we, warren >> he's a fan of his son, who was coaching at xavier and now is at louisville you do the same. >> it is very disappointing. >> that was good golf temps for you. >> good wardrobes, yeah, exactly. thank you. warren, becky, thank you did you see your picture yours is much better than mine i look horrible -- >> i haven't had time to look. >> we got to go. thank you, warren. see you tomorrow make sure you join us tomorrow "squawk on the street" is next ♪ good monday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer who is back, david faber at post nine at the new york stock exchange futures up about 160 or so as the president delays tariffs on chee chinese goods. barrick gold in a big week with powell, the drug ceos, lighthizer, michael cohen on capitol hill europe is holding gains, oil

down 2% as the president tells opec to relax and take it easy road map will begin with tariffs. the tariff punt. stocks set to open higher as the president says he's delaying any increase in tariffs on chinese goods, buffett tells cnbc a trade war would be bad for both economies. >> shares of ge surging in the premarket, danaher agrees to buy biopharma business for more than $21 billion in cash. >> i was wrong buffett stickings s bs by his t heinz investments but admitting he may have overpaid buffett on "squawk" was asked if he thinks stocks are expensive this is his response >> it depends on interest rates. we talked about that before. if you tell me that 3% long bonds will prevail over the next 30 years, stocks are incredibly cheap. >> all right jim, welcome back. good to have you especially on a day like this. so acquisitionsoutright,

expensive, and portfolio is going to grow? >> i think that the problem that he has really aside from interest rates, haven't had a recession in a long time there is a lot of stocks that are doing quite well, because businesses are doing quite well and i think that one of the things that warren buffett needs is a good solid slowdown he can handle it and many others can't. there might be some marquis brands that will be brought down along with some companies that are suboptimal and next thing you know, he would have his elephant but things have been good for a long time, valuations are up and i think he's doing the prudent thing. it must be boring to be him right now. just counting his cash. >> and not buying back as much stock perhaps as -- >> subsequentially. >> as anticipated to what they did last year. someone who for a long time as we point out did not favor buybacks as a way to create value. >> right so, look, i think that he's as usual upbeat, joyous

i love the report this week, tailwind i often tried to struggle about what is it previously he's talked about progress that progress has helped tailwind makes so much sense when you look around the world and you see how hobbled so many other nations are. u.s. has a tailwind. i thought as usual, completely precise, optimistic, terrific view of the world, i wish he talked more about some of his nonpublic holdings because the public ones, we know, are a bit of a -- in terms of kraft heinz being -- something like wells doing that well and oracle. >> oracle specifically and not understanding the cloud to some degree. >> coca-cola hasn't -- it's been trying but not recently. and then apple obviously is a large holding as well. >> he loves to fall back on something that is is long-term pertinent, the buyback, which beats his stake in the company and the dividends. i think that what these things

compound, the power of compounding is so amazing that you may not even feel the coca-cola -- i don't want to say moribund, it can recharge, and wells fargo, the financials are far more problematic than i think he thinks they are and the pantry companies are far more problematic though there i think he recognizes the -- >> that's fascinating. but still continues to say that he wants to do an enormous acquisition, which -- and it would be with $120 billion in cash sitting there, not to mention they could do an enorm ous acquisition if they find something, but it has been quite a while. >> look, there is a very smart company that did, i know i think warren buffett likes very much, danaher, a smart acquisition this morning and smart is often good for both. so i mean i look around and i think he's constrained warren buffett is constrained by something i think all of us wish we were constrained by, knowledge. he recognizes what he knows, and what he doesn't know and when you look at the ge, how

perfect, who knows more about danaher and life sciences than the man who put together danaher life sciences larry culp i think buffett is -- he knows the pantry stocks. apple, some people would say, wait a second, what has apple done lately? he's not involved with tech, which is really the go to. he never did pharma, which i think is a little more easier than he would say. but the financial he knows well, the financials have been terrible as a sector. >> so given thefinancials, given wells specifically, given kraft,given oracle, is this record more checkered today than it has been in a while >> no, i don't think so. i think that, look, these are very great franchises that are not going away, which is remarkable kraft heinz being the exception. but american express is fabulous wells fargo, a little down you can argue number one bank in america, nothing the matter with that wasn't that when he bought it. i think a lot of what happened

is when you look at where he bought things, where he bought kraft, he's doing great. and i happen to think the american express is better than it has ever been, i think that coca-cola until two weeks ago he thought was better than it has ever been. there is a bit of a shake-up going on in the industry he hasn't lost his edge. i think what one of the great testaments to why he hasn't lost his edge, he's not paying top dollar for things. >> he did a little macro with becky, talked about business units, some business units in berkshire not performing that well and overall thought on the economy. take a listen. >> overall things are a little better the rate of -- the rate of improvement has tapered, but certainly hasn't flattened that can change next month and home construction has been disappointing. right now things look fine >> interesting because he used to talk about the chrome construction would come back with the birth rate. that never came back

he talked about how home construction would come back when people moved out of their in-laws, but, you know what, the student debt has really crimped that that secular trend that he was keen on has not yet taken off. i think that's a problem i also think, by the way, he should take a little more credit for the hottest group in the market, other than the semiconductors, the railroads. he owns the best railroad. burlington northern. precision railroading brought about a level of profits that are incredible he's crafty, he's canny, the market has not allowed him to buy things where he's willing to have to overpay. he's buying these financials in the open market where he's buying goldman sachs below book value. how hurt can you get doing that? >> got to find out. >> yes >> goldman on track for best quarter in three years >> good. watch that >> jim mentions ge, the company,

the deal is expected to close in 4q larry culp issued a statement saying today's transaction is a pivotal milestone, demonstrates we're executing on our strategy by taking thoughtful and deliberate action to reduce leverage and strengthen our balance sheet, a more focused portfolio is the right structure for ge and we have many options for maximizing shareholder value along the way. david, you've been all over this today. >> key here, i think, for people to be aware of is they're not going to be taking health care public anymore can you say never? no that's off the table for now and that was something that was slated to occur later this year. remember an ipo of what might have actually been up to as much as 50% of the health care business this deal apparently a lot of inbound calls including from mr. culp's former employer, so to speak, the company he ran, danaher. that's over four years ago they also among others inquired and ended up doing a deal and there he is, he said, actually,

jim and i both spoke to him this morning, he said to me, listen, health care was plan a, but we got lots of inbound calls about this business and this is clearly a superior path. you take $21 billion, and, again, he also has to say about their debt load, it is very simple we got too much debt and so when they get the proceeds from this deal, they are going to pay down debt take their leverage ratio down, and that is something that is being applauded this morning by investors who perhaps had not anticipated they would be able to sell, what is only 15% of the revenues in health care and they're selling it at seven times revenues you may hear that and go, whoa it is only 17 times ebitda a very profitable business given only $3 billion in revenues, but more profitability from that than you might otherwise expect, jim. and as you said earlier, it seems to be a positive for both companies, danaher getting a business that it is continuing to grow in, it will now have $10

billion in revenues in this particular portion of health care and for ge, clearly, a huge deleveraging opportunity and now creating more optionality for them when it comes to health care basically being able to keep the business other than this segment of it, and decide what they want to do over time as opposed to feel as though they have to do an ipo and order again to address this leverage issue. >> the term win-win is often exaggerated and sounds like other than the movie win-win, made in a neighboring high school district from where my kids grew up, the thing you need to know about the danaher deal, ge gets to keep the vmi business which we associate with ge, tremendous service stream. danaher is doubling down on the fastest growing part of its business, which is biopharma, to compete with tmo, thermofisher these are great companies. danaher spun off its pure

industrial business and is going with this high growth biopharma. this reminds me of the pall acquisition, great for danaher, you'll see that company up it is 50 cents year after in terms of accretion everybody has been waiting for danaher, like warren buffett, to do a big deal. that's been danaher's way. there is tremendous joy there. >> they have gone out of the dental business. >> which is a tough business. >> their industrial business focusing the portfolio. >> they have a low multiple business there is a particular date i want you to focus on march 5th. >> yes. >> what happens? >> on march 5th, i believe lawrence culp will present at jpmorgan aviation transportation and industrials conference. >> is that boring or is there someone at jpmorgan that might be an interesting interlocutor >> maybe jamie dimon. >> how about steve tussa

he'll be running the q&a he's been critical of some of the decisions. i think it will be maybe the most exciting analyst meeting in history followed up by a march 7th teach-in about long-term health care which has been this the single biggest bugaboo not dealt with by previous administration i think -- >> on the 14th, their outlook conference call. >> right so you got -- >> you got a lot coming up to try to explain the story at ge. >> if you took a flyer at 7, would you be getting out now >> i wouldn't. i think -- if culp had sold and if he had done an ipo, and i know he had even gotten to the point of considering board members for the ipo, i would say same old, same old, ge, oh, my, we got to -- they sell some, then sell the rest no, the alacrity with which he approached this is impressive. i say stay tuned, more to come take the balance sheet issues off the table.

think about this this is a man of great confidence do you want to go in front of the judge, the jury and the prosecutor that is steve tussa unless you were confident? the answer is no because he genuinely thinks we have a real shot here. when i spoke with him this morning, i wanted to talk about aerospace. an aerospace company once you get rid of oil, which, by the way, i know the drilling companies still haven't come back. >> to the extent you are able to reduce leverage with a purchase price for something that was 15% of your revenue base in health care, you take a lot of pressure off. >> yes >> you take near term pressure off and you're able to operate from a more -- well, a better approach to maximize value whatever it might be so i think that's what certainly seems to be being embraced by shareholders, sending the stock up 15% today flannery did get approached by dhr. he was approached by danaher, that's previous ceo to mr. culp. and they didn't do a deal. >> danaher wanted this business for a long time. the old style through the ipo.

i point out, i think it takes off the table the 100 million share equity offering that some of the shorts have been waiting for to cover >> fascinating story not done yet when we come back, following up on friday's kraft heinz sell-off, what warren buffett had to say about that this morning. take another look at the premarket. more news on the gold miners, peloton, ipo stuff, the president making some comments on china trade we should see that in a few minutes. don't go away. we see access to fresh food being the global norm, not the exception. at emerson, when issues become inspiration, creating a better world isn't just a result,

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we did overpay we didn't overpay for kraft, i mean for heinz we bought that originally, 50/50 deal, private. >> 50/50 deal with 3g. >> yes, two stock holders. we overpaid for kraft. and we wrote down $15 billion of that and that, you know, and that's -- the cpa's way of looking at it. the market marked it down more than that and probably quite properly. >> that's buffett talking to becky quick this morning about kraft heinz after the company's shares plummeted on friday on news of the s.e.c. subpoena, the earnings miss, the major impairment charge. he did say that he misjudged competition in the sector, but they would do business with 3g

again. >> look, i'm tongue tied i'm always loathe to criticize -- not loathe to criticize 3g i think several things work with 3g, they're very disappointing one is they stuck by pantry. and they really haven't made the changes. you can go on their list, the site, and you'll see the brands they are and they're basically the brands i describe as the same as when the cuban missile crisis occurred in 1962 and frankie down the block had a fallout shelter with the exception of chef oyardee, they're the brands i'll tell you, i like -- namesake cream cheese. the rest are not my cup of coffee maxwell house. >> maxwell house. >> grey poupon. >> that one is good. that's point one it is really interesting you can have $25 million s.e.c. and not

even care. other things are so bad. when you read through the conference call and the release, it is great, organic growth, sustainability, the weight space. you think how much are they going to boost the dividend and the answer is they slashed the dividend. >> their inability to get a deal done seems to really have hurt them i'm going to make an analogy i know is not completely apt i want people to think about this for a bit i remember covering worldcom for many years in no way, in no way saying this is -- this is -- i'm not -- it is not about the fraud what i do want to talk about is wall street. and the perpetuation of a myth, myth that worldcom was that bernie evers, the gym teacher, knew how to cut costs and run his company better than anybody else he competed with. and that therefore worldcom deserved a premium to other companies and it got it because of a lot of cheerleaders including people in solomon brothers and it was able to use that stock at worldcom to buy

company after company after company and keep it going. because we, to a certain extent, and the press as well, and the investing public, believe somehow that this guy was a magicmaker i think some of that is similar here in the sense of the way the brazilians were put on a pedestal for their ability to cut costs. i understand it is is true, they were able to zero-based budgeting and everything else. but you use that, you use that to propel a stock price which then enables you to do deal after deal, the support of wall street, which, by the way, is still all in usually because the fees you get from m&a are what drives the business and then you end up sometimes unable to do a deal and look what happens. >> the eight downgrades, all which of were perpetuated by the idea, they're trying to buy unilever, stock went from 88 to 96 they're in the doing another unilever that's not happening. >> i don't know what they'll do at this point, start selling assets as opposed to buying. >> maxwell house, maybe they can

get 3 billion. i don't know maxwell house, tremendous example of a brand passed by >> definitely your grandfather's brand. buffett did call him an outstanding human being of 3g. >> wall street loves perpetuating something that is not always going to be the case. >> we'll get the mad dash in a minute, count down to the opening bell a lot to talk about on this monday morning, ahead of a very big week with powell, gdp on friday, drug ceos on the hill and more don't go anywhere. (indistinguishable muttering) that was awful. why are you so good at this? had a coach in high school. really helped me up my game. i had a coach. math. ooh.

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♪ all right, time for first mad dash of the week as we count down to the opening bell, six minutes before we get started with trading here at the nyse. what are we doing? >> one of my favorite analysts when it comes to the internet is mark may from citi i've known him 25 years. he's very dispassionate. he doesn't come in with an ax to grind. that's important when covering facebook because facebook has gotten to the point where it is such a hot button you don't hear about earnings anymore you hear about what they have done wrong. he's talking about what they can do right capex and data center deep dive he produced shows a dramatic decline in upcoming spending for 2020 and 2021. you and i both know that the big

negative other than the fact that the ethical issues is that they have to keep spending so the idea that they might be able to stop spending would mean an explosion of growth markets even if you fell, there would be some slowdown in revenue, which people talk about periodically, they could become far more profitable i was astonished at the deep dive i did not think that given the fact that we know the buildouts for data centers continues to be immense. so i regard it as a very positive feast i know it is a china day people want to vote by the semis. they should buy this one it is cheap. >> still all right. we'll be keeping an eye on facebook also going to talk about that barrick unsolicited offer for newmont mining a lot of moving parts in that one you're in the going to want to miss. talking gold when we come back on "squawk on the street." [knocking]

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you're watching "squawk on the street." the opening bell in just over a minute's time. put some context around the rally. the president delaying the tariffs set to kick in on saturday and with that china up 56 overnight, best day for them in about four years we're up nine straight weeks, 3% from the high. we could go back to early october levels if we get past 2814. >> interesting if you look at where the vix is it is so low that typically that may be something this you're worried about. i checked in with my expert, mark sebastian, great work for mad money, and it is is clear this is is an harbinger for bullishness when gets down that low. you may need that momentum to break out. semis being a leadership group, that's terrific. they were one of the worst groups in december but i don't want to sound an all clear, but i got to tell you, there are a lot of people who did not like this rally. not one bit. and i was watching someone this

morning on brian sullivan's show, talking about how she didn't like the market because money is coming out while it goes up. my answer to that is what happens when the money comes back because it is going up >> opening bell, at the cnbc real time exchange, big board today, omd worldwide, celebrating being named global media agency of the year at the nasdaq, columbia business school's annual india business conference you're right about that, jim you got that fed pivot, reduced trade risk, you got earnings that are -- have come in better than feared at least and you got the idea that the back half of the year is going to be -- remember that back end loaded phrase we used to use all the time >> look, it is -- you get the zeitgeist was the numbers won't be that good and there is some who feel the numbers weren't. i look at carter, remember, feet pajamas? you got different areas of

strength, clothing, whether it be heavy equipment, and then on top of that, you have companies like nvidia, which preannounce and it is now dramatically above. nvidia is very china oriented. you have things like xilinx, unstoppable, a leader in this market why? 5g i can keep pointing to positives, but the overall, overarching thing is is the fed blinked at the same time that the president seems to have made genuine progress in the talks. what i think is interesting is that the chinese stock market seems to like it every bit as much as we do. and their currency is going higher, which is something we have been trying to have for a long time, we wanted that. >> even though the xinhua news agency talked about new uncertainties, frictions that are long-term, complicated, the rhetoric out of china wasn't as glowing as ours. >> maybe that's a united bear front, between their bears and our bears, ursa major and ursa

minor. the more skepticism, the better. what happens, i don't believe it is a sell -- that's the next narrative you'll hear, sell the news if you look at a company, let's pick emerson a great american industrial, why is the stock going down? because of china united technologies doing this gigantic split up. why does the stock not work? because of china honeywell should be at the all time high. but, no, china you can go over -- sky works solutions, which is a terrific 5g play, not so great, china so even then we can go circle back to the big daddy, warren buffett, but apple once again, today, key bank has a thing that says video uninspiring. i feel like with apple, right now someone -- tim cook is thinking about something and wall street already decided it is uninspiring i looked at tim cook's cranium, nothing in there that is inspiring. hello. someone stole my apple watch when i was in italy. what is that is that not verification of what i'm talking about? >> did you get it back >> listen, my wife is busy test

driving a lambo so i overlooked it she took that baby to 140 on a major street >> you got the -- is that the other watch? >> my backup watch >> backup apple watch. as we're talking, the president is making some comments about all of this, not jim's watch, but china trade, at a white house meeting with the national governors association. take a listen. >> what we did with our trade talks in china and it looks like they'll be coming back quickly again and we're going to have a -- another summit, a signing summit, which is even better so hopefully we can get that completed, but we're getting very, very close, ambassador lighthizer, steve mnuchin, a lot of folks in the room have been helping. and that's been great. and i just see our -- >> he referenced the u.s. mca, said he will probably get that ratified and said i was able to get it approved to be honest with you by using tariffs. >> well, look, it is going to be very controversial because as

warren buffett said, tariffs aren't good for anybody. i think one thing that surfaces is is that our market is a great market this wouldn't be happening if all the rest of the markets were robust we're the one that we're selling into i find that when people talk about brexit, their eyes glaze over this is all that the big industrials, i met with another, in italy it is what people talk about when i think about it is how much more calm our country is than the 700 -- sorry, the $17 trillion economy that is europe. the chinese economy. and then i get up in the morning and think, okay, what is going to happen in venezuela today that is horrible you just have a lot of areas that aren't doing that well. and then you have us, and you kind of need us. so i don't know. you need us. >> yeah. >> no shortage of merger an acquisition activity on this monday morning we spoke a lot about the biggest deal of the morning, which is ge sale of biopharma part of its

health care business to danaher. but we do have a fairly large deal, at least, nice when you wake up and own this thing, watch 122% premium time talking about a company called spark therapeutics. roche is going to be buying this company. its gene therapy, it is going to help the treatment of hemophilia a. complements roche's efforts that are already under way in that area the purchase price is $114.50 a share in cash. you can take a look and see that that is quite a number 122% premium to the previous price of the stock on february 22nd that being friday. they do expect to close this in the second quarter of 2019 and, jim, just another example of some of the names that we don't typically hear about, about a $4.5 billion deal, where a large pharma company, merck,

paid some -- it was a much smaller deal, but the premium was staggering, earlier last week and this one here is quite nice as well if you certainly -- >> and lily did a big deal the beginning of january that was another company that is speculative biotech. glaxo did one. it is almost like a lot of companies just feel like we got to get in this game. and they seem to be willing to pay any amount of money, given the size of the premium to get in the game. so you've got that doing well. you've got what i call the cloud kings doing well, positive note today on service now, wow, have you seen that thing? positive note on splunk, the way to be able to main data. incredibly positive note from sales force. and then just a couple of things that continue to move up endlessly. a company like twilio, it will not quit that, again, is facilitation involving coding and the web and i learned how to code from twilio, not that i know much about it other than to say that

twilio is the platform for lyft and the platform for airbnb. you send -- are you amazed they have your information without knowing who you are? that's twilio. there are companies that don't quit that didn't do well medtronic up 10, procter did a little better. see that one by the way, why don't we compare and contrast procter with kraft heinz. not like you can -- you can't make old brands dance. but you have to spend money and that's what procter has done. >> and time. listen, they went through some dark periods >> did they ever needed better leadership want to come back, leader in the market is xilinx, which also happens to be the name of my dog, which was bob marley, but you know what, bob marley switched redemption song, xilinx he's in obedience school he's been a bad boy. he keeps eating ball point pens.

i have a red one every time you come home, you're scared to death. >> mine eats pencils, not good either. >> he could go to obedience school with my guy they would have a party. >> got more? >> let's talk about this barrick, newnewmont, goldcorp thing. not often we see an overbid for -- sorry, a bid for a company that is currently in the process of trying to acquire another company. that's what we're dealing with this morning with barrick proposing a merger with newmont mining calling it an unprecedented value creation opportunity for shareholders of newmont. now, you're looking at the stocks, saying, well, doesn't seem to be a particularly exciting reception and that's because it was basically an at market deal. this deal is is not about a big premium. it is gold you got to use stock, you don't use cash they don't have debt and so you need to come at a price that is accretive and

speaking of mark bristow, the man who ran randgold and put randgold and barrick together and now his management team merged with barrick. nice job there since then it seems in creating value at barrick. speaking of bristow, this morning, there is some of the details on it, 2.5694 is what we're talking about. all about the synergies. that's that they're focussed on. billion annually, 7 billion in total. versus what they say is only $100 million in synergies that newmont gets with the goldcorp deal not as though this deal is foreign to either one of these companies. but apparently it is not something that the ceo of newmont was willing to really revisit recently talking again about the possibility of a joint venture but nothing in terms of a real response to wanting to do this so barrick makes the decision to make what is -- what we call a

hostile bid, unsolicited bid the goldcorp transaction require s shareholder votes. there is is a provision in the bylaws that allows for the calling of a special meeting if you get more than 25% of the shares they put in a proposal to lower it to 15 you have a lot of overlap in the shareholder basis. black rock owns $4.4 billion of the -- what you put together their ownership in both companies. so it is not inconceivable that if shareholders are in favor of this potential deal, you could call a special meeting there is at least an ability for barrick to potentially move this forward. right now, unclear where that is i don't have any comment for you at least directly from newmont i have not spoken to their representatives this morning but what this is all about is nevada that's where the synergies come from the way it was explained to me, you have two gold mines separated by a fence, take down

the fence and you immediately save a billion dollars or some very large amount of money and that's what bristow told me as well. he's, like, listen, our biggest asset is the management team and this deal makes our job in nevada a lot easier. and the value of the transaction is in the synergies. their net present value in the synergies at that number you heard overall, how you net present value, they say the deal worth 41 to 42 for newmont shareholders they're not reflecting that at all right now. one would expect they'll have to go up if they want to try to get it done. but it is interesting to see and, again, it is all based on getting that gold out in nevada, and the fact that the two companies, if they were together, would be able to create an enormous amount of efficiency. >> dr. mark bristow, doesn't want me to call him doctor anymore, but he happens to be, one of the great investors in gold as well as a great miner. a lot of where he mines is in

areas in africa he's point blank said to me, i would be scared of, but he's not, putting in nevada, which, david, you could -- i don't know. i remember in godfather, it is not clear, but the state of nevada is far safer than many of these countries. >> yes, it is. and, again, they both have very significant operations in the state. this is going to be interesting. going to be more about the actual gold investors. a different breed than it is going to be about the typical event investors who get involved in these kinds of deals. that's where you see the decision made here as to whether or not they're going to succeed at barrick, with this -- what they call unprecedented value creation opportunity or newmont will be successful in bringing its goldcorp deal to fruition. >> very rare you have a company that is actually the etf the senior gold etf. i love this deal love it. >> all right, guys 2807, not quite back to the early october levels we were

shooting for to pisani. good morning, bob. >> four to one advancing to declining stock, up 160 points, still pretty modest given the fact we talked about the president, talking about substantial progress in the trade talks and tariff hike delay. a lot of this as we keep saying already starting to get very much priced into the market. we're back to where we were at the highs in december. the last highs, 2800 remember that? december 3rd it was. as i recall. here we are, right back. full circle, 2800 to 2350. one that was the bottom of the close on december 24th, all the way back to 2800 people keep asking me, why did we rally so much there say lot of stuff we were worried about in december that kind of looks off of the table, all of a sudden, now let me run down the numbers. aggressive fed, they seem to be out of the rate hike business. how about a trade war? looks kind of less likely. how about that big oil plunge we were all worried about, going to be signs of a global recession that isn't happening

what about that global recession, which is the main story motivating the stock market seems less concern, china more stable, europe definitely not good we want to hear from powell about the recent string of weak economic data in the united states the fed on friday in the report, partly blamed trade issues the question, mr. powell, this weak economic data in the u.s., if the trade war goes away, will that improve that's the one question i would ask jerome powell thisweek as for what we're doing today, it is the cyclical gain and lower moves from more defensive sectors. look, you got semis, banks, industrials leading, consumer staples, a defensive group to the down side. the china stocks, of course, they're moving, i'll put up some of the ones that trade right behind me here jd.com, alibaba, baidu and sina. the recovery has been a largely

cyclical rally so we're up 18% on the s&p since the december 24th low. you see industrials, tech, energy, all outperforming the overall markets. the laggards, of course, are those defensive names, health care, consumer staples, and utility, i would note particularly health care, which is a big market leader last year is now a market laggard. this is a global recovery. i mentioned many times, not just china, but eafe, that's the wor world, frontier markets like nigeria have generally been up, overall lagging the united states one final comment, it is very significant that ge sold its biotech business to danaher because they appear to be taking that big ipo, that ge health care ipo off the market now. this is very important because the way i have it, this probably, the ge health care

would have likely been the second largest ipo in the united states in 2019 uber at 76 billion number one. these are total valuations, not what they would floatfor we work, palentir, airbnb, lyft, we're looking to go $6 billion or so next year. that's an issuance off the ipo mark and helpful overall a lot of stuff coming in people more than 200 ipos priced you take what might be the second largest one off the market, it helps all the other ones out there because the question is who is going to buy all of this stuff on the year? and ge taking one of its main ones off the market. i think it would be helpful for the ipo business just near the highs for the day, 200 points on the dow almost back to you. >> and, carl, i'm glad bob mentioned about the ipo. it is clear that's not happening now. that health care ipo they didn't say it in writing

specifically but it is clear from what i heard and the conversations that i think we both had, jim, that that's no longer what is going to happen for ge so important that people understand. >> i think it is -- i also point out that the number of ipos is immense. that's my big worry, supply. because remember the index fund you mentioned black rock owning this -- the gold it is blackrock, you have gigantic index funds and every single case. vanguard they can't saytake ipos. you need money coming into the market to buy the stocks the first couple will be so fabulous, just high fiving and then as we go down the q, we'll say, wow, how did that come from. >> we'll see more crowded mornings on this floor to the bond pits, rick santelli at the cme good morning. >> good morning, carl. one week of 2s, we're somewhat moving sideways. though 2s settle at 2.5 on

friday, up 1 basis point look at one week of 10s. turning up ever so slightly from really what was the bottom of the range there on the low 260s. now at 268, up 3 settle 265 the point is, stocks are up pretty solid the run is very solid. the reversals off october lows is rather large. but yet the treasury complex which paid so much attention at various points when stocks are moving up and down seem to really be hunkered down at this point. and if you look at a dollar index chart, a little different scenario, not all that much. here is a nine-day chart of the dollar index nine sessions. you can see we have scaled it back down, kind of hovering between 9625 and 9650. really if you take a step back in foreign exchange as well, mostly sideways activity, all while the equities have improved

and trade seems to have a big part of this issue proof? look at a july 2018 start of the dollar versus the yuan the dollar is at a seven-month low. think about the discussions, the negotiations, the foreign exchange manipulation, it all seems to fit that chart seems to represent a rubber stamp so far on some of the confidence now all we have to see is a done deal and how much is actually priced in and the surprise left in the equity markets. jim, david, carl, back to you. >> we'll talk to you in a bit. rick santelli, dow enjoying a nice monday morning. s&p 2808, back to november 8 back in a minute imagine traveling hassle-free with your golf clubs. now you can, with shipsticks.com!

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keep your eye on the s&p today. 2809 essentially with some of the top names including ge danaher with news of their own and western dig.

we'll get "stop trading" with jim after a short break.

let's get to jim and "stop trading. >> trying to explain how broad this rally is. it's not just the semiconductors not just the cloud kings, not just industrials take a look at carter's, cri i point this how the because

this has been apparel. apparel has been hit or miss apparel sold typically in department stores, the largest children and baby's apparel, almost back to where it was before the big decline that's going to be what you're going to start seeing from retail i think that that's another group that could move up i spent a lot of time, by the way, in milan, and i want to look at doing more work on capri which is, you know, this is don idle's company which is jimmy chu and kors and versace which looked very good in milan. i promised my wife that she did a look milan fashion week was really not much of an opportunity. >> well, when you're driving lambos, time is tight. >> you would think that italy is in recession fashion week and people spending fortunes on lamborghini. i dropped atic ta tic-tac and i

clean enough to eat it this could be a prelude to really good things. >> tonight what, have you got? >> you know, i've got a little company that a lot of people don't talk about, liveperson one of those things where, again, it's cloud-related, and they make it so when you do customer service it's a.i., so sometimes when you type in something, i like size 9 shoes, oh, eally, what color? it may be a baabbott or it may s guys good to be good. >> good to have you back you were missed. see you tonight at 6:00 p.m. tonight, "mad money. what jim buffet told becky quick this morning dow is up 175.

welcome back to "squawk on the street." some breaking news our december preliminary read on wholesale inventories up 1.1%. this is more than triple the expectations, and our last look goes from up.3 to up .4. this is preliminary and will get tossed this is a good start especially considering the bigger the number this is the more kick-in you get to fourth quarter gdp. on the trade and sales side a completely different picture it was down 1%

so down 1%, so which made the widgets. we didn't necessarily sell the widgets, and our last look doubled down from .6 to down 1.2 so maybe one part of this talks about the economy, and the other part is talking about production these are interesting numbers, carl we'll have to pay attention to how gdp embraces them. yields, backed up a basis point on this. that makes sense that they were paying attention to the trade sales side back to you. >> all right great context, rick. thank you very much. rick santelli. good morning, everybody. welcome back to "squawk on the street." i'll carl quintanilla with morgan brennan and david faber at post 9 of the new york stock exchange bulls trying to fight their way through critical levels here s&p 2805, and the dow is up almost 150. >> and our road map starts with the oracle of omaha. billionaire investor warren buffett weighing in on everything from his bets on apple, kraft-heinz and the economy. >> stocks are higher the president says we're getting, quote, very close to a deal with china. delays, increasing tariffs on

chinese goods. >> and sharesed of general electric are surging and an agreement to buy a data farming business for $21 billion in cash. >> we'll begin with becky quick talking with the oracle of omaha for a three-hour special becky here to talk about the takeaways. every time you're with him the conversation takes on a certain tone and color your thoughts about this morning? >> reporter: you know, this what is kind of a wide-ranging conversation, carl if i had to look pack and poibat to one or two things in particular it was his comments on the market that will catch everyone's attention he put out his thoughts in terms of the market and stocks he basically says they will never make a call on the markets, but he did go into a little bit of color on that in the show this morning. he talked about how if you're wondering if stocks are cheap or expensive, it really depends on where inflation -- where interest rates head from here, that that's been the big question that's been determining things for ten years

it will continue to determine things, and he basically said that if interest rates remain low like they are today, then we will look back and think that stocks were very cheap at these prices now, that's interesting to say because when you look back at just two months ago in december we were obviously at much lower rates for stocks at that point, and then if you look at the 13-f filing that berkshire just put out and talked about the number of stocks they were buying in the fourth quarter, you saw that they actually bought fewer stocks in the fourth quarter than they did in the third quarter. kind of interesting when you think about it, especially when you think of interest rates and what jay powel said back in the fourth quarter basically indicating that the chairman of the fed would not be raising rates any time soon, sounding much more dovish that made you think if buffet was just looking at things he may have wanted to buy a lot more stock in the fourth quarter so what gives? here's what he had to say. >> i thought stocks were a buy in the fourth quarter just like in the first and second and third quarter. sometimes there's a lot of other things in mind that may use money. sometimes they work out, and sometimes they don't. >> does that mean you were

holding your cash in case a deal came through >> we had at least one deal possible it wasn't very large, so -- so we -- i like stocks in the fourth quarter, but i like -- i would like buying a business even better. >> reporter: all right that was the what moment that was a huge hint they weren't buying more stocks because they had a potential deal on the line now, buffet didn't give us more details about what that potential deal that got away, what company -- what company it was involving other than to say it was a company here on planet earth, but that still gives you a lot of insight into how he thinks about things. he would still rather buy an entire company rather than buy stocks, pieces of a company. however, he's been pretty clear lately it's way more expensive there's too much of a premium when you're trying to buy a company outright he attributes that to private equity funds and the amount of

money they have raised and how much they are willing to leverage things. there's too much money looking for too few deals particularly in the price range they are talking about, a company of $50 billion or greater we talked to him about a lot of different changes that they have actually seen in the berkshire portfolio, the stocks that they do own, equities and trading for that i asked him about some of the changes that he's made in the portfolio based on the last 13-23 filing that we saw one of the big items that made a lot of news is berkshire actually sold 3 million shares of its apple stake that brings it down to 2295.5 million shares still 35% of the company outstanding. he did say that that sale came from either todd cole many or ted wesler in their office, two investments managers in control of their own portfolios. one of them bought shares of apple before warren buffett bought those shares himself. they sold that stock during the quarter because they wanted to buy something else

they each manage about $13 billion, so if they want to buy something else, if they buy another opportunity they have to sell something one of them bought apple to buy something that they thought was a better purchase. when it comes down to what warren thinks about apple. here's his position on shares of apple. >> i don't see myself selling. every -- the lower it goes the better i like it obviously it's really not back to where -- it may have briefly, very briefly got there, but -- but if it were cheaper, we'd be buying it >> reporter: and guys, one more bit of breaking news for you would you think in three hours we'd be able to cover all the topics that we needed to and after the cameras stopped rolling i will tell you what he answered, breaking news again. there was a reuters story last week that said berkshire hathaway was-ins talks to sell applied underwriters, an insurance company that does workers' compensation. he confirmed that when i asked

him afterwards he said that they do have a contract of sale it has to be approved by the state insurance regulators in all the states in which they operate. he's expecting that it would close by september 30th if they get all of those approvals i asked him why he would sell it because normally when berkshire buys a company, it never sells it this is a company, applied underwriters, that they own 80% of the company he pointed out that they have two other workers' compensation insurance companies that they own outright each of the other two companies are bigger, and he said it's a little awkward when they are competing with two other bigger 100% owned subsidiaries in the same company again, that is news we can confirm, applied underwriters. they are in -- they do have a contract of sale to sell applied underwriters, and, guys, i'll send it back over to you >> yeah. becky, it's interesting to hear those comments from him, especially given this letter from over the weekend and the fact that he said that, you know, how important the float income is in terms of insurance but that -- that the overall sector will continue its dismal

record of, earning subnormal returns on tangible net worth as compared to other american businesses you were just talking about the fact that there's so much capital driving up the value of companies and how difficult that's been for him to make a big acquisition, but also it sounds like that's playing out insurance as well. >> reporter: right >> okay. >> reporter: sorry told you everything i know about this, sorry. >> i love it when you're too the point, beck. a great morning of stuff so much to talk about. becky quick wrapping up her morning with buffet. let's bring in chief investment officer from wedgewood partners and mike santoli back after a week off good to have you back. how long can we talk about a dearth of opportunity at prices that attract him >> hopefully not too much longer we've been -- our clients have been shareholders now. this is going to be our 20th year of owning the stock, and it

was music to my ears this morning when he revealed he was elephant hunting and didn't bag it because that was my first question in reading the letter not much activity in the fourth quarter. now we know why. >> right. >> i've been in the camp that for a couple of years now have said i think -- you know, the biggest elephant he can bag is in the omaha zoo, in his own backyard, his own company, but i think that he would much rather continue to build out the conglomerate, build out the equity portfolio, but he laid out a pretty cogent case once again in the letter to buy back shares, and so i hope he -- i hope he starts swinging a fatter bat at that pitch. >> he did say it would be a big repurchaser in coming quarters >> sure. >> even though some might have been disappointed by this one. >> and always with the value in mind, right, so i think that's where he wants to draw a distinction between the general kind of buyback because that's what we do with our cash, decision of a lot of companies and his own. i also think it's interesting. you know, it seems like a

contrast or maybe a contradiction when he says, look, stocks look like a good bet yet we bought nothing. on the other hand, how does he actually bet he bets big when he feels he has an edge. if low interest rates and other factors are keeping the asset class of stocks at elevated valuations, he doesn't necessarily feel as if he has that edge or that -- that bargain to buy enough at a discount to buy something else so his own stock by default might be the better option. >> when you're looking for an enormous acquisition to do as well and looking at the size of their cash pile it might well be it's harder to follow the playbook which he'stypically used which is hey, management, come join us because we keep you -- you can do what you want. we love you. we won't get involved with you, but i don't want you going out there and seeing who else might want to buy you, and when you're talking about a $100 billion deal and you want to read the proxy and see whether they actually took a look around and got a real value, it's just hard for a company in some ways to do the deal buffet likes to do where he feels like he can get a

really good deal and bring in a great management team and do the right thing by shareholders in making sure you've got the highest price. >> yeah. it's almost an impossible situation. i mean, if he wants to buy these good if not really good businesses that are of that size, they don't necessarily need to come to omaha and do a deal with uncle warren now, maybe if it's on the "forbes" 50 and it's privately owned, family-owned, that's another whole thing, but even with that situation, all this private equity, i mean, it's -- i was actually surprised when he said that they were close to -- >> to doing something. i wonder what it was we'll all try to figure it out. >> we can rule out intergalactic companies. >> only on earth. >> shucks. >> listen, he has done large deals, so, i mean, burlington, precision cash parts, but size of what they are talking about now would even dwarf those conceivably if he were to use most of their cash. >> if it would be. who knows, would he consider a

$30 billion deal a very large acquisition? >> probably so. >> he doesn't have to use all the cash. >> and he can do two, but he can't even find one right now. >> you've got this giant float, and if the risk of recession is rising and if at some point in the coming years we actually get one, he's going to be in quite a position, berkshire will be in quite a bit of position to deploy that capital. >> yeah. unfortunately, you have to root for bad news for him to, you know -- to swing at fat pitches. the stock is our largest position on the one hand i don't want it to go down or be in an economic environment where he'll have opportunity which will hurt the rest of the portfolio, but that's what he needs all that said, here we are in a very long bull market, maybe the later stages of an incredibly long economic expansion. i mean, berkshireis -- his words, a financial fortress. i mean, it's ft. knox on steroids i can't think of a better company with all the diversified earnings streams to weather an economic storm and take

advantage of it, but that's more of a scenario in a market that's declining which we really haven't seen that much of, so there's frustration there. i hope he buys back his own stock. >> as for the lessons out of the portfolio, he talked a little bit about banks and oracle, the cloud. it remains a challenging hill for him. >> it does because oracle is one of those companies that, yes, it does kind of look cheap if it's just a broad play on business, i.t. spending, and then this sort of admission i don't know if i have an edge here he has an idea where he wants to have an advantage in terms of his long holding period, being the preferred buyer or in terms of value and you don't get that in a lot of places on the other hand, with apple, you know, i couldn't, i wouldn't buy more apple here. you owe more than 5% of the company. the company is shrinking the flow owning more the business pretty much every quarter you have $45 billion worth of it every day. >> thoughts on the kraft-heinz deal and comments he made today about overpaying >> yeah.

a couple of thoughts i thought in his folksy way, he was -- a lesson for all investors, i think he was rather cold-blooded in saying made a mistake. if i were smaller in terms of my portfolio, i would sell it all with a smile i think there's a big lesson there for investors. i think the other takeaway is that here's berkshirewith 300 billion in equity. 208 billion in assets. kraft-heinz is just not that big. i mean, i hate to torture an analogy, but it's kind of like joey zaza in "the godfather iii," he's not that important, but lessons learned on how he sold or how he thinks about kraft-heinz as a mistake and how quickie will was to recognize with oracle. hey, i don't have an edge here i'm gone >> we also got -- >> kudos for the "g iii"

reference. >> thanks. when we come back, a trade truce for now. the president extends the tariffs, at least a deadline, and says we're closing in on a deal as we go to break, take a look at the top performing names on the s&p venghori right at 2809 be right back. the future of technology investing lies beyond the tech sector. it's about technology transforming every sector. ♪ at pgim, our bottom-up approach uses a technology lens to identify long-term winners. from energy... to real estate... to retail. finding such opportunities for alpha is the true value of active investing. and around the world, you have a partner in that pursuit. pgim: the global investment management businesses of prudential.

welcome back president trump says we're closing in on a trade deal with

china as he extends the deadline for a deal past the previously set march 1st date kayla tausche is with us from washington with the latest kayla? >> reporter: the most optimism yet, morgan, coming from the president today. in nearly 30 minutes of televised remarks to a set of governors visiting the white house, he talked about that north korea summit that's going to happen in vietnam he said it was going to be tremendous he called on governors to lobby for infrastructure spending, talked up the 200 miles of wall that will be built pretty soon with new funds, but the trade headlines is what the market is focused on and what we're honing in on right now. he said on china he said there's going to be a signing summit between him and the president of china at some point soon, that they are making progress, and let's listen in on what he said about that >> it was a tough -- it was a really tough negotiation, and same thing with mexico, but in the end we got it done, and it's a great deal for us, and it's a very good deal, i think, for canada and for mexico.

they have to get it approved also we have to get it approved and let's see what happens, and i think it probably will be. it should -- i think from our standpoint i know how much they hate me, but they have to hate me even more not to get this deal approved. that's the only thing i can say. >> quick correction there. that was actually him talking about the u.s./mexico/canada trade agreement where he talked about the tough negotiation there and the fact that tariffs actually helped the white house get to the finish line on that deal and called on cook to pass that deal quickly. on china where he was talking about those negotiations there, he essentially said that all of the trade spats that the administration has opened up could be nearing the finish line as we head into the 2020 election season and that it's been tough up until now, but there could be resolution soon listen into that >> we have tremendous potential. when we fixed these trade deals because we're being ripped by everybody, we're just being ripped we lose $800 billion a year on

trade. think of it. it's -- 800 billion. nobody even knows what that means, and we're fixing that all up we start with mexico, canada, china. china is the big up. china is 50% of the number, even more, and we're doing very well. that could happen fairly soon. >> reporter: so we'll see exactly what that final agreement looks like, but the president did preview a potential signing summit or signing ceremony to take place at mar-a-lago at some point in the near future. in just about two hours time the president will leave for vietnam and perhaps we'll get a little bit more commentary then guys >> well, we'll be looking for t.kay law tausche, thank you. president trump tweeting just moments ago, quote, since my election as president the dow jones is up 43% and the nasdaq composite almost 50% great news for your 401(k) as they continue to grow. we are bringing back america faster than anyone thought possible billionaire investor warren buffett meantime making comments earlier on "squawk box" about

tariffs and the trade war. >> if it were 25%, there would be some big adjustments. some of it, the suppliers have swallowed over in china and some we split with them, but -- it pushes prices up i mean, there's no question about that, but it hasn't had a big effect at 10%. a number of them have told me at 25%, i mean, the world changes you either get a lot more money for your product or you source it differently our do something. >> for more on what this haul means for the markets, we're joined by matt hornback, morgan stanley global head of interest rate strategy and john rutledge, chief investment officer good morning both. john, i'll start with you. we had "closing bell" on the heels of the meeting with the president and the chinese on friday you had expected this deadline to push back, but there's a lot of questions about what this deal could be that potentially shapes up, and perhaps more

importantly what enforcement could look like. your thoughts? >> that's the real issue a dole is something that has two aspects. one is what everybody announced and the second is what everybody does afterwards. the announcements here are important, and they are going to get done this is about the trade deal i expected we would do they will announce they will buy a bunch of stuff, the chinese guys they will announce we'll reduce tariffs on both sides. there will be some ip advantage because ip protection is already under way in china there's new laws being passed right now, and there's a new enforcement mechanism in china because they needed to protect their own companies, so that's working in hour favor. the difficult part is industrial policy the difficult part of enforcement, of course, is governments forcing american companies to exchange technology and soforth. the reason it's so difficult is not because they don't want to do it in beijing it's because they have no way of enforcing it through the court system courts are very young in china, and this kind of court actually

works at the local level in city by city and is influenced by mayors which is why they had to put penalties in that go from beijing out to the mayors and vice mayors to get anything to happen, but all in all it's a very, very positive thing that's happening this week. >> john, just to dig into that a little bit more. i mean, we're talking about -- there's a conversation globally happening now around reform of the wto. how would that play into this deal >> well, wto has still not quite been lived up to you know, one of the things we might get announced this week is allowing more u.s. companies to have majority ownership of things inside china. that's a good thing. that was promised by wto, and it's been holding out companies like jpmorgan and visa and so forth, and -- and there's -- you know, that would be a very interesting and easy one to do because ubs has already been approved, and wto this time around needs to focus more on capital flows and services and less on stuff like boats because

the capital flows are what matters. the part of the announcement they are going to do on the currency is the least of the enforcible things. they are going to announce they are going to stabilize r & b against the dollar that actually is something that the chinese leaders want because they don't want capital to flow out of china and weaken their currency stabilizing the currency will help them make their job easier. >> and matt, over the weekend larry fink from black rock talking to cnbc and saying that perhaps one of the more disturbing things about the u.s./china trade situation right now is that you've got china buying, what, $1 trillion plus worth of u.s. treasuries because of the trade deficit and the impact that could have longer term over the coming years on u.s. death, on the treasury market and just at a time when our deficit is expanding what are your thoughts >> yeah. i mean, i think the question ultimately is who is going to end up buying the u.s. treasury bonds, and one of the things that larry fink didn't mention is who bought all of the

treasury bonds in 2018 it certainly wasn't china. in fact, it was mostly u.s. households that were the biggest buyers of u.s. treasuries through 2018, so, you know, from my perspective, ultimately somebody has to buy the debt the question is who is going to buy it if it's not going to be china? then it's probably going to be somebody in the united states, and what we saw in 2018 was that 2.5%, 3% ten-year treasury yields was enough to incentivize u.s. households to come in and scoop up most of the debt that was issued in 2018 >> matt, if we get a deal between the u.s. and china this year, we've got a fed that has become more dovish, that it's in a wait-and-see patient mode. how does that shape fed policy moving forward >> i mean, it's a great question particularly at this time of the year when we're going into the fed's review of its policy strategies and tools in june, there's a lot of focus on exactly how policy is going to move forward, especially given

that inflation has been relatively subdued and hasn't really achieved the fed's 2% target for any length of time worth talking about, so when i think about the future of fed policy, it's probably not going to be higher rates for some time to come. you may get another couple of rate hikes this year if inflation does begin to march higher, but, again, the fed is talking about reviewing its inflation goal at this point, how to characterize that inflation goal it's unlikely that they are going to be overly aggressive at hiking rates when -- when inflation is still below their 2% target at this point. >> well, we're going to leave it there. gentlemen. john rutledge and matt hornback, thanks for joining us today. >> a pleasure. >> thank you >> as we go to break and get a check on the major averages here, dow hanging on to a 150-point game got the vix under 14 we'll get meso details on ge and

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shares of general electric still up rather sharply this morning, although well off the highs the company saw.

let's call it about a little less than an hour ago. the company agreeing this morning to sell its pio pharma business to dannier. the purchase price, $21.4 billion, 21 billion in cash. it's a big price about seven times the revenue of the unit which only represents is a% overall of the healthcare revenue that the company sees, but the margins in the business are fairly good so it's about 17 times ebitda still a high multiple and one that is certainly being embraced by ge shareholders this is a deal that apparently at least has been thought about for dannier sometimes. in fact, sources tell me that they approached the company under its previous leadership when john flannery was running about the possibility of trying to pick this unit out of the overall healthcare business. it didn't happen then. it is happening now, and it is as significant deal, both for the cash that will come into ge and will be used almost immediately when it is received

to reduce leverage at the company and pause it pu-- and be it puts off the notion of pursuing an ipo unit the company had been planning to ipo a healthcare unit in the second half of this year, a splittorff of some kind in which it might have owned 51% of the overall company. that's not the case. there's a lot more optionality, but they have dealt with in many ways the concern of shareholders, that being as larry culp termed it to me simply when we spoke earlier, having too much debt and, therefore, the ability to use the proceeds from this deal against selling the unit at seven times revenue and 17 times ebitda is seen as a positive though morgan, interesting to note that the stock has come well off the highs it saw a little while ago it had been up as much as 16%. still it's a positive

development creating the optionality putting off the plans. the plan "a" had been an ipo we got a lot of inbound calls, and now it was the better path to take. >> as bob pisani pointed out in the last hour, this would have been a healthcare ipo, largest of 2019. i also spoke with larry culp this morning and a few things that he said to me, that they are focused on completing that carve out and remaining the core business and that the ipo in 2019 does look unlikely at this point, that it changes the dynamic and that they are excited to have healthcare a bit longer also, this isn't the only deal for ge today they also have their transportation and tech merger taking place this morning, too and wab tech, it closed, thank you. we spoke about that, too, and they said that they can monetize that stage in a thoughtful way over time because the plan there is to sell out of that transportation stake for ge, raise cash there, too.

investors have been really nervous about how quickly they were going to do that, aggressively they were going to do that and with with regard to today's bio pharma deal they can be careful shares of ge up 50% justsince the start of the year after being at its financial crisis lows as recently as december so it's quite a turnaround very quickly. >> up 45% since the beginning of the year, as you said. had been up as much as 50% dannier, as youcan see, also benefitting this morning we shouldn't forget about that has almost as large of a market cap as ge does seep as a strong add-on even though paying seven times revenue, it's a high-margin business and 17 times ebitda they are spinning off the dannier business and gotten out of industrial. they are focused on this part of healthcare, competing with the likes of thermo fischer, and it's going to be a $10 billion business for them. >> two key dates in the coming

weeks, i would also note next thursday, march 7th, ge insurance teach and conference call for investors where they are going to go into more detail and disclose more around that insurance business within ge capital that i think quite a number of analysts and investors have been nervous about given the massive reserve charges we saw in the last two years. also, march 14th, ge outlook which we haven't had since culp took over, so finally going to get some guidance there in terms of the plan for this company all right. well now it's time for our etf spotlight. taking a look halt energy stocks with oil falling from its highest level since next the xop, xle and oih all coming under their highs. crude under pressure after president trump quoted oil prices getting too high. opec, please relax and take it easy world cannot take a price hike fragile. despite today's decline wti crude is still up more than 20% so far this year

>> it is the mobile world's biggest event, the mobile world conference happening right now in barcelona our jon fortt is there for us this morning good morning, jon. >> reporter: good morning, carl. normally it's all about phones opening this up conference, but this time we've got a little something different. microsoft launching the hololens 2 head set, a lighter design, more wearable. i actually tried it on bigger viewing area for the mixed reality. lower pricing, and also cloud pricing. part of the idea here is to link it into the cloud. if you buy it one off it's $3,500 but there's the ability to pair it with the azure cloud also i talked to alex kitman, a technical analyst at microsoft, the father of the hololens and the connect about how 5g really links in to the hololens vision. take a listen. >> with the advent of 5g, what it enables us to essentially

start being able to now have a symmetrical edge to cloud platform for all of the artificial intelligence which ultimately will allow us to do low latency a.i. on the edge but high precision a.i. in the cloud. >> reporter: now 5g and geopolitics, really the center stage here at mobile world congress in barcelona, so just to run down a few things, qualcomm announced new 5g products here including for fixed wireless and for pcs, intel's got base station technology that's 5g spec if i and vm ware talking about their cloud and put telco coming up in just about an hour on "squawk alley" and huawei is very active talking about 5g equipment and hand sets. i talked to ericsson's ceo about huawei specifically, the impact of this tangent, whether it's actually helping his business.

he actually said no. listen. >> reporter: we don't see any impact in our order booths of this almost the opposite, so if we think about our operator customers, they are concerned that this leads to uncertainty, worries, so if anything we have gotten a much more uncertain situation. >> reporter: so that's borje ekholm ceo of ericsson saying all of this not helping. it causes customers to hesitate wondering what the environment is going to be like, but overall no impact to sales, he's saying, guys back to you. >> jon, you've covered this event for us for so many years now. given 5g and huawei, i mean, it's going to be the newsiest congress we've seen in several years, right >> reporter: oh, wow, yeah this is number six for me.

can i find six fingers i've been up since before midnight eastern time, but, yeah, when zuckerberg was here and, you know, they bought whatsapp, that was a very nussi year, but the story has very much changed 5g becoming a reality now. not only do we have 5g hand sets, we've got 5g foldable phones people are talking about, plus all the equipment lots of companies jockeying for advantage. lots more coverage from here coming up. >> can't wait to hear a lot more from jon from barcelona on "squawk alley" in 20 minutes when we come back pulitzer prize winning columnist jim stewart here with us to talk about buffet's call today. dow up 135 now

i think it's been quite weak

after what you would expect after ten years of recovery and the stock market quadrupling from the lows and unemployment at 3.7%. people are just making different choices. >> that's buffet on "squawk box" this morning despite disappointment on housing, does remain relatively optimistic on u.s. economic growth with us to talk all about this, pulitzer prize winning columnist jim stewart is here with us at post 9 god to have you back, jim. >> thank you. >> what did you make he has a great window into what housing will do perhaps. what did you make of his comments >> he does the numbers have been very weak lately which surprise me a little bit in january because suddenly the stars seem to align. you know, we had a nice stock market recovery through the month. simultaneously interest rates going down that's a prescription for a boost in new home construction and residential sales that we just haven't seen yet, so i think that's -- that's a little surprising, but about, you know, this looks to me like this is buffet terrain there's some -- if you're looking for values out there,

the housing sector looks to me like one that's pretty depressed given in theory it should start picking up >> so you think it -- you think maybe the challenges of finding some things to buy are not as quite as it seems. >> i've been wondering about that we all know at any given moment that something is a bargain out there, and he is a value investor stocks are reasonably high, but they are not as high as they were at their peak certainly december, if you're a value investor, i would have thought might have opened up interesting possibilities. i know he sadie had had a big deal in sight that didn't come together maybe it a was coined of based only some attractive valuations in december, but, you know, we see today danaher found something they found to buy. people look at that hand why wasn't that an attractive proposition. i think the deals are out there if you have the guts to step out

to it. >> we're getting a gdp read delayed later this week. had a string of weaker than expected numbers last week i mean we had the government shutdown and all the volatility in the stock market. all of this trade uncertainty. i just -- i wonder how much of it is temporary and how much of it, you know, is -- is potentially a sign that we're going to see some longer term weakening here in the u.s. i mean, do you have any sort of inkling or gauge when you look across your universe >> well, i think one of the key questions that you hit upon are all the things that you mentioned temporary or longer term, and -- and we still don't know about that. they could be temporary. we've got a china deal if we get stability in the stock market and continuing maybe even hitting new highs. if we get continued new interest rates like that, then those problems will all be temporary those are all very positive both for economic growth and future earnings and return for investors and for the stock market and i think we've been tilting towards the idea that they are temporary which is one reason why the stock market has gone as

well as it has, but you have to remember that we don't know yet for sure, and once we do know for sure it will be too late because that then will all be baked into the stock prices so you just have to make some intelligence bets here my own gut feeling here is things are looking pretty good. >> does the kraft episode reveal certain liabilities in buffet's model? >> i think so. i think two glaring ones first, what quite a few people have talked about his idea of what's the competitive advantage? what's the moat around this company which is all the consumer brand and he's a big believer in the power of the brand. i don't know we've got a new generation coming up here i don't think you say kool-aid and they like run to the refrigerator some of these things are getting pretty steal i'm not sure that haul brands are created equal. coca-cola may be almost unique category, so i think the brand strategy is in question, and he's kind of acknowledged that secondly more fundamentally, you know, kraft-heinz is now under investigation from the s.e.c.

for potential accounting irregularities, and when buffet wrote in his letterhe's seen many issues like this over the years where management decides to tweak the numbers just one time and then we'll catch up the next quarter, well, that is the road to run for many companies, and, of course, he didn't say anything about this being kraft-heinz, but i wonder in the back of his mind does he worry about something like this? we don't know yet. all we know is that they are looking but that goes to the question that he's always put so much importance on which is the init tellingity of management. he says he only wants to invest in companies that are not only well run but are ethically run where because of the character of the people in charge you don't have to worry about something like this, and it seems to me at the very least he's got to be worrying about this and wondering about what forces he would put -- what horses he whoput his monon. >> didn't quite verbalize it today. see how it plays. >> a company dropping that much

in one day is a shock. >> good to talk to you jim stewart. >> much more ahead on "squawk on the street." don't go anywhere. [leaf blower] you should be mad at leaf blowers. [beep] you should be mad your neighbor always wants to hang out. and you should be mad your smart fridge

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we help farmers lock in future prices, banks manage interest rate changes and airlines hedge fuel costs. all so they can manage their risks and move forward. it's simply a matter of following the signs. they all lead here. cme group - how the world advances. welcome back to "squawk on the street." rick santelli here live on the floor of the cme group i would like to welcome my first guest of the week, peter boockvar thanks for joining methis morning. >> thanks, rick. always fun. >> you know, there's always imports, exports there's always two sides of a ledger, debits and credits you have continued to accentuate there's another side to the perception of inflation by our central bank most humans would call it cost of living. explain why this subtle differentiation is so important. >> well, if the fed would

replace the word inflation with cost of living, i think the discussion around their policies would be much different. so now they are on this -- this analysis that if inflation runs below 2% for a period of time, then they need to have a period of time where it trends above to sort of average out. trends above to sort of average out. above would be let's call it 3%. take out the word inflation, say we need 3% increase in the cost of living, and somehow that would be the right way to calibrate policy meanwhile, it was reduce real wages, send the consumer dependent economy into recession as consumers retrench on those cost increases, would lead to higher market interest rates i think the fed needs to throw out the word inflation, replace with cost of living, and reanalyze this discussion. >> off camera we were discussing if there's one country that's the poster child for paying too

much attention to inflation at the expense, being so clinical about it without the human element, it would be japan decades and decades of stagflation. don't the models get turned off, all the people at the fed table talk about how citizens are effected by the long term strategies >> yeah, the great thing with bank of japan is we have this period of time providing us evidence of how zero interest rate policy and many years of qe work instead of learning from those lessons, the european central bank, bank of england and our fed seem to be intent on repeating all those mistakes so the discussion specifically with the fed last week, they seem to be having the same discussion the bank of japan had all these years. you can assume when we go into the next recession, whenever that might be, cut rates to zero

again, do qe, how bank of japan addressed their issues over the years, that never worked take the bank of japan to a lesson and do the opposite. >> it makes perfect sense. we're just about out of time in the final analysis central banks were never meant to be, when we pull the alarm for recession, do everything you can to stop it, those are very therapeutic. they're not about trying to avoid setbacks they're there to nudge the economy, maximize its efficiency peter, thank you for an interesting discussion carl quintanilla, back to you. >> rick santelli, thank you very much. when we come back, fed chairman on the offensive, jay powell preparing to testify on capitol hill this week, but behind the scenes he has been working to win over congress big time that story is up next. y appreci the military family and it really shows. with all that usaa offers why go with anybody else? we know their rates are good, we know that they're always going to take care of us. it was an instant savings and i should have changed a long time ago.

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fed chair jay powell set t testify on capitol hill starting tomorrow behind the scenes, he had plenty of facetime with lawmakers ylan mui has that story for us >> previous fed chairs are reluctant to engage with capitol hill we spent the past month pouring over powell's public calendars and find he took a different approach this chairman a constant presence on the hill

he had 98 personal phone calls or meetings with lawmakers four times the amount of janet yellen over the same period. he reached out to both sides of the aisle, from rank and file members to party leaders fewer democrats than republicans he had 20 individual contacts with those that oversee the fed. >> perhaps chairman powell knows his job will be easier the more that congress understands what he's doing to fulfill his remit of price stability and full employment >> reporter: we know president trump has not been happy with jay powell's performance in the past, but the sense on the hill is that the fed is finally understanding it is congress that oversees the fed and not the administration guys, back over to you >> ylan mui, thank you for that. talk about a graphic there, comparing the two fed chairs we have a programming note tomorrow, we have special live

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it is 5:00 p.m. in barcelona, 11:00 a.m. on wall street "squawk alley" is live ♪ ♪ good monday morning. welcome to "squawk alley." i am carly fiorina with morgan brennan at post 9. jon fortt live at the mobile world congress in barcelona. more from jon in a couple minutes, including his interviews with the vmware ceo we begin with warren buffett. talking the state of the economy, his stake in apple, and his thoughts