it's february 27th, like 2019. like "squawk box" begins right now. we are live from the nasdaq market site in times square. i'm becky quick. futures trading for u.s. stock markets, treasuries, and commodities were halted for efrl hours because of a technical fault at the cme group that problem lasted from roughly 7:340 p.m. until 10:45 p.m. eastern time the cme is investigating what went wrong in the meantime, though, you can see things are back up and running now. dow futures indicated down by 82 points s&p futures are down by just over 8.5 points. this does come after muted gands

or muted losses yesterday towards the close it looked like the markets were trying to rally, but the dow he wanted down by 34 points. nasdaq off by less than 0.1%. the dac is off by .6%, and nenl the ftse down by .3%. take a look at what's happening on the treasury market u.s. ten-year yesterday ended the yield at 2.636%.

this morning it's slightly lower. gearing up for high stakes nuclear talks with north korea's leader and eamon is on hand live in hanoi this morning with more. eamon. >> yeah, good morning. we do expect to see the president coming by our live shot position here in downtown hanoi. a really remarkable site just a few minutes ago. the motorcade route not officially released, but a lot of the tourists have gathered in expectation of seeing activity, and just within the past couple of minutes white glove vietnamese policemen whipped out barricades they've been storing ask closed off the street. hundreds of people were rushing to the barricades to get the best positions along what is expected to be the president's motorcade route here he is on his way to the metropol where he will meet kim jong un we're going do see three different events here. there will be an official greeting between the two men the first time they've seen each

other since last year's summit in singapore we're also going to see the two men have this one-on-one meeting in which they'll be able to discuss so many of the issues on the table, and then later in the day, we'll see that -- what they're billing as a social dinner between the two men and their top advisors a lot to watch for here. woulder going to see dualing motorcades here in a couple of minutes time things are really getting started here in vietnam this evening. >> did you get thrown out of that hotel >> no. >> worry staying at a different hotel. the malia hotel is where the press filing center is that's where all the reporters show in to work. a lot of the tv network have set up their live shot locations there.

they're staying there, though, and they're able to stay in their hotel rooms either a couple of floors down. you're allowed stay there if you had already booked a room, but nobody is working there, and everyone is having to scramble >> we don't want to give president trump any ideas about what the president has been able to do. i guess he might not like him in the same hotel either. especially his own hotels. >> well, dwoent know exactly we're going to see this, and the question is how much will we see the two leaders speaking directly to the press? whether there will be opportunities for reporters nearby to shout questions in the past the white house says urge the white house press corps not to be too disrespectful during the moments where we see both of the leaders on camera to ask

questions, but not to ask them in too aggressive of a manner. especially dealing with kim jong un, who is not used to dealing with the free press and what comes along with that. we'll see whether the two men do stay questions then the one-on-one meeting then we'll see that social dinner as well we might get some comments during the course of the dinner. that wob an opportunity where both men and their entourages will be at a table together. >> we, of course, come back to this throughout the show maybe there will be a smoke break. >> i did on the train on the armored train >> why he takes a quick smoke break in the middle. right now let's welcome our guest host for the hour. leland miller, international ceo, and leland, thanks for being here this morning. >> my pleasure >> what should we look at as kind of a measure of success for this meeting >> the problem is we've been dealing with the china -- it's been -- there's been a lot of

pressure on getting big deliver pools. using u.s. leverage. let's get the big win. north korea is different there isn't really a win to be had in the short-term. most people think denuclearization is never going to happen, but even if it did, you're talking about the process, and the president's focus has to be stable focused diplo diplomacy and making sure you continue the policy and are pushing for transparency from the regime and you are pushing for a step by step movement towards where we want to go without the big win. there is progress to be made and making sure we don't have the confrontational stance that is weave had you don't think it's

going to happen. you don't think it can, and what can we accomplish where people think it's a good summit >> i think in the most difficult process on earth >> what about declaration? if we can at least get declaration to figure on what what they have did sfloosh that would be great movement forward. what we want to do is make sure we know where the weapons are and more of what the capabilities are, where we want to make sure that the missile testing ban continues. the problem is there's going to be -- kim jong un has goodies up front. he wants peace and u.s. troops out of south korea he wants economic sanctions minimized, and there's always the pull just give us this, and this is what has fooled president after president after president.

he has said recently this is not on the table, but i think that as you start talking about a peaceful resolution, and people start talking about nobel prizes and ending a korean war that's gone on for seven years, it's going to be very alluring to start -- >> how can that happen without not just declaration, but also massive deevg liesation and moving towards a real denuclearization i understand that this is one of the toughest problems on the planet.

>> any economic sanctions we take off are going to be almost impossible to put back on unless there's a serious provocation. what the plan has always been was to give up front concessions about transparency and weapons sites and then to move on from there. if they're not seeing progress, then the white house can be in a difficult position they're going to either have do declare what we're doing not working or they're going to have to give kim more and more. this is the exact trap that everyone has fallen in >> does the prosperity carrot for his people, and is that appealing to this guy? they made a tape that had hotels on the coasts in north korea and, i don't know, with some of the things you would want like speed boats, all these things that show him to appeal to him that you could be an economic story like south korea, which

has been a miracle over the past 50 years >> or vietnam. >> or vietnam. do you want that for your feel, or is he fine staying in power >> does he care about the people >> i think that this north korean leader would like the opportunity to break out of the rogue state status and to better the economy and to better the people, but he will not do that at the expense of giving up his survival guarantee, which is a nuclear weapon this becomes very, very difficult when the closer people get to this, the more they realize that there's no easy scenario where kim gives up weapons. we can push him more and more as he has pointed to. 28,000 troops aren't geared towards north korea. >> but our troops that are there, you know, protecting south korea, if it's a nuclear power, what good is it >> the idea of a ground war is still one that he could get away

with and not have the same global condemnation as a nuclear attack >> there's also a signal that would be sent if the u.s. started pulling troops out after 70 years, what where you saying? is the u.s. less engaged in asia or -- there are a lot of signals that would be sent by just pulling troops out of there. >> what would be a goal for us to have at some point in the future >>. >> 70 is okay. >> 08, 90? where do you -- >> dends what's happening with china? >>. >> china has chinese national interests, and they're going to keep pushing the idea that we're going to pull out and -- you have to move in, but it will be against u.s. he said that's a big bowl of popcorn, and he pops it in his

mouth. this is great. the more he is worried about them, the less he is worried about us, and this is what's happening. north korea is a wonderful foil for good policy and then good diplomacy. >> leland is our guest host. he will be here for the rest of the hour >> we'll have much more looking at these lowe's numbers right now. we'll have those after the break. as far as paper losses, down $50 million in her weight watchers stock. after a disappointing twitter. called ww now. is that -- ww? >> makes a motor www is like an internet thing, you know worldwide web. >> yeah. >> a bad start to the company's

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get $250 back when you pre-order a new samsung galaxy. click, call, or visit a store today. >> welcome back. monitoring president trump as his motorcade comes to a meeting with kim jong un we've been talking about this all morning. we'll continue to be watching this move. these are some live pictures of what appears to be the motorcade pulling up at the hotel, and now the curtans are being gone >> the beast over there, aren't they >> i this i they are. >> it has gone into one of the military planes. they sent over multiple -- there's more than one. >> you have been on it >> they send over multiple cars.

>> i don't know how we'll go over there in ten years without air travel >> whose way >> eamon on the ground he has been following all of the goings on here, and we'll check in with him later. adjusted earnings fell well short of estimates on the street revenue also missing expectations weight watchers is predicting sales of about $1.4 billion in 2019 below analyst forecasts of 1.of billion. the company announced a pivot to a wellness brand

it's rebranding itself as ww part of the reason for that new campaign had been to try and lure in more men i think they look at weight watchers as being traditionally a female brand the company did say, though, that recording has been very disappointing, and, remember, they were up against a strang comp from a year ago >> the move into the stock impacting the fortunes of high profile shareholder oprah winfrey. her investment has lost about $50 million. these are paper losses win tri owns about 8% of the company or 5.4 million shares. they've seen a huge run-up since she first got involved.

>> we should note she sold a large stake back in march of last year, which probably locked in profits from where she bought in >> sense oprah win vested, 158%. it's adjusting with the -- that at 19? >> it must be. >> that would mean, what is it >> home improvement just out with results probably not expecting anything great after home depot, so yesterday i think it was down in sympathy, so today it's okay.

the estimate for 2.03 or 2.1 then six to 610 is the outlook for next year and 604 is where the street is right now. for same-store sales next year they're forecasting 3% i don't know is that -- can they do that? they didn't do it this quarter >> as i look at these lowe's results, the number that really stuck out to me -- the 1.7% comp is the total company i think what's more meaningful is a 2.4 domestically. importantly, we always talk with this on the show, you look at that relative to home depot.

>> some success with early spring merchandise, which i think spring started yet >> narrowing the gap home depot still performing better they're still -- home depot still stronger, but lowe's, at least by this measure, has kaupt a bit. >> what macrofactors are at play here are there any? housing?

the economy in general in the entire mood of people that follow the economy after powell switched, it's been better in january than it was in december. that's not affecting this, is it >> there's a lot at play here. when i'm talking about -- it's almost daily i think the market investors with regard to home improvement retail are overly concerned, too concerned about the weakness we've seen in traditional housing metrics. yes, housing has been weaker that's more transtory nature. it's only one month, but there's eye lot of internal things helping them as well

>> you follow it >> what do you mean you do >> i was joking. i thought you were going to say, lowe's and -- >> i'm all over the place. i do follow -- >> that's insane you are a renaissance man. i'm glad i asked >> i spent a lot of time on the conference call last night spoke to the fo for a while after the conference call. i don't recall seeing. weight watchers or ww is a unique business model. it's very seasonally skewed. >> again, makes perfect cents strategically, but it happened

quickly. they probably -- >> do you think it's the wrong timing because the first quarter is so important? i hadn't thought about it being their fourth quarter if this is the quarter when you make all your money, if you miss now, what does that tell you about the rest of the year you have to wait three-quarters until you restart? >> that's the problem for the business and the problem for the stock. >> i don't know if -- >> because we only decide during our new year's resolution that is we're going to lose weight? >> for the most bart people want to lose weight they don't need the -- >> do you think it was turk into a wellness company >> i don't think that's a mistake. >> they did this around two months before the peak season. >> all right never thought about -- i've

thought about that other one >> what's the other one? >> nutrisystem you eat the food, you lose the weight >> because they have men spokes people that appeals to you. >> i'm going to start asking everyone >> can't believe you followed ---ure here for low's, but -- >> did you just make that -- you really follow it >>. a lot more this morning. the big stock movers including a big retailer a pharma stock getting slammed, and a pop in a pizza stock you're going to want to eat that

one. plus, we're monitoring the nuclear summit in vietnam between north korea and president trump and kim jong un. expected to speak about a dinner in just a couple of minutes, and we will show you that as it happens. we're right back in just a moment each day our planet awakens with signs of opportunity. but with opportunity comes risk. and to manage this risk, the world turns to cme group. we help farmers lock in future prices, banks manage interest rate changes and airlines hedge fuel costs. all so they can manage their risks and move forward. it's simply a matter of following the signs. they all lead here. cme group - how the world advances. ♪ ♪ dear tech... let's talk. we have a pretty good relationship. you've done a lot of good for the world.

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we sunleashing the promisegas of clean energy. at emerson, when issues become inspiration, creating a better world isn't just a result, it's a responsibility. emerson. consider it solved. snoo they are frornlt of the press right now having just arrived. president trump. we'll listen in for just a moment

>> we'll see thank you. thank you. this looks like this is just a photo op what have you seen so far? i know that you watch the motorcade come by your live shot >> yeah. the motorcade came by. both leaders now at the metropol holt you can see them doing the photo op, handshake there. uncertainty about whether they'll take questions the interpreters both approaching both men so they can -- there is some communication difficulty here as these two world leaders appear on the world stage the iran nuclear deal which the president had suggested was a stashl deal.

this president now trying to conduct a better piece of diplomacy for the united states than he views his predecessor did in a similar situation ly thely give up his nuclear weapons, and thaes the question here for everybody the president of the united states is racheting down some of the expectations for this summit suggesting last week that he is happy if the north koreans are simply stopping nuclear test and stopped launching missiles which they have done over the past year that the president says is a good outcome so far. although the -- maybe the bar has been lowered in terms of our expectations for this meeting.

at least there are no longer weapons or missiles flying over the sea. >> i think the metric for success on this is different than just about anything else. president trump should be credited for the fact that he is de-escalated tensions from where he got them. you know, the real scary thing about this is that president trump is good with the big stick and the big care root, and that's why when he left aside where the china trade negotiations are line right now, i think his model is very well suited for negotiate tots the chinese.

this seems to be a one-on-one situation. >> the chinese are involved, and a lot of what happened with the u.s.-china trade deal was based on the idea that the chinese wouldn't scuttle the talks the chinese are sitting back they're engaged. they're -- they don't have an active role in this wrash p i believe this is a situation where they're there in front of the media and taking pictures. not sure how much kweds e questions they'll be tailing at this point, and that's a big question, too. what will happen at a press conference where they're

actually speaking again? >> there's a lot of talk about denuclearization clearly what president trump means by that, which is no more nooukt north korean nukes is very different than what kim jong un hasments which means we're going to denuclearize the entire peninsula, and that's to say there's no way for american troops there there everybody will be out and leave us to either control or all of korea or to operate without this u.s. troop presence on our border it's very different definitions. it's very hard to have a negotiation or even a prs conference when you are not aligned on even the definitional foundations. that's noikt.

>> walk with me through this, and the question is what's kim's motivation for doing that? it's served him very well to be very slow and very incremental in terms of what he has gin up >> i'm not sure he would have his interests of his people in mind or opening things up from them, but maybe from his own ego's perspective, he would like to see the country advance it looks like president trump is speaking right now. i hope this one will be equal or greater, and we've had a lot of progress, and i think the

biggest progress was our relationship is really a good one. >>. >> i think that your country has tremendous economic potential. unbelievable unlimited. i think that you will have a

tremendous future with a great leader, and i look forward to watching it happen and helping it to happen we will help it to happen. >> thank you all very much we appreciate it we're going to go have dinner and then we have some big meetings scheduled for tomorrow, and we'll see you, i guess, at our news kvs at some point during the day thank you very much. >> mr. president -- that's president trump and kim jong un sitting down just before they head to dinner

let's get to eamon who is on the ground in hanoi. what would you take from that? >> i wish we would have gotten an answer. also, an economic pitch. this president suggesting that north korea could boom like the former north vietnam where we're standing right now has boomed economically if it joinds the company of nations denuclearizes and opens up to the outside world. the president suggesting that the united states stands ready to make that economic boom happen we'll stee how receptive kim jong un is to that message as the events go on we didn't get a translation, as you guys are pointing out, of what kim jong un was saying. we have to wait for the translateors to do their work and give us a sense of what comments he might have made. this is a president who is making both a personal pichl man-to-man to the north korean leader and also an economic pitch between these two nations. >> who else is in the dinner besides the two leaders and the

translateors >> well, we know that nick mull veiny, the white house chief of staff will be in the dinner along with the president of the united states. they are opening it up to some of the top advisors from both of these countries. we're expecting just about four to six people in that dinner it's going to be a relatively small group. we will see some of the top entourage from both sides. >> appreciate it we'll be coming back to you throughout the program for more on what this summit could mean for the markets, jack calf eithery is here equity portfolio manager senior vice president and port yoelo manager at fl putma'am do we believe the market is going to move today on this news one way or the other >> i think that if it is interpreted as a positive sign for trade relations with china as trufr's general foreign relations, then that could be a real positive for the market

not sure how much difference it will make purely for north korea. one of the biggest barriers to kmienz trade has been trump's negotiating stance i think the way to interpret this would be purely as a fleekz of how trump is negotiating with foreign powers >> jack, in your sense, we were talking to leland before in terms of president xi watching this, and he said he has a bowl of popcorn does this help trump's hand or hurt trump's hand? >> i think it helps trump's hand and that he continues to emphasize that politics is personal i'm developing a relationship of north korea on a personal basis as a way to create aefz of

growth and aefz of opportunity. kbpgss have been aggress ily damped down over the says last few yankees woosh. >> does that make sense? this idea that personal connection that he may or may not make with kim jong un somehow that is going to get transferred to the relationship he may or may not have from president xi

a lot of this is about him saying there's been a lot of threats for the first year, year plus of my term. now get down to business, and here's where i start delivering on all the things i said i could do and nobody else could do. the more he shows progress, the more it seems to back -- >> expectations have been lowered. we thought it was sort of baked into the cake that there would be a deal of some sort, whether it's a photo op or something else then expectations were, again, sort of diminished in terms of what we ultimately get. expectations of progress or that the bar has been lowered >> i would say a combination of the two. it has been -- we're going to make progress politically, and

whether that was we're going to have tariffs go into effect on march 1 it's, no we're going to postpone them to be reworked at some point in time because we're making tremendous progress towards the deal of some kind. whether it's we're going to make progress politically, we're going to continue to -- whether it was progress made with a federal reserve in terms of i'm going to be cautious and i'm observing what's occurring on a global basis and economies in terms of adjusting monetary policy i think news got better. policy expectations have been pushed out and in some senses reduced in terms of how much how quickly. that's allowed markets to rally, and you've seen a nice improvement in, say, the p and the valuations and the expectations embedded more than you've seen, say, the reality actually be reflected on the ground >> what are you telling your clients this morning >> if you look at what the expectations are in the market back to the pointed of what expectations are you look at

industrials, and that's what would benefit from the trade deal semi-cap equipment is up 13% cap goods is up 12%. i think the market is already expecting that there's going to be some kind of a deal much better than what the market was expecting a few months ago i think that although expectations may have come down, the expectation in the market has already come back. >> as a result of that, do you say to yourself, okay, it's now baked in, and maybe even overbaked in terms of what those expectations are do you pile in to those sector that is you just talked about where you say, you know, they've already gone on their run. i have to wait for a pullback. >> typically you don't see 100% even when expectations are higher.

we still have the risk of estimate reductions in the fourth quarter, and on top of that we have the risk that the fed is going to reverse course, particularly if the economic data stays strong and if the market stays strong as we learn now the fed is looking at financial conditions at the market >> if you think of apple -- if you are tim cook watching this today, what should be thinking >> you probably assumed that the china deal is coming, but at the same time this is not going to make any of your problems go away apple has a lot of problems in the chinese mainland that have nothing to do with trade, and so i would say that his problems

abroad have just begun >> we will continue that conversation in just a little bit. jack, i want to thank you. good morning >> thank you >> thank you >> it is good morning for everybody. hopefully. well we'll see coming up, we are monitoring the events in vietnam where kim jong un are set to speak she will weigh in on the nuclear summit in vietnam. shus-china relationship. other things "squawk box" will be right back. does request wit imagine traveling hassle-free with your golf clubs. now you can, with shipsticks.com! no more lugging your clubs through the airport or risk having your clubs lost or damaged by the airlines. sending your own clubs ahead with shipsticks.com makes it fast & easy to get to your golf destination.

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and i think that you will have a tremendous future with your country, a great leader. and i look forward to watching it happen and helping it to happen and we will help it to happen. >> that's president trump speaking moments ago to the leader of north korea, kim jong-un, as they sit down for this long-awaited dinner let's welcome senator joni ernst of iowa. senator ernst, thank you very much for joining us today. >> my pleasure thank you. >> we'll ask you first about the news of the morning as the president sits down with kim jong-un. you thoughts on what you anticipate, what you expect, and what you would consider success.

>> i think success as we define it overall is the denuclearization of north korea. i am pleased that the president is sitting down with kim jong-un. i do think that is an important part of this process but again, ultimately to define success, it is denuclearization. and north korea has to commit to that >> this mixes in pretty closely what what's happening with china. china is always the third party involved as someone who can help us with north korea if they choose to slow things down that gets us to the china trade talks. obviously this has played out in your state with soybeans and other issues that have gone there. what do you think about where we stand in the trade talks what would you consider success on that front? >> well, success is if we can get a much better deal with china than what we have experienced in the past. our iowa farmers, they do stand behind the president they really believe that this

needed to be done. and they wish that this would have been done years ago however, they want to see these trade talks wrap up and we want to see a deal in place they consume a lot of iowa soybeans we want to see those talks progress what we have heard is there is substantial improvement in those trade talks as they go on. and i am very hopeful that we'll be able to wrap this up. i'm glad that the president did not put on that 25% tariff additional he's holding off on that that's a good sign that perhaps we are starting to see the wrapup of this deal. >> senator, you've been very focused on pork barrel projects, anything you think is using taxpayer dollars inefficiently what do you plan to do on that front? >> well, we have a number of initiatives there. one is the presidential perks bill which is an allowance,

modernization act for former presidents as they leave office. what we have seen is that taxpayers are footing the bill for their staff, for postage, for their phone expenses, their travel expenses, office. you name it, the taxpayers are paying for that. and many of our former presidents receive tremendous book deals they get expensive speaking engagements. they charge enormous fees. so why is the taxpayer absorbing that what we're doing is putting a limit to the amount they can charge our taxpayers and that would be for any future presidents we also have the billion-dollar boondoggle act we're working on which would require the director of the office of management budget to produce a report annually, give that to congress which will explain any of those projects -- federal projects that are a billion dollars over their original cost estimate as well as five years beyond what their target completion date

was. we are wasting a lot of taxpayer money on projects that are going on way too long. one example is the california bullet train which is 13 years overdue. >> i saw your tweet on that. >> yes $44 billion beyond the cost estimate >>do you have support from you colleagues in the senate >> we do we do. ma matter of fact, the presidential perks bill is co-sponsored by a democrat maggie hassan of new hampshire. we are getting bipartisan support on a number of these bills. we all believe we can do better for the taxpayers. >> senator, let me ask you, the house passes legislation the claim of a declaration of emergency on the border. that now goes to the senate. according to senate rules, i know it has to be fast tracked how will you vote on that legislation? >> well, i am leaning no on the resolution of disapproval which means that i would support the president. and i do want to go through the

text of the bill and see what is being proposed the vice president joined us at lunch yesterday, our policy lunch to discuss the proposal. we do have a crisis at the border we do have a lot of illegal immigration going on there and of course as brought up by a colleague in my state as well we see a lot of issues with methamphetamine and so many drugs coming over the border if we can stop that at the border, it's a job well done >> want to thank you for your time today appreciate you joining us. >> thanks so much. good to be with you. >> senator joni ernst of iowa. time for a quick parting shot from our guest host are you going to do that we've been nice to you leland miller. i guess it doesn't necessarily mean it's a negative in summary, i think what i heard from you is that denuclearization is a pipe dream

and there could be progress made, but it's going to be viewed as a failure because we don't get denuclearization so there's no way to win on this >> but you can play the game for as long as you want. denuclearization even if i was wrong and there is going to be denuclearization, this is a decade-long process to take apart north korea at the level of sophistication -- >> so you view this half full then >> they're going to keep talking about denuclearization those are the talking points this year and it'll be next year too. we aren't going away from that soon >> we'll keep your views in mind as we see it criticized, probably, over the next week or so thanks to leland miller for joining us for the hour. when we return, our guest host for the remainder of the morning is larry bossidy he joins us to give his thoughts on the issues of the day plus the hot sector he's been in and out of it's one you might not anticipate i certainly didn't little later, we're going to debate jay powell's performance on capitol hill yesterday.

and why it may be a no-win situation. stay tuned this is "squawk box" right here on cnbc. it's absolute confidence in 30,000 precision parts. or it isn't. it's inspected by mercedes-benz factory-trained technicians. or it isn't. it's backed by an unlimited mileage warranty, or it isn't. for those who never settle, it's either mercedes-benz certified pre-owned,

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china trade talks. the nuclear summit and the fed's take on the economy. issues keeping investors on edge we'll discuss america's path for growth straight ahead. retail detail. a number of big earnings reports this week. we'll talk lowe's, best buy, and whether or not oprah winfrey can help weight watchers bounce back plus the latest on brexit, emerging markets, and more with a man who runs more than $300 billion in assets. the second hour of "squawk box" begins right now ♪ live from the beating heart of business, new york, this is "squawk box. >> good morning. welcome back to "squawk box" here on cnbc i'm andrew ross sorkin along with becky quick and joe kernen. guest host larry bossidy is here so much to talk to him about and

get his thoughts on the president and leader of north korea this morning take a look at u.s. equity futures at this hour you're looking at the dow off about we'll call it 85 points. s&p 500 off about nine points. the nasdaq looking to open off about 26 points. meantime, as we just mentioned, president trump meeting with north korea's leader kim jong-un later today to talk denuclearization and so much more. they just had a photo op headed into dinner very shortly want to get over to eamon javers who's in hanoi right now eamon? >> reporter: good morning, andrew it was all smiles and hand shakes between the two leaders here as they opened the second summit between north korea and the united states during the course of president trump's two-year presidency. the two leaders met in person. they're engaged behind the scenes right now in a one-on-one meeting. we expect soon to see a social dinner later this evening here hanoi time the president made an economic

pitch to kim jong-un saying if he denuclearizes and joins the family of nations, he has a chance for great economic success in north korea and he pitched this as very much a personal relationship between himself and the leader of north korea. here's what he said. >> i thought the first summit was a great success. i hope this one will be equal or greater. i think the biggest process was our relationship really a good one. >> and andrew, reporters on the scene tell us they asked the president a question about michael cohen's expected testimony later today in washington, d.c. the president was asked if he had any reaction to that testimony. he shook his head but did not say anything in response to that question we're going to see this remarkable split screen moment in this presidency later today as the president's former personal lawyer testifies up on capitol hill at around the same time that the president is behind closed doors with the

leader of north korea trying to negotiate denuclearization of the korean peninsula >> can we just talk about that for one second which is to say, you know, i imagine for the president it's going to be a bit complicated to be in the middle of this dinner while i would also think he would want to be getting updates about what's happening on the hill and what michael cohen is saying about him >> reporter: there's going to be questions if the president will stay up late here hanoi time to watch this on television he's already been tweeting about michael cohen today. he's tweeted some skepticism of michael cohen. over the past several hours getting ready for this face-to-face session and one of the key foreign policy priorities of his presidency so it's all coming to a head in one 12-hour period of time here in hanoi >> eamon javers in hanoi, we

will be seeing a lot of you throughout the day thanks all right. our guest host today is larry bossidy, former chairman and ceo of honny well and a cnbc contributor. you can see on the screen you're in a box with the president. that's pretty good company you've got there in terms of the world stage here but you've been a former ceo of honeywell and ge executive what do you make of what's happening with the president and what he's trying to accomplish in north korea >> i think it's more of a dog and pony show than any concrete signs of progress. i don't even think we define denuclearization the same way. >> right >> i mean, they have one interpretation i think we have quite another. so i think you got to say that a meeting like this is fine. i mean, it may be an inch or a step forward, but i don't think a hell of a lot will come of

this >> in terms of economic issues, it obviously plays into our negotiations with china. to a large extent or that sort of exists on its own, i would think, too, although president xi is obviously going to be watching >> i'm more optimistic with the trade talks of china you have to remember, we have a 375 billion trade imbalance with china. if we impose tariffs on the degree over $500 billion worth of imports to this country, this hurts them i think they're at the table in a serious way. i'm more optimistic while it isn't going to happen in the next week, that there'll be a deal with china that will put us in a better place than we are right now. >> so for the economy and for the global economy, that will be a positive i guess the global economy could use a little bit of a tail wind with some of the head winds

when you talk to your friends, people who have skin in the game around the globe, it's slowed a little in a few places has it not >> it has slowed certainly with china, for example. you never know what the numbers are coming out of china. but i think there's reason to conclude that it's slower than it was europe has been slow with the 1% gdp kind of thing in germany and france the two big economies over there. but still pretty good. i think we tend to overreact if you look compared with last year, it's certainly softer. if you look at an absolute basis, i think it will be maybe 2.2 in this country. so i think we're going to have a pretty good year economically. >> so if you were making decisions as a ceo, would you be looking at retail number -- retail sales number we've got. or would you be looking at the job gains we've got? they seem to be divergent. >> i think job gains are more solid in terms of a peek at the

economy. they were surprising i might say. but i still think the economy in this country is going to be good as they say. not as good as last year but if you look at housing, you look at car sales. still had good numbers in terms of history so i think we're going to have a pretty good year >> if you were out on a golf course with jay powell and you know on a golf course everyone lets their guard down. what do you think he would tell you really happened between october and where we are now >> i think he would say to me if he were honest that i learned a lot in my first year and that i've overcome some of those weaknesses and i'm in a good trend now. i hope you'll be patient with me >> so was there a communications problem? or was there -- was the policy flawed in that last part >> there was a lot of discussion as you know in those days in terms of different opinions on the fed. and i think he tried to weave his way through a neutral

position and it didn't come off very well. >> and you think that he is -- has learned from that and is in a good place policywise and he's up to the task, he's grown into the job in a better way? >> i do. i thought he handled himself very well. he'll get by that as well. i thought his answers were measured and effective i think he's doing a good job. >> we've been -- i didn't realize i'm sort of interested now, too, but we've been talking about congresswoman alexandria ocasio-cortez might get a chance to question jay powell are you interested in that, and roo u? >> just as a pure fascination, yes. >> if it's theater as you might imagine. >> like a rubber necker, right how many cars are involved in that >> how many people come from

being a bartender to being able to question the fed chairman >> we have a live shot right now, the beginning of the dinner between president trump and kim jong-un. leader of north korea. mike pompeo there. mulvaney >> there's the u.s. side probably the translators looks like a translator and two additional guests on the side of kim jong-un as well. >> want to try to listen in? >> this is the dinner that we've been awaiting to see what happened we had heard those comments just before where president trump was pretty -- promised things about economic development we'll see what comes out of this we'll see what they have to say. this is some small talk,

pleasantries taking place. a photo op as we get ready for this dinner. you say you're not anticipating much >> yeah. i mean, i think they'll both pronounce it success for the summit then maybe there will be some progress but i don't think the end game is in sight. >> let's listen in to what the president is going to have to say. i think he's making some comments and maybe being interpreted right now too. >> thank you very much, everybody. see you tomorrow >> see you later that was a quick comment >> let's get back to the state of where we are right now. do you think -- this is an overall question do you think that the -- some of the policy moves that we made -- that president trump made and congress made as well as deregulation, do you think that was front end loaded and

keynesian in nature? it's above where we were it's above trend but if we grow at 2.2%, are the best days behind us for the economic boost we got for the tax reform >> no. on a longer term, certainly not. i think 2020 is dependent upon what occurs this year on a number of fronts includesing the trade talks, et cetera i think the tax cuts will be productive i think there's a lot of discussion about these buybacks which is always controversial. in other words, when you buy and the stock goes up, you look smart. >> just how big a piece of the day-to-day market has become buybacks there's a fascinating article.

i don't know if you saw yesterday this idea that effectively forget the real investment it isn't the investor in the market right now it's actually the buyback program that's in the market right now. >> i mean, i believe in private markets. and things will take care of themselves over time they'll look good in some cases, not so good in others. you know, you either invest in your business which you'd like to do. or you can't just give money to employees and be non-competitive on the one hand. i think stock buybacks help share owners, but they'll always be controversial >> let's bring in eamon javers he's in hanoi. a little unclear as to what expect later president trump said we'll see you tomorrow does that mean we won't see a press conference after this? >> reporter: the president said earlier today he hoped to have a press conference tomorrow. so we'll see whether that, in fact, is the case. but what struck me about those images we just saw was the intimate setting there between the two leaders.

you just saw their top advisers and a couple interpreters. on the north korean side we had j kim jong-un and the minister of foreign affairs there also joined by the secretary of state on the u.s. side and mick mulvaney, the chief of staff for president trump. and that's it. a very small group there we're told it was a smaller group of reporters than usual who were allowed in that room to view that intimate mealtime setting. oh, to be a fly on the wall of that conversation as the evening goes on here in hanoi as the leaders try to hash out what would be the future relations between the united states and north korea, becky >> eamon, thank you very much. that may be the last we hear from the president, president trump and north korea's kim jong-un tonight. we will see. again, this is just moments ago as they sat down for this long-awaited dinner, very intimate dinner. it's not just the two gentlemen.

there are two people from each party there to monitor and kind of bring back what they hear from these talks taking place as well the president had said earlier they anticipate having a press conference tomorrow for all of this but we will keep you up-to-date with anything else we hear on this front coming up, a lot more here on "squawk box." earnings just out from best buy. the stock surging on that news we will tell you about it. bring you the details and talk retail in just a minute. that stock up 10%. plus, can oprah turn around weight watchers? that stock and other movers coming up as well. stayun ted you're watching "squawk box. a lot more ahead lieve it. that we just hit the motherlode of soft-serve ice cream? i got cones, anybody wants one! oh, yeah! get ya some! no, i can't believe how easy it was to save hundreds of dollars on my car insurance with geico. ed! ed!

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welcome back, everybody. let's get you caught up to date on what's happening at this hour we are watching lowe's this morning. lowe's beat estimates. revenue did come in below estimates but they do notice a strong surge for comp sales for january. and u.s. comp sales closed the gap to a certain extent from what we saw from home depot yesterday. home depot has always outperformed but the gap got narrower with a report today home depot yesterday, one of the big drags on the dow lowe's shares indicated up by

1.5% the justice department will not appeal the ruling of the acquisition of time warner the government was unpersuasive in seeking to overturn it last june earnings just out from best buy. best buy earning $2.72 a share compared to estimate of $2.57. revenue also beating forecast. comp store sales rose more than expected and raised the dividend to 50 cents a share from a 45 cents. a couple other stocks on the move this morning has been a brutal few hours or oprah and her stake in weight watchers which fell by $48 million in a matter of minutes after the company reported results shares of the company plummeting more than 30%. 35% now after the earnings came up short also gave a weak 2019 outlook. oprah owns about 8% of weight watchers she was able to take profits at one point with a nice gain

probably got back at least what he put into it >> and then some you look at the gains she had made she got in at under $7 >> probably the amount she sold was probably equivalent to more than what he put in. papa john's fell pizza chain's revenue was short of analyst forecasts and that stock is up gaining but you can see had a rough six months down about 6%. coming up, best buy getting a big boost this morning after doing much better than estimates than was expected. other retailers reporting. you can see lowe's is up 2% gaining back what it lost yesterday. then later fed chairman jay powell set to testify in front of the house financial services committee today. yesterday he told the senate committee that the economy

remains strong but dangers could be brewing >> growth has slowed in some major foreign economies particularly china and europe. and uncertainty is elevated around some unresolved government policy issues including brexit and ongoing trade negotiations we will carefully monitor these issues as they evolve. >> more of his testimony and what it means for the markets is straight ahead "squawk box" coming right back people know aflac... aflac! ...but not what they do. so we're answering their questions. aflac is auto insurance, right? no. uh uh. is it homeowner's insurance? no... uhuhuhuh! is it duck insurance? nope. ahhh! do they pay me money directly when i get sick or injured? yeah. aflac!

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welcome back some key retailers reporting this morning including lowe's and best buy lowe's revenue was just shy of what the street was expecting. best buy reported better than expected earnings, better than expected revenue, better than

expected comp store sales. oh, yeah, they raised their dividend as well as a result that stock is up sharply by more than 7%. lowe's is also up 2.8% joe feldman is senior director at telsman what do you want to talk first >> we can start with best buy, i guess. they were a little better. >> that was good news across the board. you'll see them down sharply when it misses and up as you saw this morning when it's up. are people still trying to figure out if it's a good long-term play >> i think that's been the issue with this one. you do see a lot of volatility but they've consistently been able to beat we actually liked it heading into the quarter i think expectations were low coming in which is why you're seeing a jump in the stock the guidance was really good better than what we expected bracketing the consensus numbers

and going beyond on the high end for both eps and comp. >> there's only five buy recommendations versus 19 holds and 2 sells on the street. are you one of the buys? >> we are not. we did like it in the print. they had a good fourth quarter given what we heard from costco and others about electronics it was a good performance we figured best buy would be taking share i think that's going to be the case our concern has been there's a lot of investment spending ahead for 2019 now seeing this new guidance today, you know, we have to start to think about that. because obviously the numbers are coming out a little bit better than what we had expected >> joe, i have to say, if you look at best buy over the last few years, it's kind of been amazing. they basically pulled themselves off of death's door and found a way to compete when there were so many doubters >> absolutely. i mean, they continued to put up good numbers they told us that they're going to expect a very low single digit type same store sales rate figure they're going to have a flattish up operating margin

and they've consistently put that up. quarter after quarter and year after year and i think there are a lot of people that figure that the gas had run out of the tank. but it looks like 2019 should be another decent year for them >> home depot was one of the big decliners on the dow this morning you see lowe's higher even though there was -- depending on if you look at it glass half full or empty, you can paint it either direction. looks like the street is saying this is good news especially because they are maybe out-performing -- maybe not out-performing home depot but closing the gap. what do you think? >> definitely seems like we got that in the month of january, they said they did 5.8% comp in the u.s. that's better than what home depot reported yesterday that was a first time in a really long time that we've seen that but i think what -- you have a different story with each one. home depot seems to be a little more top-line driven right now where lowe's everybody is expecting it to be the big driver of results.

so if you can get the top line at lowe's to be in line to slightly positive and ahead of expectations like we saw today, that's a good thing for lowe's i think that's where the variants with the two stocks are. i feel like people including us that if lowe's can put up some good numbers and operate more efficiently within the stores and drive more profitability to the bottom line, that's going to be a good result for them for 2019 that's what people want to see i think that's why you're going to see that and the stock's up even this morning there was definitely some reflection of that in the numbers. >> joe, this is larry bossidy. i followed home depot and lowe's for a long time. obviously home depot has outperformed them far long time. do you think the changes at lowe's is fundamental for the future or is this just a return after some disappointing quarters in 2017 and '18 >> i still think home depot is the leader of the pack they're best in class. they execute and operate so well i think lowe's has an

opportunity to close that gap. we don't expect them to completely close it, but we expect them to narrow it if they can narrow it and bring up their profitability over the next year or two, that will certainly help the stock and from that perspective, you'll see that. we don't expect them to overtake home depot by any means in terms of size or scale, but there's an opportunity to grow a little more aggressively in terms of the bottom line. >> you downgraded home depot today to a market perform. where do you rate lowe's and if you think they could out-perform, what happens? >> we have an out-perform on lowe's mainly because regardless of what you think of the economic environment or the housing market, we think lowe's has a lot of initiatives in place to drive profitability this year. >> okay. joe, thanks for joining us today. joe feldman from telsey advisory group. coming up, we're going to speak to devan kaloo for

aberdeen standard investments. take a look at u.s. equity futures at this hour we are in the red off 67 points. back in just a moment. [ phone rings ] hi, tom. how's the college visit? does it make the short list? yeah, i'm afraid so. it's okay. this is what we've been planning for. knowing's important to you is why 7 million investors work with edward jones. onmillionth order.r. ♪ there goes our first big order. ♪ 44, 45, 46... how many of these did they order? ooh, that's hot. ♪ you know, we could sell these. nah.

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still to come on "squawk box" this morning, we are following developments in vietnam where president trump is meeting with kim jong-un we will be getting the latest on what's being discussed and what it means for your money in just a bit. and we're watching earnings from retailers this morning we've got lowe's, best buy, and other names reporting. the numbers and other corporate headlines straight ahead plus, day two of fed chairman jay powell on the hill you can watch all the fireworks right here on cnbc "squawk x"etnsig aer isbo rur rhtft

welcome back to "squawk box," everyone checking on the european markets, you are going to see they're mostly red arrows on these major markets. the biggest decliner were stocks in the uk. let's get to wilfred frost he's been following some of the developments on the brexit front this morning >> sterling is back above 1.33 against the u.s. dollar today for the first time since june last year as theresa may preempted probable defeat in the house of commons today on brexit

amendment votes and probably further resignations from her government or her party. she has now offered three votes on the 12th, 13th, and 14th of march respectively the 12th of march vote will be on her deal. if that fails, on the 13th there will be a vote on whether to approve a no-deal hard brexit or not. and then on the 14th a vote whether to extend article 50 and delay brexit the market is interpreting no deal is less likely and had been gaining steam as part of the opposition leader jeremy corbyn said they would back the idea of a second referendum. a response aimed at stemming further resignations from his own party. there will be more amendment votes today in parliament, but the sting taken out of them by yesterday's development. and sterling as i said at an eight of nine-month high >> are we getting to some sort of end game here

>> not yet, but the prospect of no deal has fallen again in likelihood it's been yo yoing in likelihood the last couple of weeks but suggests that has fallen in doing this, offering this vote which is caving in to remainers' demands, she's hoping that will lead the brexiteers to see hers as the only way left. >> if the second vote fails on the second day and that would be the idea of just a hard brexit, don't worry about a plan the third day, if they get to that vote and decide to extend, is it up to them alone. >> the eu would have to agree. >> it was only clear if he would offer extension if it looked like they would take referendum? >> i think that was implicit in it the point being with the extension, it's only going to be short-term to june

they're not going to want to let it go past the dates of elections. and that is an important point to note. that, yes, the pound has rallied significantly the last couple of weeks, but the extension of it is only for two or three months likely to put us back where we were six weeks ago two or three months left and nothing really solved. that's why you haven't seen a further rally, for example, and we're still stuck. the other wild card people talk about this morning is if all three votes fail so the first two pass without passing if you see what i mean third one, extension -- >> that makes the hard brexit more likely once again >> where does this leave theresa may? is she going to weather this storm? >> the betting odds are suggesting that once brexit is sorted, she will be under a lot of pressure. because she has angered both remainers and levers and dragged things out either way, she's already made a

pledge she won't stand in the next election. so her authority which is not soaring at the moment anyway once brexit is solved as an issue, would be at a new low, i would imagine. >> wilf, thank you the morgan stanley capital international index, take a quick look at it emerging markets, the stocks are in the spotlight due to the latest u.s./china trade negotiations doesn't look a whole lot different than some other markets. joining us now to discuss all things emerging markets is devan kaloo, head at aberdeen standard investments which has $736 billion in assets under management so i figure you'd end up at emerging markets one way or another since i think you've got to look everywhere with that much money under management. that's a big responsibility. things are better in emerging markets. it's amazing, but i think what

powell does here or central bankers do around the world has a big effect on emerging markets because the last thing we need are rates going up and currencies going down. and we started to see a little bit of that, i think, as we headed into fall and winter last year but it's weathered that storm and is now a good place to be. >> i think so. i mean, i think when you think about what's happening in 2019, you have to put in context of 2018 three big issues in 2018 issue of the dollar, slowing china, and the third being the trade protectionism war. and i think 2019, those things look incrementally better and you get better value for emerging markets so yes, we think it's better however, it's still not out of the woods yet. it's still not clear specifically with regard to the third issue. protectionism. necessarily a good deal will be struck >> just slowing growth >> and overall you have global growth slowing >> as far as valuations go, still cheaper than developed

markets. >> absolutely. but i suppose when look at valuations on the global basis, that's one of the big issues is the u.s. versus everything else. so effectively the u.s. looks relatively expensive versus just about any other market you compare it to. >> you know, one thing when you look at emerging markets, they're fragile. in other words, if there isn't a china trade deal, if there isn't a brexit deal, if these protectionism things continue, they seem to hurt more than everybody else in terms of this condition. don't you have to consider it somewhat fragile >> well, i think one of the key things to remember with emerging markets is more often than not, it is the foreigners on the sentiment. and what's happening globally has a big impact on that there are one or two markets where that's different such as domestic market in china where the domestic investors are the key drivers. perhaps that's one of the areas

you should be looking at the asia market offers good value after the collapse and if china is serious about deflation and specifically focused on domestic, then naturally the shares look interesting. >> you have people on the ground in thailand, indonesia, india, and others monitoring elections that are important to your investment in those areas. i mean, it would seem to me that you'd need some professional advice if you're out watching cnbc this morning. if you're worried about ---i i have no idea who's running in thailand or indonesia and you would need some expertise, i think. what negative surprises could happen at this point >> in thailand it's the switch to democratic rule and i think the issue there is more that that happens peacefully and efficiently >> okay. >> i think the bigger issue in terms of elections coming up is the bigger one in india whether or not upon mr. mody is able to

win majority again and there will be reduced majority and maybe less than that >> what's your position on that specific issue >> our expectation is that the big reforms have been done so whoever comes to power is going to have a better time of it but you will come back with reduced majority but will not lose the election. >> brazil is a positive. surprises in elections can be a positive >> absolutely. if you take brazil as a good example of that. got a fairly radical economic reform being proposed. and if he delivers on just half of those things, that would be much better as well. >> some of the stocks have not been greatly welcomed as of yet, as you know. >> well, i think one of the issues perhaps you need to make a division between the economic

policies and social policies i would say socially they would be open for some debate. with regard to the economic policies, those are, i think, very solid >> so i guess the bottom line, they're cheaper. but they're more fragile the united states is more expensive. but you know it can make i think more educated decisions. i don't think you're going to get blind sided quite as much, perhaps, here, right is it worth paying the premium valuation? >> i would say two things. first of all, when looking at markets more generally, there's the liquidity overall. and volatility is rising that affects all financial assets including stock markets the same with the rise of populism ultimately boils down to the issue of state intervention. state intervention is rising whether that's the form of protectionism, form of redistribution, increased taxes. i don't think emerging markets are necessarily worse off than developed markets. >> yeah.

we have an election here with some of those same themes you were just talking about. >> you're going to believe the polls heading into that? >> exactly devan, thank you are you going to get to a trillion i guess you're working on that >> i was hoping to >> okay good good luck. when we return, the fed and your money a recap of yesterday's testimony and what you can expect today from the hill when fed chair jay powell goes before the finances committee. plus we head back to vietnam for the latest developments on today's meeting between esentrp pridt umand kim jong-un. "squawk box" will be right back. this is huntsville, alabama. aka, rocket city, usa. this is a very difficult job. failure is not an option. more than half of employees across the country

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a new samsung galaxy. click, call, or visit a store today. . welcome back to "squawk box" this morning right now here to discuss the fact that the fed has had since the late december rally, peter boockvar is here also cnbc markets commentator mike santoli is in the house steve liesman is also here i don't think your mike is working perfectly yet so we have to hold off on -- >> it's good now. >> is it working can you talk talk >> stop. don't mess around with him >> okay. it's nice to see you peter, real quick, we're going to hear from jay powell later today. is aoc really going to ask

questions? is that how that's going to work >> i'm not sure she's on the committee. >> i thought that's what we were talking about. >> she's on the committee. >> and he kind of dissed her yesterday, powell did. so she may -- she usually doesn't shy away from -- if i were her, i would. she doesn't shy away from a fight. >> her issue is obviously income inequality 80% of stocks are run by 20% of the people and the fed has helped to raise asset prices i wonder if she makes the connection and asks about it >> mike santoli, i saw you talking yesterday and we were having a debate about buybacks i wonder how much you think that may come up in the conversation? >> it'll come up because it's a platform to say, here's what bothers me about the economy and the financial system and that's what the committee uses it for as to whether this is really a fruitful conversation to have with the fed chairman, i kind of

doubt it is. it's fascinating the way buybacks have been isolated as this big villain that seems to capture a lot of the unease about all these other issues whether it is income inequality, whatever it is it's very strange as a focus of all the attention. >> okay. mr. liesman, now that your microphone is working -- is it working? >> i believe it is. >> what are you interested in today? >> i'm interested to know -- we hear aoc i don't think aoc is the whole of the democratic party. and certainly not any part of the republican party i always sort of take a step back and say where do -- where does congress want to go with the fed here what are the main issues on the table? yesterday there were no issues on the table because when the fed is not hiking or pausing, there aren't any real concerns in congress. they just assume -- they don't

worry too much about inflation one question in which youguys had a good curtain raiser on about the issue of inflation targeting. powell tread very carefully there on this issue of raising the inflation rate i think powell is pretty aware if they do raise that inflation target, that it's going to be demagogued pretty forcefully from people saying wait a second the fedwants my cost of living to go up by more now than it did before that's not going to play very well >> hey, peter, you wrote the most interesting take of all the takes yesterday on the testimony. i think your end point was that it's almost as if they've added a third mandate for the fed and that is market volatility. they want to tamp down on that what makes you think that? >> well, in the statement -- in his prepared speech, he talked about the positives of the labor market and then they talked about cross currents and conflicting signals. and the number one signal was the financial tightening that we saw in the latter part of last

year well, they think it's some externality that causes the tightening of the financial conditions it's the tightening of policy that causes the tightening of financial conditions it causes credit spreads to widen and stocks to fall so they're really chasing their tail and i thought it was interesting that that was their number one -- that was their first worry. >> before a slowdown in -- >> in china and europe >> they'd be more focused on the idea the market reacted badly. which tells us what in terms of market participants, mike? >> well, i think it's been pretty standard understanding of cycles that the fed will tighten until something breaks that's how recessions happen now what you have is the market especially last year was anticipating the moment when the fed was going to, perhaps, break something. and that created its own sort of feedback loop right here also i think what's interesting is you have a lot of things going on before or setting the scene for the fed to be kind of cast as the problem here

the market doesn't love we have a global slowdown. the market doesn't love we have peak earnings growth the idea that we have corporate bond yields reaching a three-year high. all this stuff is in the backdrop but you can isolate the fed. because with a few words they can change that story. that's why you can't change the rest of it you can't make china grow faster but you can throw a tantrum and with a shift of words. by the way -- >> mike, i want to add that the market turned around the bottom of this market was 1226 you cannot find any fed speak at all around 1226. in fact, i happen to know the fed was quiet around then. it's almost as if the market is this petulant child and decided it had been bad enough that mom was going to give me what i wanted that i was going to get dessert without eating the broccoli, for lack of a better metaphor here what you see if you look at a timeline of this is that from

12/26 before it's affirmed on 1/3, the market anticipates this turn around and then at the very end there you can see this whole rally has been post that but the market bottoms on its own without any fed speak at all to speak of. >> also that's because the markets are on internal dynamics it being december and everybody forced to kind of participate. and we get to exactly 20% on intraday loss. and for more times than you would think is coincidence in history. we've had a just less than 20% drop in the stock market without a recession. >> can i ask something it seems that -- we can relitigate history -- >> and we will >> the point of trying to relitigate history is to try to learn from it to try to understand what he has learned from it -- >> who's he? powell >> yes, sir. and what he will therefore do as a result of it

>> we know that powell and the fed have learned a lot from the taper tantrum. which was that they need to be very sensitive to how they even float trial balloons and we know he was a little careless he was careless with the balance sheet being substantially smaller. he was careless with autopilot and i think he's probably learned that he needs to be very sensitive to these things and watch carefully. on the other hand, what we've learned from the actual balance sheet runoff, that remains something we're going to relitigate for awhile. what peter said notwithstanding, market rates have fallen while the fed has reduced the balance sheet. and there's a lot of technical reasons for that but the idea that the balance sheet runoff has been responsible for some selloff in stocks, that's something that's a matter of huge debate. >> don't you think, though, at least in the last six months the market's got more confidence in

powell in other words, that he is going to be acting in a way which is going to be conducive to growth in the u.s. economy? >> that's two narratives is it confidence or is it -- >> i'll let peter answer but the only confidence the market has is the fed is on hold. they weren't happy with him before >> the market has little confidence when he's tightening. and they love him when he's not. >> okay. gentlemen -- >> we'll see if he loves them when they start to tighten again. >> we'll watch for his testimony. we'll see if it pans out the way we just spoke about. peter, nice to see you mr. santoli, mr. liesman, thank you. come up in the next hour, a lot more ahead on "squawk box. the latest from hanoi, vietnam, where president trump is meeting this moment with kim jong-un wendy sherman joins us to discuss what the outcome of this meeting could mean for the global economy, trade with china, and so much more. and later, why guest host larry

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with north korean leader kim jong-un as we speak. jerome powell getting sered in the senate yesterday. >> banks want to get bigger and ri richer and everyone else pays the price. >> will he end up well done after today's testimony? and it's a big morning for retail stocks. some of the industry's biggest names moving on fourth quarter earnings we'll run them all down as the last 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" on cnbc. i'm joe kernen along with becky quick and andrew ross sorkin our guest host this morning is

larry bossidy. i just saw comments from jpmorgan about general electric. this is about the most recent sale which most people applauded but we'll ask you, that'll be a little bit of a tease about what we talk about when we do get a chance but in the meantime, let's check out the futures right now which have been in the red all morning long down 76 points similar to yesterday the dow actually tried to make a stand. was up for awhile, but was down lower. the s&p down eight, almost nine points treasuries were lower again, the yield. not the instruments themselves but 2.63% now on the 10-year we are right at 3% it is a very big morning for retail stock want to show you what is going on we've got a lot of movement across the board best buy out with fourth quarter results. compared to the consensus

estimate, that stock up. look at it almost 10%. a little over 9% right now revenue beating wall street forecasts. and best buy also saw comparable store sales rise much more than expected it raised its quarterly dividend to 50 cents per share from 45 cents. lowe's beat estimates by 1 cent. revenue and comparable store sales did come in below estimates, but lowe's is noting a strong surge in comp sales for january. and that stock up over 4% right now. and there's shares of campbell soup this morning. beating estimates for the latest quarter by 7 cents with adjusted profit of 77 cents flat organic sales and profit margins also fell. that stock up almost 6%. it's been a highly choreographed evening in vietnam this morning president trump meeting over dinner right now with north

korean leader kim jong-un. eamon javers is there. few surprises here and there what have you taken away as the biggest news so far? >> reporter: that's right. we've seen an intimate meeting here between president trump and kim jong-un. that dinner as you mention is still going on so they are behind closed doors. each man with two of his top advisers and interpreters in the room here in hanoi the president, though, has been making his pitch to kim jong-un today as an economic pitch as to wha could happen to north korea's economy. similar to what happened here in vietnam. here's what the president said earlier today. >> i think that your country has tremendous economic potential. unbelievable unlimited. and i think that you will have a tremendous future with your country. you're a great leader. and i look forward to watching it happen and help it to happen.

>> reporter: it's been a spectacle here we expect to see one more movement here tonight and then they'll button up for the evening and carry on again tomorrow we'll see whether we get the opportunity for reporters to ask any questions of the two leaders. the two reporters who asked questions during the hand shake between the two leaders were subsequently excluded from the dinner so the white house putting out a statement saying that that's due to the sensitive nature of the conversations that are happening between the two lead ners that room so we're not sure whether we're going to get the opportunity to have the two leaders respond to questions. the president was asked about the upcomie ining michael cohen testimony today. he shook his head but didn't say anything >> you know, the issue is we're still waiting for tomorrow that's probably when we'll hear the next word about what happened tonight, eamon?

>> reporter: yeah, that's right. what they've done in the past, we were in argentina with the president when he was meeting with the chinese, for example, and as air force one is gearing up to go, the white house aides huddled and put together a statement to give us in the press adds to what had actually transpired in the room i expect we might get some readout tonight once this is said and done once the president gets back to his hotel and tomorrow we'll have another day of events here in hanoi. so we'll wait and see what happens between the two men during the course of those events as well >> hey, eamon. if you stay there friday, the weekend comes even earlier, you know >> reporter: i'm so completely upside down, joe i don't know whether it's a weekday or weekend right now >> i think it's like 12 hours, isn't it >> reporter: yeah. we're 12 hours ahead of you guys it's wednesday night here. >> think about that. for you with your tweets and everything else, i mean -- >> reporter: right. >> he'll be starting the weekend when you do. >> i was just going to say every weekend i start 12 hours

earlier than you which is not fair but live is unfair >> reporter: we live in different time zones anyway. i've got my crack social media team on top of that tweet. continuing this discussion to talk more about the trip to vietnam and the nuclear summit is ambassador wendy sherman. she served as north korea policy ambassador what do you expect we're going to hear tomorrow morning as we talk about being 12 hours behind or ahead >> i think the president has come to make a deal as he likes to make. he certainly wants to divert he may not have answered the question to the press about michael cohen, but he tweeted about it this morning when i wish he would have been focused on getting ready for this historic meeting with kim jong-un. >> in truth, it has to be a distraction. >> absolutely it is. clearly. he's tweeted about that.

i think kim jong-un will put something concrete on the table but it won't be much maybe to dismantle some of the facilities at yongbyon i think the president is going to do a political statement at the end of the korean war. i think he's going to open liaison offices with korea i think he may encourage some waivers to sanctions in south korea so they can get going with the industrial park and the railway between north and south korea. but i think the people who are going to be really happy today are xi jingping of china and vladimir putin of russia >> let's speak about that. i know as you look at these images right now, pictures you probably thought would never take place between a u.s. president and this leader. is this is a positive for you? given the advice that you've offered previous presidents on this topic >> well, look. president clinton was ready to go to pyongyang if we could cut a deal at the end of the process, not the beginning.

i supported these two guys getting together because they both think they're the only ones that matter. and maybe it could make a breakthrough these things only work if you do the detailed negotiations. they're having this dinner tonight. steve beagan who is actually doing the nitty-gritty negotiations isn't in that dinner and although it may be a social dinner, the real work is the work that steve is doing >> to the degree that the market and economy are focused on this, but they're focused on this relative to a bank shot to china. jingping is watching this thinking what? >> he is thinking, well, first of all i didn't get a tariff increase because the president wanted to make sure we had good relations as he went into north korea summit i'm sitting here holding the leverage he's thinking, i'm responsible for the north korean economy, so i hold the final decision about whether this proceeds or doesn't proceed. i'm glad the president's making peace and really agreeing that he can stay de facto exactly as

he is. which is country that has nuclear weapons and the means to deliver them so the president of china is a happy guy this morning >> so do you think this is in the best interest of the united states, this summit? >> look, larry i want the president to succeed. i don't want north korea to have nuclear weapons ofr the means to deliver them the fact of the matter is, as our intelligence community has said, it is absolutely unlikely he will do that. because this is all about his regi regime's survival. and we will have to go a very long way in this it's going to be a tough negotiation. >> can i ask you a question about regime survival not in north korea but in the united states if you're negotiating with a president of our country, it may very well be that donald trump remains the president for an additional four years after 2020 it may not if you're kim jong-un, how do you think about that relative to this negotiation >> you try to get as much as you

can before the honeymoon is over i mean, these two guys have said they have a bromance going and so before the breakup, you try to get everything you can. keep that diamond ring >> you said breakup. you think there's a breakup between these two or potential political breakup. >> there's a potential political breakup. >> then in terms of china, my other question is is president xi behind the scenes or any other chinese leader behind the scenes whispering in the ear of the north korean leader? >> i don't think it is an accident at all that kim jong-un took a 68-hour train ride through china to get to vietnam. he was really paying respect and deference to the chinese he knows where his butter is really spread. and it is with xi jingping >> what's the best case scenario for what comes out of this

>> what we really need to have here is a true ongoing, deliberate negotiation with a pace of negotiations that gets us to a more secure place. what we will see, i think, out of this summit is some deal. but that deal won't take us very far. and i believe that kim will get more than we get >> explain that though gets what? >> i think what it will get us is a step maybe to beginning to dismantle one of his major facilities at yongbyon but he will get a lot from us. and the problem with even a political statement that the war is over is that it says that the united states is disengaging from northeast asia. whether our troops leave tomorrow or leave months from now because there will have to be a negotiation process for new treaty, that nonetheless, this will add to the disengagement. >> you think our troops leave south korea in a matter of months at the outset >> i think that is possible.

i hope they don't. but i think that's possible. >> that's not officially on the table at this point. >> it is not on the table and the president said it is not on the table. but if you have a peace agreement, even if it's a political one and you're moving towards a peace treaty, it gives the rationale to say what are your troops doing here >> wendy, thank you. always great to get your perspective especially given the moment that we are in. >> thank you when we return, trading to make money in cannabis stocks with our guest host larry bossidy. he's the former honeywell chairman and ceo he'll tell us which of the pot namehes likes and why shocker of the morning for me. "squawk box" will be right back. [knocking]

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i can customize each line for each family member? yup. and since it comes with your internet, you can switch wireless carriers and save hundreds of dollars a year. are you pullin' my leg? nope. you sure you're not pullin' my leg? i think it's your dog. oh it's him. good call. get the data options you need and still save hundreds of dollars. do you guys sell, other dogs? now that's simple, easy, awesome. customize each line by paying for data by the gig or get unlimited. get $250 back when you pre-order a new samsung galaxy. click, call, or visit a store today. welcome back to "squawk box. check out share of gw pharmaceuticals which makes cannabis baked medicines expecting earnings for the latest revenue though short of forecasts. the epilepsy drug which just launched in the u.s. is seeing high levels of physician and patient demand our guest host today is larry bossidy. and larry, it says -- this is

what it says in the teleprompter tell us why you are high on cannabis stocks. >> first of all, i'm not high on cannabis but i think it's here to stay. it's an opportunity to make some money. i've been in and out of a number of them. tillray and cronos and aurora cannabis i think it's a nice investment >> you wild man. >> wait a second you just said two things is it an investment or is it a trading play because you're in and out of these things >> it's a trading play. >> because you think that what's going to happen here >> i think it's going to get legalized in most states overtime zplp why wouldn't you want to own it in a long-term basis? >> because it's going to be volatile it is volatile right now things happen every day and these are relatively small companies. they don't make any money and if they do, it's only a little bit of money now over time i will stay. but not now. >> right now you still kind of look at it as bitcoin? >> yes, i do

>> dabbling in it. >> if you have been involved in tilray, you bought and sold at the right time, you would be well off >> i want to talk about ge more than pot stocks. so you saw what happened you saw what happened with the $20 billion-plus so jpmorgan today said in an analyst note, this is not about liquidity. this is about the company raising catch by selling earnings to reduce leverage and liabilities while a core business burns cash even including health care. >> this is my friend tusa >> i also want to talk about what tusa said as well because he still has a $6 price target on general electric kept a neutral rating on the stock and saying the deal helps

to unmask the underappreciated enterprise cash burn that he sees in the $2 billion comment from jpmorgan. >> i think first of all, they're not giving culp enough credit for what he's done here. in other words, he has identified the fact the company has too much debt. there's $21 billion deal is going to help reduce that debt and i think he's going to have other asset sales. so once he gets that under control, you know, you're left with a power systems business which is under siege right now but over time is a good business aircraft engines is a great business and they got some other smaller businesses over time it will shift to growth and investment. right now he's making sure he gets the balance sheet in shape. i give him a lot of credit because he's doing that. >> it is possible to, you know, throw out the good, throw good money at bad isn't it >> yeah. you know, first of all, you got to survive

and if he doesn't get the balance sheet under control, that's in jeopardy, it seems to me >> what if it was worth $30 billion? >> he got nice earnings from it. >> so you can look at it objectively. >> pretty good price he's going to keep the rest of health care. >> normally it's not a zero sum game but maybe danaher got a good one. >> i think ge did as well. i like what he's doing there's a lot more to go it isn't over by any stretch i think the road is in the right direction. i'm confident he's going to get there. >> all right we can go back to -- did you buy all the mustang ranch things in nevada how much philip morris you got left >> it's not a matter of -- >> you are the opposite of the esg guys, i guess, aren't you? the worse, the better? >> some would suggest that -- >> for medical reasons

>> but do you have a view on pot more broadly >> yeah, i don't think it's a good idea. but i think it's going to happen and so if there's an opportunity to make some money along the way, what's wrong with that? >> it already has happened, right? might as well tax it and regulate it and try to help people you can raise money with taxes to try to help people that get in over their head >> there's other people who would say, you know, you could -- you know, cocaine is already out in the world. >> believe me, i know that argument the reductionist argument. but i know no, i know we've had your buddy on that wrote the book about it. he got a little hyperbolic on people throwing people off of roofs and stuff. but i do wonder, it's hard to measure who's high when they're driving. you know, is it great in high school years >> not a good idea but i say, you know, some people think it's attributable to declining intellect. but i still like the idea of

commercially at least having an opportunity to play in this game >> all right thanks, larry. larry's with us for the rest of the show a programming note, you can see gw pharmaceuticals ceo tonight on "mad money. that exclusive interview will come your way at 6:00 p.m. eastern time there's the gentleman that jim will be talking to coming up, getting grilled on the hill. >> i'll bet that suntrust and bbnt looked at that -- and what everyone else sees and that is the fed works for big rich banks >> was fed chair jay powell's testimony just a warm-up for what he'll be facing today in the house from lawmakers like aoc? we'll tell you what to expect from what's likely to be a heated hearing on the hill wn quk x"omg ght back so, you'll take our clubs straight to the course

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welcome back to "squawk box" this morning take a quick look at futures we are in the red this morning we've also been watching a conversation taking place in vietnam between the north korean leader and president trump this morning. dow jones looks it would open off about 72 points. nasdaq off about 30 points and the s&p 500 off a little -- we'll call it nine points for now. weight watcher shares plummeting after the company reported disappointing fourth quarter results and a weak outlook for this year.

earnings fell well short of estimates. weight watcher is predicting sales of about $1.4 billion in 2019 just a couple hundred million below the forecast of $1.6 billion. the company announced a pivot back in october from a focus on dieting to a wellness brand. in fact, rebranding itself as ww recruiting for the new campaign in 2020 had been disappointing the move in the stock impacting the fortunes of high-profile shareholder oprah winfrey. her investment has lost more than $55 million on paper. she owns about 8% of the company or 5.4 million shares. according to a recent s.e.c. filing, we should note she sold a large part of him or her stake in march when it was much higher she's still got a triple and weight watchers is doubling down it plans to tap winfrey who is

also a board member and spokesperson to play a central role in a digital marketing campaign this spring in other corporate news this morning, ebay closing in on a settlement with starboard and elliot management. both activist funds have been pushing to break that company up an announcement could be as soon as this friday when we come down, one down one do go. after yesterday, jay powell heads to the house to testify today. a job that comes with a lot of second guessing, is powell really in a no-win situation we'll talk about that when "squawk box" comes right back. nh met a burst pipe. so grant met his insurance: you are caller number 12. which didn't quite cover the steinway. but what if he'd met pure insurance? owned by members. he'd have met: lisa, your member advocate. who'd introduce him to gustav: leave it to me.

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are you pullin' my leg? nope. you sure you're not pullin' my leg? i think it's your dog. oh it's him. good call. get the data options you need and still save hundreds of dollars. do you guys sell, other dogs? now that's simple, easy, awesome. customize each line by paying for data by the gig or get unlimited. get $250 back when you pre-order a new samsung galaxy. click, call, or visit a store today. ♪ welcome back to "squawk box" right here on cnbc we're live at the nasdaq market site in times square mortgage applications, they rose 5.3% last week according to new figures from the bankers association.

the average 30-year mortgage rate fell by one basis point to 4.65%. also, take a look at this. mylan shares are tumbling in the premarket this morning you're looking at that stock off almost 10% missed on both the top and bottom lines and it also gave weaker than expected earnings guidance for 2019 and earnings just out from tjx, the parent of tj maxx and marshalls. matched the consensus estimate revenue also above estimates analysts had expected a 3.5% increase also announcing an 18% dividend hike it's day two of fed chair jay powell's grilling on capitol hill yesterday he faced the senate. today we could be in for some fireworks in the house and representative alexandria oca o ocasio-cortez otherwise known as aoc. steve liesman joins us with

more >> jerome powell's testimony today could be more contentious as he'll take questions from many new committee members some of whom are more ideological. here's powell facing new faces 16 new democrats 12 of which are even new to congress compared to 18 returning numbers of course there's a new chairperson there. i don't know if she goes by chairwoman of chairperson, maxine waters. the big showdown could be with congresswoman alexandria ocasio-cortez, aoc as she's known. in its simplest form suggests the government can just print money to pay its bills and achieve full employment. powell was asked about this yesterday. >> the idea that deficits don't matter for countries that can borrow in their own currency i think is just wrong. i think u.s. debt is fairly high at a level of gdp and much more importantly than that, it's growing faster than gdp fairly

significantly fast per >> now powell's answer is not quite responsive to mmt. because if the government just prints money, there's technically no deficit created but the effects pretty much the same as powell may have laid out. depreciates the dollar, spikes inflation, and causes interest rates to surge of course proponents say that's not the case but most economists say it would be >> we got some pretty interesting questions. and i thought toomey did have some pretty in-depth ideas with a pretty good grasp of what was going on you expect that to be repeated in the house >> here's what's going to happen i watch these things and i tell you guys then we have these guys on or sometimes ahead of time but you never know who's the guy or woman who's paying attention to this stuff. it's -- there was a comment i think it was in the times or the journal this morning that so few senators yesterday asked about interest rates that powell at the very end had to volunteer

something that he wanted to say. sometimes you get up there and the market is desperate to know what the chairman thinks about interest rates or the economy. and all they're interested in is scoring political points so you don't necessarily get what you're after sometimes in these hearings we'll be watching to see who's got financial acumen among the congressmen. >> i think becky made a good point and toomey i think his comments about inflation and it's perhaps changing the way you look at it, increasing it as the case may be was interesting. and he handled it nicely he didn't commit one way or another. >> but he knew his stuff i was impressed with toomey, just how deep he went into the balance sheet. >> the fed has to tread carefully here they have this 2% inflation target by the way, there's not a lot of scientific or research evidence around why 2% and not 2% it's simple why they're at 2%. 1% is too close to zero.

so the idea they haven't been hitting it, powell said yesterday we owe it to the public about why we're not hitting this rate. >> that's a good question too. >> and then to think about raising it -- we're going to go 2.5% to 3% great. okay you think there's going to be public support for that? the fed needs to be careful not to create a political fire storm. >> all right let's continue this conversation joining us right now with more on what fed chairman powell could be facing on capitol hill is david wessel. also phil swaigel. david, you've been a long-time fed watcher. what stuck out in terms of what you heard yesterday? >> well, i think one thing that's interesting and steve mentioned it i think it was in the journal that they didn't want to talk about monetary policy. to the extent that they weren't scoring points which is of course what members of congress do they were really focusing on the

fed's regulatory side. there was a lot of criticism of the bank merge enand sun trust there were concerns about whether the fed is doing what congress wants to ease some of the regulations and capital requirements on the mid-size banks and stuff. so i think -- and that's not surprising you know at the moment, most of them don't have any complaints about monetary policy. so they're using the forum to kind of push the fed in the direction they want in regulation the democrats to be tougher on the banks, the republicans the opposite >> what do you think in terms of what you heard, mr. swaigel? >> like david, the lack of focus on monetary policy was striking. by nature the house is more defuse there are going to be random questions and that would be the challenge for chair powell to figure out what the underlying question in. maybe if something's not well posed. i think he showed yesterday he's

really good at this testimony and addressing the concerns. so i think today will go well. it'll be interesting but it'll go well. >> david, how do you expect this inflation targeting to play out? he's not hitting his target, he has to do something. but the thing he might do could create a political fire storm. >> i think the fed has made clear they're not going to raise the inflation target above 2% even though there's some advice mostly from academic economists that they should they seem to be moving towards this notion of an average of 2% over the business cycle. which is another way of saying that when you have a long period as we have when inflation is below 2%, they're going to tolerate maybe even encourage an offsetting period of inflation above 2% that's what john williams has been pushing the new york fed president. and i thought rich clarida has spoken the vice chair will be about it. and i think powell was opening the door to that and the advantage of that is it helps them get away from the problem you siidentified

they don't want interest rates to be too close to zero. but they really don't want to challenge the ped rock of the federal reserve act which says price stability which now like it or not is defined as 2%. >> phil, let me ask you something from another guest we spoke to today peter boockvar had this idea yesterday the fed has added a third mandate and it's watching the markets. just based on the opening statements where fed chair jay powell said that they paused largely because of movements in the u.s. and financial markets, secondarily he said weakness in both europe and asia do you think that is a stretch do you think that's legitimate phil first and then david. >> i was pleasantly surprised that jay powell was so up front about that because the markets -- i'm not quite as strong as your previous guest that this is now like a third leg of their mandate you know, it was a one time situation, right the decision to hike was close

in december. they probably got it wrong as long as they're acknowledging that, i don't see them paying heed to the markets in the future necessarily >> david >> well, i think that the fed has added a third mandate, but i wouldn't frame it the way peter did. i think the third mandate is financial stability. that's why there's so much talk about things like leverage lending and stuff like that. look, the fed has always paid attention to the markets particularly when they're big moves. monetary policy works through financial conditions there was a change in financial conditions you'd be foolish not to see some signal from the markets. on the other hand you don't want to create a greenspan put and doesn't want to create the powell put whenever the market goes down, the fed backs off. so they want to say we see information from the market. we compare that with other signals we get from the economy. but we're not keeping the market

high or stable >> i'm sure you want to spend the rest of this time here we have defending modern monetary theory right? >> oh, boy >> i'm sure david is bemused we're even talking about this. he's been around so long but phil, i just want to ask you. this idea we can just print money, right i mean, what's wrong with it sounds pretty good we sort of did it during the financial crisis, right? >> right exactly. we did and for good purpose. paul krugman has been spectacular lately on this in "the new york times. and he's just got it right look, eventually we'll have inflation. and if, you know, eventually we'll have to deal with that and the consequences won't be pleasant if powell has rising deficits, rising inflation he and his colleagues will have to tighten on monetary policy. >> but david, phil has that ever so slightly wrong in that you

print money, there's no deficit, right? >> i don't think they argue that but the thing they forget to mention to people is their theory says if the economy overheats, if we start to get inflation, then we're going to rely on congress to raise taxes and cut spending rather than the fed to do that management of the economy. i think one of the problems here is modern monetary theory has gotten a little bit mixed with something which sober economists aren't talking about which is if you believe interest rates are going to be low for a long time, then there's less urgency about reducing the federal debt to gdp ratio. because you can -- you're more likely to grow your way out of it it doesn't mean that we should be running big deficits now. but there is less urgency about reducing the current level of the debt if you believe interest rates are low and are going to be low for a long time not because of the fed but because that's where the natural

rate of interest is. >> let me just go back to you. from an investing perspective, if this is what the fed has added the third mandate and that's financial stability, what does that mean for the markets does that mean they'll be able to more easily push them into doing these things more admittedly watching maybe it's always been this way. what do you think? >> i think it's somewhat dangerous if it gets to the point the last couple of days. i don't think over the long run that's where their concentration ought to be. and i think if it is, it means more mercurial stuff and something i don't think is in our best interest. >> dupg this is really a change? i'm confused you said it sounded like the fed's been doing it anyway >> when i stay financial stability, i don't mean keeping the stock market from being volatile i mean looking out for all the

things that led to the worst recession of our lifetime. banks that are over-leveraged, capital ratios that are too low. a failure of regulation and supervision. so things like there's been a lot of discussion about. bernanke set up to ask the question what could go wrong and how could we be prepared for it? that's not about keeping the stock market from going up and down that would be crazy. >> it's an important distinction. >> it is >> gentlemen, thank you very much david wessel, phil swagel, and steve liesman. coming up when we return, your biggest market movers of the morning. and calls from long-time market timer milton berg. check out tjx, best buy, and lowe's all reporting earnings this morning plus we are waiting for the end of the dinner in vietnam between

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welcome back to "squawk box" this morning take a quick look at the futures right now. we are in the red. i wanted to say it was getting a little better. maybe just a little bit. anyway, dow jones off 60 points. nasdaq off 26 points s&p 500 off about seven points we are now just about an -- now

just under an hour to the opening bell on wall street. under an hour as you mentioned to the opening bell on wall street, dom chu joins us with more on what's moving this morning. dom, good morning. >> good morning, becky so consumers very much in focus for our morning movers we're going to start with shares of best buy which are among the best and biggest gainers in the premarket. up about 11% on a million shares of volume. electronics retailer posted better than expected profits and sales. and better than expected sales growth at existing store locations as well as a more upbeat forecast. it boosted dividend by 11% and put a new buyback authorization in place also watching what's happening with lowe's. higher premarket by just about 4% on 90,000 shares of volume. america's second biggest home improvement retailer had a mixed report profits better but sales narrowly missing also came in below estimates but those shares are accentuating the positive. tjx, that's the other big one here tj maxx, marshalls, home goods

that company posting matching analysts both beat expectations thanks in part to better store traffic during the quarter those shares you can see up by 2.5% premarket back over to you guys. >> thank you, dom. for more on the overall markets, let's get to a man who's been a top strategist and market timer for the last -- no way last 35 years. hard to imagine. milton berg ceo of mb advisers you have a tracking portfolio you began in january of 2014 and the tracking portfolio, the mb that stand for milton berg >> you got it. >> up 77.4%. the s&p is up 51.28% going back just that far, you're out performing the s&p giving you a little credibility so you can tell everyone the december 24th low is in and we're now in an extended bull market >> extended bull market. >> early stages of a new extended bull market >> our projections are as high

as 3207 on the next -- >> on the next how long? >> some time in the next 12 months we have a classic bear market bottom december 24th five-day volume highest in two years going into the low the rate of deceleration to the downside was 7.65% came out at 6.5% in five days. typical bottoming of a bear market and the 30 days post-low had typical action breadth was 2.36% on the upside. which again is the early honorable stages the fed panicked along with the investors in the market. powell had no reason to pause in my opinion he's just continuing what he's doing. but he panicked. also typical of bear market bottoms. the fed panicked and starts lowering rates they haven't lowered rates but all you need is a pause. and we're getting that pause just one other point very

important. we track ipos. we count all ipos. we had the lowest number of 90-day ipos in nine years. same thing with the 1988 low same with the 2003 low so typical early bull market action. >> what does that mean the backlog in ipos i'm told has never been higher. >> yes but they're afraid to bring it to market. and that is what you see at a bottom >> so you think now that the market -- >> now the ipos are fine for bull market. but at a bottom of a bear market, ipos dry up. >> you like -- i mean, since it plays into what we were talking about, i don't want to have another fed discussion but you think the fed should not be targeting inflation >> i think the fed should tart 0.00% inflation. their job is stable currency the dollar is down 99% since the fed came to action in 1916 they're not doing a good job 2%, where did they get that

from >> as far as top sectors, this is i guess derived technically as well computer science and medical devices. >> computer software and medical devices. we own a company called b.a.t. it's like they're ringing doorbell for the heart wherever you are for the heart. wherever you are in the world, the physician can see how your heart is acting on the internet. the leaders in the field, patentepaten patents on technology. we think of medical devices and computer software leading this rally. >> what did you think of the ge deal with danaher? >> we actually recommended danaher a number of years. it is one of the oldest stocks of the new york stock exchange we like the way danaher is managed. i don't know about ge. but it is great for danaher. >> you like retail or not? >> we're in the early stages of big decline in retail. the brick and mortar stores. you have to have a company like lowe's, emgo people go to lowe' because they can't buy items on

the internet retail in general, no, the apparel and shoes, i say forget about buying those kind of stocks. >> mcdonald's? >> executing pretty well not a high growth stock, but earnings are still growing year after year we still have -- it is on our recommended list as well. >> o'reilly, autozone? >> people don't buy that stuff on the internet. >> autozone was at a 52-week high. >> doing very well the reason is because there are certain items not going to go on amazon and purchase it. >> service that comes with it too. by the window, windshield wipers, they'll come out and install it for you. >> cannabis stocks >> never touched those things. >> how about -- >> i don't inhale. >> you made some comments, did you -- >> bitcoin, we find -- we did a lot of work in currencies, noah friedman says u.s. dollar is a fiction. the only reason it has value is because the government gives it value. >> named after him >> he's named after me

however, bitcoin has no government backing and has no intrinsic value never had a currency that lasted the government backing and neither had intrinsic value. gold has intrinsic value, no government backing bitcoin has neither of those not a real currency. >> great, milton, thank you. great to have you on today appreciate it. >> down to the new york stock exchange cramer listening in, joins us now. we didn't get to -- we heard about danaher, i wonder if you saw what tusa said about ge today. >> we got a meeting coming up where he has to face larry culp, larry culp has to face tusa. tusa is negative this guy is doing everything right. the annual letter he sent out, it is so clean, so clear, so opposite of the way ge has been reporting and i think the power will be resolved

i'm in the culp camp after tusa interviews him, coming up in a couple of weeks, i think he changes his mind. >> really? you just heard milton bird say we're in the early stages of an extended new bull market is he too bullish? >> i've been saying that he's been watching the show. i've been watching his show. the bear market ended when the fed blinked. the day before christmas and i think it has been remarkable -- the only thing i disagree with him on is retail we have a major number of retails report in the last 24 hours. may have to revise his forecast. lowe's was great tjx was great. best buy was great i understand about how he feels about the relative to macy's a lot of people are off mall i think online is good i agree with him on autozone amazon couldn't destroy them the only thing i disagree with him on is the cannabis stocks. cannabis is here to stay and when larry bossy says that, i am going to be right

>> i was wondering, larry is in the -- in and out, though. where are you now? >> they are trading vehicles they're trading vehicles >> on the bench now. >> on the bench? >> yeah. but i'm going to get back in i like where i've been and i'm going to continue. >> kronos gets hurt, you come back to it gw pharma, got them on tonight, that's another way to play cannabis and, wow, you know, doctors love that stuff >> did you -- what did you make of home depot yesterday? initially the response wasn't great. >> too negative. people are too negative. yeah it is a great team they're buying back so much stock. they bought back 4.4 billion thought they would buy back 4. the problem is they're consistently good. now you've got lowe's with ellison. and this is a c student, that delivered a b plus report. that's much more exciting to me. and i know marvin -- he's not done the charges show he is really meaning business he's streamlining, he's doing

things that if i were home depot, i would say darn it all they got a guy who knows how to run it because he learned at home depot >> i think we got a jobs report coming up again, i can't believe. is the jobs report going to confirm the retail number we saw or will retail come around and confirm the employment picture that we had. >> i think we'll be fine look, i think that -- i'm still trying to understand weather related because of home depot. the one thing that is consistent is jobs are being created. i thought powell that, look there was more slack in the system than i thought. he should have made a call without saying, i was brain dead doesn't have to say he's brain dead he's wrong he's brain alive >> okay. i thought about -- i thought about saying something and i decided now i don't say things i'm in the going to -- >> i like ge, larry. i like the two larries i like larry bossy and laurry

culp. >> thank you, jim. see you in a couple of minutes president trump's former attorney michael cohen just arrived for his testimony. there he is. guards with him. "squawk box" returns in a moment who says our bank isn't tech enough? everyone, look at your phones. the design thinking, the digital engineering, security, blockchain, and we will be first to market! yes. when we do we launch? unfortunately, in 2 or 3, hours. why the delay? cognizant is helping banks use digital technologies at scale to advance speed to market. onmillionth order.r. ♪ there goes our first big order. ♪ 44, 45, 46... how many of these did they order? ooh, that's hot.

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welcome back to "squawk box. our guest host, larry bossy, former ceo of honeywell, cnbc contributor. a minute left. i have a curveball for you elon musk, the s.e.c., if you were the judge, what would you do >> if i were the judge -- >> the judge. >> i would suggest to the board that mr. musk, who is very creative guy, be executive chairman and new ceo and spokesman represent the company because he continually makes comments that are ininjujuriouso his shareholders. >> you would take him out of the ceo? >> i would >> that's a bold statement. >> jim cramer, by the way -- >> that does not diminish what he's done. he's a very creative guy i don't think he has the genes to be the ceo.

>> larry, are you long the paraphernalia stock like the bondmakers and stuff have you bought any of those >> pretty conservative. >> you are okay >> not there yet >> just wondering. >> larry bossy, thank you. we have a big day ahead. we'll be monitoring developments in vietnam and michael cohen, jerome powell, everything else join us tomorrow "squawk on the street" begins right now. good wednesday morning, welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. the president and kim jong-un kick off their second summit in hanoi. both leaders finished what they're calling a social dinner. the president believes the nuclear talks will lead to a, quote, really wonderful situation long-term and a live report from hanoi in a few moments. along with the summit, more big hearings on the hill today powell day two, house financial services, u.s. trade represent lighthizer in ways and means and former trump attorney michael cohen at house