. >> joe and andrew are off today. let's take a look at the u.s. equity futures at this hour. you're going to see green arrows across the board dow futures indicated up by 40 points after falling by over 200 points yesterday you did see a big range for where the markets were trading yesterday. i think the dow strayed at almost 550 point range for the course of the day. a lot of pressure on selling jim cramer was saying it was really kind of forced selling by the machines that took over at some point >> i mean, once -- we got ai very specific technical level on the s&p. didn't make it over there. in the end it was about less than a .4% drop in the s&p >> bouncing back from some of the lows we've seerch earlier. >> a lot of the recent winners were the ones that led the

pullback a big stall for the companies. >> while real estate and utilities were the top forming sector, which paints the defensive tone, the materials, oil did get into positive territory by the end of the day. it wasn't just as broad of a -- oh, no longer does china trade headlines boost the market >> you guys are watching as the close happens, so you can give under the circumstances the play-by-play the next morning on these? >> quite literally >> we've gone for at least an hour or two. >> anyway, it was the biggest pullback we've seen in about a month for the market, but, again, this morning green arrows across the board let's take a look at what happened overnight in asia you're going to see that the nikkei was off by .4%. hang seng was flat then the shanghai composite up by almost .9%. then in europe where there is some active trading taking place in the early hours, you're going to see a mixed picture markets in both france and germany are flat the ftse is up by about one-third of a percentage point, and italyand spain also flat a this point finally, take a look at what happened in the treasury market or what's happening in the

treasury market with the ten-year yield picking up a little bit 2.737% carlos ghosn has been granted bail by a tokyo court, but he is not out yet. prosecutors have appealed the decision if their appeal is rejected, ghosn could be released as soon as today the ousted nissan charnl has spent three and a half months behind bars already in a 52-square foot cell. his bail has been set at 8.9 million, and he must remain in japan even if he is released >> probably has to turnover his passport something along those lines. >> and be sur veil -- surveillance on him at all times. gosh, if you have been in a 52-foot square for three and a half months, i think any form of bail would be hugely welcome because, of course, all those reports saying that even throughout this crisis, he has hardly been able to speak to any family members or anything like that.

this was hinted at yesterday we knew this was coming. >> yeah. definitely the chinese premier also acknowledged that the trade dispute with the u.s. was one of the challenges that faced the chinese economy, but also said that this year was going to be a tough struggle cpi at 3%. the economy is going to create 11 million new jobs. this is significant because it's down from the 13.6 million jobs that was created in 2018 the premier had said that job stability was going to guide policy, so the deficit to gdp ratio was raised to 2.8% this is up from 2018, and it helps to stabilize the economy the budget is going to carve out

2 trillion yuan for bigger tax cuts and lower fees. all of this is meant to try to help companies here to survive the tougher times and not lay off people bank lending for sme's is going to be a priority, and also, the government said that it's green lighting local bonds 59% more than last year to fund infrastructure now, what was also interesting about the report was what was missing from the report. there was no mention of made in china 2025, which is a controversial program to turn china into a technology leader, and it's also to raise eyebrows among its trading partners, including the united states. however, the third priority for 2019 is instead to promote high quality manufacturing and to strengthen technological innovation the lairng might be different, but the ambitions for beijing are the same guys >> that absence of themade in china plan, i mean, are

people -- people on the street there noticing that and thinking, gosh, president xi is really caving to the u.s. here and the negotiation with the u.s. is going really badly, or is it a non-event and the framing of the whole trade talks being one that, know, china is winning this discussion? >> well, i think on the streets, people are not necessarily relating it, but among actionic circles, people have definitely noticed that in a lot of the various reports they haven't been using the -- i don't think it's a concession from china to the united states but it's way way to down play the language but the ambition certainly is there. when i was looking at this work report, and i realized i have been in china a long time because i feel like i could date

the years here based on what else is in the work report, but when i looked at the work report this time, i thought it was really interesting that there was no mention of made in china 2025, and that, instead, we saw a different language which is advanced manufacturing or high quality manufacturing which are starting to see more and more, and that's to be a technology leader >> when we talk about some of the stem husband measures, the cutting of the reserve requirement ratio for banks, boosting lending to small enterprises, some infrastructure, local government bonds for infrastructure spent, is it fair to say that most of this stimulus is the classic old china just turn the taps on even if it has long-term negative effects as opposed to the more structural reforms they were trying to pursue two or three years ago to boost the consumer?

>> the government is well aware of large stomach lis there are quite a few, and i feel like more and more economists who are worried that the -- that there's going to be more of an inclination to continue to do some of the old-fashioned stimulus that the government has said in the past and continues to say today has been very dangerous for this economy. >> eunice, thank you for joining us this morning. it's good to see you the other point to mention as well, today another day of china outperforming the rest of asia, and it's not -- it's only slightly -- >> up .9%. >> year-to-date, again, shanghai

is outperformed s&p 500, but it's outperformed all of the rest of asia, and it really comes back to their ability to ease whether you think that easing is good for the long-term, they have that flexibility in a way that none of the other kind of major developed exporting kind of economies in asia that have been linked to the slow global growth have. >> you can come up with the whole idea of them no longer saying that they want to do world domination there are a lot of people who have criticized them for coming out and being so bold about it, but it's kind of like the toothpaste you can't put it back in the tube you can stop saying it, but we've been alerted to the ambitions along the way. >> yeah. i mean, so much is signaling effect from these statements >> it's too late to say, oh, never mind >> on that level it has some significance, right? >> right >> i mean, the long-term target itself of great growth for their nation, you can't really criticize. >> it's how you get there. how you get there is and what it means for anybody you are trying to do business with on the other side of the table. sometimes it helps to be -- maybe not tell everybody your every ambition

>> it's for how long it was sort of under the radar. >> if you are being critical, and on mad money, the ceo mark benihof outlined expectations for the next few years >> here we are coming up on a year that we're going to do $16 billion in revenue that far exceeds my expectation. i still have never been more excited about sales force than i am right now when i look at the short tv term, you know, i see $20 billion right around the quarter. i see $30 billion right around the corner we initiated a four-year guidance today, jim, of 26 billion to 28 billion.

>> sales force has had a solid start to 2019. shares up more than 13%. it was down a bit more in the premarket late last night. down 1.6%. it did come off the back of sort of 3% decline yesterday along with other software stocks that were hit because of good year-to-date performance >> it was at an all-time high just about less than a week ago. >> other stocks to watch this morning, shares of game stop are moving higher in the premarket video game retailer announcing a new $300 million stock buy-back and a new cash dividend of 38 cents a share. game stop shares right now set to open about 5.5% that's about one-quarter of its market value the $300 million buyback obviously, they abandon plans to sell themselves, so there's been a lot going on with game stop and some criticism of how they're using or not using their car. also initiated a dividend. >> down 24% for the year too >> this is one of the cheapest larger stocks in the market right now because people assume the business is just kind of slowly going away.

>> blockbuster >> exactly >> we are also keeping an eye on shares of kohl's quarterly results expected around 7:00 a.m. eastern wall street is looking for earnings of $2.17 a share. despite the broader market's incredible run, kohl's share are pretty much flat target results also on deck. the retailer put up strong holiday sales numbers, and investors want to know if that trend continued into january target results due around 6:30 a.m. eastern, and we'll hear from brian cornell, the ceo, at 7:30 a.m. eastern time right here when we come back, a new proposal in congress is picking up steam that would tax every single trade that you make in the markets. we have the details after the break. right now as we head to that break, take a look at the biggest premarket winners and losers in the dow. nike leading the way up by about 52 cents .6%.

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>> i didn't try to throw you off. >> you successfully did for part of it. there we go. the stock market -- >> we'll keep an eye on that in the meantime, democratic senator brian shats of hawaii is expected to introduce a new tax bill today in an interview with fox media last week, the senator said his bill would tax the sale of stocks, bonds, and derivatives at a 0.1% rate that tax would be applied to any transaction that takes place in the united states or any transaction that a person makes in the united states the senator said his proposal could raise nearly$800 billion over ten years if it clamped down on speculation and some high frequency trading that artificially creates more market volatility the bill mirrors a similar proposal in the house from peter defauzo, and alec andrya cortez. we've got a debate on this coming up later in the slow.

interesting. if you just put purely on the surface, if it really is going to raise that much, and it's a 0.01% tax, you are, like, well, that's a lot better than many taxes there are across, you know -- >> just feels like we're getting into the point of where we'll tax anything >> sure. skbro i don't know exactly, but they do exist else why, and compare to that that if it raises as much as increasing the wealth tax elsewhere it's more appealing in a relative sense i get the negative down side >> i'm not a fan of adding taxes like this. the one thing that sounds slightly appealing is the idea of cutting down on some of the trading just for trading sake. >> the only type of trading it would really make a difference for in a big way is, you know, electronic automated very, very, very high volume trading. >> that's interesting. >> i think you would have to look at exactly how many fees

there are, the ek change fees. as you see already on every transaction to see how this compares to the .1% on top of all of that, and i think trading can be sent elsewhere. you can always find another venue in other locations >> if capital is treated >> it's not as if you can count on that $800 million >> i'm sure the exchanges would not be a big fan >> no. >> opposed to every -- >> the other point behind this, of course, which is a theme that sort of comes out with some of the progressive candidates proposals for increasing tax on the wealthy, which is that the people that predominantly hold stocks do tend to be more wealthy, and, again, if you snap shot the last decade or so, there is a slightly bigger reason to pursue that in a way than in the past because of qe which was a huge, huge stimulus, and largely benefitted the people that already had stocks and financial assets as posed to main street. >> there's a slightly elevated case today than at any point in the last 50 years to go after

that sort of area as opposed to -- >> you hear the noise about it, i'm sure >> also, i would be interested to hear how an operator of an index fund, an etf, that is doing nothing but trying to lower fees for management fees, and that would affect their ability wrshs. >> right when you have to trade on a daily basis, just to mirror the index. >> right those tend to not be the wealthier people those tend to be the people watching at home that's the main street reflection of what happens on wall street. >> the other point is to make it even more appealing and in a relative sense is who does it fall on and you can structure it such that it's not the seller, but the broker, and it's more of a wall street tax. >> that always gets passed on to the consumer >> that's drew >> try >> try >> again, i mean, you know, we have a debate on that coming up later in the show. still to come, it was a dismal february for hollywood, but a new female superhero could help turn things around that story coming up next. plus, retailer target expected to report around 6:30 a.m. eastern time we'll bring the numbers, the

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>> 29% of hertz global >> the box office in the u.s. posted its worst february in 17 years. ticket sales were down about 38% from last february's record breaking $1 billion hold that was boosted by black panther. this year the lego movie 2 was supposed to bring in crowds, but generated a disappointing $91 million in ticket sales. hollywood is pinning its hopes on disney's a captain marvel" which opens friday the female-led marvel film is expected to haul in around $130 million in its opening weekend bob iger facing a $13.5 million pay cut. the company amending his pay

agreement and the possible total bonuses paid he made $65.6 million last year he had a boost to his base salary keeping it at $3 million. it cut its potential cash bonus from $20 million to $12 million, and reduced its long-term incentive pay by $5 million. disney didn't provide a reason for the change, but the company faced some backlash for shareholders last year over proposeding compensation plan for iger, and that was shot down target results are due out in a few minutes we will bring you the those numbers and show you the reaction in the tock right now, it looks like target shards are down about 2 cents to $72.65 target ceo brian cornell will be joining us right here on set in the first on cnbc interview just a little later this morning. as we head to a break, we're going to take a look at yesterday's s&p 500 winners and losers ♪

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welcome back you're watching "squawk box" live from the nasdaq market site in times square. good morning we are awaiting earnings from retailer target due out in the next few minutes in the meantime, let's check in on the markets this morning. u.s. equity futures at this hour following a decline yesterday. of course, we were down 0.8% on the dow. s&p was down 0.4%. nasdaq down just .2% all of which were well off the lows of the session. the low for the s&p was down more than a percent. we're expecting a slightly positive open for the dow. the not too much movement either way in the futures markets

europe for you a little bit of a mixed picture this morning predom independently red, though, with the ftse higher the rest of couldn't nelkts europe lower again, we're talking .1% or .2%. aidsa trade, the outperformer once again after the best part of 1%. hong kong flat japan down half a percent. oil prices, which were up a little bit yesterday they were up just over 1% and slipping slightly today or at least brent it wti crude is back. the note ticked up last week twarpds the high 2.7%. handle towards the low this week 2.74%. the dollar for you, which was flat for the most part yesterday, albeit higher against the euro, which had a soft day, sees a little bit of strength against the euro.

>> then really calmed down it seems like it wasn't any lasting. >> certainly, the equity markets mirrored that in the -- sharply in the middle of the day, but higher by the -- splitting those declines by the end of the year. >> retailer target just out with some numbers these are the numbers we've been waiting for from this big retailer it accident loo like they came in with earnings on an adjusted basis of $1.53 a share revenue also beating the forecast, and a comparable store sales increase coming in at 5.3% that's combined with the digital and same store sales and beats the street's estimates of 5.1% you want to break that out same store sales were up by 2.9%.

digital sales up by 31%. it looks like they're also giving a little bit of guidance about the full year. according to -- it looks like full year adjusted earnings per share of $1.32 to $1.5 it. street at $1.33. >> that's for the first quarter. then the -- you're right we also have the full year here, too. for the first quarter, it looks like that analyst consensus is about right in the middle, and then for the full year that earnings is actually above the street's consensus there. >> i had seen numbers as high as 5.4% for that expectation, but this is in line with what the -- they reported for earnings >> if you look at the gross margin, i was able to talk to target a little bit and to figure out sort of what we're looking at here with the quarter.

when you are looking at the merchandise mix, and so initially target had thought that the merchandise mix they would sell more home apparel and accessories, which are higher margin they ened up playing really aggressively going after baby and toys in the absence of babies r us and toys "r" us, which paid off in sales, but ultimately, those are actually lower margin, and so that hurts some of the gross margin area there. when we're looking at that, the gross margin was down 40 basis points year-over-year, and some of that came from that merchandise mix, actually. >> charlie, the other big issue they have is obviously margins were pressured by what they're doing in terms of trying to deliver to the customer any way they want, becoming more amazon-ized where you will deliver a about -- they took away any of the charges they used to charge to show up in two days for delivery on those things they can get -- have you come pick it up in the store, too >> it's not free shipping for the retailer it's free for us, and it's a great benefit to the shopper, but at some point in time you're going to see that flow through

the margin we saw it this year. i think courtney's point on toys is dead on they doubled down hard in toys with toys "r" us gone. i was in the stores pretty much every day the last week up to christmas, and they were reloading toys much later than they had any other year because, again, there's no toys "r" us. >> much later in the season, like restocking? >> i was in the store saturday night before christmas, and they were reloading the toy aisles, and that's not something you are used to seeing toys are lower margin. you try to pick it up with other stufr. >> is it good to do that >> one of the things i've been trying to keep an eye on is what's the ripple. if i was going to go to toys "r" us to buy a plush or whatever for one of my kids 20 years ago, what else do i buy at toys "r" us i'm going to buy more toys if i go to target to buy that plush animal or a toy, what else can i buy at target?

it's almost limitless. snooef used toys as traffic drivers or whatever you want, and they try to pick it up with something else >> if i could pick up on the other point about the cost of fulfillment, we know that target talks a lot about using those stores as noticeds of fu fulfillment, and we know they had a pickup and stores drive-up, ship from store service during the holidays, and for the quarter 75% of the digital orders were fulfilled by the stores if you can come and pick it up or get it to them when it's much closer than the cost of that shipping is lower. >> that's all the dinl tal stuff. 2. the% comparables same store

sales growth as well how does that stack up compared to their rivals? >> that's operate good the traffic was up 4.5%. i mean, that's very, very strong >> street was only looking for 2.6%, so they beat on that >> the total comp growth is 5.3, and the stores contributed 2.9% of that. that says a low margin business. they seem to have gotten the better handle on the mix what do you think about that strategy in general? >> i think food -- you look at what wal-mart has been able to do with its food business, and costco as well the running joke for years is you could find any cereal you

want at target they started to suppress that. the food business is a good traffic driver in target's case, they've been re -- i have covered the company for a long time, and i have seen multiple it ragss of the food business there, and now they're in another one they're trying to reset food, get it a little more curated for the neighborhood if you go into the tribeca store, you'll see it really tight to what the people in the neighborhood need. i think it's still evolving. we had this question as to whether it was really a slump. >> mike, i saw the commerce department numbers for december, and it was a real disconnect

you look at am sflon, costco, target best buy the big dies did really well was the -- at the one end of the barbell, that great performance from those companies it would take an awful lot to suppress that i think the consumer was still strong we still have a positive outlook on the sector, which takes us through the balance of 2019. driven a lot by the big guys that's where retail is these days it's a tale of, you know, the have's and have-not's, and the have's are becoming more have-y, and the have-want's are getting lost >> there's something to do with away we saw on the market in december and caring off some of the high end consumer. we heard that as a player that served a higher end consumer

that it was very noticeable. it was very sudden it was, otherwise, unexplained >> has there been a resurgence >> in some case, yes not in all cases. >> i asked him more than once. we still didn't know what happened want what i would think. >> want the normal nordstrom not the rack >> for a while i thought we were getting out of that deep, deep promotions and getting back to a point where consumers were willing to pay a little bit

more i'm not sure what happened >> we want to thank you for coming in today. >> thank you >> courtney will be sticking around we'll be meeting later with brooirn cornell, the ceo of target still to come, as becky just mentioned, no reason not to mention it again brian cornell target ceo will be joining us to discuss those numbers. the stock up 5%. first, china making news overnight. the cutting edge target for the year we'll tell you what the government is planning to do to combat slowing growth. ♪ just hold on, i'm comin' ♪ hold on, i'm comin' ♪ hold on ♪ don't you worry, i'm comin' ♪ here i come

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zbleefrmt us u.s. quick it futures have been indicated higher the dow futures up by 35 points. s&p futures up by two, and the nasdaq up by two as well dow was down yesterday, although it did moderate its losses through the course of the session. still, you are looking at the biggest declines we've seen in almost a month's time. again, this morning you do see green arrows across the board, and target was just out with earnings that beat expectations, and that stock is up pretty handily. recapping the news that broke in the last half hour. papa john's has reached a settlement with former ceo john. he agreed resign after they hired a new independent director that is mutual acceptable to both core parties. remember, he owns a big chunk of

the stock. it's not as easy as just firing a ceo and seeing him go away that stock right now not trading. the last trade was $43.39. time now for the executive edge, and we'll start with the big news out of china overnight. the government there cutting its growth expectations for the year to a range of 6% to 6 approximate the 5% that is down from the 6.6% gdp reported last year china announces plans to shore up the slowing economy, including infrastructure spending and $300 billion in cuts to taxes and corporate fees news just in regarding car rental giant hertz global. carl icahn has cut his stake in the company. he holds 3.3 million shares. his ownership stake from over 35% to about 29% the stock is down about 1.2% sizable cut, but he still clearly has -- and a developing story out of japan

carlos ghosn has been granted bail by a tokyo court, but he is isn't free yet prosecutors have appealed that decision if their appeal is rejected, ghosn could be released as early as today the ousted nissan chairman has spent three and a half months behind bars in a his bail has been set at $4.9 million. as a condition, if the bail is eventually granted, he must remain in japan. when we come back, an electric car disrupter we'll tell you about the chinese that could soon rival tesla, and as we head to a break, quick check of what's been happening in the european markets this morning. right now it looks like the cac and dax are slightly lower down by one-tenth of a percent ftse is up by a quarter percentage point, and we'll be right back at&t provides edge-to-edge intelligence,

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welcome back one of the big movers this morning, shares of target. they are sharply higher after the company reported quarterly profit of $1.53 a share. that was a penny above what the street was expecting revenue also beat forecasts, and comp store sales increase of 5.3% beat the 5.1% the street was expecting. if you break that down, those are comps including both same store sales ask digital comps. same store sales were up by 2.9% versus the it.6% then digital sales up by 31%

target also gave a better than expected full year earnings forecast they're saying now they expect to earn $5.75 to $6 about the 05 the street was at $5.61, and that probably explains a lot of the up side that you are seeing right seeing right now. again, those shares are up by 6% right now. a gain of 4.31 cents at 7:30 a.m. eastern time, we will be speaking to brian cornell. the chinese electric vehicle market has benefitted from enormous state subsidies to get it off the ground an one company in particular debuted last september. the company has a $10 billion market cap nearly half of fiat's. is this company a threat to tesla? joining us now the freeman chair at the centers for strategic international studies. scott, good morning.

thanks for joining us. >> sure. >> place this company, if you could, in some context so we mentioned a $10 billion market value that is 1/5 of tesla's market value. and nio has only sold a little over 10,000. where does it fit in and is it a threat to domestic producers >> well, it's a young company, but it's the real deal they have about half apercent of china's total electric car market because the market last year sold about 1.1 million passenger vehicles nio brused around 12,000 cares last year. around 8,000 per quarter i think we'll see something like that they make what many think to be a very good car, but they're still young. they're still learning how to ramp up production, still at about 1/5 the size of tesla's production and they are still primarily in

just a few cities in china they're not national china doesn't have national charging infrastructure to support electric cars across the country in a sustainable way it's still early days. and so they need to be taken seriously. >> a lot of the news surrounding tesla has been about their struggles to command a higher price for some of the newer vehicles they're trying to lower down to this mid-30,000 range for some of their models. where would nio come in against that at this point and i guess how do they get there to a lower price point >> yeah. nio's going to probably be somewhere around that lower price point eventually, i think, around 300,000 chinese yuan. which is high for the chinese

market they're at the top end i'm sure they want to bring that down at some pointt car market but tesla is still exporting to china, not producing in china. so nio has got to use the window that they still have tw to ramp, lower the price increase, their service, to be able to establish their brand before tesla and daimler and audi arrive with electric models. >> hey, scott, how much do they benefit from the rules in china right now just in terms of the benefits you get if you are buying there and what the administration there, what the government there will do to subsidize it >> sure. they benefit as much as anybody by the government still provides subsidies though not as high as they did in the past they provide a bunch of funding for charging infrastructure, for

the battery industry which has helped nio grow. nio has a good relationship with the government in shanghai and they have worked closely with the companies helping them manufacture. so definitely without the government support creating supply, generating demand, it's going to be hard for companies including nio to grow. but the chinese government has tried to reassure everyone thaer car market is not going to waver. >> scott, you said the cars are pretty expensive when it comes to the chinese consumers' eyes what about the brand image does tesla have a superior brand image in china perhaps because it is imported >> i think tesla has still -- they have the top brand recognition and reputation amongst electric car makers everywhere and a lot of people just don't

think of tesla as an electric car company just as a luxury auto maker nio has done a lot in this first three years to strengthen its image coming out with a very fast concept car that set the speed -- world speed record for its nio houses where people can go and experience the nio brand getting a lot of media attention in the united states and elsewhere. and so they are on the right track, but they're still young they have to get over these first few early years to establish themselves, not slip up and also just china's such a large market and has such up and downs as you reported. growth was slower than expected in the end of 2018 still not picked up yet. so the overall economy can be

sluggish they're going to be facing some wins they need to fight against. but they so far have done a pretty darn good job >> yeah. long-term. if they're only a half a percent and they decided it's going to be a big market, maybe there's room for plenty. we'll leave it there appreciate your time this morning. scott kennedy, senior adviser at cisi big gains in just the last month alone in shanghai. will the rally in china continue more on that next. and later, target ceo brian cornell will join us to talk about the company's fourth quarter results. this stock up 5% or so in the premarket. you're watching "squawk box" on cnbc we're ba ia upckn cole

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is a trade deal with china close? a look at what's on the table for both sides and what it means for your investments is straight ahead. target's quarterly results are out. brian cornell joins us ahead of today's meeting with investors plus the fda is cracking down on retailers who sell tobacco to minors. we're joined with a list of companies violating the law as the second hour of "squawk box" begins right now

live from the beating heart of business, new york, this is "squawk box. >> good morning, everybody welcome back to "squawk box" here on cnbc i'm becky quick with wilfred frost and mike santoli u.s. equities at this hour are indicated higher once again. s&p futures up by 2.5 points then the nasdaq up by 2.5 points as well. this all comes after a decline yesterday, but a day when the losses were stemmed as we got later into the trading day you did see the dow down by just over 200 points. that, believe it or not, is the biggest decline we've seen in a month's time here's what's making headlines at this hour we're watching target. the company reporting earnings of $1.53 per share revenue and comparable same store sales also beat estimates

and gave a better than expected full-year forecast the stock is up 5% in the premarket. brian cornell will join us later this hour to talk about the year ahead. another report delayed by the government shutdown is out this morning new home sales expected to fall 3.9% giving back part of a 17% november gain. and papa john's john schnatter will resign from the company's board. i got both right there >> no. you said papa john it's papa. >> p-o-p-p-a think of it that way >> i love it when you call me big papa >> announced a settlement with the company. he will step dow the

>> schnatter is the biggest shareholder, right >> i believe biggest individual shareholder. that's why you need all these machinations with the board. not just fired couple of stocks to watch this morning l brands will be urged to separate its bath & body works from the victoria's secret flagship plans to make its wishes known in a letter it will send to chairman and ceo leslie wex lle. there was a big bump that day. the extrapolation of that is you have one well-performing chain and one that's maybe struggling. >> the wexler brands, split them up, put them together. >> limited, express -- >> victoria's secret >> abercrombie used to be part of it. they got spun out. >> the candle company. >> right

i believe they sold henry bindal didn't they? >> it did get sold but it was crazy to see all of the crazy hits for the mall wound out of that same company >> a very large shareholder himself. you have to go up against him if you want to tell him how to run his company. ingersoll rand was added to the list trade talks with china remain a big focus for investors this morning kayla tausche joins us with more on that front. good morning again it's good to see you >> chinese officials addressed the trade negotiations overnight at the opening of the national people's congress. the country's commerce minister said trade talks have been difficult. and its premier warned of a tough struggle as it was cut to the lowest in nearly three decades. the annual policy blueprint cited the effects of the trade war. for resolving the ongoing trade

issues here's mike pompeo inhis speec to the iowa farm bureau. >> the good news is this help is on the way will both be better off. the outcome of the trade negotiations underway will pay dividends for people in each of our two countries. >> he said in a local interview the two are on a cusp of a deal. and they're also at the center of their resolution in discussions over which tariffs to remove first. the trump team is said to have prioritized politically potent duties on agricultural products. tariffs would be removed on a schedule, not all at once. and part of the discussion right now is whether this initial batch of tariffs that gets removed, does it happen when this deal gets signed. does it happen at some check point in the future and what happens from there

>> this morning as eunice yoon was reporting, it doesn't feel like a huge concession on the china side at least how they're spinning it domestically >> no. and certainly i would point to the comments by larry kudlow last week. that's the clearest we have heard the administration yet say that china's willing to do anything specific regarding that he said that china was willing to abandon subsidies to certain made in 2025 industries. after those comments, i spoke to a few people who had been briefed on where talks currently stood. they thought china actually wasn't there yet we'll see when this language comes out what exactly they are committed to doing >> when you talk about politically potent tariffs, which ones are we talking about? are there states where president trump was supported? >> yeah. that is the expectation, becky and the whole idea of the

resolution behind the trade war now or this temporary detaunt is motivated by president trump's desires for re-election. you can see that in the fact that china is proposing a six-year target for its purchases through a 2024 through a trump second term. so certainly the re-election is in focus the president wants to be able to say he did what he campaigned on in the trade sphere and that the economy is chugging and that, you know, you essentially take pressures off so people in the heartland of the u.s. when they go to the polls, they're not feeling that pain. >> kayla, thank you very much for that let's continue the discussion. joining us here, global head of fundamental equities and portfolio manager of emerging market at robako and director of global macro, global asset allocation division good morning to you both fabiano, if i start with you, the outlook for china, the

market's bounced significantly in the last couple of months is there still upside or does it rely on the trade outlook? >> the trade outlook is key. it is not the only reason why the market is bouncing back. another is the increased inclusion of china and the world indices which clearly means that investors have to start taking notice of the country. and increasing their exposure. because most of the investors at the moment are still underweight. but at the same time, if there is no trade agreement, we will have more on the gdp side and earnings side. earnings are key for china in terms of equities. >> yesterday we did see the market selloff a lot of people saying that is because all the positive news we've had of late on the deal, progress was priced in what was your take on that particular point >> yes i think that's right it's a little bit of a sell news going on

everyone wants to be the first one to sell the news and the s&p rallied about 20% right back into what is considered resistance at 2800. so if anyone's going to sell it anywhere, this would be the place. it doesn't mean the rally is over, but it's probably going to stall out here and so i think it makes sense that the market takes a breather here my view has been all along that trade tension is a long-term structural thing and that, you know, individual battles may or may not get resolved and looks like this one will but that doesn't mean that the whole thingis over and that maybe down the road there'll be other flare ups. >> so the key thing for u.s. equities is that earnings and do you think the turn towards bearish sort of outlook on u.s. earnings is overdone >> yes i think there's three things going on obviously we had the 20% decline, the fed pivot, and how long that pivot will last is unknown. we have a big reflation going on in china now so there's all the trade talk,

but china was slowing well before any trade tensions. and now they're sort of starting to stimulate their economy which they can do better now that the fed is sort of out of the picture because of the currency. i think most importantly right now is that the earnings narrative is starting to improve. so the 2019 earnings estimate from the wall street community was at 12% in terms of growth, the expected growth rate it fell to 5%. and over the last three weeks it has held very steady that narrative is starting to stabilize. that maybe we will get around mid-single digits. and if we can do that after 22% in 2018, then that's a pretty smooth kind of landing, if you will, on that front. >> you think it's time to look out from u.s. equities which marks in particular? >> china and krooer aorea are t

who do the most in 2018. probably not for entirely the right reasons. baked in in terms of negativity. those are two markets we like. particularly if there is a trade negotiation that resolves in a positive way and we also like brazil. i think the new administration, the new impetus on reforms, the new minister of finances really starting in earnest with a lot of new initiatives we like that obviously in emerging markets, everything can happen. everything can change at the last minute. but so far so good >> you mentioned the change in the index weighting of china for emerging markets suddenly investors who thought they were on a market weight or overweight find themselves it's a mechanical effect, right? how far can that take the china market and at what other market's expense, do you think >> china's about 15% of global gdp. it's now less than 4% of some of the major indices. unless you think the economy is going to shrink by 75%, this

could be a big gap that needs to be filled there. other indices. i think -- >> that's market cap >> that's current market cap a posed to the weighting in the index. jurrien, what's your take on the dollar index ahead >> i think with the fed potentially shifting to a kind of inflation-targeting regime, like a price level, something that's more dovish than what they are doing now, that, you know, all else being equal should be a negative for the dollar because it probably means lower real rates going forward structurally not just cyclicly. but the question is, you know, if it's weaker on the dollar against what currency?

the you'euro is no trip to paris either i'm not sure there's a lot of downside for the dollar. but i don't really see a lot of upside here. and it's interesting that gold is actually kind of stirring a little bit because that's the only currency you can buy that's not a pairs trade with another currency. >> we'll leave it there, guys. thank you. when we come back, target's chairman and ceo brian cornell will join us on the retailer's latest quarter that news-making interview is coming up in just a few minutes. and then dr. scott gottlieb will join us. he's got a list of retailers who have been put on notice about selling tobacco to minors. the names and possible eaforcements straight ahd. stay tuned you are watching "squawk box" right here on cnbc so with xfinity mobile

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both stocks looked a little bit cheap. well below their highs coming into this. obviously reassuring comps >> they've spent a lot of money to invest in stores and invest in delivery. whether that by straight to your house. they've done the same thing that walmart did a few years earlier. it's interesting to see the street's reaction to my gosh you're spending money. back to you're spending money and it's for the right reasons you never know what take you're going to get on these. >> there's some visibility on the payback. and i think target's raised guidance for the full year, current year shows some kind of confidence probably from the company that they can hit those targets >> right you know, there's strategy of going in when you hear why the operating margin declined. in part, it was going after things like baby and toy with lower margins. those are probably consumers you want to win and thinking this is a place to go for the toys

>> it's another couple reports that make the sales number look somewhat confusing again but people have moved past that. that said, a big part of the share price gains this morning are in their guidance for the full year as opposed to just the last quarter's beat. but either way, last quarter beat had decent comps and definitely contrasts that to december retails sales number. still to come, a reading on which companies are hiring paychex joins us and then ceo brian cornell of target will join becky for a 'rba-s ierew wee ck in a couple minutes

the paychex monthly small business employment watch has been released. hourly earnings growth improved by 2.5% and the small business jobs index was unchanged in february continuing a trend of job growth consistency over the past three months joining us now is marty mucci of paychex. marty, good morning. so it seems like a pretty steady picture in terms of employment on the small business front. what other themes would you pull out of the latest report >> yeah, i think it is pretty steady which is nice because

we've seen a drop the last three months in the rate of job growth for small businesses so it's good to see it stabilized to january in the february numbers one of the things we're watching is business optimism if you watched business optimism, it continues to be high but it's dropped off the last five months with one of the biggest concerns being able to find and hire the right people to do the jobs and we're going to watch that to see if that does slow down some of the growth. if i can't find the right people to fulfill the orders, it may slow down some of the job growth that one we're watching. also across the country, all regions are pretty much down except the south is back in the first spot and energy is really helping texas kind of regained the top spot and dallas regained the top spot all the small businesses around that are pretty healthy right now for job growth >> you mentioned this idea -- and it's been a complaint for a long time of small business owners of trying to find the people to fill the rolls

there's also this counterargument where people say, look. we're finding there's more slack in the labor market than we expected more people are coming back into the job market so are you finding there to be evidence that they're still able to expand as they need to and hire >> no. i think -- you know, the biggest concern we're finding from small businesses is that they can't find the right people. now, there may be people available, but they don't have the right skills particularly in those -- some of those jobs where there's technical skills needing welders and plumbers and people like that to fulfill the job orders what you're seeing now is an increase in training a big need for training, technical training and some of these small businesses actually paying for that bringing trainers in to make sure while they can find some people kind of having on the fringe, they're at least being trained now and getting the technical expertise they need for the positions. >> you mentioned energy as a bit of a bright spot are there other industry trends that you would highlight >> well, you know, manufacturing

is down year over year and we saw some bounceback in that last year we're disappointed to see manufacturing on the bottom of the job growth list right now. but other services, those discretionary services are still at the top of the list even though all sectors are down pretty much year over year again, when there's such low unemployment, it is difficult to fill those jobs. therefore, it's hard to get growth we're hoping that some of these fringe people, some of the people on the fringe not in the job force before will get up there. >> another theme in the news now, a lot of folks talking about complaining they don't have as big a tax refund as they expected a lot of highlighting of the withholding schedules and whether people are getting the right amount withheld. has that become an issue among your clients >> well, we're definitely still hearing it from the client employees. that they had expected larger

refunds or that they generally got a refund and this year are not getting a refund and actually paying a small amount so we're watching that to see will that hurt consumer spending consumer confidence is still very high as you know. and high year over year and month over month even. so we're not seeing that dampen consumer confidence in spending yet. but we are a little concerned as you get into the primetime for refunds. will that slow anything on the growth side with people spending habits because of the refunds. >> we've been talking about that this morning wilf made the point that the strong numbers from target this morning make us wonder if the december retails sales number was really just a false read was that a problem that's going to get washed away able nothing to worry about what would you say based on the numbers you look at, based on the information you have >> from what we've seen, december was a little bit of a surprise so i think the demand still from what we see from our clients in the small business arena, the demand is still high again, it's really this concern

that can i fulfill the orders because i don't have the people, the employees or technically trained people to handle the orders coming in so that's probably the biggest concern. but consumer confidence in spending still seems to be strong the only other thing, you've mentioned it before, is home sales are down about 8%. new home sales from last year. and will that slow small business work around construction and all of that we haven't seen that yet but we're concerned that may pop up >> all right marty mucci of paychex, thanks a lot for keeping an eye on all of that for us. >> thank you when we come back, the ceo of target on the company's quarterly results. check out the stock. it's up by more than 6% now. a gain of $4.43. and later, alexandria ocasio-cort ocasio-cortez, we'll debate her bill and what it could mean for

wall street in a bit right now look at the u.s. equity futures the futures are up but by less than ten points. nasdaq down ten points stick around we'll be right back. want more from your entertainment experience?

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still to come on "squawk box," a warning from the fda to retailers who've sold tobacco to minors dr. scott gottlieb of the fda is our guest. top of the hour, senator ron johnson talks china, trade, taxes, and much more speaking of taxes, democrats will unveil a bill today on financial transactions seen a way to fund the green new deal we'll look at how much this proposal could cost wall street. when we come back, target ceo brian cornell on the latest quarter. that news makinginterview is coming up after a quick break. stick around "squawk box" will be right back.

target ceo brian cornell made a bold call here on "squawk box" last summer that he was seeing the healthiest consumer environment in years let's see where things stand today. the company out with fourth quarter results and results for the full year. also guidance for the current quarter and the current full year cornell's going to be facing

some questions from wall street analysts today first he joins us right now. brian cornell is target's chairman and ceo courtney raieagan is also here brian, thanks for being here today. >> good morning. >> let's talk about the numbers. you came out with numbers better than expected. revenue a little better than expected comps were better than expected. and it was the guidance for the full year that i think a lot of people are watching now too. you're saying for the full year, $5.75 versus $6.05 and the stock is up pretty sharply on all of this news. what's happening in the company right now? >> i think we're building on the plan we put in place two years ago. i think you see that in our 2018 results. we talked about the fourth quarter being our best fourth quarter in over a decade it builds on a strong year 5% comps for the full year really strong market share growth across all of our categories we continue to see great from a

digital stand point. that's the important message both parts of our business performing well. in the fourth quarter, stores grew almost 3% digital is up over 30% so a really good year for the team, but we expect 2019 to be even better. and that was part of our guidance today >> you are meeting with wall street analysts right after here. >> we are. >> and it was almost two years ago today that you were meeting with those analysts and they did not like what they heard you were talking about reinvesting in the stores, spending a lot to catch up in terms of distribution and competing with the likes of an amazon what do you think the reception will be today? is this a little bit of a victory lap? >> well, we don't take victory laps, but i think today will be proof the strategy we put in place is working that the guest is responding well that the investments in stores are driving store comps again in the fourth quarter were the strongest we've seen in years. our new small formats in places like new york being well received

the investments in our own brands are driving market share gains in many important categories i think importantly the investments we made in fulfillment are connecting with the consumer they're taking advantage of ordering online and picking up in store they're driving into our parking lots there are ship shoppers now taking advantage of same-day delivery all those elements are coming together and we talked about this a few months ago our goal is to make target america's easiest place to shop. and i think that's starting to happen so we feel great about the progress, the investments we made in our stores, our brands, and importantly our team have paid off i think we saw that in our full year 2018 results. but more importantly, the guidance for next year where we said this is going to continue we'll deliver, you know, low single digit comps in 2019 operating income which everyone is focused on. you're going to see margin stability. operating income will grow in the mid-single digits. and at the same time high single digit eps growth in 2019

so all the key measures are coming together. it's taken some time but those investments we made are delivering good returns for our investors. >> for the holiday, comps were up 5.3% full quarter with january that's not a holiday month, but in general is there any cadence change in the likes of traffic or sales those government numbers really throw a lot of us for a loop in december then we heard from other retailers that january's been a little spotty too. >> courtney, in q4, traffic grew by 4.5%. that overall comp increase, it was driven by traffic. more guests in our stores, visiting our sites we saw consistent performance in november, december, and again in january. it was a few weeks ago when we announced our results. we guided to a 5% comp for the full quarter we delivered a 5.3%. that was just continued strength

in january akroz all of our major categories >> you said it was some of the healthiest environment las year how would you gauge things now >> it's still a very stable consumer environment consumers are shopping you're seeing strong consumer confidence still and our outlook for next year is that we'll see consistent results across 2019. so certainly we're going to watch it carefully and it's going to ebb and flow but right now i think we're seeing a pretty consistent consumer environment and that's certainly showed up in our january results >> can you give a preview of what you're going to tell the street today about the forward plan for target? i'm very curious in target plus. the idea of a marketplace on target.com, but a little different than the market places we're seeing from a walmart or an amazon because you're selecting the different brands and fulfillment could be different from the other players. >> including here's the big headlines for today. the strategy that's been in place the last couple of years

will continue into 2019. will continue to invest in stores we'll remodel over 300 stores. in urban centers and on college campuses we'll invest in our brands we'll continue to scale and mature our fulfillment capabilities and we'll continue to invest in our team and the results will be even better in 2019 than they were in 2018 so no major changes. we'll continue to execute our plans, continue to scale and build a very durable financial model that's going to be sustainable for years to come. >> let's talk about the operating margins. because there were some estimates on the street that were higher than you came in with you came in with 4. % which is consistent with what you've seen the year before. i had seen some estimates as high as 4.5% what was it that pressured some of the margins >> you know, we got the challenge of a 53rd week versus a 52nd week. there are some changes there if you normalize the numbers, we

feel good about operating income performance in the quarter that will continue into 2019 we feel like we're on a path to stabilize operating income margi margins, continue to see operating income dollars grow. and all of the investments we're making are going to start to scale and will get leverage against that in 2019 >> you're talking about the investments in terms of delivery at home from the website or people picking up in the stores, those investments? >> absolutely. and we look at full fulfillment as our friend. one, the consumer really prefers that it's really reliable it's easy. it's convenient. and it's more profitable for us. as we see that shift and we saw that during the fourth quarter, and you've heard that from other retailers, order online, pick up in store our drive-up capabilities. well, one, it's preferred by the consumer, but importantly for us, it's more profitable so that's really going to help our margins going forward. >> people are watching your margins not only for the

fulfillment capabilities but also because you hired more than any other retailer for the holidays you've announced your plans to move towards $15 minimum wage. has that had any impact on your operating margins? >> we hired over 12,000 seasonal team members in the fourth quarter. and i think that investment we made in wage has made us an employer of choice so we're getting great response from team members. they recognize we're investing in their futures and we're getting great responses from communities across the country because they know we're going to invest in our team >> you know, brian, i have a question about tariffs previously before you had said that you were able to sort of use our levers in other categories you could balance it out in another area if we end up rolling back tariffs as the u.s. and china go through these negotiations, could that be even better for target or have you already balanced

that out so we're not going to see material difference in the end? >> obviously we're all watching it really carefully. it seems like it ebbs and flows every day. certainly right now we're hoping there's going to be certainly a change in the tariff discussion and those will be minimized going forward. and if there is, that gives an opportunity to continue to invest in our business going forward. >> brian, want to thank you for your time today. >> thank you >> brian cornell, ceo of target who's going to be speaking with the street just about an hour and a half. when we come back, the fda calling out certain retailers for selling tobacco to minors. fda commissioners dr. scott gottlieb will join us with the names and possible enforcement for those companies. we've got the futures this morning actually just turning negative across the board. we had been up across the board earlier this morning right now looks like the dow is down by about a point and a half s&p down by less than a point. and the nasdaq off by ten points "squawk box" electric right back this is loma linda,

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want more from your entejust say teach me more. into your xfinice remote

to discover all sorts of tips and tricks in x1. can i find my wifi password? just ask. [ ding ] show me my wifi password. hey now! [ ding ] you can even troubleshoot, learn new voice commands and much more. clean my daughter's room. [ ding ] oh, it won't do that. welp, someone should. just say "teach me more" into your voice remote and see how you can have an even better x1 experience. simple. easy. awesome. welcome back to "squawk box. let's check in on the futures at this hour. yesterday we did see declines. but we finished off the lows we're pretty much flat in the premarket today. little bit of greenfor the s&p the dow and nasdaq just in the red. shares of salesforce down 1%

this morning as the company offered less than expected fourth quarter guidance. that's overshadowing earnings. posted a beat on the top and bottom lines still the company's full-year guidance was in line with wall street's expectations. it was down more when the numbers first hit. so it's recovered steadily over the last 12 hours or so. on "mad money" last night, the co-ceo marc benioff outlined expectations for the next few years. >> here we are coming up on a year we're going to do $16 billion in revenue that far exceeds my expectation. i have never been more excited about salesforce than i am right now. when i look at the short-term, i see $20 billion right around the corner i see $30 billion right around the corner in fact, we initiated a four-year guidance today, jim, of $26 billion to $28 billion. >> salesforce has had a solid start to 2019. shares up more than 13% year to date

developing overnight, carlos ghosn has been granted bail by a tokyo court but he isn't free yet. prosecutors have appealed the decision if their appeal is rejected, he could be out as soon as today. the ousted chairman has been behind bars since november his bail is set at $9.8 million and he must remain in japan even if let out on bail the fda is naming names in a new report the fda put 15 national retailers on notice for allegedly selling tobacco products and e-cigarettes to minors joining us right now is fda commissioner dr. scott gottlieb. thank you for being here today what brought about this action >> well, what's happening now is we're targeting corporate entities we've taken a lot of actions against individual stores. we've done more than a million inspections of individual stores in conjunction with the states looking for sales to minors.

we found large retail chain hs a large amount of recidivism they're allowing corporate policies to condition those sales. we're going to hold them accountable for those policies and look at their culture of complian compliance some of these stores have substantial violations in the case of walgreens, 22% of the stores we inspected, over 6,000 stores had violated sales to minors. >> what do you mean 22%? 22% of all cigarettes they're selling are going to minors? >> 22% of the stores where we attempted undercover buys using shoppers posing as minors actually sold the cigarettes to the undercover shoppers. they had violations. they have about 10,000 stores nationally we inspected about 6,000 of them 22% of the 6,000 we inspected

actually sold tobacco sales to minors >> do you think they were doing this knowingly or lack of good controls >> i hope it's a case of lack of good controls. there's a perception a lot are individual mom and pop stores. we're seeing a lot of violations and repeat violations across large corporate chains walmart was also in the top 15 some were gas stations some had violation rates as high as 44% krogers. dollar stores. there are those on the list that have the ability to impose good practices on individual stores yet they have a lot of repeat violations and violations across their outlets. >> what's been the reaction from the companies you've spoken to

>> there are actions we can take now. we can send corporate-wide warning letters. we are sanction stores we have a lot of civil pents we can impose we've never imposed a criminal sanction but we have imposed civil sanctions in the past. we have issued, for example, corporate warning letters in other situations across the regulatory portfolio something that's certainly open to us in this situation. >> why are you singling out walgreens so much? why have they been invited in? you mentioned them a lot their rates in the 20 percents, but there were others in the 30-plus percents >> walgreens got us looking at this we had a situation three, four weeks ago now where we sent a no sale order to a walgreens pharmacy outlet that had a lot of repeat violations and we looked at the data at that time and found a high rate of violations across their entire chain

or create a perception in the minds of consumers shopping in a pharmacy environment that somehow tobacco might be, you know, more safe than it know, more safe than it otherwise

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light at the end of the trade tunnel can they close the deal? retail stocks on the move. target and kohl's both beating estimates this morning and the stocks are jumping and a new proposal would tax

every trade you make it's not a new idea, but it is making a comeback in washington. the big question other than can it pass is would it work the final hour of "squawk box" begins right now ♪ live from the most powerful city in the world, this is "squawk box. >> good morning, everybody welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick along with wilfred frost and mike santoli futures had been higher when we started the show it's given back a bit. dow futures now indicated down about a point and a half s&p off by a point the nasdaq down by nine. we did see a decline for the markets with the dow down just over 200 points. believe it or not, that's the biggest decline you've seen in a month's time but i think the dow and s&p have

been down four out of the last five sessions. >> it's been modest declines although you will have some people see if that was of significant yesterday. it was strong in the premarket, did open higher. the s&p kind of clicked to this level it lasted early november then couldn't hold up there and fell i think for two weeks people have been saying that we have some nature of pulk. maybe this was a bit of a signal that for now this rally has sort of spent itself. >> yeah, i mean, also, though, of course we were up in january month to date it's not been far. we're well high at the moment. >> for march >> but with the negativity -- >> january and february were both good. >> 1% off of yesterday's intraday high on a -- when you're up 20% off the lows, still pretty modest. >> exactly let's take a look at the treasury market. we've been watching yields there. and the 10-year this morning is indicated -- the 10-year yield is indicated at 2.739%

target shares surging this morning after earnings and revenue above expectations and adjusted $1.53 per share 1 cent above estimates revenue also ahead of forecasts. same store sales increased 5.3%. that was above consensus estimate of 5.1% and target also gave better than expected full year earnings forecast we spoke to ceo brian cornell about the quarter just about 30 minutes ago. >> we're building on the plan we put in place two years ago i think you see that in our 2018 results. we talked about the fourth quarter being our best fourth quarter in over a decade and it builds on a really strong year 5% comps for the full year, really strong market share growth across all of our categories we continue to see great performance from a store standpoint and a digital standpoint >> we will dig a little deeper into those numbers a little

later this hour. but from the interview, helping boost the shares as well which are up nicely. >> and i think part of the interesting thing that he said was that he's a steady consumer. you remember we talked to him last summer and he was talking about what he'd seen at that point about being a phenomenal consumer environment there so many questions have been raised since that point about whether the woes you see in particular retailers are because of consumers or if they are just -- or they're unforced errors that have been made by some of these retailers. he did say he sees a steady consumer environment, but also said that all of the investments they've been making in the stores and in digital fulfillment have started to pay off. >> i think, you know, the street's concern big picture with target and walmart has been, yes, they have to do all this spending. they have to kind of participate in this arm's race or will when they see it paying

off, i think it shows that the story's intact it seems like these big stores are the base >> scale's been key for this transition and target came to it a little bit later than walmart it looks like more than just one of them is able to survive against this amazon threat >> the guidance for the full year is $5.75 to $6.05 a share the street was below that. their expectations before heading into this was $5.61. so that's what you're talking about. raising guidance for the full year >> and for the first quarter their guidance was $1.32 to $1.52. not a big part of the beat coming from this quarter >> this is extrapolating from this, but one of the themes of earnings season, guidance was coming down and that was one of the reasons the market was

softening up or people were thinking it was due to soften up because earnings growth is not going to continue through the year this is clearly a different theme to that. >> target, moredomestic. it's not a business to business story. or enterprise, software. something you've seen a hesitancy. >> although the tariffs would hit a company like target on the expense side. >> another big retailer on the move adjusted for the fourth quarter. revenue also above forecasts comp store sales beat the quarter. that was above the 0.3% gain and that stock is up in the premarket nearly 5%. papa john's has reached a settlement with its founder john schnatter. schnatter will resign from the board once a mutually independent director is

appointed. >> is a schnatter or schnatter because i was giving you grief before i thought it was schnatter. >> you're probably right >> i don't know if i am. now i'm questioning myself on everything >> i can tell you for sure it's john. >> thank you well done. >> that's my input >> i overcorrect for my new york accent sometimes >> i don't think you have a new york ak certain. >> there you go. >> i do a good job >> i rarely correct. shares of hertz global has gone down. icahn cut his stake to 28.91% from the prior 35.27%. obviously still a heavy stake. that stock has struggled but it's lifted up off the recent lows and kind of gone into this range, but down this morning very volatile. a ton of debt. there's really only a small sliver of value. u.s. officials sounding more bullish on the prospects for a trade deal with china.

kayla tausche joins us with more on that front. >> officials addressed the trade negotiations at the opening of the national peoples congress. and while they said that they are working toward a path forward on negotiations, they plan to remain at the table. the country's commerce minister said the talks have been difficult and its premier warned of a tough struggle as the growth was cut to the lowest in near decades. u.s. officials are optimistic on the prospects of resolving this ongoing spat here's secretary of state mike pompeo last night in a speech to the iowa farm bureau >> the good news is this help is on the way american producers and chinese consumers will both be better off. the outcome of president trump's trade negotiations currently underway will pay dividend for people in each of our two countries. >> he later said the two countries are on the kus

of a trade deal. while farmers have been in the cross hairs of the deal, they're also at the center of any resolution in talks over which tariffs to remove first, the trump administration has looked at certain duties that were deemed politically potent products. ch would be removed on a schedule, not all at once. potentially not even when it's signed but at some check point in the future we'll see exactly when that time frame shakes out pu it's an approach that could invite political backlash with many democrats pushing for a tougher deal with china and republicans acknowledging they'd prefer de-escalation going into 2020. >> thank you very much for that. we're going to continue the discussion now with our guest senator ron johnson. republican of wisconsin. senator, good morning to you thanks for joining us. >> good morning. >> when you hear it's possible to see a trump/xi summit later

this month to sign things off, does that tally with what you expect do you think we're that close? >> we've been in contact with a number of administration officials across the board they're sounding more and more optimistic they're getting close. they're kind of ticking off item by item. i would call them cautiously optimistic from my standpoint, that's very good news. we need to conclude these trade deals. i think the administration has done a fabulous job of stopping the regulatory burden. i realize what the administration is trying to do is reset the trading system around the world we've been taking advantage of china as the primary abuser. stealing our intellectual property the chinese economy is suffering and this is probably what the trump administration had to do that's what i think they've

accomplished to really bring certainties to the american economy and markets. >> the president suggests he's rushing to make a deal for the sake of doing so opposed to getting all the fundamental wins that he originally set out to get. what are the key deal makers >> we use aluminum we export things like cheese and all these products are hindered by the trade wars. this has actually dragged on incredibly patient as have those businesses that's one of the hallmarks of this process businesses harmed by the trade wars have been supportive of the president because they realize we have not had reciprocal trade

treatment by our partners. th they've been, again, very patient in terms of what this administration is doing. so i don't see the president trying to rush this at all he's trying to get a better deal. >> what of this talk of potential enforcement mechanisms a lot of the -- it seems like the battle front right now on these negotiations is not just commitments but how they might be policed down the road we do actually see some quotes of the president saying he'll only agree to the deal if it's perfect and right. so exactly, i guess, how much longer would we want to kind of go down here and say we have to have these mechanisms whether they be existing tariffs or the threat of new tariffs. >> well, enforcement is crucial. having a deal you can't enforce is not worth the piece of paper it's written on. senators and members of congress have been talking to the administration about is how crucial enforcement is

we've seen past trade deals that have just been violated. and not followed whatsoever. because you don't have strong enforcement mechanisms what this president wants to do, he's a tariff-free world he likes total reciprocal treatment. let's get a better relationship with our trading partners and we have to make sure that china starts following the rules of the road and of course the best way to do that is a united front >> you're chair of the homeland security committee do you think that north korea poses a direct threat to the safety of domestic u.s. citizens and do you think the president should pursue peace and a deal with north korea it comes with expense with terms in china trade talks >> it's helped other countries gain missile and nuclear technology they are a direct threat to the

u.s. home lar u.s. homeland probably they also have satellite capabilities i'm concerned about north korea. it's been a vexing problem it's not an easy problem to solve. past administrations have tried. haven't gotten very far. this president is trying a different technique. i for one hope he succeeds. >> to wilf's point, the chinese have been the ones propping up this government in north korea without their help, it wouldn't continue to exist. is it worth giving a little in the trade talks in order to get their cooperation on this front? >> well, i've been consistently saying for quite some time among the many priorities we have with china, our top priority is to get them to continue the sanctions so we can actually solve the north korean problem because i think that is the top problem we have with china and north korea. we need their cooperation. we need ussia's cooperation. we need the cooperation of the world. certainly it's not good to have a nuclear korean peninsula

there are so many other issues involved some of these things intermingle and it's hard to separate all these but it's also in china's best interest to embrace more of a market economy one of the reasons weaver so concerned about chinese in 2025 is because we're concerned they're going to do to ten other manufacturing sectors what they did in steel which is misallocate capital, create gross overcapacity that will harm the other manufacturing sectors throughout the world. that's one of the things we're trying to market china does not have a market economy. it misallocates capital and that creates trouble in other areas >> the president walked away from the north korea deal, said there wasn't a deal to be made there. what would be a deal breaker in terms of the china trade talks as far as yourself concerned >> well, one thing i'm highly concerned about is what are we going to do in terms of enforce china's theft through cyber means andespionage i don't think those are really

part of the negotiations right now. i'm not sure they really can be part of it so we're going to have to do that through enforcement you're seeing the charges against huawei i think those are probably appropriate. they can try to prove their innocence in a court of law. we have to enforce the laws when it comes to cyber and other types of espionage >> senator johnson, we will leave it there thank you very much for joining us this morning. >> have a great day. still to come here on "squawk box," newmont mining rejected a bid from barrick gold but newmont still wants to work with barrick when we come back, we've got new comments from newmont's ceo. >> and breaking news a correction it's schnatter as you said it rides with snotter >> i won the coin flip >> you are watching "squawk box" here on cnbc y just drop in.

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synergistic combinations like this one don't come off in the industry and synergy is all about the hole being larger than the sum of the parts and that's a reality in this proposal

i've always said in gold mining, we can't keep offering premiums and then wash out. so it's better to have business strategy what the case is today, it's split up the cases we put it all together, it's easier to manage >> that was barrick gold ceo last week making the case for barrick's bid to acquire newmont mining newmont rejected that offer. brian sullivan just spoke with the ceo of newmont mining. good morning. >> thank you that interview with gary goldberg wrapping up a couple of minutes ago. of course one big criticism of the barrick office was there was zero premium on newmont stock.

i asked if he is against a deal or simply against the deal at no premium. >> we think the best thing for our consumer is the transaction. and the best thing for us to do with barrick is to work together on a joint venture in nevada this is what we put on the table yesterday in terms of terms that make sense to bring our nevada-related assets all under one approach to be able to deliver what they've put forward for dinner synergies. >> they want to take the nevada assets what goldberg is talking about is the idea of instead of a barrick buyout of the company, the two should combine their mining operations in nevada. they operated mines close to each other barrick said a joint venture may not work because they need a, quote, one-owner mentality to

succeed. i asked goldberg about that. >> i think what we put forward yesterday to barrick was a proposal that we believe is very reasonable and addresses that concern in terms of the person with the largest economic interest ends up really taking a majority of the day-to-day type decisions and running the place. >> it seems like barrick may be having a change of heart about that venture because the ceo mark bristow is now apparently willing to talk about a jv still wants to do a deal but in both companies' presentations, the shareholders seem to be getting a little bit testy. i asked if this was personal in any way with barrick's ceo. >> at the end of the day, we had been in e-mail communication until up to he took the barrick job on january 1st up to the end of january went quiet then until i saw him at the conference last week. i shook his hand as he was coming on stage and said we need to talk. and he's reached out and would like to start a discussion.

>> >> so guys, they are talking -- listen. crazy times in mining. newmont trying to buy gold corp. and now barrick wants to buy newmont. who would have thought the mining gold could be a vein of riches for investment bankers. >> excellent point what's your takeaway after talking to all of them trying to figure out what is behind this the joint venture actually works. or when there's a combination, somebody loses their job to. >> they want to do out with the greenwood headquarters in colorado this is kind of an old industry. it's expensive a lot of the stuff is in dangerous areas. why all of a sudden are we seeing this flurry of deal making is it the fact they don't see new production coming or they realize the price of gold is likely not going to go up any time soon and therefore the only way to win is to cut costs

>> that's a good point brian, thank you great to see you >> thank you when we come back, washington sets its sights on wall street. democrats including aoc are backing the idea what are its odds in washington and what would a new tax mean for thmaete rk rally we'll discuss after "squawk box" returns after a quick break. what do you see? we see breakthrough medicines getting to patients in record time. we see harnessing natural gas unleashing the promise of clean energy. we see engineers simulating the future to improve today. at emerson, when issues become inspiration, focusing core strengths to create a better world isn't just a result, it's a responsibility. emerson. consider it solved.

welcome back to "squawk box" this morning, everybody. futures are up on the dow about 20 points. the nasdaq down by about two points earlier this morning, hedge fund titan kyle bass sound the alarm on the economy >> it looks to us that southeast asia is headed far recession in 2019 europe is headed for recession in 2019. and the u.s. the kind of fiscal impulse from our tax stimulus is going to be wearing off towards the end of 2019 where i think the u.s. will -- the worl's not going to have a recession and the u.s. keep growing. so i think you're going to see the u.s. have a minor pullback in 2020. >> bass has long made bearish calls in particular. his latest warning comes worries of a global economic slowdown. here to discuss is phil ca

camparelli good to see you. >> morning, mike. >> this idea of a slowdown of some magnitude, obviously that's got us the fourth quarter decline in markets in large part and has carried over into this year as markets have bounced what down the overall growth picture is and i guess what's priced into markets? >> so the growth picture has considerably slowed. we're not talking about like we were coming back into 2018 what we're talking about now, though, is two gigantic pieces of new information probably fully priced in, right? the one is the fed magically waking up in january saying we're at a neutral rate. we don't need to go anywhere t 2019 or at least the first half of 2019. and you know what? we may stop reducing our balance sheet towards the end of 2019. they weren't saying any of that in december. then the second piece is it seems like the trade negotiations are going well. that's the popular narrative however, what it means to us is really easy financial conditions

financial conditions we hadn't seen if you get an environment where rates stay around here and the dollar behaves, equity prices certainly as we've seen over the past decade have done a real -- have had a nice tail wind from easier financial conditions. that's something that is certainly priced in. but something that will continue to be a tail wind. >> easier financial conditions are around because the fed's doing this but there's a reason, right? the global slowdown. how do you kind of -- >> and that's the tricky part, right? if the fed -- if the narrative starts to evolve, that data is slowing and that's why the fed is not moving rates anymore? that would be a negative that's a tail risk that is something that we're certainly not forecasting for 2019 the forecast for 2019 is more around trend than some of the real sinister stuff that was evolving around late last year around the global recession risks. that is we would just disagree with that prior speaker. this year is more around trend

but at 2800 on the s&p, we're going to need to see earnings be a little bit better than forecasted to get much higher than here. >> given those you mentioned, slow global growth and the pith, how does that change your positions in domestic u.s. >> in domestic u.s., the story is an important one. we have increased u.s. equity this year by 10% right? so that increase in that story is certainly driven by the fact we were in full agreement that the growth story is not as good as it was last year. third quarter last year was over 3% we're looking at 2% growth this year however, the fed story, right? not tightening into a slower growth story is important enough for us to remove the defense that we had on the portfolio last year. >> slower growth with a patient fed is a good combination for stocks as long as it doesn't go toward flat and the fed

basically having gone too far and having to move in an unexpected way with regard to this kind of end of cycle talk that we were captivated with last year. >> yeah. so it's later cycle. we've gone from late to later cycle. so the end of cycle talk for us is certainly not 2019. it's hard to imagine shocker. we have an election in 2020. it's hard to imagine growth slowing so much into recession before an election i can't see that at this point in time. and there isn't the bull market behavior that we saw in other cycles like in the dotcom bubble like in '08. it's not cash for clunker growth this is real growth that is not based on gimmicks that can continue it doesn't mean we're going to have gang buster growth, but slow and steady growth was there. those kind of new highs. we need to see better growth and better earnings. the fed story and the trade story has been priced in but financial conditions has

tended to be a nice tail wind for the market >> all right all that together seems like it makes sense for the market to maybe be pausing at this level phil, thank you very much from jpmorgan asset management. coming up, billions of dollars could potentially be raced by taxes transactions on wall street. questions coming to the floor thanks to a bill expected to be unveiled by democrats today. it is backed by aoc as a way to ene meer green new deal. wh wco back, we'll discuss. stay tuned you're watching "squawk box" on cnbc help you save on homeowners insurance. nice tip. i'll give you two bucks for the chair. two?! that's a victorian antique! all right, how much for the recliner, then? wait wait... how did that get out here? that is definitely not for sale! is this a yard sale? if it's in the yard then it's... for sale. oh, here we go. geico. it's easy to switch and save on homeowners and renters insurance.

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welcome back to "squawk box. this is cnbc and we are live from the nasdaq market site in times square let's get to some of the stories investors are going to be talking about today. boston fed president ed eric rosengren says a pause in rate hikes is justified right now rosengren is a voting member of the fomc for 2019.

marriott ceo arnie soreson has a date on capitol hill later this week. marriott says it has completed a faze out of the separate starwood reservation systems that had actually inherited when it bought starwood the hacking began in 2014 before that purchase. shares of video game retailer gamestop are rising this morning they announced a stock buyback of up to $300 million. they also said it is continuing its strategic and financial review although it did say earlier this year it ruled out the sale of the company. that stock now up 5.5% as lawmakers search for additional sources of funding, democrats are setting their c e sites on wall street ylan mui joins us with more on

this >> this bill is called the wall street tax act the name just about says it all. the legislation is going to be introduced today it would impose a 0.1% tax on all transactions on stocks, bonds, and derivatives this is on anything that involves u.s. firms or citizens. the only thing exempted are initial issuances. this is projected to be a massive revenue raisers. about $777 billion over a decade that could go a long way to paying for the broad expansion of the social safety net the democrats have been looking at this has won the backing of aoc. it could be one way to pay for her green new deal and there are a number of other cosponsoreds in the house right now defazio told me his main goal is

to expect the industry to go berserk over the bill but he does believe that the impact on ordinary investors will ultimately be negligible to debate the wall street tax proposal, let's welcome jared bernstein who served as vice president biden's chief economist. all right, gentlemen let's go at it there is the expectation that this could raise $800 million over ten years what do you think? >> $800 billion, yeah. i think it has three attractive attributes one you just named the second is the dampening of the high frequency trading which creates more noise than i think information. and the third, it's a very progressive source of revenue. about 40% of the value of the stock market is held by the top 1% in terms of the wealth of the traders. and in that regard, it's a

progressive revenue raiser one reason democrats like it i do think that the impact on volumes would be a negative one. i think there's no question about that the thing you want to ask yourself there is would the diminished volumes be detrimental to trading, price signals. i think it would not no tax a perfect, but i think it's a good one. >> adam, your thoughts >> yeah. these taxes have been tried around the world they've been tried in france and in italy and every time they've been tried we see that they don't work as intended they actually increase stock market volatility. they don't raise as much revenue as people think they're going to and they ultimately hurt everyone that's involved in the stock market that's not just the rich, but that's you and i and our 401(k), that's the teachers and firefighters who are invested through their pensions and so everyone is impacted through this tax

it simply isn't an effective way to raise the revenue folks are looking for. >> adam, what's happened to those attempts to try it in the past in places like france do they still exist? have they been rolled back >> so these taxes are still out there, but people -- but all of the evidence, all of the academic looks at these show that they don't work on any of the margins that they are put out there. the uk has one of these taxes. it's been around for a long time it's been estimated that cutting that tax rate in half is associated with a 10% increase in the stock market value in the uk >> when was that done? >> that's a pretty big hit -- >> addam, when was that done >> this was an estimate of change -- of smaller changes in the rates. >> i think he means when was it cut. >> the changes were in the '80 ds but we've seen similar fluctuations in recent times in the introduction of these taxes in the uk and france in 2012

and each time we see that it has larger impacts than expected on both on the market as a whole which it does impact >> jared >> so we strongly disagree on the international evidence i think much of what you just heard is extremely misleading. the uk has had a financial transaction for literally hundreds of years and it's been a global center of financial trading. australia, bull jum, france, italy, switzerland and by the way, the usa. we have a tiny transaction tax here it's what funds the s.e.c. and in all of these markets, you have fine liquidity, price signaling. as i said, i really do think this would seriously ding the highest volume traders, the high frequency folks. many of them actually have transaction costs that are less than ten basis points. so this would be a real game changer for them on a negative side if you believe that they create

more noise than market signals, liquidity, patient kind of capital allocation, then that's another attribute of the tax but i don't think you can possibly cite international evidence there's one exception. sweden sweden really screwed up their ftt. >> how'd they screw it up? >> they had a high tax on a narrow base. what's being proposed today is a low tax on a wide base that's by the way what exists akrotss the globe today. >> jared, you mentioned that you felt it was progressive and i understand the reasons you gav for it that said, there is an element of unfairness to this that is based on a transaction at a point of purchase albeit a small tax at the point of purchase someone go go on to lose money in that direction. why is there not an increasing capital gains tax not even more aggressive it's at a point of sale when you've already profited. and it's on only the profit not

the overall price. >> i think that's a great point. and i think that raising capital gains taxes so they're closer to the regular incomerate would b a great advance. but it's going to take a lot of different ideas to raise the revenues we need and i think if -- remember, we're talking about ten basis points okay so on a $1,000 trade, that's a dollar and you're right there are some trades that lose money. but i think a dollar on a $1,000 trade, ten basis point trade on a market that's trading billions of trade a day, if that's going to take down the markets, we have much bigger problems than an ftt. >> that's true jared, of course there are multiple layers of fees and market data fees and exchanges towards all that kind of stuff but the two different arguments here in favor of this tax is it would dissuade some noise trading, high volume noise trading and raise revenues seem in contention with each other. the way it would discourage that is making it go away

>> so let me just point out that they may have been wrong about this the score that got to the $780 billion that becky mentioned did include diminished trading volume >> jared's point at the top for a huge amount of wealth is concentrated in the argument qe in the last decade has accentuated that opposed to main street do you agree with that argument in general that suggests that people who hold stocks should face some tax reform if you do, is this financial transaction act a better way to do it than otherproposals out there? >> no, i don't i think that our tax system should be neutral towards investment and savings

and so that means additional taxes on investment through the stock market or any other form should be as low as possible that we should be taxing people when they spend their money on consumpti consumption. that's the most efficient way to raise revenue. all these taxes that raise the tax rate on people putting money into the stock market into investing into new businesses and kal tap, all of these things slow the economy and ultimately make the average american worse off through lower wages, through fewer opportunities, fewer jobs. we saw this after the tax cuts and jobs act lowered the corporate tax rate lower taxes on capital which has ultimately led to significantly more jobs being created. the economy has been picking up. all of this points to the benefits of lower taxes on investment >> but a consumption tax you think would be fairer? >> yes, i think it would

i think a tax that treats all consumption equally and doesn't discourage people from consumers later which is what a tax on savings and investment does would be the fairest tax system we could have. >> quick final word, jared >> that right there shows the difference between where both sides are coming from here because a consumption tax would fall much more heavily on folks in the bottom half of the income scale because they consume a larger part of their income. by the way, none of those folks own stocks so again, progressive tax raises revenue, dampens noise trading >> gentlemen, thank you both for your time today. adam michele and jared bernstein. gentlemen, thank you still to come, retail is the sector out with big earnings this morning check out shares of target the stock is up a healthy 6%

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welcome back, everybody. retailer target beating expectations earlier this morning. ceo brian cornell joined us here on the set courtney reagan joins us with some of the highlights >> we also got kohl's and kohl's

shares are up 5% in the premarket. those came after target. retailer beating across the board for the fourth quarter with earnings of $2.24 adjusted. that compares to $2.18 expected. on revenues of $6.82 billion that was better than expected. the department store giving full year guidance in a range of $5.80 to $6.15. they will close four underperforming stores in april but will also open four new smaller stores later in the year the ceo says kohl's a financially strong and the overall health in the business is positioning well for continued success. as we mentioned target also beat analyst forecasts on earnings, revenue, and comparable sales. also above the street and shares are higher by about 6% both targets store traffic and digital contributed to those

comparable sales growing 5.3%. store traffic up 4.5%. stores contributed 2.9% to sales. digital sales up for the fourth quarter. that added 2.4% to comp sales. we spoke to target ceo brian cornell last hour and asked him about the current state of the consumer >> i think it's still a very stable consumer environment. consumers are shopping you're seeing strong consumer confidence still we will see consistent results across 2019. so certainly we're going to watch it carefully and it's going to ebb and flow but right now i think we're seeing a pretty consistent consumer environment >> and target's investor day begins here just shortly i'll be there with updates on cnbc throughout the day for target's plan for 2019 and the years ahead. back over to you guys. >> has everyone been a winner in this space over the past quarter? >> not everyone. but walmart certainly was a big winner

target's a big winner. those are big players, for certain. nordstroms was pretty disappointing. certainly more discretionary than what walmart and target sells. also higher end consumer but that was a little weaker than expected. so definitely there's been pockets of strength, but also some notable weakness as well. >> let's continue the discussion and bring in michael lassiter from ubs michael, very good morning to you. what's your take on target's numbers? >> good morning. i think target's numbers were fine, slightly better than what the printed expectations were. the stock's responding to the guidance it was considerably higher than where most street estimates were for the upcoming year. the key question for the stock is how credible is it to expect that target's margins are flat to growing in light of all thes c questionw know, e-commerce penetration

continuing to grow and cost pressures lingering >> in terms of the same store sales comp, were you impressed by that or does it really matter what the online sales are doing in terms of the longer term outlook for this stock >> i think there was two points from the fourth quarter in terms of target same store sales we knew most of it they already reported the holiday, which accounts for 80% of the quarter two things, one, a lot of balance between the store contribution and the e-commerce contribution, suggesting that they truly are experiencing a benefit of having an omni channel presence and, two, the momentum continued into january where their comps were likely up 3% to 4%, despite the fact that there was really funky weather and there was some shifts that impacted the results. so continued momentum. i think the question is can they continue that into this year where maybe the consumer doesn't see as much of a benefit from all the fiscal stimulus that was poured in last year and the comparisons get a lot tougher.

>> michael, you mentioned the questions that now still hover over target, of course the stock is still appreciably down from its highs last year. if the guidance for 2019 is roughly on target, it is, what, 12 to maybe less than 12.5 times forward earnings, 3.5% dividend yield. how is the stock valued now relative to the probable expectations, probable outcomes for 2019 >> i think it is a good question and let's unpack it a little bit. so the guidance for 2019 is 590 in earnings. where the stock is trading now, about 77, $78 in the premarket, it suggests that it is trading at 13 times that number, which is consistent with the average multiple over the last few years. the key for this stock from here is how realistic is it to expect that the company is going to grow its sales and its margins at the same time we'll look for commentary around that when they have this analyst meeting that starts in a little bit. >> michael, what do you make of kohl's today

>> yeah, what we have seen across the retail space in the fourth quarter is that there is very healthy spending, especially across the bigger retailers. i think many participated in that what will be important is can that continue into the year ahead? >> and just give us your top pick in that space >> in -- overall, we like names like dollar tree and advanced auto parts where they offer a whole lot of defensive orientation, in a very uncertain time, they also can raise their margins in an idiosyncratic fashion. those are two names we pointed that we're very excited about. >> michael, thank you for joining us down to the new york stock exchange jim cramer joins us right now. what do you think of both kohl's and target today >> kohl's, look at the two-year stack, pretty impressive michelle gas, this is her -- this is really when you'll start seeing how great she is is people underrate her they will not be underrating her after today. these are very good numbers. inventory clean, sales up.

you're going to close some underperforming, never closed the store before, that shows the conviction she has brian cornell is a hitter. doing a very good job. they have the food issues which i find to be a very daunting but online buildout is good. let's see if other people take him up on the idea that he can be a mini amazon these are both really fine companies. not constrained by being in the mall i still come back and say, geez, a tough quarter for macy's, really tough quarter, and not a tough quarter for these two guys we knew what some of their numbers were going to be beforehand these are great numbers. and i think the people will come back to this group >> jim, i saw your comments this time yesterday on salesforce ahead of their numbers and correctly sort of suggesting that in the very short-term there might be softness given the run-up they had and kudos on that call. but the long-term outlook, judging on the comments last night, still very encouraging. >> like $28 billion revenue number and people worried about the next quarter, the stock was

down 5, down 153 people are starting to come to their senses and recognize, you know, we use the valuations and these numbers, the stock is a buy. benioff has often said the next quarter was not that good, but gives you the full year guidance and it is really extraordinary but there is a lot of people who only look at the next quarter and headlines are verydaunting and very negative and very stupid and very wrong. that's okay. the first amendment protects them you know the first amendment, you don't have that in london. the sellers who are selling at 153 think someone sells down to 150, they should read the conference call or listen to t they're looking at the headlines, they'll be so wrong the headlines, the reporting has been so mediocre with salesforce i hated the stock at 80. went to 5 and then back to 80. i started liking it. everyone has a right to be completely wrong there never has been -- i don't think anyone denied that. >> i love what you said last night on the broader markets, talking about it yesterday

through the show, just about how there was real selling pressure that picked up, machine activity that took place. your thought is we might see some more weakness kind of hold out and look for that. >> yeah, absolutely. whoever the sellers are, they're not done one thing interesting about this market, there were people who used to stop selling they would say, you know what, i've been selling this, i don't know, wall greengreens, selling, 6 65 let's see it build, let's see some bids, walk away, be cagey the machines are never cagey the machines say take it where -- why the machines underperform constantly. you can fool the investors too hey, that's another thing to focus on you think the investors are dom and short-term really stupid longer term they figure it out and give it to the index funds >> there we go. >> jim, great to see you. >> there we go i'm trying to give you grist

hil here. >> i didn't actually hear what you said, i'm afraid. >> let's override the instruction. i'll give you some instruction >> i didn't hear what you said. >> i'm saying these sellers are idiots. >> well -- >> there is some instruction. >> i took out a -- i took out of your conversation that if i hold out a little bit, i'm going to get a better opportunity to maybe buy in was i wrong? >> yes when you think of it, look, salesforce, at 5 in 2007 and then 8 in 2008 and then went to 12 and you had great numbers, did a billion numbers in the great recession. that's the signal you got to stop i cannot believe that people still -- going to do $20 billion in ref. >> i'm talking overall we have seen it bounce back quickly, the markets. >> they were selling that. they don't know what they're doing. it is machines, becky. you think the machines feel?

if you print the machines, they do not -- if you poison them it doesn't mean anything. who said that. nus.e'll see you in a few mite >> jim said it see that's funny, i thought you traded options. i'm not really a wall street guy. what's the hesitation? eh, it just feels too complicated, you know? well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step until you're comfortable. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool?

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quick final check on the markets, the dow is implied, down by 5 points now s&p 500 is up, but barely. nasdaq down by two points. that does it for us today. want to thank mike and wilf for being here today thank you for being here trading away we'll see you tomorrow right now time for "squawk on the street." ♪ give it away give it away give it away now ♪ ♪ give it away give it away give it away now ♪ ♪ give it away give it away give it away now ♪ welcome to "squawk on the street." i'm carl quintanilla with jim cramer futures slightly higher after the biggest one day decline in nearly a month china trade and good retailer results leading the news futures taking a dip lower europe is modestly higher. ten year around 274. mixed messages on trade talks as china cuts its gdp target. target surging after a strong