>> fist, let's get a look at the u.s. equity futures. things are bouncing back after the declines of yesterday. yesterday, though, dow lost about 103 points this morning it's bouncing back by almost the same amount. s&p down by close to ten points, and, again, it's up by the same amount this morning. with the losses we saw yesterday, you were looking at

all of the three major averages being on track to lose ground for this week with the gains you are seeing this morning if things continue here the dow and the s&p were down for the first time in four sessions yesterday the nasdaq actually snapped an eight-day winning streak again, bouncing back this morning almost to the exact amount that the declines that were posted yesterday. are you seeing green arrows across the board dax up the cac and ftse up by almost half a percent finally, take a look at the treasury market here in the united states. yields at 2.688% >> michelle, you are here, right? i mean, if you are here, you're going to work. >> okay. >> i was reading the paper >> will you do this?

>> i don't read -- >> you were the one of the best. if you -- if you are here, why can't we tap your vast prompter reading talents? why is that not -- >> i'll do whatever you wish >> i would like you to stay for three hours. >> i would do. every day. >> the stock getting crushed this morning the company posted a miss on the top and bottom line for its fourth quarter i can't believe oscar meyer. what happened? worry going to talk about that slashed its dividend disclosed that it received a subpoena from the s.e.c. at issue the company's procurement accounting policies related to agreements with vendors. i can only imagine the type of accounting you can sort of do there.

>> perhaps the bigger issue, the $15 billion write-down of the kraft and oscar meyer brands largely due to consumers moving away from packaged foods, higher commodity costs. there's a lot of people that see a lot dog, and they've told their kids that you eat one of those, you basically explode you can't even get -- right? hot dogs are not -- >> there's also organic hot dogs that are really competing. >> okay. they have no nigtrates >> we buy apple gait >> you don't need to defense me. i put skyline chilli and a bunch of cheese. warren buffett's brookshire hathaway and cg capital are two of the biggest shareholders of

the stock. it's again down more than 20% right now. you can submit your questions on soeshlg media with the _#ask warren then tune in monday at 6:00 to see his answers live see if you had read that you're not -- you're not going to be here >> i saw something is bernie sanders silent on the whole thing? >> i need to confirm that. i saw that he refuses to -- >> he refuses -- >> to recognize guiado, the guy that's been recognized by government wrv. >> i don't know, the socialists stick together, honestly?

>> i think he honeymooned in the soviet union nicaragua and comments about just crazy -- then i saw some really weird harassment type i mean, the worst comments i have ever seen >> i zd do you belief that bernie sanders can be president of the united states i do not believe michelle, do you think it's possible do you think it's possible by the millenials. >> i wish bernie sanders had been on the ticket last time around because i think we would have had a much more honest election about what the american people wanted.

you know, the republican party let donald trump take the spot the democratic party did not let bernie sanders take the spot >> it's -- the parties are being coopted by people who didn't rise up through the ranks or aren't even members of the party. bernie is a socialist. i think he tops out maximum for -- you would need six independents running it would have to be an election where they have eight candidates >> you think if bernie lunz, though, there would be an independent candidate. >> the democrats dropped him look like a hot potato i started drinking starbucks every morning. >> i wonder if he wouldn't actually -- the democrats are so obsessed that he would upset the

democratic vote, but i wonder if he wouldn't pull a lot of the republican vote. >> he would. >> yeah. >> he would pull from both, but i think it would hurt the democrats more just from the -- >> i'm not kwinconvinces of tha. >> you have to hand it to him for speaking the truth he grew up in public housing he is an unbelievable success story. you can't just say -- that's not where the democratic party is. they're for repat yags there are a lot of -- they're moving further and further -- >> extremely far left. extremely where far. it's really -- >> when you are talking about him potentially being the guy who is leading the democratic party right now, he is a guy who only caucused with the democrats. he is a socialist. he wasn't even part of the right -- part of their party until this last election go-around. if you want to see how far the party has change and how

quickly -- by the way, remember, the democrats have now changed the rules. it they had been in place, bernie sanders would have led the ticket >> right >> hillary is supposedly advising klobachar and someone else >> she's made some statements that the other democrats running have not >> write those candidates off. >> do you take everything she says and do the opposite all right. let's tell you about something else that's new this morning apple is taking steps to address a common complaint about its iphone in china. that it's too expensive. the technology company partnering with payments giant and football to offer interest-free financing. under a plan the new iphone 10r would cost about clars dla 40 a month over two years reca remember, apple's stock dropped last month because -- the revenue fell 20% in china just in the latest quarter. >> you see the new samsung phone. >> that you can fold

it looks really cool >> but it's $2,000 >> that's a small part of the market if you are grab flashy people who are willing to spend that kind of money. >> that's a lot for a phone. >> it's really cool. i hope apple >> now, if apple can sell $1,100 smoelz phones. >> so many things happen because you can't close your phone >> you ready yet you want me to -- you're not going to do it okay ford is probing some possible issues with its fuel economy and emission tests the company says it hired outside efforts to investigate after employees raised concerns. at issue the calculations used to translate test results into mileage and emission data for

regulators they do not involve defeat devices for ingeniusly used by volkswagen they are used by the image >> when i read those, i thought is everybody cheating on this? is that the only way to hit these emission goals and targets is to basically -- >> it raising the question of government falling again, government intervention, in making demands that if companies can't beat them, then they -- >> they could be -- trucks are so -- >> suvs are so popular when gas prices are ow, this i what consumers want. whether you see how pervasive the cheating was throughout europe, it makes you question why -- if you are going to make demands that nobody can meet, eventually what do expects do? you're not supposed to -- i'm not just filing illegal activity, but you have to ask

what has been wrought by government intervention insisting on all of these things you didn't get it anyways. that's the thing right? >> it makes me think that there's no way to -- >> right exactly. high level talks between the united states and china are wrapping up today. the china's vice premier has been the biggest negotiator. he will be meeting with president trump today. kayla has more from washington today. good morning >> good morning, becky those negotiations continued into the evening last night culminating with a dinner for the two dozen or so officials from both sides at the blair house across the street from the white house. that capped off a full day of dialogue that a senior administration official characterized as positive. now we turn to today where president trump prepares to meet leo hud during negotiations where, when trump received the vice premier last month, he presented a letter in an offer to buy five million tons of soy beans from president xi. sarah sanders declined whether

to say whether it signals a forthcoming announcement, but certainly that's what the market is waiting for china's practice of subsidyizing state companies in order to disadvantage multi-nationals is currently in focus the "wall street journal" reports that china offered to stop these subsidies, but didn't provide any detail on which ones the pressure now is on both sides to make a deal it's still very high the title of special envoy was bestowed upon liu he for this visit. he has the full power to negotiate on the chinese president's behalf if he needs to do so to get a deal. >> the only person here that has that power is president trump. >> well, putin >> certainly president trump is the place where the buck has stopped. secretary ross and mnuchin have brought him several it ragss of a deal that did not meet muster.

even before president trump went to az why in 2017, they were supposed to potentially announce an opening up of the financial services there president trump said, o, that' not good enough. the fact that some of the same offers are coming up again has led to a lot of criticism of thing negotiations certainly the economies of both countries are different. the fact that we are nearing a new election cycle for president trump certainly makes this time different. perhaps the fact that tariffs have been on for some time now increasing the pressure on china's economy makes this time different as well. >> you knew that was sarcasm, kayla. i need to do that because they'll use that outtake on, like, some show or something, and -- they will >> aqua man. >> yeah. aqua man i mean, i guess the reason that i even say that, he had the act -- we have the former acting director of the fbi saying i'm not sure whether -- that's, you know, it's not that crazy to --

or -- i'm just wondering who is crazy here >> we may hear soon, rate, kayla? are you hearing anything about timing if mueller wanted to release it, and he is going to vietnam next week, i was thinking, oh, okay, so it can't be next week, right? >> well, there's a question -- >> it would be after next week why not before next week >> it could be before next week. it could be after next week. certainly the reporting has zeroed in on this end of february space in time i know nbc news has done a lot of reporting on exactly when this could come down, and it was said as soon as the middle of february >> did you see the investigation could be shifting.

>> i think one of the reasons, joe, why the house is taking that tack, and it's not just adam schiff's competent, but it's the oversight arm of the house financial services committee that also -- they've been hiring investigators and looking into a lot of these issues one of the problems is that you have the senate intelligence committees investigation that itself is close to conclusion, and do you just go back and comb over all of the same information clearly they want to find a different angle into this so they don't do all of the same work and get the same conclusion >> is there another term you could use beside comb-over from now on for me? >> can you find me one >> i don't know.

i heard that look what i have to do look >> i thought you took a hair dryer to it. >> i'm tweeting that someone -- kevin brady tweeted something out from behind him yesterday, and someone just tweeted that that's me in makeup i'm going to tweet the toupee challenge. >> i'm going to take a picture of you in makeup next week >> and i will of you >> no. never mind game is off where. >> totally lovely. both of you. absolutely hard to improve upon perfection. >> back to sarcasm, kayla. >> thanks, kayla coming up -- >> i want to talk to michelle. she's got some really good thoughts >> she does. of the china trade issue >> yes >> you have a different perspective than a lot of people >> there's two big issues. there's the blekt intellectual

property and then the state subsidies of the state-owned enterprises. there's also this talk about verification, verification are we going to have a verification profit on intellectual property? i'm not sure it's worth thinking about that much anymore because we -- are you going to send a government inspector with a checklist? >> the pretty of the province doesn't ask him for the plans of the robots whatever else they have asked for in the past in exchange for the market access. the company was supposed to even get. verification happens when the cyber security chiefs of companies in the united states with lots of intellectual property tell us, you know what, we're not getting pinged a million times a year by addresses, i paul ryan addresses in china anymore that's how verification happens. we're not a command and control economy. decisions are made by individual

companies. by the way, i think it's kind of late for china a lot of companies have been frustrate for a long time. foreign drirkt investment in china didn't match what you saw in that economy, and that's because this is long before trump came to power. you know what, it's just not worth it anymore we're not getting out of china what we thought. labor costs are too high, and add all of these things together, and focussing on a verification process is silly. you know, that's going to happen on the company by company decision making level whether or not they decide to go back in based on a change in chinese behavior >> i think there is some -- there's lots of ways that comparison doesn't work. i think there is a comparison. there is one comparison. we're so worried about the rides of japan that will take us over. i think we were worried about chooirn. i would be far less worried. when you see the choices they are making in their economy, they're going to be stuck in

this permanent -- they're going to flatten out their gdp they're not going to grow as they have 400 million people out of port. a billion more to go those people aren't going to emerge from property the way these guys are acting. too much state intervention. it's crazy what they're doing. they're going backwards. >> it's just -- i was so traumatized. >> too high of priced. we extract capital from them, and then they went bankrupt. you know >> they did pay top dollar the state said, no, we're not going to give you water rights or anything any of that. you doipt own the land, by the way. >> they didn't do the due diligence. they paid $1 billion thinking they were buying the land. >> you wouldn't. >> make my day >> on a first name basis now >> we have been for a while. i saw him a month and a half ago. he was awesome

just walking around. >> playing golf. >> yeah. awesome. anyway, coming up, a potential hostile takeover in the mining sector, among two companies that have been very active in m&a in the la year. we'll talk gold and deals next here's a look at the biggest premarket winners and losers in this case it's the dow. ♪ don't fence me in. ♪ let me be by myself ♪ in the evenin' breeze,

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apparently there's some aliens involved >> i forgot about that >> you don't remember bad boy advising bill clinton on his -- >> that was so old the tabloid that competed about "the national enquirer." >> the globe and mail. >> not going to put any credence in that. i don't believe bad boy is advising >> i'm impressed >> let's talk about a shake-up at zillow. the ceo is out he will be replaced by co-founder and former ceo rich barton rascof has served as zillow's ceo for nearly a decade. he will be remaining on the company's board, but there's been a big transition as the company started offering mortgages and other services that's been a little bit of a rough transition the company also posting earnings of 1 cent a share that was in line with expectations also, a beat on revenue. zillow shares initially fell, but now we're trading up by about 12 cents

when we come back, nintendo promotes bowser. it could have an impact on the future we'll explain what it means next a programming note for you on monday warren buffett will be answering some of your questions. you can start submitting them on social media platforms that special show starts monday at 6:00 a.m. eastern and it comes after the shareholder's letter that comes out tomorrow you read the letter. if you have questions about anything else that's happening at brookshire, go ahead and send those to us.

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>> what? >> stamps.com lost nearly half of its value overnight the company is ending its exclusive partnership with the u.s. postal service. stamps.com says that it will still be able to sell stamps, but will also pursue relationships with other carriers the company's full-year guidance of $5.15 to $6.15 a share came in well below what the street was expecting. street have been looking for $10.79 a share, and, again, that stock is off by about 48% this morning. nintendo's u.s. chief is retiring in april. reggie fils-aime has held the job since 2006 he is credited with expanding the reach of the wii console he will be replaced by the

current senior vp of sales and marketing. he came to nintendo in 2015 from shanana, and formerly work as electronic arts and procter & gamble he led the marketing efforts of the switch game console, and, yes, oh, his name -- his last name is the same as that of the mario brothers villain >> you are dating yourself shananana. zoo people under 40 have no idea what you are talking about >> for both of you out there -- that's our total -- >> wasn't he -- >> it had a tv show. it was great i loved it >> he was my favorite. >> bowser, of course did he do the -- ga game of the month with the slicked back hair >> i don't think he had very many -- >> he was always showing his muscle in his cut-off t-shirt. >> coming up, more on the big mover of the day, and we're talking about kraft heinz. here's a look at yesterday's s&p 500 winners and losers

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good morning welcome back, everybody. we've been watch being the u.s. equity futures, and after a decline yesterday, you are seeing the major averages actually bouncing back above -- or just about the same levels that they lost yesterday dow was down by 102 points yesterday. this morning it's indicated up by 104 s&p was down by almost ten points it's up by almost that much right now. the nasdaq, which was down by about 29 points yesterday, is up by almost 29 points this morning. our top corporate story. kraft heinz shares getting crushed this morning the company posted a miss on

both the top and the bottom line for the fourth quarter kraft also slashed its dividend, and it received a subpoena from the s.e.c. at issue is the company's procurement accounting policies related to agreements with vendors. all of this is happening the company also said that, by the way, 2019 things aren't going to get any better. the things will get worse before they get better. that's why you see all of those things added up. stock down by 20%. brookshire hathaway is a big investor in the company. brookshire owns 26.7% to kraft heinz. we'll ask warren buffett about his investment on monday it's our annual ask warren show. it's a chance where you get to submit your own questions. you can do that on social media, on facebook, on inbe sta gram, on twitter just use the _#ask warren. then tune in to see his answers live zpliefrmts new reports say that pinterest has confidently filed for an ipo the social media company is looking for a valuation of at

least $12 billion. just one of several tech names expected to go public this year. that includes uber, lyft, and post mates time for the squawk planner. no economic data of note on the earnings calendar. we will hear from retailer wayfair and autonation before the opening bell high level trade negotiations resume, meanwhile, in washington today between the u.s. and china. >> it's been a strong year there have been people talking about if january and february if

the gains hold that 38 out of 39 times that meant a really good return for the year. did anything surprise you after the december 24th and december 26th action? were you surprised by this >> i think it's -- i wasn't surprised by the rebound i think it's important to take the starting point into account. the rerating that you saw in valuations really set us up for fairly attractive returns over the course of this year, and what's most interesting to me is if you look at what's driven the rebound since the beginning of the year, since christmas eve, wherever you kind of want to draw the line in the sand. it's really been all about multiple expansion you have actually seen expected earnings growth begin to come down, and to me that means that there's just a lot in the price. back in december we were having conversations of mid to high single digit returns for this year, and now we're at mid to high single digit returns for this year. the question is what happens next i think that the market is expecting the fed to remain relatively dovish. i think the market is expecting growth to remain moderate. i think that the market is expecting a deal on trade.

i'm not sure we're going to get all three. >> i think the multiple expansion you're referring to probably was a direct result of the shift in the fed's -- >> yes, is00%. >> which brings us to rj gallow. munis always make sense. probably now more than ever in certain salt states, i guess, right? i hate it lock things up for a long time, but suddenly we went from three and one-quarter to 26 on the ten-year. maybe -- were you recommending munis last year? >> yeah. we were bullish on munis in 2018 the tax bill cut new issuance quite drastically, and we expected that would position them for favorable relative performance last year, which occurred.

now we have an interesting dynamic. the risk asset bounces occur the question is what's next? on rates we're getting pretty neutral. you can come up with a scenario where the u.s. economy diesel rates, and certainly it doesn't go into recession. inflation holds and maybe rises as the year goes on. rates would rise maybe the fed gets back into the game tightening. >> you can see counterveiling forces at the moment we see symmetry to the rates outlook, and that's good for bond returns from an income and taer standpoint good for munis and high yields good for corporates and other assets that do better as the economy keeps expanding.

were they watching bullard that was cool for that to happen he keeps making the point, r.j., that we have no idea what a normal interest rate is at this point. >> have you to recalibrate everything you have ever learned about buying long-term bonds because if rates go down from here, it doesn't matter you went out ten yoerz. you're going to make money it's hard to lock up your money in moye mind for such a low yield for such a long time i worry about principle risk we need to get beyond that >> it is a little hard to fathom, but i think for my people, certainly for me, many people in the show, people watching the show, much of our lives really from the late 1960s all the way up until the 1990s

yields were sharply higher than they are today when you this i about the context of the world, what was going on over that period of time, there was a big inflation mistake on the part of the federal reserve in the 1970s. >> real rates matter a lot rates aren't that shocking they used to be two to three >> if you get a deal when it comes to chooirn, what does the market do? does it employ up, or is it all priced in? where is the risk? >> a gentleman was saying perhaps there's not, and the trade deal hasn't been entirely priced in. my view is that the majority of what the market has done is based on two things, right it's based on resolution of

trade, and it's based on the fed remaining relatively dovish. i think what's been most interesting is if you have watched volatility during this whole period, right, it's come right back down, and that fed put fields like it's back in place. the fed has been adamant that the fed put is not in place, but their actions and their words are signaling two slightly different things i think the key thing for investors to focus on this year is really policy. >> you ask questions, but you'ren going to read any -- >> let me do this. at one point i'll read the tea leaves with my novella voice >> how many kids in -- that you grow up with did they call you? did you have brothers? gallow brothers? >> i just have one sister. >> confusing

thank you, david jp morgan. r.j. gallo of fed rated. he wasn't an only child. >> he had a sister >> no, doesn't -- he has no brothers he has a brother >> no relation >> you wish. >> bhek, let's talk about an auto stock that has seen some mixed headlines in the last 24 hours. this follows a trend it has followed for the last two years or so. we'll reveal the mystery chart next later, we'll talk about the former retail executive about what to expect ahead of the sector's big rngz week specifically what results from macy's's, best buy, home depot and others we'll dell you about the strength of the american consumer ghhe oc bs b" ng "squawkox rit ren fl

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. >> time for the executive edge we'll get back to that mystery chart that we showed you just before the break we're talking tesla this morning. tesla has started delivering model three cars in china slightly ahead of schedule the company says they hemd a delivery event in beijing today.

>> you can see it's had a rough week also, it was bad news for tesla yesterday when consumer reports said that it could no longer recommend the model three because of reliability issues related to the aint, the trim, and the body hardware. separately, cnbc interviews with tesla customers found issues with tesla's return and refund programs in some cases tesla left customers waiting for months beyond the date that the refunds were promised. in one case a $1,000 refund check bounced. customers also complained that they were notified when their refunds had been a spokesperson

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welcome back, everybody. retail takes over the earnings calendar next week macy's, home depot, and lowe's are just a few of the big names to be watching joining us now on what to expect is jan kniffen he's a cnbc contributor. great to see you >> great to see you. >> we're getting towards the end of the earnings season when the retailers all come what should we expect next week? >> most of them already told us what's happening, right? we already know the macy's story. it's part of the ugly category they told us that up front i'm a fan of macy's. they're clearly not able to bring it down to the bottom line yet. they told us that. they're still under construction, if you will, on getting the business where they want it to be. i was just in a macy's yesterday out in new jersey, and, you know, they're trying a lot of new things they've got a centralized checkout system they're looking

at they're closing less producti i stores they're moving the business online >> but consumes are changing rapidly as evidenced by what we see this morning by kraft heinz. consumers are changing rapidly on every facet >> yes that's one of the reasons they've got a whole floor of the store in woodbridge which is their off price concept. but that's across retailing. macy's is just an example. >> the off price is now in the full price store it used to be a separate facility where you sent your off price stuff like an outlet the outlet is now within >> unfortunately, i am so old, that's the way it started. we had a bargain basement in every store. >> right >> and then we moved away from that because the space was too valuable because every woman in america went to work and we needed all that space for apparel. well, that's no longer the case. and now t.j. maxx, they were just a twinkle in a person's eye when i was back there.

they're only a little over 20 years old. they took all that over. so now we're fighti ining back, right? nordstroms has the rack. >> what does that mean for margins when you talk about having the off price stuff in the real estate that used to be too expensive to have the off price stuff? >> for gross margins, it's still not a bad thing. because they're selling volume in a space that wasn't productive before. every department store in america are now too big. kohl's have been portioning off the store, putting 20,000 square feet of something else in there like an aldi macy's has been putting up other shops. they're soaking up the space all they're doing now is soaking up off price stuff

right now macy's has been beaten up enough, we got the news i'm still a fan there. nordstroms i'm waiting to see what the number looks like they're another company that's doing all the right things to remain competitive so it's not that hard to like those two. anybody else sort of in the space is pretty tough. it's hard to like the mall-based guys from the point of view of the stores it's not so hard to like kohl's. they're off the mall though. it's not hard to like macy's off the current pricing. yeah it's a tough decision to make. it's easy to like home depot and lowe's >> thank you for coming in michelle, thank you for better here >> pleasure to be here watch the events in venezuela this weekend come up, shares of kraft heinz down sharply after a disastrous fourth quarter report and the disclosure of an s.e.c. probe. what it means for your portfolio and for warren buffett's, when we hurn.

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stock futures pointing to a higher open as investors await the outcome of trade negotiations the latest from washington and what it could mean for your money is straight ahead.

kraft heinz seeing red the company stock plunging after slashing its dividend and revealing a subpoena by the s.e.c. details coming up. and under the hood of autonation the nation's leading dealership chain reporting results and revealing the man who will replace mike jackson as ceo in a first on cnbc interview as the second hour of "squawk box" begins right now 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 becky quick and michelle caruso-cabrera is still here >> we twisted her arm. >> we appealed to the powers that be. in studio as well, richard bernstein. ceo of richard bernstein advisers and a cnbc contributor

will join us until 9:00. u.s. equity futures at this hour playing right into bernstein's hands. you've been long you've been bullish. six out of seven weeks it's been strong actually the lows were december 26 and it's been really rip roaring since then. >> it's been okay. yeah >> okay? what are you the at&t commercial? the doctor comes in -- >> it's the pepsi commercial okay it's the new one >> you know the at&t one how's your surgeon oh, he's okay. >> but there's the new pepsi one. they say okay. but they say okay. >> now you sound like heidi heitkamp >> okay. real good. here's what's making headlines at this hour let's get you caught up on the news news just in from car retailer autonation mike jackson is stepping downa ceo next month and will then become executive chairman. he'll be replaced by kyle

leibert. they will be talking to us later this hour to talk about the change and the quarter in which revenues fell short. again, we'll have more on this news coming up in a little bit former enron ceo jeffrey skilling has been released from custody. he was convicted in connection with enron's collapse. at the time, he was sentenced to 24 years in prison, but that sentence was later reduced european union ministers are beginning discussions today on how and when to start trade talks with the united states this comes amid the possibility on eu car imports. have asked eu countries to approve mandates so formal talks can begin. high-level talks between the united states and china wrapping up today in d.c. kayla tausche joins us with more on that front. good morning again >> good morning, becky those high-level talks with

close with a meeting at the highest level. president trump at 2:30 today will begin receive the chinese vice premier as special envoy. as for what's happened in the last month since the two met, there have been two more rounds of high level talks. lots of paper passed back and forth. and the contours of a deal emerging around these six issues including forced technology transfers and intellectual property to this begins. and china has also increased the offer to buy agriculture and energy products. the u.s. has asked for action on ten items before the presidents of these two countries will need to seal any deal which if any of those items china has agreed to is unclear, as positive. ending with a lively dinner at the blair house. we will see if that camaraderie continues into today and what exactly some of this language

looks like if and when we get a statement from the delegation. >> i don't know what it means, that things are going well then you get back to enforcement and all the other things i don't know i don't know, kayla. i do think it's interesting that people didn't want to do anything are now the ones saying it's not going to be tough enough the way of the world i would have to say that there are -- for something that was so panned taking on china, there are -- i just can't help but think maybe there was time and there are positive things that will result from this. no one else ever tried >> well, that's one of the reasons, joe, why the criticism has emerged of late from people who were pro-the president taking on china in the beginning that you have created a situation whether you liked tariffs or not at the outset you've created a situation where the u.s. has never had more leverage to take on some of

these very serious issues that will change the direction of the china/u.s. relationship going forward. and specifically the direction of the chinese economy people say that if the president agrees to an easy deal, that he is essentially throwing away that negotiating position and that if you leave tariffs on, if you make them even more strenuous, you could have a stronger position maybe going forward. but the question is the cost to the markets and the cost to companies' bottom lines. >> all right joining us now to talk about what a trade deal could mean for the markets -- wait a minute weren't you at bernstein at one time >> i was many years >> rich bernstein is here as well doug, did you used to work for bernstein or seidel? >> i did not i know joe works at blackstone and worked with byron. i worked with byron for a long time we were both mentored there. >> this is a kevin bacon thing doug cohen at athena capital

managers and our guest host this morning richard bernstein. rich is also a cnbc -- huh >> big words for early in the morning. >> are we just going to get some kind of group thing from you three that you're all related? let me start with you, richard you've got that nice jacket on >> thank you. >> do you expect the trade deal to be already in the markets or a boost if it were to happen or a letdown if it doesn't happen >> all of the above. >> could be all of those >> all of the above. i think there is certainly the rally in the market to some extent has been because of people believing that there is going to be some kind of resolution, i think if you look at what's going on in the chinese market, you can see that where private sector companies are starting to out perform, you could see that going on. so i think the markets are beginning to price in some kind of resolution. the other thing in the backdrop

which i think people haven't talked enough about is simply the amount of monetary stimulus going on in china which to some extent may make this whole thing kind of meaningless in six months so there's a number of different issues going on here >> just defer and say that was great, boss? >> that's great, boss. i would add to that on the stimulus front, i think 2019 is going to bedefined by central bank stimulus and central bank easing that's a sharp contrast to last year last year we saw central banks tightening across the world. hiked rates in 2018. and that showed when it came is a asset prices the last time we'd sen such aggressive tightening was -- so what's changed in 2019 i think we swing back to central bank easing. it's the fed it's the ecb and the people's bank of china. i think that ends up fueling, you know, equities over the

balance of the year. i think we -- you know, the pace of the rally so far is clearly unsustainable. but 6 to 12 months from now, the markets are higher and i think the reasons is because we've got a dovish federal reserve plus all the stimulus coming out of china. >> joe, you don't want group thinks so let me give something a little bit different >> good. >> all right so first -- actually, look i agree with richard the china deal probably is priced into the market completely now my concern would be something that i think michelle mentioned in your 6:00 hour. there are structural issues that are very significant i'm not convinced the trade deal alone is going to get china back on the pass. that's still a concern for global growth. also on joe's point, of course we have moved toward a much more

dovish trajectory for central banks gloebbally. in the u.s., you have to be careful. when you look back at what powell said in his minutes, there's no question in my mind he wants to tighten and normalize. and the fact the global economy was slowing in the fourth quarter, pretty significantly, the markets were as tumultuous as they were not surprising they pulled back. but on any sign of the economy here in the u.s., i think the fed does come back into play and that could stifle a rally. >> okay. that sounds very similar to what michelle has been talking about. china's got its own problems >> can i show you this chart can we bring this snup the bar graph of what's happened in chinese lending over the last ten years. where it started going out mostly to the private sector and slowly but surely. i don't know if you guys have it but it's startling how much the state has taken over and just gone completely backwards.

all these steps towards liberalization -- >> but that's normal for the environment. their capitalism isn't our capitalism >> take a look at this this is -- >> 2010 through 2016. >> so the red is the lending to the state sector the yellow is lending to the private sector they can stimulate all they want, rich, but it's ineffective because it goes to inefficient, crappy state-owned enterprises >> i think we're thinking about this wrong though. remember their capitalism isn't based on profit capitalization, theirs is on employment maximization if you think your economy is going down, you want to make sure the big employers don't get hurt i think that's what they've tried to do. what's starting to happen now -- that was my point about the stocks of the private sector companies are starting to out-perform the stocks of the state-owned enterprises. that's a big difference. and if that continues, that tells you the economy is

starting to right itself and i think that my guess is that chart would probably change >> look. i think clearly some legitimate points there but i think when you look at chinese worker productivity and i always take chinese economic figures with a grain of salt, but business since 2007 is down about 15%. you know, there's a demographic issue there that i think is going to be a major challenge over time. so ironically, i think chinese stocks are the cheapest in the world. but the chinese economy and its impact on the global economy, that still concerns me >> i would agree with that >> joe, you weigh in bernstein said earlier he taught you everything you know. but only 10% of what he knows. which was weird. did blackstone know -- anyway. >> so what i was going to say there to rich's point on the -- >> he's ignoring you, joe. >> i get that a lot >> i don't want to get into trouble on this one. we'll take it back to the

private companies versus state-owned enterprises. it also shows just the sheer weakness of the chinese economy. of course you've got the government official data which is showing a slowdown. but the policy makers there are panicking given the sheer amount of liquidity in the market what's happening now is the interest rates that are being charged to the private companies are beginning to come down i think that just shows how wrong they were last year when they tried to actually start to tamp down on the non-performing loans and the shadow banking system they slowed their economy on purpose and then they walked head first into this trade war and realized they had slowed too much so i think we will see that private company sort of out-performing i think it's a sign of just how much liquidity they need to put in >> all right, gentlemen. thank you. doug cohen, joe seidel, and rich bernstein will be sticking around did you know you were both on today? >> no. >> not until we walked in. >> was it an awkward moment?

>> i learned last night. i couldn't sleep last night. i was so excited about the opportunity. >> it wasn't an awkward, oh, hi. it wasn't awkward when you got here >> not until you got involved. >> was it a good breakup >> yeah. we're still in the same fantasy football league. >> yeah. >> what brings people closer together >> nothing >> i was at the bottom of that fantasy football league this year like 15 out of 16. >> i think i was 13. >> he's the next generation -- >> good. that means you're paying attention to your day job. >> he is much younger. >> next generation of expert advisers i think thank you. >> kind of like andrew thanks, guys >> expert adviser that's like senate intelligence, right when we come back, kraft heinz slashing its dividend. we'll have more on that story and other headlines. also autonation results are out. we will hear from mike jackson

and the man ready to take over for him at the helm. stay tuned you're watching "squawk box" on cnbc on monday, warren buffett answers your questions three hours with the oracle of omaha. nothing is off the table submit your questions on twitter, facebook, or instagram and make sure you use the hashtag ask warren that starts at 6:00 a.m. eastern on monday. only on "squawk box. and riches beyond your wildest dreams. there's a place where you can find all of this. 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.

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the xfinity store is here. and it's simple, easy, awesome. welcome back, everybody. tensions escalating in venezuela as the president there maduro has closed the border with brazil and is considering closing the border with colombia as well. things could be rising to a head this weekend michelle caruso-cabrera is here and let's talk to her about what's been happening with that situation. >> yeah. the reason this weekend is significant is juan guaido who is the other president of venezuela as has been recognized by the united states and other countries said this is the deadline to allow humanitarian aid to come into the country so there's going to be a showdown on the border hundreds of thousands of venezuelans on either side are gathering. the venezuelan military has blocked the highway with big tankers that would prevent these tons and tons of aid that's been

provided by the united states. and what is going to happen over the weekend as we see these civilians cross -- we presume civilians. what's the venezuelan military going to do? are they going to let them through? will they shoot on their own people we've seen this historically throughout standoff moments in the past what's the military going to do? >> when's the concert? >> concert's tonight friday night >> do you know who's playing in it >> he's got some big latin stars. i don't know the names >> and across the border, maduro has a competing concert. >> right and i have no idea who's in that one. >> i thought it was going to be a big deal like live aid >> they were trying to make it but it's hard to get that much equipment into the jungle at short notice you can watch it it's going to be live streamed >> all right great. thank you. so many places around the world. that's why we need an

international type -- she just winked that was a good one. coming up, kraft heinz playing catch up oh, boy. stock in the red after posting a huge loss and slashing its dividend that stock story and much more when we return "squawk box" will be right back.

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all right. let's get a look at this morning's market movers. dom chu joins us right now with more good morning >> let's take a look at some of the movers we're seeing this morning with regard to the analyst actions that we are seeing we've got shares right now of intel moving to the upside on some positive analyst commentary we've also got shares right now checking out what's happening with shares of nvidia. analysts there saying those shares appear attractive both of those the equivalent of a buy rating nvidia's initiation of coverage here then citigroup shares moving up by about 1% on some skittish volume early on this friday. the reason we want to highlight those three stocks is because between nvidia, intel, and

citigroup, we've got a look at some of the biggest movers off of the low we saw back on december 24th. as you can see here, the vanek vector etf has gained 20%. the spdr bank etf is up 27% since those lows so banks and semisleading the way higher it's worth noting in that same time frame, the s&p staged its very own very respectable 18% to 19% gain so yes, bullish. but semiconductors and banks have been leading the way higher >> thank you very much dom chu. meantime,shares of kraft heinz getting pounded after missing estimates on both profits and revenue. that stock down as much as 20% last night it's down just over that this morning. the company also revealing an s.e.c. investigation into its accounting and controls. the cfo citing rising costs for the shortfall. >> the extraordinary inflation we're seeing in 2018 and now

seeing in 2019 from things like tariffs and transportation should mitigate over time. as we're starting to see in the markets today. and we're also confident that we will be able to -- we'll be in a much stronger position to manage those costs through our pricing and savings going forward in 2020 >> on top of all that, the company also slashing its dividend joining us on the "squawk" newsline is aaron lash consumer of equity research at morningstar. what's the most concerning to you? >> yeah. i think that, you know, if you look at the actual -- actually at the top line performance, we actually view that as a positive but you're absolutely right. that got overshadowed by a number of negative headlines surrounding the s.e.c. investigation as well as the dividend cut more troubling than anything else, the s.e.c. investigation in and of itself seems narrow in

scope. the extent to which they're using the proceeds to reduce their leverage is a positive but obviously when combined, it's definitely a significant negative headline. >> let's just look at the base of the business. t just the idea they don't have the pricing power they've had in the past that consumer tastes are changing that they had been more than they had anticipated what do you make of that >> i think that that's very -- that's something that we've been saying that, you know, our expectation or our thinking had been that kraft heinz had been underinvesting behind their brand switch not only hurting its topline trajectory but also its retail relationships in which consumer trends have been evolving much quicker was hurting their brand equity and so from our vantage point,

needed to up spending behind both its brands as well as its capabilities and that seems to be something management may be embracing going forward. as it relates to brand strength and the intense competitive landscape. >> let's break that down that's two separate issues one is consumers' changing tastes another is a company that has been well known behind it for kind of slashing costs up front. that's not going to be the case? >> i think you can't cut your way to growth. i think there has to be a combination of both driving efficiencies and improving the efficiency of the business the landscape is so competitive. and the extent to which barriers

have started to collapse and smaller niche operators have proven more agile in responding to consumer trends has put the onus onestablished manufacturers to even play quicker and respond quicker to evolving trends. >> you're looking at stock over the last two years that lost two-thirds of its value. does this make you like the stock price? >> from a valuation perspective, we think shares are attractive at this level. obviously as you point out, it's not going to be a quick turnaround and we're not going to see, you know, a significant near-term catalyst >> i spent a lot of my career on the sell side. one of my personal criticisms of sellside analysts were they never put a sell rating on a stock. what could possibly be worse than a situation where a company is overstating their value of

their balance sheet where they're being investigated by the s.e.c. why would this still be a value >> i guess we look at it based on a long-term discounted cash flow model i have a number of sell ratings or stocks i view as overvalued. >> what have those companies done that's worse than this? i guess that would be my question what could be worse than this combination? >> we're thinking about it in terms of the fundamental -- you know, we're saying that kraft heinz has no mote. that their mote trend, their competitive position is eroding. but from a valuation perspective, we think the shares look undervalued there are names we really like from a competitive advantage perspective that are rich right now. i think if you look an the packaged food side of the aisle, there are a number of names that

have been able to generate growth we don't think they're trading at that value. >> thanks for coming on today. also a programming note for you. monday warren buffett will join us to talk about this story and much more. berkshire's earnings and his big stake in oracle or the stake that's not there anymore we're going to talk about all of these issues because berkshire hathaway again owns 26.7% of kraft heinz. that's 6:00 a.m. eastern time on monday when we return, much more on the trade talks takes place in washington today and autonation's mike jackson joins us to talk about the state of the auto industry and a big change happening at autonation we'll talk to the man who will be taking over as ceo. right now as we head to a break, take a look at u.s. equity

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♪ still to come, mike jackson and his replacement if that's even possible. a first on cnbc interview with both executives. we're going to talk earnings and the auto sector in just a few minutes. and then the kraft heinz fallout and what it means for berkshire's warren buffett we will find out right from warren's mouth i can't say the horse's mouth. a programmer reminder. the oracle of omaha will be joining us for three hours on monday you're going out there again. >> yep plus the latest development ts out of washington where president trump is expected to meet with chinese officials on trade today. we'll bring you any updates and what it may mean for your money. "squawk box" will be right back on a sonprart trg emkesession. we'll be right back. it's absolute confidence in 30,000 precision parts. or it isn't.

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welcome back to "squawk box. the futures right now, 118, positive momentum on the dow nasdaq up 34 s&p indicated up just under 11 autonation reporting a short

time ago the nation's largest auto retailer at $1.10 a share. that's 4 cents short of the estimate bigger news here as well autonation also announcing that long-time ceo mike jackson is going to be stepping down next month. joining us right now in a first on cnbc interview is autonation ceo mike jackson also autonation incoming ceo carl liebert welcome to both of you mike, it's kind of hard to imagine automation without you as the ceo been there for 20 years now. and the stock has exploded under your watch so let's talk a little bit about your decision to leave and decision to bring in carl. i guess that wasn't your decision, that was the board >> good morning, becky first, i'm thrilled to hand the baton of leadership of autonation to carl liebert it really is a joy this was a process which i

kicked off on your show middle of september it was our -- my board did an outstanding job. we had tremendous interest in the position and down the stretch i became involved with the top candidates and concluded that carl was uniquely prepared to lead autonation he has the unanimous support of the board. and i might add also our two largest and long-standing shareholders cascade and esl which combined own 40% of the shares of autonation what makes carl so special and i told you back then first and foremost whoever is going to be the ceo of autonation will be an outstanding leader carl definitely passes that test next, though, what i am particularly enthusiastic about is he's done retail at scale he knows what it takes to sell things one at a time and fix things one at a time

beyond that, he's got a skill set that prepares him to suz the opportunities that autonation has over the next decade and that is supply chain logistics, expertise as we build our precision autoparts capacities and has successfully built a digital platform with almost 13 million members at usaa which exist in a virtual world very much so and is particularly strong on mobile and that's an opportunity here at autonation. and finally, he is a car guy now, he doesn't know the car business, but he is a car guy. his father owned a drag strip in southern indiana and carl was there dropping the flag. and that's priceless to have as a kiskill set. >> what's your analysis and what do you plan to do when you step

in >> good morning. i think my quick analysis is we have stores coast to coast to start with a platform already established and mike after 20 years of building this platform, taking over from wayne, it's an incredible opportunity to think about how we connect with our customers from end to end not only through our stores but parts. how do we engage them on digital and mobile and this idea we know our customers want to be we think that is a really strong case >> mike has talked over the last couple of years about how things have changed so much in the industry it's just harder to make a profit on some of the new cars coming out do you see any change in that part of the business >> no. actually more excited about the

service side, becky. and i think this is the opportunity we talk about of building this customer operating model. trust and credibility throughout the value chain and earn loyalty for life so how do we really take data, make it and build it at scale. i'll call it a compelling service. so proud of my team. something we do in the claim we're able to do that. like we think no one can do. >> so you're going to be there as executive chairman. i don't know if you've got your plan completely but you probably never set out to -- it's impossible to do you almost did >> here's the thing.

>> you're like founder 2.0 you are autonation at least as much as wayne was. that's a testament to the last 20 years, i think. you made it what it is, right? >> thank you, joe. but here's the way i think about it autonation will always -- only had one incredible founder and that's wayne what wayne did in putting his company together i could have never done he was a special man also wise enough to know he didn't have the skill set to make it all hum and make a brand. that's why wayne brought me in now i look at the situation and say, okay. the scale is here. we got a brand that's trusted and admired. build a purpose for the company, finding a cure for cancer which is a culture that goes from coast to coast but the skill set that's needed for the next chapter is not my strength and i'm wise enough like wayne

was to say let's go find a great leader who exactly has the skill set to seize new opportunities that i've created. that's why i'm thrilled to hand the baton on >> on the other hand, i'm trying to figure out he stock it's down in the high 30s now. is that a commentary on what we worry about with the economy itself we hear auto sales softening when people talk about harbingers of the great period we've been, any they point to sales. the investment you made. what do you attribute it to? >> absolutely, joe as they say in the "godfather," this is the life we chose. autos is a cyclical business as far as investors are concerned, i don't care whether it's a manufacturer, supplier, retail, you don't buy the stock at the end of the cycle. that's just where their mind-set is

but that also creates a lot of opportunities which we've taken advantage of over the years and have always come out of downturns stronger than we went into them. and we intend to do that this time also. >> it's michelle good to see you. >> good to see you >> we talk about softening autosales. you steered the company through the time period where autosales in the country fell from record, record highs down to, like, 10 million annual sell rate a decline of nearly 50%. where we watch the major car retailers almost go bust it was crazy yet you managed to steer the company through that time period carl, are you ready for big challenges have you got the skill set to handle crises the way that mike did? >> good morning, michelle. this is the opportunity that mike and i spent a lot of time chatting about where we are in the cycle and where the industry is

so mike has an unbelievable amount of confidence, i think, in his selection as well as me board's. but this is to really engage and maybe that platform for creating the customer experience that through a downturn allows us to actually grow and do extraordinarily well we believe that the coast to coast platform model that we have lots of opportunity to take advantage of that. so there will be head winds, but we like to see that there's some significant opportunity to take advantage at this point. >> i should be very clear. we're not looking at anything like '08 or '09 in the next couple years this is a very gradual downturn. i think this year industry sales will be around 6 million

5% to 6% is my estimate on that. it's nothing like '08, '09 >> i was just trying to give you props for steering the company through one of the roughest times ever it was an amazing feat considering what could have happened >> mike, one of the things i've always -- >> my attitude is adversity is your friend. adversity is an opportunity. once you understand that, then you can really leverage the situation. >> mike, one of the things i've always loved about you is you come on good news or bad and are willing to take the questions. this quarter earnings were below what was expected on both the top and bottom lines what happened? >> it was a challenging quarter, no question. we had difficulties in california where for the entire industry retail was off 10% for new vehicles and we had a very difficult comp in texas and florida because of the snapback from the hurricanes that were very strongsnapback year ago so our new vehicle sales were

down 8%. but even beyond those two explanations, i think retail is getting more difficult we took action already on the -- i know exactly where to go get it and how to get it done without disrupting that's my gift to you, carl, i already took the cost action >> we're out of time, but i just want to -- you've been watching tesla and the developments this week you've had some outspoken comments in the past any comments on just currently on your thinking on elon musk and tesla? >> well, at first i'm very proud that i can tweet without having to go through legal and i don't have to recall my tweets >> i can see that. >> i think he's over-promising on autonomous vehicles in almost an unethical way

the idea that he tells people to relax on autonomous. but you have to be ready to say that's the wrong message to the consumer i think his bait and switch approach on selling the model 3 where he takes hundreds of thousands of dollars of orders and then does an auction he'll build your vehicle for you if you're willing to pay a higher price there's not another retailer in america that could get away with that bait and switch >> wow mike, you need to come back on again soon and talk more about this >> just invite me. bill there >> you're welcome any time autonation ceo and also carl liebert who is the incoming autonation ceo gentlemen, thank you both for your time. great to see you >> thank you >> great seeing you. coming up, is america too dependent on the rich to pay more taxes robert frank joins us with a preview. >> good morning, joe the top 1% paying the highest share of taxes ever. should they pay more

we look at who pays what and the real rates paid by america's wealthy. coming up after the break. 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,

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all of you. how you live, what you love. that's what inspired us to create america's most advanced internet. internet that puts you in charge. that protects what's important. it handles everything, and reaches everywhere. this is beyond wifi, this is xfi. simple. easy. awesome. xfinity, the future of awesome. as part of their tax plans, many democrats claim the wealthy get special breaks and pay lower rates than the rest of america but a look at the rates the taxpayers actually pays shows a different story. robert frank joins us right now with more on that data and who pays what. good morning >> good morning, becky they are the two words that joe and michelle love the most and

have become the rallying cry for democrats running for president. fair share near an all-time high. the top 1% will pay 43% of all federal income taxes this year that would be a record the bottom 60% pay 4% of all income taxes now, of course, the incomes of the wealthy and share of total income is also rising. the top 1% will have 20% -- double what it was in the 1980s. but basically the same it was in 2005 now, the real battle is over the rates paid by top earners. despite claims they get special breaks or lower rates than the rest, the rates actually paid by the wealthy known as the effective rates are still by far the highest. the top 1% paid an average rate of 27% in 2016 the middle to upper income earnings paid about 11%. while the bottom 50%, paid less

than an 8% rate. bottom line, we are funding government with an ever-smaller, ever-richer group of taxpayers >> you know what though? the top 1% is a pretty big number if you look at the 0.001%, that's where bill gates will say it's the 400 wealthiest americans and what they're paying you look at those statistics, that's where you get somebody paying 8%, 9%. >> the top 400 pay a rate around 18% and 20%. most of those top 400 are one-time capital gains splers. they sold a business, made it into the top 400 very few of those -- >> the bottom are the waltons. >> few of thoes repeat more than one year that's why the 400, it starts -- it goes up and then goes down in terms of the rate at the very, very, very top >> a lot of the money that was accrued by the people that came

before them. if you think it's all irn h inheritance, their family members paid on it if you don't like capital gains, change kwcapital gains. >> that is one of the proposals getting talked about right now >> but to say 8% when it was accrued working. then by the time you're 70, you're paying 8% to say that it's because of -- you paid it on the way in while you were making it. >> some of it was fueled when warren said he pays a lower rate than his secretary there's a perception they get a lower rate there are people who pay zero tax who are billionaires but for the most part, we have a progressive tax system where the wealthy pay a much higher rate >> let's bring in david walker

what would be -- is the -- david, i just wonder, does br x brookings or you or your colleagues not think we're progressive at this point in our country or we're not progressive? >> we definitely have a progressive tax system, but it's undoubtedly the case that we need to raise taxes on high-income households one is their income has skyrocketed. and at the same time their rates have not done up over the last 30 years normally in our system when income doubles or sququadruples they rate has not gone up. the other reason we need to raise taxes on the virich is tht we have this long-term budget issue where we'll either need to raise taxes or cut spending.

>> they want to raise taxes but spend it on more skbieentitlemes we don't have a lot of time. let me ask you're in connecticut. i don't know you're probably -- i don't know if you got the stockholm syndrome or what, but taxes are never high enough, are they >> i'm trying to get out question have a progressive tax system and there's another key statistic that you didn't mention. 44% of tax filers pay nothing. and a percentage of those get a rebate due to earned income tax credit and child tax credits look, we need additional tax reform we have a structural debt. if you want to raise taxes which i don't advocate i think we have a spending problem. you'd have to raise taxes about 10%. if you wanted to balance the budget, you'd have to raise it

30%. we need to have a debate we do have a progressive tax system it's more progressive today than it was after the l.a.x. tax reform and i think that's reality. >> we had too much discussion before i apologize to both of you for making it short. but you both got points in it's like a 57 hard out or something, isn't it? >> it is >> that's so we can pay our bills. >> anyway, robert, thank you michelle, thank you. >> great to be here this morning. pleasure when we come back, is big tech at war with new york city after amazon's announcement last week, will uber be next to cshla with state officials we'll be right back. [knocking] ♪

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the final countdown on trade. one week until tariffs on billions in chinese goods are set to spike china's vice premier will meet with president trump in washington kraft heinz squeezed the company slashing its dividend revealing an s.e.c. investigation and writing down the value of some of its most iconic brands. and is new york at war with big tech how do other tech disrupters feel about doing business in america's biggest city

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 live from the nasdaq market site in times square i'm joe kernen along with becky quick. our guest host today richard bernstein at richard bernstein advisers the futures right now are indicated up triple digits up 101 the nasdaq indicated up 27 and the s&p indicated up just under 10 closing in on 2800 on the s&p which is above a lot of the most recent targets that were 2750. we're not quite there yet. but we've had six, seven pretty good weeks for the s&p the 10-year note, 2.68% basically this morning big problems at kraft heinz.

the stock getting crushed this morning after the company reported a miss on both the top and bottom line for the fourth quarter. as a result of an internal investigation it recorded a $25 million increase to product cost but perhaps the biggest issue is the $15 billion write down largely because of consumers moving away from packaged goods and commodity costs. warren berkshire's hathaway is one of the largest shareholders in this stock that stock this morning down by about 23.5% at this point. we'll get the chance to talk to warren buffett about this on monday it's our ask warren show tune in on monday morning

starting at 6:00 a.m. to see his answers live we are a week away from what could be a big spike in tariffs on chinese goods there's also a key meeting in washss that could change the calculus on all of this. kayla tausche joins us with more >> good morning, becky high-level talks between the u.s. and china will close with a highest meeting today. president trump will again receive the chinese vice premier who is this time negotiating directly on behalf of china's president as a special envoy in the month since this last met, there have been two more rounds of talks, lots of paper passed back and forth, and the contour around forced technology transfer and intellectual property rights. president trump yesterday signalled he wouldn't block chinese telecoms and chinese has increased the look to -- but the u.s. has asked for action on ten items before the presidents would seal any deal which could happen in the coming weeks if

china delivers which, if any of those chb has agreed so is unclear but yesterday's discussion was looked at as positive. ending with a dinner at the blair house. we'll see whether that positive tenor continues in the oval office and whether there is some sort of announcement heralded as part of that meeting >> waiting if ining for a lot , aren't we? >> per usual >> even more maybe all right. thanks, kayla. for more on u.s./china trade talks and what a win for the u.s. would look like, let's welcome former u.s. deputy trade representative he's now president and ceo of c&m international. on a scale of one to ten, what do you think ween end up with do you think both sides will be able to save face with a two there are some people that think maybe we're in a position to be above five where are you?

>> i think we're seeing the outlines of a deal and i can imagine a deal that is relatively comprehensive being struck a little too early to judge the odds, but i think a five is not necessarily an inaccurate calculation. i think we have to see what the final deal is. the challenge for the u.s. is that the thing that we cite as the most important thing for the u.s. to get which is fair access for u.s. technology and ip firms into the chinese market is one of the most if not the most difficult thing for the chinese to give. so i think the jury's out until we see whether we can win on that element i think all the rest can fall into place but the central core of why we started this investigation is the toughest and that's the one where the u.s. has to really stick to this to make sure that this fight was worth it. and we secure long-term gains.

>> do you think that china is negotiating in good faith if we do come to some agreement where there are concessions? are they going to be concessions they can do work arounds to get around some of these things? or have they decided, you know what we want to be long-term participants in global trade and we realize we got here this way, but it's no longer going to fly. and we will actually change some of our behavior. what do you think? >> well, we've seen over a period of years including the negotiations on the bilateral investment treaty that there is a real division within china around how much they want to liberalize and how much they want a staked control of the economy. i don't think that fundamental decision is going to be resolved in this trade agreement. i think we see that china wants to get both.

so what i suspect will happen here will be a deal. it will add a lot of things that are important to the u.s it may not deal with the long-term systemic problems. because those are the ones that china doesn't want to face then we have to have the right means for this but they haven't lived up to those. and so this is one where the verification process is going to be absolutely essential as well as me ability of the u.s. negotiators and i have great faith in ambassador lighthizer, the ability of them to hold out for what we really need for a long-term not just sort of a short-term public relations event that said we struck a major deal with china. this is going to be a long slog that will go well past the negotiations >> do you applaud president trump's initial foray into this area in terms of, i don't know,

want to say started a trade war? do you think across the aisle for them to ever get credit does it have to work out well if it blows up, it's going to be we shouldn't have done it. or was it time to say this is something he should have taken on >> the initial set of investigations is absolutely appropriate under u.s. law and it's been used by a variety of presidents across a number of countries. what happened in this, though, is also quite clear. is it the white house exceeded their statutory authority to impose a tariff on a whole series of products that were not related to the underlying statutory authority that they used so the challenge in this is that china has broken the rules but the u.s. then broke the rules of

how they engaged but this is something that's going to be a challenge long-term. i don't think that's the way any president should take this on. but we are where we are. now we need to get the best deal that we can and we need to make sure that china lives up to that deal and that is something that will take literally years and years and years of continued work and negotiations to make sure they live up to any promises they make at this time. >> robert, "the wall street journal" pointed out that there were certain industries that we've lost -- the united states has lost market share. are regoing to be able to regain that market share after this or is that market share essentially

lost >> i hope we're able to substantially regain the market share and break down some of the other barriers china's put in place. china is using all of its tools to promote its domestic industries to become global champions and become innovators in ways that make them more successful over the long-term than u.s. companies. that's the whole issue about tech transfer, forced tech transfer, ip theft that is a fundamental seismic issue because the -- where the u.s. succeeds globally is where china wants to win and they are competing unfairly so at the end of the day, all the rest of these things will work themselves out. and there may be gains and there

may be losses. but the key thing that we're looking at is this is a negotiation that will impact a 5, 10, 15, 20-year horizon and that's what we need to make sure we keep our eye on the ball with and all the other short-term issues certainly have economic consequences but we can't lose sight of why we started this and, in fact, that is the statutory basis on which the president and usgr wiar willing to start this initiative >> thank you we'll see you again soon thanks still to come this morning, it is hollywood's big weekend. julia boorstin is walking the red carpet at the academy awards what can you tell us >> it is actually covered with white plastic now as they do their preparations for the big event sunday night this year at the oscars, it's not just the movie moguls and the movie stars that are going to be in the spotlight

it's alsnelio tfx. we'll have that story coming up after the break.

welcome back to "squawk box. the futures right now up 113 on the dow on the morning session

nasdaq indicated up over 30 at this point the oscars are coming up on sunday night this year there's a first. netflix is nominated for best picture for the first time ever. julia boorstin joins us right now from the red carpet with more on that front good morning again >> good morning to you, becky. netflix has truly arrived in hollywood. after years ofinvesting billions of dollars in content, it's finally heading into the oscars with the ultimate acclaim from the establishment with netflix's first-ever nomination for best picture, "roma" has a total of ten nominations which is tied for any movie this year with "the favorite." oscar contention is a big deal because netflix has defied all of the theatrical rules. it rented theaters to release the film itself with no transparency into its box office and it made it available for streaming three weeks later. the big theater chains boycotted netflix refusing to play it.

now $25 million-plus is being spent on the oscar campaign for a movie that cost about $15 million to make. why are they making such a big investment they are trying to help draw top talent to its studio as it competes with disney and warner brother who is will both start to pull more content off the platform for their own rival services launching later this year rbc's mark mahaney tells us it would be a positive for netflix. it might help add to new subscriber growth or improve subscriber retention the oscars could elevate the view of the content. back over to you >> it's 5:15 in the morning there. are they playing music behind you piping it out? >> you know what's really funny? this is actually the el capitan theater across from us it's owned by disney and they're showing cinderella this weekend so we're getting some old

classic fairy tale music behind us >> hollywood >> kind of plays into the whole oscar theme, yeah. >> how many of the best picture nominations have you seen, julia? >> i've seen -- i haven't seen as many this year as i have other years. i've seen five of them we'll see what happens i did see "roma" in the theater which is unusual >> my son wants to see every single one before the oscars it's not on nbc is it? >> no. >> yeah. i won't be tuning in i have not seen "vice. but did you see the -- >> i saw it. >> did you see "the favorite"? >> i did >> did you see that? >> no. >> i saw "roma." >> it is whammy, isn't it? >> it is wacky. i'll see it before the oscars sunday >> i saw the kris

christopherson they totally wreck a fer rrari >> but here's the interesting thing. there's no clear cut winner. usually going in you could say maybe it'll be one or the other. will it be a "black panther" which came out much earlier last year which is a great film totally different kind of film you know, there are so many different types of films nominated. no clear front runner. >> julia, i'm telling you that i knew the actress in "favorite. did you see "broad church" she played a detective in that i knew how great she was as an actress from that. >> she definitely has a good chance there's also the question of lady gaga. she's -- you know, has a lot going into this as well.

>> julia, thank you. and by the way, actually play in this interview too let's bring in tom rogers. he's the executive of winn view and somebody who has a long bit of experience with all of this what do you think happens with the netflix film is that enough for them to actually win an oscar? >> one thing i know is "the favorite" is not the favorite. >> "roma" is >> "roma" is the favorites by critics' pick and "time" magazine it came up four times more likely to win than anything else i don't think it's going to win. and the reason i don't think it's going to win goes to the heart of your question i think it is such a disruptive pick for the academy to end up embracing something that is really going to go to the heart

of movie theatrical distribution and the whole -- >> so disruptive to the industry. >> you know, it -- netflix came up with a better way to watch television consumers have voted it's a great way to get what you want when you want it how you want it. and they're doing the same thing with movies. people have been talking about simultaneous release to the home for a long time. and movie studios have run the numbers on that. many, many times it's been, oh, should we charge $20 for the home $25 to the home if it's simultaneously opens nobody's ever done it. >> but there'd be a lot of people who would pay it. >> a lot of people would pay it. what netflix is not only tiny window three weeks then into the home, but it's free as part of your netflix service theatrical quality films being released with no incremental cost, that's hugely disruptive >> barry diller was interviewed last week and said hollywood is dead because of just this. that netflix is the hollywood

killer do you think that's an accurate representation >> no. i mean, the talent pool that exists in hollywood is simply going to -- >> i think he met the studios. >> the studio financing system is in the midst of huge disruption and you have disney trying to change netflix none of them are going to be able to catch netflix when it comes to the number of subscribers it has and with that the amount of money it can pour into production. welcome to the end of the year when a scorsese film is likely to be released in the same fashion directly into the ne

theaters by netflix. >> game this out just from an investor's perspective we've got people playing along at home trying to figure out what this means. follow the money how do you invest in a situation like this when everything is being disrupted? or is it too difficult to tell right now? >> well, movie theaters are not going to go away i always think that for purposes of the big action adventure thinks special effects, movies, you're going to have a theatrical experience. date night families taking kitsds to the theater. but there's going to be a lot more of this direct release to the home type of windowing think of a star is born, it's released october of '18. won't be on hbo until summer of '19. i'm not long on movie theaters over the next five years >> you know, tom i think of it just like retail and with consumer packaged goods. you look at heinz, the collapse it has today because consumer

tastes have changed. you look at macy's and all the retailers reporting next week, they're getting hit the same way. consumers are changing as a result you're still going to have people shopping. you're still going to have people going to the movies you're still going to have people eating some of these packaged goods but they're going to have to change their business it's the new stuff that wins, right? i go to the new theater that will serve me dinner at the same time >> yes the seats have gotten incredibly comfortable. they're trying to make up for what it would orz be like at home but the fact of the matter is when you can get a movie at home, you don't have to pay incrementally for it, don't have to pay $16 for popcorn there are a lot of people who are going to say this is how i want it when i want. it's going to to be a tough trend to stop. >> tom rogers is a cnbc contributor and long-time friend of the show. thanks for being here. >> thanks for having me. >> julia, we'll hear from her on monday too, i think.

>> like you created cnbc success has a million followers. >> and look what you have done with it. >> don't bring that up coming up, is new york city at war with tech we're going to talk with a former uber official to find out. and it's a "squawk box" tradition. coming up on monday, warren buffett will join us and answer your questions you can start to submit them on social media platforms with the #askwarren with a special guest apparently this monday. >> really? who's that >> mack. mack's going >> mack goes every time. he's running away from the camera look at us there you go >> why don't you like to be on if you acted like you liked it, we wouldn't i stay tuned "squawk box" will be right back. elusive today. e is it because so many go after it the same way, chasing after short-term returns?

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. welcome back to "squawk box," everybody. we've been watching shares of kraft heinz this morning right now sitting near new lows after the company reported an earnings miss. a dividend cut, an s.e.c. investigation, and a write down. looks like the stock is now down 26%. a decline of $12.72.

coming up, tech backlash after amazon's awkward exit from new york, we're asking if the city's now hostile to big tech what can it do to avoid losing big business deals in the future uber's former general manager will join us he's in a cab on his way over right no w. that have made the rx the, crleading luxury suvhnology of all time. lease the 2019 rx 350 for $449 a month for 36 months.

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♪ welcome back to "squawk box" right here on cnbc we are live from the nasdaq market site in times square. here are the stories investors are going to be talking about today. a hostile takeover bid may be coming in the mining industry. according to published reports in canada. the deal being considered is said to be for $19 billion in stock. barrick just completed a $16.1 billion takeover of rival rant gold resources apple is teaming up with ant financial. it's planning to offer interest-free rates for iphones.

and check out shares of stamps.com this morning. presented much weaker than expected results for 2019 because of the end of their exclusive partnership with the u.s. postal service. right now that stock is off by 52%. all right. former enron ceo jeffrey skilling has been released from federal custody. he had been convicted in 2006 of fraud and conspiracy in connection with enron's collapse he spent 14 years in federal custody. 14 years in an 8 by 10 cell surrounded by people that were less than human. max kady >> well done you got the music. >> it took hours but 14 years was the -- that's the exact quote from cape fear 14 years, counselor. 14 years anyway, amazon's war with new

york -- it's friday. i mean, the music is -- and speaking of remakes, robert mitchem was in the first one at max kady and then he was in the second one as the detective -- yeah anyway great. great movie. scorsese at its best nick nolte jessica lange. >> and the daughter. >> juliette lewis. amazon's war with new york made headlines recently. now it's shifting to other companies. mayor bill de blasio has said he wants to extend the supply cap on oouner vehicles now both are suing the city. is uber the next tech company to face a growing backlash? joining us now is josh moore, former general manager of uber new york and founding partner of moving capital josh, i can go back to the 19th century and come up with analogoan analogous things or look at what's happening in some european city where is you

just feel like your existing businesses, you know that jobs are going to be lost with good people and it's just hard to stop disruption it's been happening forever. how do we handle it? it's hard on people like the cabbies and the medallion owners >> well, i think the amazon issue is separate from uber. i know there's a "new york times" article that suggested it could be next. i think with amazon, it would have been great to have those jobs in new york but new york is special and should come at full price. i don't think discounts should be available there's a lot of great companies like uber that are happy to do business there and pay full ride uber generates tons of tax in new york pays the full sales tax which taxis don't. over 3 million cars that come into the city every day. i think as a corporate citizen, uber is great for the city they provide a great service and pay a lot of tax >> but the reality is the reality. i've had people that are saying

that the subsidies that amazon was being offered are to counteract the reverse subsidies that are systemic to high-tax states would you locate in chicago in illinois right now without some type of incentive to do it i wouldn't you're only as -- if you're not a hospitable place for business, then a business is not going to come to you. thai they're going to go somewhere else i don't like crony capitalism, but this is the end result of what happened. there are not 25,000 jobs now going to long island city and that's just the way it is. i mean, you can say, you know, it's great new york has all these great things to offer. but they're not coming >> well, you know, new york is a great city for uber. when i brought uber to long island city in 2012, you know, we saw the opportunity as huge it isn't really about how hospitable the government is

>> what's different? maybe different for uber maybe different for amazon than it is for uber you got a crowded city where people need transportation and it's a perfect fit but amazon could go basically anywhere we're just talking about the education, the colleges around new york, i guess, and things like that. it's a totally different situation, right >> yeah. if you look at the new york issue, the city is at times hostile regarding supply so much -- how many driver partners uber are allowed to bring onto the system. that's been sort of the debate since 2015 when the taxi industry had the idea it would be a great thing for them for the city to cap the number of uber cars on the road. so a few months later the mayor suggested doing that he was able to get that law passed in 2018 along with a different law about driver wages which accomplish the policy goal

if you're not familiar with it, they passed a law that created a formula that based on each company's utilization, that is how often the cars are busy. there's a pay floor that drivers have to earn it's like a dynamic supply cap it puts it back in the court of uber or lyft or juneau to decide how many drivers they want to have and as long as demand is there, that's okay. that law is in place and creates a good quill lib yum for the city >> i'm sure if it were to affect you and uber, there are places where oouper's not welcome, right? and where the entrenched businesses that are already there are favored by the local politicians. i mean, if it affected you, i think you'd probably have a problem with it at that point, right? >> well, look. i think, you know, the number of cities that are hostile towards uber i think is reducing by the day. the business in the u.s. is very

strong i think new york is still the largest one despite having the most onus regulatory policy. when you're doing business on public streets, that's the nature of the beast. i think that all that uber wants is to be treated fairly. and i think sort of an arbitrary supply >> i think airbnb is a different situation. but they're dealing with some of the same things at this point. there are a lot of people that didn't want machines to come either and farming squimt and everything else. >> we can't have cars. what about the horses? >> exactly what about the buggy whip manufacturers? they're all gone i know look at the poor record stores i should have never invested in all those photomat franchises. i'm still -- i mean, it's horrible what happened to me thank you. we'll see what happens i think it's a problem now for

tech companies in new york we'll see. maybe not. >> we'll see >> but what other city could even elect bill de blasio? is have you thought about that >> i hope no city does, to be honest with you. >> preaching to the choir. anyway, thank you. >> the capital of vermont? >> yeah. >> monthere was a guy behind you the whole time doing that interview going -- i don't know how long it took him to leave. >> was it the mayor? >> no. when we come back, faang stocks might be getting company. how are investors making room for a new batch of tech innovators we'll also need a new acronym. stay tuned you're watching "squawk box" on cnbc

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welcome back to "squawk box. the futures right now have moderated. the gains we had earlier, up about 70 on the session for the dow. the nasdaq indicated still up over 20. and the s&p indicated up just under eight points under an hour until the opening bell on wall street. dom chu joins us with a look at some of the morning's key movers good morning again, dom. >> good morning again. let's kick off this hour's morning movers with a look at trade desk -- the trade desk ttd the ticker up around 15% on just around 60,000 shares of volume premarket. the advertising technology

company posting better than expected profits and sales after yesterday's close. it also gave more upbeat guidance and said it would invest more in connected tv, in data products as well as expa expanding globally those shares on the move also watching right now shares of wayfair up around 13% or so. 770,000 shares of premarket volume the retailer posting a smaller than expected loss on better than expected sales. the number of wayfair's active customers also rose by 15% over the same time last year. so those shares on the move. then one more to kind of get you going. the shares of the gym and fitness center chain planet fitness up by around 2% on just around 2,000 shares of premarket volume helped along by a buy by analysts at jeffreys they like among other things the evolution of planet fitness's brand to be more of a platform like amazon or netflix and focus on value back over to you

>> thank you very much with pinterest filing, the faang acronym could get new letters. our next guest is here to talk about the market landscape for these disrupters also whether investors will have to sell their faang stocks just to make room for uber, lyft, and pinterest. joining us now is paul meeks let's just -- before we even talk about whether faang exists as a trading acronym anymore, let's talk about whether uber, lyft, pinterest, do these stocks have the same format as the original had >> the interesting thing about some of these names, particularly pinterest which is going to compete in the digital advertising space, is yeah they might be good opportunities. but the ipo valuation ranges that i'm hearing about i think are egregious. >> egregiously high? >> the situation with pinterest

rumored with a $12 billion valuation. if you were to give it the price to sales ratio of facebook which is company that probably aspires to be not in the near term but the long-term, that would be an ipo that should be $8 billion or less now, with uber and lyft, interesting. i'd like to see more from the prospectus but this has a lot of revenue runway but also companies that are hugely loss making and probably be loss making and cash flow burning for some time. >> so where do you think numbers like $12 billion come up i mean, you can have all kinds of whisper numbers but do you think that's actually where it prices or do you think it gets taken down well before that >> i think it should be taken down i've heard uber, for example, craziness to think that ipo will go for $120 billion. and if it does, it should be immediately shorted. the last round for uber was a $70 billion valuation. that's more reasonable but i still think it's high.

the last round for lyft was about a $15 billion valuation. again, it should be trading at a discount it'll be interesting to see lyft probably goes first in the ipo market how is that for the follow along with uber. >> paul, it's rich bernstein you and i go back a million years. i know when we were both at merrill, we had this same discussion it was probably b.c. back then but tech is always very cyclical that's always been my contention that's what we were discussing a long time ago. if profitability is peaking out here in the united states, and if this begins to roll over, are we seeing these tech companies come to market because the shareholders i think realize the next 12 to 18 months profitability may be more cyclical than people think and they're trying to exit is this a great opportunity for a public equity person to be buying these companies >> hey, rich you know, it's wonderful to be back with you. with these these conversations i believe back in the late '90s,

right? hopefully the most sober of the tech investors at that time. i think you're absolutely right. i've always thought that at least on a cyclical basis, you know, the growth rate for these companies should be gdp plus a couple hundred basis points. because i.t. spending should be a little bit higher. >> right exactly. >> so when i see some of these valuations, it reminds me of the bad old days i still have lashes on my back from that environment where some of these companies are coming at ridiculous valuations and although they're higher quality than some of the firms that were coming in 1999, 2000, 2001, the valuations are still unsettling to me. >> paul, do you think that these stocks could -- do you think the ipos will be taken down effectively or is this a situation where you're a retail buyer that you're left holding the back >> oh, man i'm really worried take a look at about two years ago we had snap.

and that is probably the closest thing that we'll have to pinterest, right i remember at the time it was supposed to be a facebook killer that stock had a huge run from are its ipo price. and it got up into the 20s and then it went to 4. down 80% and i think that snap is a horribly managed company pintere pinterest, i don't know enough about it hopefully it's better, but please, please, please, the retail investor should probably -- particularly if it's a frosty ipo -- there's no reason to buy on the ipo i think it could go way down and it might be attractive at some point. but not in the first 478 hours. >> pinterest, i saw it being described as an image catalog or image searching company which kind of surprised me i always thought of it as a style company. should we be thinking of it as the technology underneath it and not what it's -- >> i think we shouldn't. the key thing to look at all these companies is where they

get their money. and of course they're going to be trying to vie for that digital advertising budget and if you take a look at e-marketers' positions, they say years from now they're going to have 1% of the share right now you still have an oligopoly with facebook and google with about 60% of the shares and the third will be amazon so those three companies will garner the share then what happens with twitter and snap and pinterest i'm not convinced that they're going to be long-term players. >> paul, can i change the topic slightly here and just -- it's almost like tech stocks are not tech stocks anymore. right? if you think about lyft and uber, they're transportation, consumer cyclical stocks is there anything you're really interested in in traditional technology >> you know, i am a weird guy because i am a value tech guy. you know, i try to be the tech

contrarian and there is a company that everybody hates that i love. not because it's a good company. it's actually a sad company, but it is grossly undervalued. and that's centurylink ctl. stock's trading at about 13. a solid at least dollar in earnings per share growing 5% or 6% per year. last week it got crushed because they took their unsustainable dividend payout from $2.16 per share per year down to a buck. so it still yields 8% in a 2% market i like all of the faangs i watch all the stocks i like to see value and those the only compelling value i see right now. >> these stocks going public, uber, lyft, pinterest, does that take away from faang or is there enough for everybody the same investors are buying all these shares >> that is a very interesting question i think that if you end up after

reading the perspective and attending the road show for these companies, i think what you may do is take some market share out of your portfolio for some of the faangs and go into those names. because you have the people that seem to be interested and they may think that these are the new growth companies, but i don't think so >> all right, paul, thank you for joining us today good to see you. >> good good to see you. >> paul meeks. >> coming up, what is warren buffett buying ahead of our big show on monday, we'll look at the legendary investor's latest portfolio moves. and the last time he actually made a big acquisition, it has sten a while, that is straight ahd.ay tuned you're watching "squawk box" on cnbc

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welcome back futures moving lower in the last few minutes following a report from bloomberg that the eu is ready to target caterpillar and xerox if the u.s. raises tariffs on european autos. i don't know whether that -- i don't know, we're down a few points from the highs in the dow. now 70 we were up 110 at one point. so we're a little bit lower. what is coming up monday so, people at home, i mean, whenever we do buffett, it is a

big show some is asking on twitter whether i just said we had a big ask warren buffett show. a big ask warren show, which is what i said. but a lot of times the info that comes out, it is a big ask show, right? it does turn into what turns out -- >> big answers >> big answers big important answers. >> we'll be sitting down with the legendary investor on monday to talk markets, investing and much more. ahead of that, let's look at buffett's latest portfolio moves. leslie picker joins us with more. >> she's not someone going to prevent us from -- she came up with the new york post headline for -- >> now new york post is going to have that there say big ask show on monday. so -- >> she came out with bezos,

yeah. >> i appear like a nice innocent -- but there is another side. >> you can write for the post. >> maybe one day in the meantime, though, buffett watchers and berkshire experts surprised by a couple of recent changes to the portfolio during the fourth quarter revealed last week in the 13 f filing. as of december 31st, berkshire hathaway dissolved its stake in oracle, noteworthy because that news sent oracle's shares lower, but also because the firm had only acquired a stake in the prior quarter and berkshire is known for holding positions for longer than that also berkshire hathaway paired back its stake in apple sending shares down on the news as well. reuters reported that buffett himself did not sell o, one of s associates did, to make an unrelated purchase berkshire hathaway had been adding or maintaining the apple position each quarter for last three years. of course, that changes things and then there is kraft heinz with shares plummeting this

morning on an s.e.c. investigation in disappointing earnings announced yesterday berkshire is the largest shareholder owning about a quarter of the company buffett's involvement dates back six years when he teamed up with 3g capital to acquire heinz, merging it with kraft. that will be an interesting conversation on monday >> so many strange things. the oracle stake is particularly odd, just because he changes his mind from time to time but seeing berkshire buy that big of a stake and sell it immediately definitely raised some eyebrows. >> and a tech company. >> is it some of the new generation behind him that has got different attitudes? >> yeah, they do what they want. they don't ask him about their trades they do what they think is right and move that money around and their portfolio has gotten bigger and bigger over time. >> could it be in change in attitude to the whole company we're beginning to see >> i think there are just different investors at play. i think behavior is very dependent on which one of them is making the decisions on that stuff. >> sure. >> that would be my guess. >> as we look back to the fourth

quarter, that was a unique fourth quarter we had in the equity markets so it is not too surprising to see some kind of unique action by these investing luminaries given just sort of the dynamic at play with the volatility and the big equity sell-off we saw >> and it doesn't say what they have been doing for the most recent quarter when we see this big -- >> we had seven weeks since then could be a whole new ball game. >> could be. >> see what answers we get out of him. >> bernstein, people can't really necessarily invest just like warren, obviously helps to have money to make money. i think back on the days of the financial crisis with the deal we got with goldman sachs, the deal with general electric, if i could go in there and get 10%, 11% coupon and equity, i think i could be really good is there anything he does that you try to do in your day to day in. >> i would say the beauty of

warren buffett is that -- you'll be surprised i'll say this of all people, joe, he bets on capitalism he bets on long-term capitalism. what he does, he has an insurance company that provides cash flow. and insurance is a wonderful business because people always overprice bad things happening that's true in the equity market, true in insurance overall. and so he uses that cash flow to take positions in capitalism and that's really all he's doing. the guy is a genius because in the simplicity of what he does it is not all that difficult and what i think most individual investors forget is just that simple rule is don't get overscared when things get very volatile and bet on the longer term you can be like warren, it is just people aren't they won't do it >> if you are around long enough, if the market and you were there, market was around 800 at one point, and it is now

26,000, seems like you should be long most of the time. >> you should. and the thing i tell younger people 20 somethings, 30 somethings, your 401(k), super long-term. >> thanks to rich bernstein. my gosh, the show is over. thank you, leslie. join us next week, "squawk on the street" is coming up right now. buffett on monday. >> time flies. ♪ good friday morning. welcome to "squawk on the street." i'm carl quintanilla with scott wapner at the new york stock exchange, cramer and faber off today. stocks going to have to fight a bit to finish green for the week final day of u.s. china trade talks, president meets this afternoon, the kraft heinz meltdown, upgrades for intel, citi and more. europe overlooking a survey, and nine fed speakers on the docket today at multiple fed events road map begins with futures