- the u.s. is the one that's taking

this approach. >> look at your monitor. >> and hammering china, without having -- we're on the monitor is still on. that's because -- >> i'm going to keep talking then >> don't want to mention anything too sensitive >> no, no, no. i'm not going to do that all right. i got it i sort of understand that. i guess. i hope things soften on both sides maybe. anyway, thank you, eunice. she's still on, so keep smiling. among stocks away watch this morning, wal-mart will be out with quarter by earnings in less than an hour retailers supposed to -- for the fourth quarter on revenue of almost -- just think about it on revenue of almost $139 billion. so great dpie just died not that long ago. the guy who founded the company. if they do $139 billion. one man -- what you can do in your life, andrew, now that you are on your way. you know what i mean big things >> he is well on his way

there's going to be some sliding back, and then you can see -- >> you recognize things may be -- like the world may be upsigh down, and live may be relative, right? >> believe me, the stuff i see on some web sites, the world is -- yeah, the world is definitely whacky right now. i'm not real optimistic about the way you're handling this whole 2020 thing i got to be honest with you. if you -- i'm, like, worried michael moore. >> do you think my run was premature what are you suggesting >> some people are saying you are handing this to strufrp with how far left the geographic center of your party is right now. >> you as in you, democrats. you as a representative of your

party. >> not anymore it all changed on friday >> i never -- >> comp store sales are seen rising by 2.9% did you see that -- 85% of jurnlists are registered democrats. the other 14% forgot to register >> okay. >> moving on student loan servicing company navient has rejected a $3.2 billion takeover offer the bid came from hedge fund canyon capital and private equity firm platinum equity advisors navient said the $12.50 per share offer undervalues the company. >> okay. we got some new developments in the crypto currency space to tell you about this morning. coin base announcing an acquisition of block chain intelligence platform called neutrino they did not disclose of terms of the deal. they did say that the technology will hip coinbase prevent theft

and identify bad actors. i want to show you the price of bitcoin because it's actually spiked over the weekend. now up to $38.70 it's got a little juice in its step there >> i thought you would have said something about this first thing. >> what? because you read that coin boyce neutrino -- >> you are the bitcoin maven andrew is, too >> e on, me? >> yes, you. who did you think i was talking about? >> i thought andrew. andrew is the real interest in the bitcoin. >> in the bitcoin. >> in the crypto currency. >> what do you think happened? >> no idea >> the jpm coin announced friday >> ask that guy on his show, the one guy. >> brian kelly >> the notre dame coach. >> i shall coming up, the venezuela crisis president trump warning the country's military if they continue to stand with president maduro how this intense situation can impact the markets. as we head to break, here's a look at the biggest premarket winners and losers in the dow.

we see homes staying cooler without the planet getting warmer. at emerson, when issues become inspiration, creating a better world isn't just a result, it's a responsibility. emerson. consider it solved.

u.s. equities indicated

slightly lower seven out of eight weeks the s&p has been up for six out of seven something like that. some news from the financial sector wells fargo ceo tim sloan is going to appear before the house financial services committee on march 12th to answer questions about the bank's various consumer abuse scandals. president trump issuing a warning to venezuela's military putting more pressure on nicolas maduro and reiterating the u.s. support for ron guiado >> today i ask every member of the maduro regime, end this nightmare of poverty, hunger and death for your people. let your people go set your country free. now is the time for all venezuelan patriots to act together as one united people. >> joining us now cnbc contributor michelle caruso cabrera. fiery speech, no surprise.

already a response from maduro >> he has completely rejected it and called trump a nazi. trump's speech is part of this very steady drumbeat we've seen for the last month every couple of days there's either sanctions and announcements from the lima group, the u.s. government flew in three c-17s loaded with humanitarian aid into a town on the border between columbia and venezuela over the weekend, and president trump isn't alone in the western hemisphere he sat down with the president of columbia last week, and he reiterated also the military has got to turn because it's time for maduro to go >> his days are over, so now the military who are the ones that have to make the next turn, the change, they have now to support president guiado what is the other option continue with that dictatorship that has -- a hyperinflation of

millions, the deterioration of all the liberties. juan guiado is not only the option to enter into a dem kraerks he is the option to re-establish liberties and hope for the venezuelan people. >> there's a showdown coming saturday, february 23rd, juan guiado said that is the day they need to enter in all the humanitarian aid madur owe rejects there's a crisis, even though from all the video that we've seen coming out of there, obviously, there is one. >> what is the steadline who made this deadline, and what happens because what maduro still controls the military and securities services. >> right juan guiado, the interim saefl declared president it's an artificial deadline. he has put it out there. it's clearly coordinated with columbia, brazil, and the united states and everybody else is supporting him the idea is to get a lot of aid into three cities near the border and then to pressure the military richard branson is going to throw a concert to try to bring eyes to the situation. i think it's this massive effort

to embarrass the military and nicolas maduro and have the whole world ask why wouldn't you let in humanitarian aid when people are starving? >> it accident loo like -- was it the -- was it juan guiado's idea >> richard branson said that guiado asked him to do this. now maduro is going to throat a competing concert on the other side of the island >> a competing concert >> it's become very surreal. >> the biggest applause line from trump was that we'll never have -- it was a combined speech it was directed a little bit at 2020 and all the socialists that -- >> oh, for sure. this was definitely a foreign policy speech about latin america, but it was also a domestic policy speech delivered to cuban and venezuelan exiles, so the biggest line he got was when he said america will never be a socialist country the crowd went crazy >> also, that we're going to really eradicate it from this

hemisphe hemisphere previous presidents really haven't been that outspoken about -- they've tiptoed around it a little bit more >> it was an incredibly dramatic call by president trump to say if we can get rid of socialism in venezuela, cuba, nicaragua, the entire western hemisphere will be free of socialism. we haven't had a president talk that way since basically kennedy. >> right i just -- the 24-pound reference. >> weight loss people losing weight in venezuela. >> how did -- i hear that number these are middle class and upper class people that are hungry, that -- >> starving. uh-huh >> i can tell you to lose 25 pounds you need to be hungry all the time these are people that if they had more food, that's -- we don't understand that here, i don't think, with -- >> there are rampant price controls the government decides everything when you put a price control on something, if you are a producer, right, and you can't charge what it costs to you produce, you stop producing. we learned that here in the

united states in it the 1970s when we had price controls under nixon and farmers were killing their chickens because it was cheaper to kill them than to sell them. >> we have the headline. trump criticizes socialism you made the point about north and south america and the larger point. don't you think that what he is really going after is actually the conversation among progressives in the united states don't you think -- >> for sure. absolutely >> don't you think that's what the jab is about i don't want to be dismissive of what's happening in venezuela relative to what president trump is saying, but i feel like there is sort of a double -- a duality. >> are you suggesting that he is use venezuela? do you think it's serious enough in venezuela where -- he is asking the military to back a different guy when the soviets -- or the russians are still -- >> russia and china. >> this is a serious situation you think it's all a red herring to criticize bernie sanders, andrew >> i am just -- >> do you think -- >> i'm suggesting that some of the rhetoric did.

>> we said that, it's partly aimed here and partly aimed there. i think 80% is aimed there 20% -- you think it's 90-10 aimed here at aoc? >> when you put john bolten and elliott abrams in the administration, these are two people who care very deeply about eradicating socialism from latin america, and they have on four decades your point is taken. they are absolutely -- this is also about -- >> he this call them nazis who called them -- >> maduro. >> or was that every -- was that the entire primetime line-up of cnn that called them nazis kidding. kidding. i apologize. i apologize. >> it's okay because you ales positived. >> i apologized right away >> that never happens. >> right >> watch saturday, guys. this is -- let's see what happens. >> just quickly, trade talks with china come up in the united states this week, is that going to be a pressure point at all to pressure china into backing away from their support of maduro >> so the reports are that china is already speaking with members

of the opposition in washington d.c. to try to protect their interests? remember, they have spent a lot of money i call them red elephants. they have more than 700 projects going -- projects -- supposedly going in venezuela bullet trains, et cetera all of which i think they're discovering are coming to not because they can't get anything done down there. they're going to want to protect their interests. i'm not sure i think the moment they discover that maduro is not in thei interests. i don't think they back him any longer >> do you think he is hyping the crisis just to do that, or do you really believe there is a crisis in venezuela? >> i believe there is a crisis in venezuela >> but different -- the speech was about -- >> apparently that's happening >> the speech was about -- also which isn't real right? there's not people coming over the border >> whether it's a crisis is a question or an emergency is a question >> i think it's probably no place -- i think we have more people -- >> there's more of an emergency in venezuela than on the border. >> we have to let everyone go because we can't even house the people that are coming

>> see, we went from being so close to on friday >> i can't believe you actually think this speech was about -- >> great so see you, smishmichee >> always a pleasure >> when we return on my birthday, no less, southwest airlines is having some weight issues talk about weight issues, joe. >> unbelievable. >> these are different weight issues with the faa. we'll tell you about that story when we return

every curve, every innovation, levery feeling, a product of mastery.

lease the 2019 es 350 for $399 a month for 36 months. experience amazing at your lexus dealer. 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... to retail. finding such opportunities for alpha is the true value of active investing.

and around the world, you have a partner in that pursuit. pgim: the global investment management businesses of prudential.

here's a look at an all new episode of "the profit" premiering tonight on cnbc >> when you are a southern woman, it is all about the food. >> both of your orders are pulled pork, and the next one is br briquit. >> when we have had things, we lose people. >> are you annoyed >> i'm a little annoyed. i have to tell you look, i -- when people don't

like my food, i get irritated. >> and you can catch all the sparring between marcus and the company tonight with two new episodes of "the profit" at 9:00 and 10:00 p.m. eastern on cnbc >> we mentioned it right before the break, the faa has now been investigating southwest airlines for failing to properly track the weight of the checked bags on its plane this is a serious issue. the "wall street journal" reporting the probe found significant mistakes with employees' calculations leading to potential discrepancies when pilots compute take-off weights. the faa has not decided whether to push southwest, but it's a real thing i mean, i have been on small planes where, you know, we were talking about -- >> move things around. >> when they try to move you around, they say can you sit in the front? we want you to sit the back snits a hot day, and they're trying to -- all of these things the fact that they can't figure out the weight of the bags properly >> i always take that personally >> when they ask you to move -- >> can you, sir, move to the other side

come on. right? >> i just think if one person or two people moving on the plane in the wrong place is a problem -- >> it's a bad plane to be on >> it's probably -- >> not a plane you want to be on >> they've been off by 1,000 tons, but it never -- no one's safety was ever -- >> i immediately thought, you know, southwest, what do we know about southwest and their luggage? it's still -- you can still take your luggage, right, without paying for it, right are people using -- that's what i thought of not that they're -- >> just overloading their small bags and stuff >> coming up, what does this holiday shortened trading week hold for investors we'll get into the markets next. plus, is apple preparing for life after the iphone? the tech giant reportedly shaking up its leadership ranks to get ready for the future. that's in the next half hour we are waiting on wal-mart the results are expected we'll have numbers and instant reaction "squawk box" returns right after this business unlimited card,

i get unlimited 1.5% cash back. it's so simple, i don't even have to think about it. so i think about mouthfeel. i don't think about the ink card. i think about nitrogen ice cream in supermarkets all over the world. i think about the details. fine, i obsess over the details. think about every part of your business except the one part that works without a thought. your ink card. chase ink business unlimited. chase ink business unlimited, with unlimited 1.5% cash back on every purchase. chase for business. make more of what's yours. ♪ don't fence me in. ♪ let me be by myself ♪ in the evenin' breeze, ♪ listen to the murmur of the tall concrete, ♪ ♪ send me off forever, but i ask you please ♪ ♪ don't fence me in. special offers available at your local mini dealer.

driverless cars. all ground personnel please clear the hangar. trips to mars. $4.95. hydroponic farms. robotic arms. ♪ $4.95. delivery drones or the latest phones. no matter what you trade, at fidelity it's just $4.95 per online u.s. equity trade.

>> ewe watching "squawk box"

live from the nasdaq market site in times square. >> you are going to break in with that. welcome. good morning to "squawk box. u.s. equity futures at this hour down 71 points or so, and we just hit a long discussion on venezuela and socialism. >> we have not confirmed is. >> no. >> i want to point that out. >> right after our discussion, that's so weird. would you call that -- >> we knew that was coming >> oh, you probably did. did he actually tell you >> no. >> all right that's what it sounded like you knew when is the last time you guys spoke?

>>. >> did he know all the things you said about him over the years? >> it was a total -- you think he is tuned into cnbc a lot, andrew we're the anthesis >> we'll get bernie on >> you know, good capitalism is okay just the kind we have now is a little bit questionable. >> there are things that could be fixed i think we can all agree >> whoa, whoa, whoa. let's get with us now to talk markets after a long weekend alesso of oppenheimer funds and ali mccartney managing director at ubs i'll start with you. we're going to look all over and go global. university of rome you know, i wish that would have been one of my options you know what i mean

>> i would be sitting there learning nothing i'm just going to ask you sort of an over arching question of whether we will see new highs or whether we're -- you feel like u.s. mashlgts are getting the top end of a range here because we've had since the beginning of the year, a great move almost a snap back. is it getting tired? >> i think we still have room to go i'm not going to say we hit bottom or there are different highs to come. i think we're still constructive on the u.s. market we definitely see some slowing maybe even negative earnings growth in the first quarter. we see the second quarter taking off, and i think, you know, in the last five bull markets, we have seen periods of sort of earnings stabilization, and then we've seen growth. in the last five you've seen 15% earnings expansion before and 20% earnings expansion after

now we're getting to normalization. i think you're going to have the same thing we've seen for a while, which is you're going to have volatility persisting it's going to be in this february groundhogs day, and every day is a reflection of where we are in chinese trade talks. >> did you just say you not sure the lows are in. >> i hope the lows are in. we definitely think there's a greater chance of a lot of up side than a lot of down side >> we're, like, 15% off the lows, aren't we, at least? >> look -- >> you think it's possible at some point this year we go back to the december 24th levels? >> i hope not. i think it's probably more a tail risk than anything else if you start to have concern around the three big things we're seeing, if you see the fed instead of taking the dove irk and supportive substances it has, if you stheem looking at data if they don't like and it backs off a little, then you might be in trouble. if you start to see some of the

rhetoric around trade extend to autos, or you start to get japan, you start to get europe, you start to get the commissioner of germany involved then i think you're in trouble we're in for 4% expansion and normalization here we're late cycle you're going to see more volatility than we've seen over the last 11 years. >> you don't like europe much. you would know hopefully the underweight there. modestly overweight here, but emerging markets look good again? >> yeah. we continue to see europe as showing the weakest cyclical dynamics we think the u.s. will continue to lead on a relative basis in global equity markets, and for emernling markets, we have been position overweight at the turn of the year and into january we've now scaled that overweight back to neutral. why is that?

germany, italy this disconnect between rising equity markets and a weakening fundamentals bears watching, and some of the places we're most worried is -- >> china is one of the best performing markets in the world so far this year shockingly, even though the data has been weakening this year in terms of europe, we've seen that too, though we've seen that strong bounce for this year in light -- in the face of weakening data at what point would you say or if you ever would say that stimulus from central banks around the world would help fuel these rallies because the ecb just coming out and saying it's going to go back to helping bank lending basically with another

program. >> i think you are hitting the nail in the head this rally was fueled by oversold conditions that we saw into december, and the two catalysts for the rally were dovish primarily by the fed, ecb, and stimulus from china, aas well as constructive trade talks. on it will be difficult for the donaldson develop enough consensus and bring on more stimulus at this stage after this rally that was driven by expectations and stimulus we need to see the data validate that, and usually the data lags the poim he tes by six to 12 months >> your biggest overweight is u.s.

>> in global equities, yes, we favor u.s. equities at the expense of european equities, and we're neutral on emerging markets. >> okay. we have -- he always used to talk about a wedge between fundamentals and where the markets were there was like a wedge remember once he wanted underlying fundamentals to catch up with that i would think you could keep the wedge if rates stay low, which is what we're going to see now i'm not as concerned as you are. the rates aren't going anywhere in europe now, and that means we can't go anywhere here >> absolutely. that wedge is driven by the lowest discount rate we can imagine. now, on the margin, though, when we will need at some point some positive earnings momentum, some cash flow news that basically tbz to sustain this momentum coming up, one of the recent leadership changes that apple mean for the future of the

company? we're going to get to that next. plus, our squawk newsmaker of the morning. senator rob portman will join us on this site set to discuss the latest from washington that includes border security, lejs larks the trade war, and so much more. a lot mi ucongp on ""squawk box. you don't want to miss it. we're back in a momentyou see? we see harnessing natural gas unleashing the promise of clean energy. we see engineers simulating the future to improve today. at emerson, when issues become inspiration, focusing core strengths to create a better world isn't just a result, it's a responsibility. emerson. consider it solved. you should be mad they gave this guy a promotion. you should be mad at forced camaraderie. and you should be mad at tech that makes things worse.

but you're not mad, because you have e*trade, who's tech makes life easier by automatically adding technical patterns on charts and helping you understand what they mean. don't get mad. get e*trade's simplified technical analysis. [kno♪king] ♪ memories. what we deliver by delivering. his family. his steinway, which met a burst pipe. so grant met his insurance: you are caller number 12. which didn't quite cover the steinway. but what if he'd met pure insurance?

owned by members. he'd have met: lisa, your member advocate. who'd introduce him to gustav: leave it to me. a temporary address, temporary ivory, and help him get tickets to the mozart festival. excuse me, grant likes beethoven! uh, the beethoven festival. pure. love your insurance. weveryone, looknk isn'tat your phones. the design thinking, the digital engineering, security, blockchain, and we will be first to market! yes. when we do we launch?

unfortunately, in 2 or 3, hours. why the delay? cognizant is helping banks use digital technologies at scale to advance speed to market.

slowing iphone sales growth dwloeblly, then apple is now looking to expand beyond the smartphone in terms of how it's thinking about perhaps the next decade of growth the "wall street journal" out with a story on the front page this morning dooelts detailing how apple's recent leadership changes reflect that joining us to discuss this and so much more in the headlines this morning is ed lee media reporter at the "new york times. this is the big story that they have here. apple's executives shake up underscores focus of future. >> the future. >> the future. >> yes >> you know, a lot of people have looked to these different moves they had a switch in their autonomous vehicle department. i think they're moving awayle from being a manufacturer on those things and being the operator, sort of the operating

system for those kinds of things wlsh that's why ai is a bigger investment for apple that gets you into all kinds of things it's really the services it's really the media division that they're hanging their future on. i still need to know more on what makes up that part of their business, right? how much of it is apple music? how much it is the advertising how much of its what they project to be with this new subscription service that they can offer. >> head of the retail business -- >> angela harris >> she came in in a very high profile way from burberry. >> big luxury brand comes in with another -- >> largerly responsible for the watch and the retail after that.

how do you possibly move beyond the iphone when you have absolutely nothing in the pipeline similar >> that's tim cook's -- that's his thing now. he has to figure out what that next big thing is? it could be health care, ai, services where. >> he is evolving the iphone >> separate issue, big talk about the nfl and bidding rights the networks could are some company soon cbs is effective lir saying you are going to have to pry it out of our hands, but the tech giants want it maybe there's a sunday game that you can only watch on am amazon or youtube >> part of roj err goodell aers messable -- he needs eyeballs. the sponsorship doesn't work if he can't land 200 million people on super bowl night. >> that's an interesting example. about 100 million people are watching 2 million of that were watching on-line, right

it's still an incremental business >> that's why the network matter still. >> networks still matter, but what we haven't seen, though, is a real experiment of if i only made certain games exclusive on-line, what is the real audience for that? right now we just have overlaps. thursday night football, you can watch is be that people will just turn to their tvs. >> five years you've been worried about concussion you think it's a viable option for anybody? >> i know there's a lot of people who love to watch football look there's a lot of people who love to watch football who are less inclined to have their children play football. >> i know. >> including the president of the united states who made that comment. so i have a separate question. a bit of a curve ball but it relates to the nfl kaepernick news on friday does what in terms of the sort of overall shift in terms of marketing, how people think about the nfl, all of it >> first of all, i think the kaepernick campaign to begin with that nike did a few months back was brilliant on their end.

>> but does the settlement undo it >> i think a little bit, maybe it's a huge thing -- >> i want to know the terms of the settlement i think the public after all of this needs to -- >> the woke crowd is mad >> a lot of people are mad >> you know, a lot of -- >> i did you didn't see friday's show, i guess. >> being woke. >> he's got it on his dvr. >> the woke crowd, i get it. >> there were a lot of people protesting the nfl on behalf of colin kaepernick and so -- >> people stopped selling jerseys and stopped selling even nike products because of the campaign >> there was a rumor he's going to the patriots now. >> he could go to the panthers is the other talk. but the issue is for all those people that supported him, was does the settlement look like? by taking that settlement, does that undo any of this? and what is he going to say publicly about this? >> i've got a lot of reasons not to watch

the concussions and now this >> you're not watching >> he's going to watch golf. ed lee -- >> watch nbc golf. >> we'll talk about that next. coming up, we're counting down to the release of walmart's quarterly results. they're due out at the top of the hour plus our guest host mohamed el-erian will be joing us to break down the markets, the economy, the fed's next decision "squawk box" coming right back at&t provides edge-to-edge intelligence, covering virtually every part of your manufacturing business. & so this won't happen. because you've made sure this sensor and this machine are integrated. & she can talk to him, & yes... atta, boy. some people assign genders to machines. and you can be sure you won't have any problems. except for the daily theft of your danish. not cool! at&t provides edge to edge intelligence. it can do so much for your business, the list goes on and on.

that's the power of &. & this shipment will be delivered... on the sleep number 360 smart bed. it senses your movement and automatically adjusts to keep you both comfortable. save 50% on the sleep number 360 limited edition smart bed. plus, 24-month financing on all smart beds. ends sunday.

sometimes, they just drop in. obvious. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group - how the world advances. ♪

coming up, the earnings report of the morning. what will the results walmart

tell us about the consumer confidence and spending? numbers after this break stick around "squawk box" will be back in just a moment.

live from the beating heart of business, new york, this is "squawk box. good morning and welcome back to "squawk box" here on cnbc i'm joe kernen along with melissa lee and andrew ross sorkin our guest host today, mohamed l el-erian from allianz who has been bullish about a lot of things you we want against the grain when a lot of people weren't really looking for that and you actually stayed kind of bearish with your new normal stuff for quite a while as well. so you made a good transition, mohamed. i'm complimenting you. i'm not mocking you. >> i'm still bullish on the u.s. economy. but people are underestimating the weakness in europe and underestimating the backlash against china. these are two things that are going to play out during the

course of this year. >> can't wait to talk to you more which we're going to do shortly as soon as we bring everyone up-to-date on where the futures are. they've been worsening since the premarket session has been moving we're downabout 70 now on the dow jones. the nasdaq indicated down about 15 the s&p indicated down about seven. but andrew, the s&p was like 2775 is where it closed on friday remember everybody -- all the guys went to 2750 on the yearly targets after they got scared in december >> they revised lower. >> they're sell side people. they don't need to be right usually. they just need to keep their jobs might go further might stay where it is it's hard to be sell sided >> it's hard to set a forecast on the s&p 500 13 months before that target hits >> it is but the skill is not saying it enough to be wrong where it happens. that's how people keep their jobs on the sell side. >> that's what we do

well, it's true. >> yeah, but we're -- we're different. they can't do this we can do what they do but we can't do what we do? >> we are moments away from walmart's quarterly results. joining us is charlie o'shea to preview the numbers. in terms of the results, what are we looking for e-commerce is going to be a big thing. but at what cost is a question we're starting to ask. >> walmart's ahead of the game from that perspective. >> we see the spike up in the shares because the results are out. so it's a beat on the top eps $1.41 adjusted want to get more with kate rogers >> mentioned a strong q4 eps coming in at $1.41 compared to estimates of $1.33 revenue also more than expected for the quarter. u.s. same store sales includesed

by 4.2%. it extends the positive streak to 17 straight quarters for comp growth in the u.s. in-store traffic increased by 0.9%. that is positive for the 16th straight quarter global comp sales also increased by 2. % in q4. walmart net commerce rose. net u.s. commerce sales rose by 40%. i did get to speak to brett biggs by phone they didn't see a noticeable impact from the government shutdown when it comes to the consumer of any potential slowdown looks like they're in pretty good shape the numbers look good. gas prices are down year on year we're always monitoring the consumer and are ready to act if things change. and our business model works well in most environments. i also asked him about tariffs our merchants are staying very much in tune with what's going

on and we're making plans in any case with tariffs. if they go through in the ways prices are discussed we're going to do everything we can to keep our prices low for consumers. back over to you >> all right thank you, kate rogers >> doug mcmillan is a great manager of walmart there's no doubt in my mind. it looks like he's 12. immediately you wonder how -- you know, is the guy experienced. he's not but right charlie? he's got it going on >> he's done a terrific job. and if you build it or invest in it, they will come we've been talking about this for years now. the investments companied started making 3.5 years ago are -- >> can you explain the general retail sales number to me and the disconnect between what happened >> what's the true story >> how can the biggest retailer in the world do this well? and we saw numbers that almost looked like there was something wrong with them? >> maybe that's it >> really? >> i don't know. i mean, i saw the number as

well i thought, wait a second we're betting that walmart's going to have a great holiday. amazon had a really good holiday. target's preliminary results were favorable those were four massive retailers. so what's dragging the number down i really don't know. it's something we're trying to get our arms around it at moody's. and there might be a disconnect here i've heard a lot of things about well, it was a shutdown. there was a delay, et cetera that data is survey based data maybe that's an issue. i don't really know. but we're seeing counter to that with walmart, we're expecting good things out of best buy and target >> people use that number to recalibrate their entire viewpoint on the economy they almost dismiss the jobs numbers based on that. some say this recession has already started. here's the first data point, those retail sales numbers for me this would tell the

market that maybe you shouldn't have put too much stock in that number >> you're talking about a half a trillion dollar a year retailer. you know, 360 or something in the u.s. popping year over year growth for walmart to do that, the law of large numbers applies here. this was a phenomenal quarter for walmart and a really good year i take your point, joe >> do you get the sense that walmart is executing much better than the rest and therefore taking share -- is this a walmart contained story or is the overall consumer doing so well that it's helping everybody? be specific. >> i think walmart has -- i mean, walmart's nailed the how do we transition online? that's 40% growth. walmart's going to be a $20 billion online retailer pretty soon >> wow >> so they've hit that they're leveraging the stores. we keep calling it a barbell i like to use a teeter-totter analogy.

walmart got a lot heavier. it's sitting at the bottom and everybody else is going to flail longer sitting at the top. there's clearly bifurcation in retail right now the big guys are winning the little guys are losing that gap is getting wider and wider. and it's the walmarts and targets and amazons and tjxs of the world that are winning the game and taking share on the other end of the spectrum. >> 1% beat on same-store sales if you do the math with walmart, that's like a -- what's that -- that's like a huge number, isn't it >> these are big numbers walmart moves 2% growth is what? $10 billion. that's the thing that people may forget over time is how big that company really is. >> they're also reiterating fiscal 2020 guidance that's another important thing to keep in mind as we watch shares up 6.5% is that pace of investmentgoin

to abate or will it become a bigger piece of the pie >> the store growth is slowing they're not building stores but they're spending about the psalm on capex so it's going into tech spend. i think that walmart is going to continue to do that. they will continue to invest by and line pickup in stores food delivery saying how much will be for that walmart's going to leverage that base >> we're watching target, by the way, in the premarket session up by 1.4%. theoretically on the back of walmart's results. is there a clear extrapolation in your view should walmart be rewarded with a good quarter >> target, they put out the holiday results. 5%-plus.

you expect that to flow through. if walmart flows through in january, would expect target to do the same. so target is benefitting a little bit from walmart's halo >> should amazon go up or down on this? >> amazon will move. that's about as far as i can go. >> if more people are buying online, it's good for amazon if walmart becomes an unbelievably potent to amazon, it shouldn't, right? >> amazon's won the online battle against any individual retailer >> walmart's not going to chip away, right? >> amazon's food business, that's going to be the battle ground can amazon get that food business with a small whole foods franchise, can amazon ge food delivery going? if it can't, it's going to have a tough time competing >> so is that a done deal? because even cory booker now is just saying, newark, we will roll out the red carpet. >> nashville already has 5

thourk5,000 jobs the idea -- i -- my view always was that actually amazon was quite brilliant in pitting virginia against new york and saying, look we're going to have two of these things and if one doesn't work, we could just go to the other place. i think what you're going to see is virginia will grow to maybe 35,000 nashville might grow from 5,000 to 10,000. seattle might get an extra 3,000. i think you'll pick up around town i think that's what happened in long island city unfortunately, you know, nobody wants to move into a city where you're not wanted that's what's happened here. >> you were saying other stuff besides what i ask you does newark have a chance or not? >> i don't think that's in the cards. >> because you don't like new jersey. >> no. actually, you know what? amazon has a presence in new york already >> perfect place, isn't it that's where i would go.

real estate. smart people there are. it's not that much different than queens. >> and you're going to support this version of socialism called corporate welfare to have them come to your state >> considering there's reverse subsidies out of yin-yang at police place, right? aren't there you need reverse subsidies nobody is coming to this new jersey, connecticut, or subsidies. no one's coming. >> i think right now that's probably right. >> before welose charlie and before we forget about walmart, let me ask you a question. so my two major takeaways from you is the outlayer, don't underestimate the strength of the kierm. two, don't underestimate the big american corporation to adjust >> yes >> so looking forward, how long do you think these two trends continue is that something you can bet on into 2020?

or is that something that is just this year and you're going to reassess in a big way >> i would say the large higher credit quality, so the higher rate rated retailers -- they're executing against that play book we maximize the value and efficiency of our stores and the consumer still shops in stores we're about 85/15 still brick and mortar versus online that 15 includes walmart's business >> and the business has enough gas in the tank? >> i think so. >> there's no way you get a recession in the country if the consumer is doing okay and that's critical. because you see it from the bottom up perspective. >> we have a positive outlook on the sector which takes us through the sector we do not have a recession built into that forecast to 20 is a different ball game the larger retailers will continue to thrive here. i'm convinced. >> all right great to see you thanks for your analysis

we should note we're coming off the premarket session lows in terms of the implied open. on the dow you can see it most clearly. walmart with the move about $4 that's up 25 to 28 points on the dow. now we're looking to be lower by 50 points on the dow down 6 on the s&p 500. want to briefly talk about trade negotiations between washington and beijing because they're set to resume today with higher level talks due later this week. want to get over to kayla tausche who's in washington with the latest details >> good morning. the white house confirming the talks with china will take place in d.c. this week. you have chinese officials that are going to be in town beginning today. continuing those talks principles will be meeting beginning on thursday. the white house says the talks have a view to achieving needed structural changes in china but also says the two sides will discuss china's pledge to buy more goods yet again the president was briefed over the weekend on where things stand with china in a tweet he said of this china

trade deal that there is big progress being made on so many fronts this is as the white house works to avert with beijing. that would happen in ten days. but they're also considering snapping new tariffs on imported cars most of which comes from foreign allies the commerce department officially submitted its study to the president over the weekend. it's unclear when the report will be made public if at all or what its recommendations are but a flurry of opposition has already arisen from auto industry groups and even from german chancellor angela merkel. an official tells me there's not much support for auto tariffs. but only one person's opinion matters. and that is president trump's. and it's likely to be something that the president wants to keep in his back pocket for a rainy day for some of these negotiations as they keep going on with canada and with europe so we'll see whether he actually sk acts on these recommendations or whether it's a card he has to

play >> yeah. it's another one of those really national security -- you know, there's a lot of things that get done, kayla. it's not just this administration i guess having a steel industry is part of our -- right? >> that would fall to the defense department you would remember -- sent a letter saying only a very tiny fraction of the steel and aluminum produced in this country is even needed for national security and that the u.s. has more than enough to do that people are saying that perhaps the fact that there is not a permanent defense secretary could mean that this, you know, this undergirding of the commerce department's recommendations wouldn't come from the pentagon. and certainly have a lot of republican lawmakers senator rob portman even says, like, i find it hard to believe that mini vans from canada pose

a national security threat >> we can talk to him later. the salad days are coming again, kayla. i mean, i think they're here bernie just announced. you've got cory booker all over the place. i mean, it's -- you're going to have stuff to do i hope you get geared up you're ready, you're back. you're on top of this whole thing. because it's going to be unbelievable >> it's busier than ever some are saying there could be as many as two dozen >> they all want to live in that place. i don't know why i think it needs a little update it's a beautiful place anyway, thank you. let's get to our guest host i've got to tell you, i listened to what you're saying you know what you're talking about, right you've used the term you might have coined the term you know what we have? multi-speed economies. >> and i call it divergence. >> because here, walmart -- what is so wrong with -- to make it

diverging so much. what are the real problems just the long standing problem with -- >> politics. look at the six major economies. they're all slowing. uk, germany, spain, italy, france all of them slowing. >> not because of the entitlement state but because of specific political problems. >> they are all focused on some internal issue spain has no government. there's an selection coming up italy has a government that's trying to find its way. >> but we have trump why aren't we -- i listen to one side of the aisle about how -- we should have a horrible -- things should be going bad here if it's a political problem. >> so we had an alignment that allowed a couple of pro growth policies get through and that has helped the economy. >> really? >> yes >> for you it was always

keynesian -- >> i think that that is the third element of the president's pro-growth policy that needs to get through this year. it's going to be hard, but it needs to but between deregulation and the tax cut, you've given this economy momentum this economy was fundamentally in a good place in terms of balance sheet. europe is in a very different place. and germany in particular is weakening and we underestimate the amount of weakness going on there. i worry you have in europe the six major economies slowing and you don't have the team working as a team at all so we may see. sub-1% growth this year in europe that's almost stall speed. >> and the china backlash? that's going to be worse than people think how does that work hurt by what we're doing or people are less -- >> i was in munich over the weekend for the conference and that brings in people from over -- >> did you see biden >> i did not see him, but he was there.

>> embarrassing the world. >> lots of things people disagree on. they disagree on the great power conflicts. they disagree on this notion, can europe had a third way over iran, over russia? but there's one thing they agree on which is that china has certain practices, intellectual property theft, weaponization of development tools. certain practices that should be countered. and you -- so you have an alignment going on between governments and in this country you have an alignment going on between the government and private sector that can be quite a backlash that i think mark is underestimating. especially when you look at what's happening with emerging markets. >> did you have any free time? did you do anything fun? >> i didn't do anything.

i just walked. >> the english garden? you did nothing in munich? >> i did nothing >> that's pathetic you've been many times >> i do. i go quite often great city, isn't it >> beautiful city. >> all right never mind >> we do have some breaking news, some sad news to bring you. >> i don't like this >> carl laggerfeld, the designer behind chanel and a businessman and entrepreneur passing away at the age of 85. i know we'll talk more about this in just a bit but that crossing the news wires literally while we're having that conversation with mohamed coming up, other stories making headlines this morning. and later, fallout from amazon's decision to say good-bye from new york and the political implications it may or may not have barney frank will join us to discuss. stay tuned you're watching "squawk box" on cnbc

(clock ticking) (bell ringing) it's time. time for a new kind of cloud. the ibm cloud. the cloud that proactively protects your business from threats, instead of just reacting to them. that lets you modernize and move more of your apps without re-writing. that unlocks insights from all your data and puts it to work with ai. get a faster, more secure journey cloud. the ibm cloud. the cloud for smarter business. ♪ ♪

for each family member? so with xfinity mobile i can customize each line yup. and since it comes with your internet, you can switch wireless carriers and save hundreds of dollars a year. are you pullin' my leg? nope. you sure you're not pullin' my leg? i think it's your dog. oh it's him. good call. get the data options you need and still save hundreds of dollars... do you guys sell other dogs? ...now that's simple, easy, awesome. 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. welcome back we're watching walmart shares very closely surging in the premarket on the back of stronger than expected fourth quarter numbers beating on the top and bottom lines u.s. same store sales up by 4.2% it's a streak of 17 straight quarters of comp store growth. our extended 4.56% is a gain premarket helping across the major averages okay coming up, a lot more here on "squawk. we have big news in the aviation industry we will discuss it after the break and bring you that news. you don't want to miss that. plus, digital gangsters. that's what facebook ibes ing called in a new report we have the latest on that "squawk box" returns in a moment when you look at the critical issues facing our world, what do you see?

we see a billion more people breathing free. we see access to fresh food being the global norm, not the exception. we see homes staying cooler, without the planet getting warmer. at emerson, when issues become inspiration, focusing core strengths to create a better world isn't just a result, it's a responsibility. emerson. consider it solved. itin 30,000 precision parts. or it isn't. it's inspected by mercedes-benz factory-trained technicians. or it isn't. it's backed by an unlimited mileage warranty, or it isn't. for those who never settle, it's either mercedes-benz certified pre-owned, or it isn't. the mercedes-benz certified pre-owned sales event. now through february 28th. only at your authorized mercedes-benz dealer.

is it because so many go after it the same way, chasing after short-term returns? instead if getting caught up with the crowd, the investment managers at pgim take a long term view. uncovering opportunities for alpha across public and private markets, while anticipating unforeseen risk, has powered our rise to a top ten global asset manager. partner with pgim. the global investment management businesses of prudential financial, inc. the global investment management businesses of i cowe can do theyour screening at her house.

hi. this is the man that's going to check your eyes grandma. cognizant ai solutions are helping healthcare companies advance diagnostics and prevent blindness in patients with diabetes. everything looks good. you have beautiful eyes. ♪ welcome back to "squawk box. the battle for wealthy fliers escalating partnering with blade to chopper passengers to the airport in new york and l.a. robert frank joining us with special guests >> american airlines announcing a deal to improve one of the worst parts of flying. getting to the airport now, in new york and l.a., american is teaming up with blade to chopper people to the airport. they will be driven to first

class check-in they can hang out at american's lounge at l.a.x. for an additional 1200 bucks for two people, passengers can also be driven to the private suite typically used by celebrities, overseas royals there you get faster security screening. now, blade's going to be running regular choppers from its three terminals in manhattan to jfk. that flight only takes five minutes. to l.a.x. it will fly from a terminal next to the staples center downtown. all right. so what is it all going to cost? the blade trip is $195 a person if you buy a single seat or charter a whole helicopter for six people, it's between $695. an additional for the first passenger and $100 after that for add ons. if you're flying alone, it's $545 for the whole thing >> robert, stick around.

we do have some special guests to join us founder and coo of blade is here and janelle anderson is here with american airlines you've done this with other airlines before, am i crazy? are you still doing it with delta? >> not at this point in time >> okay. tell me how you got to this point and how many will use this service? >> i think right now for our customer base and there's a lot of l.a. to new york flying for the first time to be able to fly from downtown l.a. on top of a blade helicopter lounge on top of the building literally going to manhattan never being in a car is pretty amazing. and a lot of our fliers are doing that american has the first really important hub. as we get the price point down, i think $195, you're at that

black car barrier, that kind of suv ride sharing car price i think you're going to see a nice tickup. >> so what percentage of passengers on a given l.a.x. to new york or new york to l.a.x. flight in business class or first class do you think are going to avail themselves to this >> right now what we hear from our customers is they're looking for extensions, a way to save time this is a perfect extension for them we hear it all the time from our frequent fliers that use this kind of service. in l.a. the private luxury experience is valuable to our key fliers >> can you talk about the economics of this. does american subsidize you? >> no. they're separate purchases we needed connectivity once you got to the airport we're taking a two-hour drive and turning it into a five-minute flight it's a city within a city. >> two-hour drive? depends what time you're going at >> west side all the way from hudson yards you'll have

literally a thousand feet away to walk from your office, get in a hem copter, five-minute flight then to have the integration with american. that's really important. >> if the helicopter only has one person on it, though, or two people -- at what point -- >> it's $195 >> right but for you, what's the cost why did you terminate your relationship with delta? was there a lot of demand for that >> i think, you know, right now this is a relationship that makes sense for blade and american i think having that true first class service coast to coast and also to be able to kind of replicate the concierge, highest level of service you may not be in as an american customer through our venture is really what's -- >> only works for -- >> it's utilizatioutilization. in terms of the economics, it requires utilization we're using a helicopter they're using data to figure out what the next craft will look like >> only works on the l.a.x.

path use it for any american flight >> you can use it for any american flight. obviously blade caters to customers on this integration. only available >> $195 seems really cheap so how did you get to $195 and is $195 what you're going to start with and later it'll be something else what's the plan? >> well, charters start at $695 and go up to $1250 >> for the whole craft >> blade is flying people from the airport back so the economics are also based on what you'd call the deadhead coming back too. at a five-minute flight, it isn't that costly. >> you're saying -- okay just so i understand, you're going to capture people on the flight out and the flight back >> correct >> how are you going to guarantee you'll have both flights? >> there's no guarantee. but requires utilization and marketing and promotion. you're now getting to the black

car barrier. >> is this arrangement only for you guys >> you can fly any airline but only with american do you have this true connection >> our premium customer service rep will meet you when you land and get you to the beginning of the lines and get you right to our lounge and/or the gate much more quickly same thing on the return flight if you're coming in. they'll meet you and get you expedited right to the helicopter it is an amazing time saver and extension of our five-star services that our customers love so much. >> going to have to try it i am >> perfect for you >> it is perfect for me, right >> you through and through it is, right >> my own helicopter pilot would feel bad if i use them >> only if it's in the shop. >> robert frank, thank you for that thank you, guys. congratulations.

good luck with it. coming up, much more from guest host mohamed el-erian. also barney frank on the battle over amazon's announcement not to build hq2 in new york as we head to break, look at the futures benefitting a little bit. they've moderated their losses after a big report by walmart. we're coming right back. (baby crying) ♪ ♪hold on, i'm comin' ♪hold on, i'm comin' ♪hold on don't you worry,♪ ♪i'm comin' ♪here we come, hold on♪ ♪we're about to save you i'm comin', yeah♪ ♪hold on don't you worry,♪ ♪i'm comin' (butcher) we both know you're not just looking for pork chops. you're searching for something more...

...red-blooded. right this way. you thirst for adrenaline, you hunger for raw power. well, you've come to the right place. the road is yours, dig in. can ca hey toothless.

[ ding ] show me just add magic. [ ding ] [ gurgling ] [ ding ] show me cartoons on netflix. [ ding ] [ cooing ] [ door closes ] [ cooing ] ♪ [ ding ] show me fish on youtube. say it and see it with the x1voice remote. from netflix, prime video,youtube and even movie tickets. just say get "dragon tickets". ♪

still to come on "squawk box," a political battle brewing in the empire state after amazon decides not to build its new headquarters there investors are watching shares of walmart this morning after reporting better than expected results we'll talk street reaction in just a bit senator rob portman on the latest trade talks in washington he will injo us at 8:00 a.m. eastern time "squawk box" will be right back with barney frank. opportunity . and to manage this risk, the world turns to cme group. we help farmers lock in future prices, banks manage interest rate changes and airlines hedge fuel costs. all so they can manage their risks and move forward. it's simply a matter of following the signs. they all lead here. cme group - how the world advances.

has been excellent. they really appreciate the military family and it really shows. with all that usaa offers why go with anybody else? we know their rates are good, we know that they're always going to take care of us. it was an instant savings and i should have changed a long time ago. it was funny because when we would call another insurance company, hey would say "oh we can't beat usaa" we're the webber family. we're the tenney's we're the hayles, and we're usaa members for life. ♪ get your usaa auto insurance quote today.

this is decision tech. it's screening technology that helps you find a stock based on what's trending or an investing goal. it's real-time insights and information, in your own customized view of the market. it's smarter trading technology, for smarter trading decisions. and it's only from fidelity. open an account with no minimums today.

a new report from british lawmaker says facebook knowingly violated uk privacy laws and needs to be regulated and investigated the uk's digital culture committee completed an investigation into facebook and other social media companies in their roles in spreading fake news and disinformation. in the document, the lawmakers called for an independent regulator for social media sites. that if reached could result in large fines. the report points a out that companies like facebook should not be able to act digital gangsters. heart breaking news this morning. bernie sanders announcing he's going to run for president in

2020 joining us now barney frank. you can truly live up to your name now and be frank about everything i'll start with you try to figure out march madness you know what i mean i was looking at the odds for who's going to win this year and like duke was, like, nine to five or something. then gonzaga it's impossible. and i would say the democratic field is about the same. i don't think -- for me to be perfectly frank, i don't think bernie can be elected president in this country. but he's running do you think bernie sanders could be elected president of the united states, grasman >> no, i don't let me just say, by the way, i said that when i was -- three years ago. i would just, minor exception. my candor quotient has not significantly increased since i last saw you >> that's right. >> i would occasionally, i did have a rule if i couldn't tell the truth, i'd say i can't tell

the truth i'm not going to answer so my motto was tell the truth and nothing but truth. the whole truth? get a subpoena i don't think he can i think bernie sanders obviously makes a very important contribution i wish that the american people were more willing to vote for much of what he wants. that's my own ideological preference one of the great problems we have in politics in this tendency for people across the spectrum, left, right, middle to assume that what they personally prefer is politically the best way to go. that isn't always the case i recognize there are things i've been for that are not majority views but that's unfortunately a human tendency to neglect that but, no. i think -- and in fact, i think you see that reflected in what most of the democrats of doing look one of the problems we face right now is that i'm very glad a lot of these very active

democrats want or although in some cases but one thing i want to point out, the people who are being listed now with the leading edge, none of them beat a republican none of them frankly contributed to having a majority in the house that would expand medical care, that would fight for good claimant change policies, that would build infrastructure and protect union rights they all beat other democrats where the policy difference is for fairly small or replaced other democrats. the people who are going to be critical are the ones who beat republicans. and they are clearly liberals on public policy issues but they -- if they had advocated, the whole list of policies that senator sanders advocates, they wouldn't have won. >> do you feel that -- are you watching in a positive -- do you have positive feelings about the list of candidates you have right now and where the geographic center of ideology of

those candidates is in terms of being able to defeat president trump? you do who's your favorite right now? who do you think is electable? i don't know i can't see the future but i can't point to anyone who's already running right now that can get elected by the rest of the country maybe you can. i could be totally wrong >> let's take a look we know who the people running are announced. i haven't kept track of who's announced and who isn't. but nine senators are very likely to be running for president. five of them voted for the compromise appropriation and others voted against it. i think that's fairly representative of who they are >> they haven't announced yet. you're talking about the bidens of the world >> but cloklobuchar voted for it the distinction between who's announced and who isn't, that's artificial right now

>> do you think if for example biden runs, he has a much better chance do you think klobuchar has a chance >> the answer in part is i don't know i like what you said at the first, andrew. i go back and i don't see many people who saw bill clinton winning or barack obama. the american people are unpredictable in this way. and by the way,it is also the case we forget we complain about some things. but america has the most open democratic process for picking the chief executive of any country in the world by far. and what that does is -- say you can't be sure. they're going to be skast probably by people who haven't thought much about it now. i'm very reluctant to make predictions. i do worry about the tendency of the people left and right to assume that what they want is what the public wants.

and yes, i think there are some -- i think the green new deal would be a loser. i do not think that people are going to be advocating that whole package. there's not a lot i disagree with some i do. but there's an argument you don't destabilize a society by doing too much change at once. and i don't think -- and partly we have people who are skeptical of government. people like me who do want to expand the government in some areas need to understand that we have to show how that works. you have to do it in pieces. and then as you show it has worked, you can build on that. >> okay. let's shift gears and talk amazon mayor bill de blasio laying blame for the scuttle deal at the feet of amazon itself. >> amazon took the ball and went home what they did was confirm people's worst fears about corporate america. here's the 1% dictating to everyone else even though we gave them a fair deal.

and i think it's going to frustrate people all over this country to see a company treat a neighborhood and a sit like that >> we haven't spoken just in a nutshell, the whole scenario we saw play out, how do you view it? >> well, i agree with much of that if i were a significant shareholder in amazon, i would be very angry at them. they were -- their feelings got hurt and they spent a lot of money and a lot of energy and took a hit in terms of the reputation by the way, people don't always separate that out. amazon and then the facebook report you just talked about from the united kingdom. this is going to further fortify resistance even when there shouldn't be resistance. my view is that amazon should not have pulled out and they should have been more politically flexible it does show a kind of arrogance they were offended anybody questioned them.

from what i read, i believed the deal was going to gho through as proposed i do think it shows another problem. a great supreme court justice was in favor of the states doing things to show how policies could work but in the modern era with the mobility of capital, you know, you can't do laboratories if the specimens can move to a different laboratory if you're trying to do an experiment and the people you're experimenting on say i don't like your experiment, i'm going over here where they'll feed me better and i'll have nicer places i hope maybe through the tax system we could do something to prevent this outrageous spe spectacle where the richest people in the country extort from some of the poorer people more favors. >> congressman -- >> and if you're the local government, you can't avoid that i think it has to be done nationally >> congressman, i've thought

about this issue about the idea of effectively nationally somehow trying to outlaw incentives especially, again, when you look at a profitable company like amazon, you say to yourself something seems wrong here and yet it feels almost anti-progressive we talked about in the last hour because ultimately it wouldn't level the playing field. it would actually make it more complicated for the areas of the country that are struggling the most i think what's happened in the south and south carolina and tennessee and elsewhere, these where are areas that created incentive systems to bring volvo, boeing, all sorts of companies to places that didn't have industry. and if they didn't have that opportunity, if we effectively created either a tax system or a

a -- and we leave large parts of the country empty. i hate the whole idea and if you have a solution, by all means let's do it. but i can't figure out what we -- what would happen if we said it couldn't happen. >> two things. first of all, i agree with much of what you said but the fact is that those places that were attracted to the south have not come from the coast. they've come from the midwest. they've come from the rust belt. so this has not been a case where the companies on the whole have left the wealthier areas and gone to the poorer areas >> i'm thinking more of bmw, mercedes, foreign companies -- >> no, andrew. i'm sorry. let me finish. you talked about volvo you talked about autos awe troe industry is a great example. the photograph has shifted from the midwest to the south and that's true of a lot of the other places they've taken as to what you can do, there are two things first of all, you could have some tax penalties which could apply. secondly, and this is very

important, it's one of the biggest differences for the parties and frustrating that working people get attracted to the republicans sometimes in their direct -- to their detriment. that's collective bargaining it's unions. one of the reasons people have moved out of the industrial midwest to the south was to avoid unions it's one of the reasons the foreign companies that have come have come into the south if we were so pass national laws, if we were to be protective of the men and women who vote in the majority to do that, to join unions, you would reduce that incentive to move from middle income areas to get poverty in the middle income areas. >> there's a temporary -- that argument doesn't hold up in terms of whether they've been benefitting the same people you've talked about. it hasn't been to their detriment. >> it's been to the detriment to the people in michigan and ohio. >> okay, no.

people in general getting raises now. we got low unemployment. some of the deregulation >> but not as much as they could have bob corker -- >> that's counterfactual >> he opposed a union for volkswagen in tennessee that the company wanted to support because he said if we get a union here, they'll raise the wages. >> that's a much longer discussion though. >> let me finish this one point. >> okay. >> that they will raise wages throughout tennessee and that will limit our ability to attract companies from the north. that was corker. >> the one and only barney frank. thank you, sir good to speak with you when we come back, we'll talk about walmart's earnings. back in a minute because your investments deserve the full story. t. rowe price invest with confidence.

now you can, with shipsticks.com! no more lugging your clubs through the airport or risk having your clubs lost or damaged by the airlines. sending your own clubs ahead with shipsticks.com makes it fast & easy to get to your golf destination. with just a few clicks or a phone call we'll pick up and deliver your clubs on-time, guaranteed, for as low as $39.99.

shipsticks.com saves you time and money. make it simple. make it ship sticks.

welcome back to "squawk box. we got some big morning movers to talk about on the earnings front especially let's check out shares right now of walmart that's the big mover the biggest brick and mortar retailer in america is up nearly 4% in premarket trading. walmart posting better than expected profit and sales. as well as sales growth at existing store locations 43% sales growth on the u.s. online side of things. it also boosts its dividend by a penny. also watching what's happening with target overall. pushing that competitor higher by 1.5%. then another retailer to watch is advanced auto parts posted a profit beat

sales narrowly missed estimates. melissa, i will toss it back over to you. >> thanks so much. let's get more on the walmart numbers. joining us now are liz dunn and mike lassiter. great to have you both liz, i'll start off with you the numbers look strong across the board. is there anything that would cause you concern? >> no. the guidance was great they reaffirmed they're looking for 35% growth in their online business in 2020, fiscal 2020. so the numbers were great across the board. i think that the flow through on the fourth quarter was quite strong that's really the most impressive thing about the headline >> in terms of the guidance, we're going to see a year on year slight decline in e-commerce sales in order to achieve these big double digit numbers

>> the most important number is the investment is not going to be more dilutive than we thought despite the recent rule changes over there most of the guidance is spot in line with what they previously said it shouldn't be a surprise the surprise from the quarter was that earnings in the fourth quarter were better than expected so the base from which we'll be modeling next year is going to be higher. but a lot of that is baked into the stock price given it trades at a premium valuation >> let's talk about this valuation. close to five-year highs at what point do you say, it's all priced in? >> yeah. you know, i think -- we really have to start to see the flow through. when you have a big quarter like this, the fourth quarter where you saw the flow through, that gives some credence to the fact that it has risen to the level it has the operating margin has been going down but we're looking ex-flipkart operating margin to improve modestly or be about flat in next year and it was up this

year so i think that's, you know, a positive case. long-term they're using their size to increase their dominance and to really go head-to-head against amazon i think that's important and i think it's obviously -- it's working >> so online, michael, they're increasing their size online to the detriment of which players >> well, where they're really doing well is grocery. they've been rolling out more and more online grocery pickup locations. that's to the detriment of the regional and smaller grocers across this country. as they continue, we expect to see a rationalization on that side of the business where they need to do better is on the more traditional e-commerce individual packages, individual homes of areas like apparel and home furnishings that's going to get the gross profit dollars to be better and pair from the operating losses they're achieving from investing so much in that business >> it's a great day to do the

percentage gains have you noticed off the cuff just, you haven't noticed? bring up that chart. it's just a great day to do a quick off thecuff percentage gain i've been doing them all morning and i've been exactly right. it closed at a hundred and so every -- you see that, andrew you want to show off with your quick math skills? that's a 3.81% gain. >> thank you, liz dunn >> it's rare that happens. coming up when we return, senator rob portman. then later, ipo-nghury investors, looking to have their moment in 2019 a host of big-name companies expected -

with expedia, i saved when i added a hotel to our flight. so even when she grows up, she'll never outgrow the memory of our adventure. unlock savings when you add select hotels to your existing trip. only with expedia.

-it's our confident forever plan. -welcome to our complete freedom plan. -it's all possible with a cfp professional. ♪ -find your certified financial planner™ professional at letsmakeaplan.org. your but as you get older,hing. it naturally begins to change, -find your certified financial planner™ professional causing a lack of sharpness, or even trouble with recall. thankfully, the breakthrough in prevagen helps your brain and actually improves memory. the secret is an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown

to improve short-term memory. prevagen. healthier brain. better life. the walmart economy, the retail giant beating at the top and bottom lines this morning, what does it say about the health of the consumer tariffs and trade. u.s. and chinese officials talking again this week. senator rob portman of ohio will give us his take on the ongoing negotiations and the road to ipo. uber and lyft just two of the high-profile names getting red i do go public are some of these unicorns overvalued right now the final hour of "squawk box" begins right now ♪ live from the most powerful city in the world, new york, this is "squawk box.

>> good morning and welcome back to "squawk box" here on cnbc i'm joe kernen along with andrew ross sorkin and melissa lee. becky is off today our guest host, mohamed el-er n el-erian the futures now are down less than 50 points in the premarket session. that is the dow we're talking about. the s&p down five and change nasdaq down over 14. treasury yields today, i saw 2.68%. 2.66% right now on the 10-year couple stories that investors are going to be talking about right now. walmart the big earnings mover of the morning let's show you what's going on here the company beating forecasts on the top and bottom lines for the fourth quarter earnings coming in at $1.41 a share. that was 8 cents above estimates. comparable store sales rising above the estimate of 3.2% company also increased by 1 cent to 53 cents per share.

the stock up almost 4% right now. also, 16 states have followed federal laws who challenge the emergency declaration to pay for a wall along the u.s./mexico border will likely be a drawn out legal battle that will wind up in the supreme court. president trump predicted all of this when he made the original announcement separately, activist investor star board value asking for a proxy. among shareholders for the deal to buy celgene starboard has not decided to support the deal which would bring together two major producers of cancer drugs. we'll keep an eye on those this morning. separately, there is a new round of trade talks between the u.s. and china scheduled to begin today in washington. this after a report which could lead to auto tariffs was delivered to the white house quietly over the long holiday weekend. kayla tausche has more on that

>> the commerce department formally turned in that report before a legal deadline sunday night. it's unclear if commerce research supported that or when or whether we'll see the support itself the imposition of tariffs would undermine not help trade matters. the possible addition of these auto tariffs on foreign allies comes as u.s. officials are working to de-escalate tariff tensions with china. with ten days before a march 1st negotiating deadline, president trump tweeted that big progress is being made on so many fronts. the form that such a deal would take a memorandum of understanding but the content of what would be in that memo is still up for debate right now. >> let's get more on this,

kayla. senator rob portman is here. let's start with what kayla was talking about here what do you think eventually happens with -- suddenly we're back to europe and canada. i was all focused on china what's the end result here, do you think? >> i think something gets worked out. the question has always been how comprehensive is it? the deal with the structural problems, not just buying more american products which i think is likely. and finally, you know, what is the way to keep it accountable in other words, sometimes china agrees with things and doesn't follow through i think what you'll see are good discussions this week. the vice premier is in town meeting. they're going to agree on something with balancing more trade. trying to reduce the imbalance of the trade deficit and then property that's significant on licensing

agreements joint ventures and more. and then i think there'll be something on subsidies on the state enterprises in china which are unfairly trading with us because they have the subsidi subsidizati subsidization. and create some way to have consequences to china doesn't follow through and then perhaps a meeting with our two presidents at a very high level and kind of like we did with europe the trade dispute was put on pause while we have continued discussions. i think it's going to be good. >> when the president declared the border wall a national emergency, what were your comments >> well, first of all, i think we need to back up a little bit. what the president proposed i thought was correct. in other words, he proposed an evidence-based solution to the border he funded the top ten priorities of the border patrol zone border improvement plan and yet democrats and republicans couldn't get together to support that so they supported about half of it

it was the most that congress has ever put into barriers ever in any fiscal year it's also the most we've put into border security generally it was a way to deal with what i think is a real problem on the border now the president is saying that's not enough and he'd like to go further. the national emergency to me is not the preferred way to go. because he has the ability to go through treasury forfeiture funds and d.o.d. drug funds to be -- >> ramp it up a couple billion >> he wants to go an additional through there. >> various pundits say if the courts uphold this ability to do this, if they do that the entire structure of how we do things breaks down. that it's basically a dictatorship the difference between this national emergency and the 13

that president obama, for example. it's a different situation, obviously. but things didn't break down with those 13 or how many w. did or the president before him. they've all done them. >> i think there are 38 out there now. in those cases congress went along with it. primarily when you look at those, those were things like saying there would be sanctions on countries like iran congress never -- >> the things being constitutional here's the situation where congress is clearly not appropriated the money that the president has wanted and the president effectively has now done an end run around congress and the hopes and dreams or at least the votes of what congress has said that is appropriate >> so two thoughts there one, i don't think anybody really knows because it's a gray area if you look at the constitutional arguments pro and con. they're based on case law that

came before the national emergency act was put into effect by congress so probably he has the right to do it. at the end of the day i'm speculating here this is a political question it's not a major question -- >> what does it mean to your power? >> that doesn't mean he should do it. >> so you think that congress can decide to appropriate money for whatever and if it's enough or not enough, the president can always just say that's not right. i want to do it my way >> again, as indicated, there have been a number of them >> now when congress has effectively decided on that in advance and the president turned around saying actually, no i'm not. and what did you make of the fact that the president said i could do this or i could not do this it could take me some time. >> it's actually quoted in the lawsuit. >> yeah. >> that doesn't help his case. if you look back, you know, youngstown sheet metal versus sawyer i think it was is the

case law everybody turns to. that was before the national emergency act was put in place which creates this ability to step in. it'll be interesting to see what happens. this will be a precedent setting case they may well say this is a political question you guys work it out >> so you said you're going to support trump and his re-election in 2020. that would be -- would that be the first time you voted for him? >> joe, how could you ask that yes. it would be. because i didn't vote for him last time. after the tapes came out, i said you know what? i kind of had it and i'm going to write in mike pence >> so you're supporting him this time around. put that aside for a second and let's say that you wanted a democrat to take the presidency from him who do you think and i don't want you -- no one's going to listen to you so it doesn't matter what you say so you can

be honest. who do you think has a chance at this point one of your guys or gals in the senate >> i hate to give -- >> like i said, he's not going to take your advice. i just want an honest answer i can't come up with anyone. howard schultz is my favorite so far. i mean, do you have anybody t t that -- you got the whacky left. >> i think you're vying for a free starbucks here, joe >> no, no, no. believe me howard's not giving me free anything but andrew, he didn't answer the question yet >> i think it's pretty simple. >> give me a name. who do you think could win can biden win? i hear there's no energy in his -- >> it would be somebody like amy klobuchar who would have the best chance of winning someone who is appealing to the middle of the country. >> she went for the new green deal because it's aspirational >> i'm not defending her >> you either go for it or you don't. you like meat or bacon or you

don't. >> i think it's pretty simple. if the party lurches to the left which it appears to be doing, it's hard to win a national election. >> can i just -- i just want to go back to the -- almost just -- because i think it would be a benefit to viewers to understand the logic. you decided not to vote for president trump the first time in part because of this tape you heard this tape and that offended you, right? how do you think about that relative to effectively everything that's happened since he became president? whether it be charlottesville which i believe you decried. whether it be caging children at the border which i believe you decried. whether it be all of the informations around russian interference and whether it was the president or at least his people -- this 30 some odd people who have been indicted. how do you think of all that relative to the tape that the tape using the p-word and why

that was worse than all of these other things >> first, i said it was an accumulation of things i had had it at that point you forgot about the tax reform and tax cuts i championed for over a dozen years we finally enacted it. i tried to do it with president obama and he wasn't interested you forgot about the regulatory reform that's made a huge difference in our economy and growth in jobs and wages for the first time in a decade and a half, my constituents are seeing wages go up this is all stuff i've been trying to do for years he's the one who signed by opioid including by the way, drugs coming across the southern border he's the one who signed my human trafficking legislation to stop the online trafficking of women and children i work with him every day. >> so do you think you should have voted for him the first time >> i don't regret it what i do think is it's my responsibility as an elected official hue to work to get things done. we've established a lot.

when you look at it objectively and look at the legislation that's getting passed -- >> aren't you going to wait for the mueller report going to throw in he colluded with russia. without knowing it for shr >> i believe the government has already said in many cases not that he personally did but his team did >> his team colluded with -- >> how many people have been arrested and indicted and pled guilty already to doing something wrong here >> wow so you don't even need to wait for the -- >> he surrounded himself with criminals. wh what are you talking about >> how do you survive between these two guys >> i just ignore them. >> did hillary collude with russia >> i'm unaware of people being arrested >> there are people that have been fired from the fbi. >> all right senator, thank you for joining us >> i don't know how you put up with them. that's all i can say

>> senator you can't be any stronger in response to him saying that we know that there was russia collusion with trump >> well, i think you gave him a good response there. >> i'm trying. >> look. it's -- >> i didn't think i had to step up >> what i want to know is you can ask questions, hopefully fair questions he can answer with fair answers. we can have a civil discussion about it that's the benefit of this >> ask him if you're still voting for trump after the russia collusion is a weird question i would wait until mueller finishes at least. >> exactly i agree with you on that >> thank you, senator. >> i believe in the rule of law. what does walmart's earnings s.onmeay about the health of the u. csur's growth fears we'll debate that issue when "squawk box" returns

that's what happens in golf nothiand in life.ily. i'm very fortunate i can lean on people, and that for me is what teamwork is all about. you can't do everything yourself. you need someone to guide you and help you make those tough decisions, that's morgan stanley. they're industry leaders, but the most important thing is they want to do it the right way. i'm really excited to be part of the morgan stanley team. i'm justin rose. we are morgan stanley. i'm not really a, i thought wall street guy.ns. what's the hesitation? eh, it just feels too complicated, you know? well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step until you're comfortable. i could be up for that.

that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy. what's the hesitation? it's just complicated. step-by-step options trading support from td ameritrade

welcome back to "squawk box. taking a check on futures right now, we are looking at a slightly lower open across the board. the dow looking to be down by 37 points s&p down by about five nasdaq down by about 13. walmart premarket is a big mover particularly on the dow. it's up by 4%. mcdonald's we should note also getting an upgrade from stevens. the two biggest investors in softbank's $100 billion vision fund are unhappy with how the

fund is being run. this according to "the wall street journal." the public investment fund are upset about the high prices paid for tech companies they've also reportedly complained about the control wielded by softbank's ceo masa son about decisions. if it continues, it could make it more difficult for the fund what do you think of this? >> so it surprises me they have been vocal about it. it doesn't surprise me they're raising these concerns they are spread out throughout the tech industry as well. >> do you think it's going to change the dynamic with things softbank will do >> i don't know enough about the internal dynamics but they have a lot of money they're going to have to go through the big ticket items >> have you heard we're a sovereign fund or pension fund that has capital commitment to a fund says we're upset about what's going on >> happens all the time. >> do they somehow hold back their money?

>> no. it happens all the time. sure investors often express kwrn about the way things are being done yeah, sure >> okay. we'll keep an eye on this. it has a huge impact potentially on silicon valley and all these companies hoping to sell themselves to softbank if not private companies thinking aboutan ipo they were going to pick off. coming up, 2019 is off to a solid start for the markets. now unicorn watchers want their turn when we come back, talk about what's in the pipeline this year aside from uber and lyft and which companies are set to break out. alan patrickoff isur gst oue when "squawk box" comes right back

you should be mad at airports. excuse me, where is gate 87? you should be mad at non-seasoned travelers. and they took my toothpaste away. and you should be mad at people who take unnecessary risks. how dare you, he's my emotional support snake. but you're not mad, because you have e*trade, whose tech helps you understand the risk and reward potential on an options trade it's a paste. it's not liquid or a gel. and even explore what-if scenarios. where's gate 87? don't get mad. get e*trade and start trading today.

welcome back to "squawk box. uber revealing late last week that its gross bookings for 2018 is up 45% from a year ago. the ride hailing company still projecting a $2 billion loss foufrt quarter revenue was only up 2%.

that was the growth rate the company expected to be the biggest of the so-called unicorns to go public in 2019. raising the question whether it and other companies are overvalued before they even hit the market joining us right now is -- we're going to be talking in just a moment to alan patrickoff. i will say the uber results i thought were surprising. maybe they shouldn't be. one of the things the new ceo has done is tryto get it to profitability or try to get it closer try to remove some of the losses that may be having an impact in terms of the kind of growth rate they had the question is will investors be more -- the value growth higher there's a congestion tax which is hitting uber as well as taxi.

>> i took a cab yet and got hit with -- >> it's the congestion tax it's like $2.90. >> i'm two weeks late. i was in the taxi and said are you sure your thing is working properly alan patrickoff is here. thank you for being with us. bringing down some of the losses if your growth rate slows, how are investors going to think about that >> it's easy to have growth rates at my level where we're going in at million dollar valuation or 50. but when you're getting up to the revenue level they have to grow 24% is not so terrible. and you can't expect growth rates to keep going at 50% a year although the market is enormous. i just heard it's at $8 trillion market worldwide for urban communications one way or the other whether

it's by car or train or whatever it's a huge market. >> so would you buy into this ipo? >> no. >> no? because? >> because i just -- you know, uber's going to sell based on excitement i mean, the excitement is -- the same will happen with lyft. >> do you feel differently about lyft do you feel differently about any of the unicorns likely to become public? >> i think my experience has been when these unicorns or any go public, the first thing you worry about is what's the first quarter going to be like if you haven't got three quarters of consistent progress, at some point you hit a hiccup what worries me particularly about the uber and lyft. i'm not against it i wish, you know, let's let that start up front i wish that had been an investor but that notwithstanding, i think that you're always going to be subject to congestion pricing, public complaints, and

competition. there's a lot of competition around the world now in this whole area you know, it's -- and the drivers -- i mean, how far can you go to put out 15,000 taxicab drivers out of work? i mean, it's a -- not out of work, but certainly -- >> is there any ipo likely to come this year that you go, okay i want in on that? >> it's too early. until you see the figures, until you see what the growth rates are on hear the management speak, it's going to -- let's put it this way. when i started graycroft 12 years ago, the ipo market was quiet. we protected none of our companies would go public. but we sold a lot of them in private transactions i would say in 2019, i think this is going to be an ipo year. >> i don't know if you had an opportunity to hear it, but before you came on in the last segment we had a conversation about softbank and what seems like a brouhaha

battle going on inside softbank with their biggest investors including abu dhabi and saudi arabia upset about the valuations at which masa son has been making investments. how do you think that changes your landscape in the tech world? >> well, i think -- i can understand them. you see some of the prices, the amount -- by the way, mohamed, we served together on a board. haven't seen him in awhile we try to get together so funny i've lost my own train of thought. >> abu dhabi >> oh, yeah. they want to put in pre-ipo rounds that's been around for a long time i want to get in just before the ipo. i can get a markup and i won't be locked up, perhaps, except for six months and that's what's going on and they're putting in lots of big money assuming very high ipo prices if for some reason we have the ipo market shutting down again

that could shut down for so many reasons, something our president does i'm sorry, joe something our president does, something that happens in the economy. war some place venezuela. all of a sudden it shuts down and you wait until you get a hole again and i think that that's where we're facing now in the next -- in this period. >> in your prediction that we're going to see a lot of ipos this year, should we interpret this as meaning that companies are rushing for some reason or just the natural evolution and that's what we should expect and there's nothing more general here >> no. i think it's actually an interesting reflection of what's happened if the last five or ten years that companies couldn't go as public as fast. i could remember when you had a million or $2 million in revenues intel went public at a $25 million valuation raising $10 million. so think about that. what the world was like. and today, i mean, you've got uber in the multiple billions of

dollars. i can understand if you're a pre-ipo investor, you're counting on holding it for a certain period of time to make a rate of return. if you're wrong, you sit there and have a long-term ownership >> it's a longer conversation. we loved having you on i imagine we'll have you on a lot more i hope as this year progresses when and if these ipos emerge. thank you, alan. coming up, much more with our guest host mohamed el-erian and also walmart still trading higher after beating both the top and bottom lines this morning. up by 2.5% it had been higher 4.5% earlier in the session you're watching "squawk box" on cnbc in a suite of commodities-based etfs from aberdeen standard investments. everything from field crops to livestock, and precious metals to energy. all of which may help you diversify your portfolio. it's a big, beautiful world out there. why not invest in it?

learn more about the commodity-based etfs... from aberdeen standard investments.

♪ welcome back to "squawk box" on cnbc. miscalculating the weight of checked bags in total. "the wall street journal" reports in some cases, jets were carrying more than a thousand pounds in excess of what the airline reported but what's the total weight? i need to know that whether i decide that a thousand pounds -- >> right, what fraction is a thousand pounds? >> yeah. shares of student loan --

inquiring minds want to know i think it's a lot because i know what we take. they barely get in under the 50. mine are like 49.9 not mine, but people i know. and we've got five of them so what's that that's like 250 pounds right there. >> 737 has a maximum takeoff weight of $175,000 pounds. >> but that's 20 passengers. right? the plane is 150, 160. that gives you some estimate >> that's lat shares of navient are jumpijump ing in premarket trading private equity firm advisers calling it -- and alita: battle angel

topped the weekend box office. relatively new actress but industry trackers say it was one of the weakest presidents' day weekends in years for the movie industry i don't think she's -- >> real? >> no. >> she looks kind of cgi >> so queen is going to play at the academy awards did you see that >> really? wow. >> have you seen it yet? >> great movie you've got to see it >> okay. >> put some fake teeth on him. i couldn't get past the fake teeth. i didn't know they were fake either i found out afterwards i thought, wow, that guy's got weird teeth. apparently freddie mercury had two extra teeth. and it helped with his voice >> yeah. >> i was never -- i never listened to that much queen but i watched the movie on the way out to the golf tournament that's all i heard for the next

four days. i wasn't happy by those days and i wasn't a champion. it wasn't anywhere close >> it has nothing to do -- >> people are laughing over there. >> it has more to do with your own inadequacy >> i think that's accurate of which there are a few >> i'll let that go. just about an hour to the opening bell on wall street. dom chu joining us with that. >> a sense of inadequacies for the european financials as well. active trading across the atlantic for sure. but the u.s. listed shares of those european banks on the move premarket here as well the tone being set by europe's biggest bank that's hsbc. if you look at those shares, they're down by about 4% 450,000 shares of volume so far. hsbc also warned that economic slowdowns in places like china and the uk could dampen its results this year as well.

shares of german lender deutsche bank also down by 3.5% to 4% on 80,000 shares of volume. still feels effects from an announcement late last week that hna would cut its stake again. then credit suisse among those other banks getting caught up in that maelstrom i want you to take a look at this if you look at the u.s. banks versus the european banks, the spdr bank etf down 11% over the last year. but the msi etf down financials not a great story on either side of the atlantic. back over to you >> thank you for that, dom it's a great wsegue to the conversation we should be having with our guest host mohamed el-erian let's start with europe and the softness that we're seeing there. how soft >> for the banks, it should come

as no surprise think of it. the economy is weakening which means credit risk is going up. yields on german instruments on negative all the way to nine years. your net interest margins are being kwiezed. of course they're underperforming the u.s. the bigger message in all this is they're more dovish so the pivot has created space for other banks to become more dovish we heard the ecb the last 24 hours saying two things. one is we're going to push back the rate expectations. and we're looking atz that pushing higher on the back of proposed growing appreciation on the string >> it won't work >> it's becoming less and less effe effective. but japan as well, they're willing to be more stimulative

for the economy. >> so if i gave you a whole bunch of money, gave you a pile of money said you need to go invest in europe, i'm forcing you to invest you'd do what with it? >> i'd say would you really want me to do that? so lths get our expectations in line >> let's say you can be short europe too you can invest money in europe and be longer or short >> i would continue to favor u.s. assets. i think even at this relative out-performance of the last few weeks, the u.s. relative to europe, relative to emerging markets which have done well have further to go >> further well on the upside? >> yeah. relative to the rest of the world. three things that matter for investors, liquidity, now spral banks are a lot more dovish. so that's fine second, technicals have improved so be careful of crowded trades there. the third element is

fundamentals and they are so divergent that i think investors should really focus on this divergence it's going to matter as we go forward. >> go back to europe for just a moment life is relative what's the downside in your mind in europe from here? >> so the downside from here is sub-1% growth proves to be stall speed. and at stall speeds, bad things happen it's like a plane. it's simply not enough stall speed happens when italy is very endebted stall speed happens when there's a lot of anger in the political system so stall speed -- >> is that crisis or 5% to 10% down >> no, i don't think crisis because the ecb is all in right now. but it is another 5% to 10%. so they've got to be careful you know what? this is not an engineering problem. there are steps that can be taken. look at germany. germany is running a surplus there's a massive need for digital infrastructure so there's a lot that can be done, but you need to get the

politics of slow growth. >> thank you we've got a lot more to come >> coming up, walmart the big earnings report out this morning. beating top and bottom lines and with talk of potentially lower tax returns this year, what do walmart's results tell us about the health of the u.s. consumer we'll debate that issue when quk x"etnsft a"sawbo rur aer quick break. that's why we designed capital one cafes. you can get savings and checking accounts with no fees or minimums. and one of america's be rates. to top it off, you can open one from anywhere in 5 minutes. this isn't a typical bank. this is banking reimagined. what's in your wallet? when you retire will you or will you just be you, without the constraints of a full time job?

you can grow your retirement savings with pacific life and create the future that's most meaningful to you. which means you can retire, without retiring from life. having the flexibility to retire on your terms. that's the power of pacific. ask your financial professional about pacific life today. half of small businesses fail within 5 years.ne. and more people than ever struggle with debt. intuit is here to change this story... with giant solutions like turbotax, quickbooks and mint that give everyone the power to prosper. intuit. proud makers of turbotax, quickbooks and mint. what do advisors look for don't just track an index, help me meet a client's need. is the fund built to sell or built to last?

etfs are only part of a portfolio. so make it easy to explain. give me a quality fund that helps me get clients closer to their goals. flexshares etfs are designed and managed around investor objectives. so you can advise with confidence. before investing, consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully. welcome back to "squawk box. the futures right now indicated down about 50 points that's more or less where we've been for most of the session we were down as much as 80 then walmart reported better than expected results. that stock is up 3%. so it pairs the losses to about

50 the s&p is down seven. nasdaq down 17 walmart out with fourth quarter earnings earlier this morning. we want to get to kate rogers with more of the details >> strong q4 for walmart beats as mention eed on the top and bottom lines u.s. same store sales marks 16 straight quarters of positive comps. traffic increased 0.9% global sales increased in q4 now, walmart's net u.s. e-commerce increased by 43% for the quarter and in the year. those net u.s. e-commerce grew this is the 46th consecutive year of dividend increases for walmart. on the call, the ceo touted growth in both grocery and toys. he also said they're keeping an eye on ongoing trade

take a listen. >> uncertainties with trade or other macrofactors can make for a more challenging environment but like what we've been doing to position ourselves in the market >> i also spoke to brett biggs by phone when it comes to consumer and any fears of a potential slowdown this year, he said to us it looks like they're in good shape. the numbers look good. we are always monitoring the consumer and are ready if things change but the guidance is good for the next year. and our business model works well in moat environments. >> thank you here to breakdown what the results mean for the landscape and the economy, the principal analyst at research and economist from jp mohr gone chase. this lines up with what we've been hearing out of the retail space. were there any surprises within these results? >> not really. not for walmart.

because the company had been trending pretty well through most of 2018 the numbers that we had been seeing from the comp stores sales standpoint for the previous three quarters even excluding q4 were some of the strongest in nearly ten years. so that momentum was likely to continue into q4 the only companies that were surprising were some of the department stores that were mall based. i expected walmart to be doing as well as it did. michael, jpmorgan, did it revise down based on the retail sales numbers? walmart seems to blow that number out of the water. a lot will be with the retail sales input. >> look. the december retail sales input we have now is in the books. it's not an issue of forecasting but really of just adding up one thing i would point out is

even with that -- real consumer spending in the fourth quarter seems to be up at almost 3% annualized rate. even with that number in hand, the consumer did well in the fourth quarter and also i would keep in mind that as soon as next week, we will get the january retail sales number we'll see whether there is, you know, some bounceback which i think most people ourselves included will have bounceback. >> so isn't the market telling you that a bounceback is really likely why else would walmart pull up target share price isn't this a bigger message about retail and about the consumer >> look. i think one of the reasons last week's retail sales number was so surprises is that everything we've been hearing out of the retailers in earnings reports and chain store sales, even in december auto sales seem to suggest the consumer was doing well in december and so that's one of the reasons it was a surprise. we haven't, you know, taken things down materially going forward because of that.

but december was data now. and we do think the fundamentals still look pretty good for the consumer we already know that january jobs number was over 300,000 at the end of the day, it's really labor income that drives spending which is why we're not throwing in the towel on the consumer >> so the consumer does look strong but walmart has already said on the call if tariffs go into effect on march 1st, if they get ratcheted higher, prices will go higher what sort of impact -- have you done any sensitivity modeling on how much prices can go higher before it impacts sales? >> sure. one of the other data points we got last week was the january cpi number which showed a lot of categories that we associate with chinese imports were stronger and that's really a tax on the consumer and so if tariffs go up in march 1st, that would be a head wind for first and second quarter >> could you answer that question

>> yeah. the -- a lot of it depends on the specific categories and where it ultimately comes down to is where tariffs have not been talked about in some of the soft goods like apparel and home products that is some of the biggest areas of spend that is not where there's talk yet. what we ultimately end up having is some of the categories like furniture, the hard goods. some appliances. those are still relatively a small percent of the overall consumer spend picture so i do not anticipate that we're going to see, you know, kind of the retail sector as adversely affected as if it were impacted in some of the broader categories like the soft goods >> it sounds like, though, there could be pockets of real pain within the retail sector based on exposure to those particular goods. >> yeah.

absolutely >> department stores, for instance, they sell soft goods and furniture. it sounds like they could be in for difficulty coping with these tariffs. >> yeah. well, the department stores i think have been challenged for a whole slew of reasons. tariffs would just kind of pile onto that. the good news is that these -- the soft goods are excluded for now. so i don't anticipate that the tariff impact on some of these mass categories would necessarily have as big of an impact where i expect the retailers particularly specialty big box like an office supplies or in some of the furniture stores those are some of the merchants that will be most adversely affected consumers will likelysubstitut away from those goods or will likely substitute to american made or products that are made in markets outside of china. so that i think is likely to be the impact net net

so we'll just -- we'll seek kind of that tradeoff happening to those merchants. >> you're making an sbregsing point earlier that if you're not worried about the consumer at all, there's no way you can see a recession. because the percentage game. >> yeah. the consumer is the biggest driver of the economy. so if you don't see the consumer weaken significantly, it's hard to get a recession you need a massive policy mistake or a massive market accident but on its own, you would not get a recession. >> michael, what would be the wild card for the u.s. consumer and your outlook of the consumer and its strength >> earlier i mentioned the labor market we have recently seen weakly jobless claims seeing a down shift in job growth maybe because they're responding to trade tensions or whatever the reason may be that would make me more concerned about the consumer i think if we see the jobs numbers holding, i'm very

sanguine on the consumer i think it's going to follow how the job market goes. as i said, the latest weekly claims numbers gives some reason to, you know, be a little bit concerned at least on that dimension. >> okay. thank you both we appreciate your time. okay, we want to thank our guest -- >> where are you going >> can't you call your pilot at teterboro. why do you need to -- >> i have a conference call. >> a conference call >> there is money to be made. >> then you can call your pilot. >> want to thank you for being here. >> thank you for having me. >> always great to see you. >> thank you >> we can chat we have time. >> we have time to chat. >> when is your conference call? sorry. did you tell them you had -- >> i was wondering how long it would take you to bring up the private jet. he was a good -- >> thank you

>> thank you, andrew. >> you're very welcome. >> couple of questions, if you have time. you have time? >> absolutely. >> i thought that was pretty interesting with consumer, go ahead, i thought that was interesting. >> to expect the labor market to continue to produce jobs is absurd if i see it coming down to sub 200,000 -- >> wage gains could go up. >> at this level of employment, we should be seeing much less growth in jobs >> participation rate, though. you got the participation rate. >> you got participation it has gone up two months in a row. and you have wages above 3%. i think the labor market has a lot of momentum in it. and it doesn't mean that if one number comes down, it actually changes the momentum of the underlying labor market. >> recession in 2019 for most people that's not a likely

scenario n scenario in 2020, you hear the cries grow louder is it too early to say based on employment, the consumer, 2020 is off the table >> 2020 i think growth will weaken unless we put more gas in the progrowth. let me explain why the rest of the world is an issue. that's a drag on us. and there is only so much the fed can do so we don't have that much policy flexibility if we don't have another round of -- >> $22 trillion in debt, you do infrastructure >> i think at these low interest rates there are -- >> they won't stay low they can go up. >> we should thank europe for keeping our interest rates down. at 10 basis points with the german bund, about 257 basis points, that's enormous. we should thank them for keeping our rates down and take advantage of that window plus, don't underestimate private/public partnerships. don't underestimate the ability

to crowd in the private sector there is a lot to do to give this economy more growth momentum. >> you mentioned emerging markets. that shows to be a crowded trade, various surveys, et cetera does that imply danger in this trade in. >> emerging markets overshoot on the way up, overshoot on the way down those who understand that know that technicals are really important. they keep an eye on technicals and tend to fade big moves we had a big move. so the cautious thing to do from a technical perspective is to start fading that move plus american markets are very vulnerable to china. >> on a percentage basis, china is is the biggest impact you have to believe in china to make emerging markets -- >> not just believe that china can get its act together, that i'm sure they will over time, but china can overcome a massive change in this paradigm. the rest of this world and global growth is no longer a tailwind if anything the rest of the world --

>> who is the conference call with >> you want to know -- >> you can't do -- you can't ask. >> is it a big deal? a world leader or something? can you just give us an idea >> it is nothing you will get excited about. >> enough to where you're leaving the show early that's not normally -- we don't let guest hosts do this. sorry. if we ask you on for two hours, we expect you to be able to stay so who is it >> it is -- >> i'll save mohamed coming up, when we return, thank you, mohamed, enjoy your conference call, we're going to check the futures, get you set for the trading day, all straight ahead here on "squawk box" in a moment box" in a moment stay with usa ] change the music. ♪ when i move, you move beep. beep. use the rocket. [ sputtering ] if only everything in life listened to you ur new a. hey mercedes. [mercedes-benz voice assistant] how can i help you? change color. make it cooler. play my music. the a-class... ♪

onmillionth order.r. ♪ there goes our first big order. ♪ 44, 45, 46... how many of these did they order? ooh, that's hot. ♪ you know, we could sell these. nah. ♪ we don't bake. ♪ opportunity. what we deliver by delivering.

welcome back we have a late addition to the show a "squawk" newsmaker of the highest order, newsmakers of the highest order. take a look. it is a sorkin family here to wish andrew, papa andrew, a very happy birthday. >> hi, guys. can i ask, i said something to you guys yesterday >> what? >> i did i said something to mom yesterday about whether you guys were trying to do anything -- thank you for this thank you. and they said nothing was happening. you did that to me once before come up here, sid. say hi, sid. >> what a big girl you are now. >> this is max, this is henry. thank you, guys. >> like the pig tails. >> want to say hi? want to say hi

hi to the camera right there want to say hi. >> yeah. >> say hi. wave at it. >> wish daddy a happy birthday. >> happy birthday. >> where is pilar? she's hiding she doesn't want to be on tv i can tell are you having fun thank you, guys, this is great >> where did mama go >> where did mama go that's a good question that's how much i'm loved on my birthday. >> mama. >> you want to find mama where did she go she really is hiding under the desk or something. >> where did mama go. >> want to open your present >> want me to open this on tv? is it embarrassing no what does that mean? >> he raised his eyebrows. might be embarrassing. it's not okay. >> chocolate what is going on this is -- yes, this -- you made this for me. this was a little -- a little bowl thank you. >> that's a fine looking bowl. >> and a card. we're going to do all this on tv we have the markets to deal

with what is that to the best daddy in the world thank you, max i love you we're doing the whole thing? >> i did not get you a card, you know why everything on here looks toxic and you get paper cuts >> that's quite a -- >> you have a microphone on so everybody is hearing. >> that's true >> that's a motorcycle thank you. thank you, henry thank you, everybody i think we should take a quick check on the markets want to take a quick check on the markets, henry >> what markets? >> what markets. >> just like your dad. >> let's take a quick check -- >> apple >> you want to buy some stock in apple? >> i don't know how much that is. >> dow jones looks like it is off 52 points.

nasdaq off 16 points you want to help me here >> no. this is real fun just sitting here watching. >> the asian markets were mixed. >> what's pay pal? >> where's pay pal >> what's pay pal? >> we'll talk about pay pal after the break. >> happy birthday to andrew. >> thank you, everybody. >> "squawk on the street" is up next ♪ >> good tuesday morning. welcome to "squawk on the street." i'm carl quintanilla with david faber, sara eisen at the new york stock exchange. cramer is off today. futures sluggish as the attention turns not just to u.s./china trade but u.s./eu trade. walmart will help boost the dow. europe is red. crude and gold continue their breakout despite the dollar strength wti near 56 today. our road map begins with china trade talks return to washington stock futures point to a lower open as trader