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 quarter, you'll hear brian cornell talk about their efforts

to tackle online competition and salesforce up 30% over the past year. the major growth projections that marc benioff talked with cramer about stocks are coming off their worst day in about a month with u.s. and china trade talks in focus. overnight, the chinese commerce minister describing discussions as difficult as the u.s. secretary of state pompeo expresses optimism in an address to iowa farmers. take a listen. >> 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 under way will pay dividends for people in each of our two countries. >> did go on to say that the president will not be shy to walk away from china trade if the deal is not exactly right. got to be perfect. >> you know, this is one of those things where it is very clear there is this stop at 2025 world domination agenda. this was a curveball, and i

think that a lot of the sellers expected a curveball at the last minute it is almost as if this is the art of the deal, he's got to say he's got it going and then walk away to show he means business so many people said he needs a win. that's not how he thinks what he's thinking is that you can buy all you want, the actual structure has to make it so there is no more bogus joint ventures there is no more stealing intellectual property. but also there is no more, listen, we'll dominate the world, got to change the tone. will the chinese change the tone, i don't know i don't know but i know that there are a lot of people in administration who think, look, it is absolutely part of the game this was my theory that it is not over that you can get a deal, but there is -- this is going to be a multimonth, you know, trade practice >> david, reuters has a piece out today saying a lot of trade experts argue, look, china may well prefer to pay the tariffs than change its economic model and then go on to say, things like market distorting

subsidies, we don't have a shared definition of what that is between us and china. how do you enforce something like that? >> yeah. carl, you know, it is funny, i keep asking so many of our guests, how much downside is there in this market if in fact this does not come to fruition as it appears certainly at this point so many expect it will and when i listen to jim, and what he's talking about in terms of the ask, sometimes listening, i guess cross country, i listen very closely to you when you're right there with me, jim, of course, but i don't know, you're asking for an awful lot and it is not clear to me at all that if in fact what you're asking is what the administration is asking that you're going to be able to get it, jim. and, you know, or in a real way that is measurable and that is enforceable. and if you don't, i asked you this yesterday, asked a lot of people what is the downside or how is this going to play out if in fact we don't get to an agreement soon but let's say it is just

delayed. not as though it falls apart even with that, seems like there is a lot of hope right now given where the s&p is >> yeah, look, i think, david, there has been this tremendous money coming out of the safe domestic stocks, and going into what people feel, particularly the semis, we're going to get a deal where i'm coming from, david, is i'm not -- i'm not getting the real pushback that some -- look, not like sean hannity where i'm, like, the -- i'm not in the administration devastating. >> you read the -- >> devastating piece she's some reporter. holy cow but i do think that the hard-line camp is going to assert itself here, david. if the hard-line camp gets too hard-line, you're going to see target up 10, but you'll see semis down 10% because that's been the group to watch. look, i like apple, and i say own it, don't trade it apple up is 7 points some say up 15 if they walk away, you'll see the points peel.

>> how about boeing? boeing had the best start for a year since microsoft in '01. >> the vietnamese deal was right in the face of airbus, in the face of china. it doesn't matter, though. even though one out of every four plays goes to china, they'll be at the queue if they walk away. caterpillar, double downgrade takes it to 125. i think there will be buys i think this is rhetoric i think we heard from the softline camp. we have not heard from the hard-line camp david, remember, the hard-line camp doesn't like -- represented by vice president pence in the october 4th heritage speech that is not an easy speech. that's a -- >> it isn't. all right, is lighthizer hard-line? middleline softline where do you put him then? >> depends on the day. depends on the day. >> depends on the day? that's helpful >> i think he's waffling >> i'm helpful or he's helpful

>> none of that is particularly helpful is actually the point i was making >> right >> well -- >> you don't wear a tie, you feel like you're cool suddenly. >> that's true, you know what -- >> i think you're getting mixed messages because the president is sending mixed messages. you think the president -- i don't want to have to talk to shean h sean hannity to find out what is going on here. >> why are you picking up sean hannity? he's not part of the show or the network? >> two hannitys in the a-block. >> this weekend, unbelievable stuff. jane mare. i feel a little left out, david. do you think hannity was the judge in "the apprentice". i was an associate judge. >> all right get in there and, you know, you seem to be sharing some insight on what you think at least is is the hard-line in the administration i know you know navarro well the point is, is there more downside in this market if we don't reach a deal and something is not signed by the end of this

month, let's say at mar-a-lago, the way the administration seemed to want it, the president did. >> my point is that these -- these negotiations are not over after mar-a-lago i think that they're continuing. you better see an america best deal you better see a deal that says mastercard can -- >> cheniere is not enough? >> no, cheniere. cheniere sold out for three years. that's like, david, that's like giving broadcom the go ahead to buy qualcomm cheniere sold out. maybe free port. maybe the other thing is shareef has got going -- >> he sold out too free port sold out they have -- that's the whole beauty of that business, you have ten year contracts into the future, pays for everything. >> it is a give. you can't give to cheniere cheniere is so busy. the president wanted cheniere to send everything to poland to get rid of gazprom >> yeah. >> free port sold out.

not fcs. >> right. >> jim does mention target, and it is up sharply in the premarket this morning of course on better than expected holiday quarter results. best comps in about ten years, full year guidance was good, earlier on "squawk," brian cornell talked about his take on the health of the consumer. >> still a very stable consumer environment. consumers are shopping you're seeing strong consume are 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 is going to ebb and flow, but right now i think we're seeing a pretty consistent consumer environment and that certainly showed up in our january results. >> comps up -3 e-commerce, 31 >> i thought these were terrific this is the kind of stock, if you see more waffling on trade, people come back to domestics. and they're going to come up back to target target is not expensive. by the way, i'm trying to figure

out, you know, target has food walmart has food walmart is the biggest grocer. why did amazon buy whole foods if they're opening up a separate grocery business what was whole foods an experiment? a petri dish just a petri dish? >> i mean, when it broke that morning, right away the thesis appeared to be last mile, right? >> i know. but i'm enthralled by the fact that target didn't take any heat on fresh food. brian cornell didn't take any heat the numbers were very good kroger is going to report this week, they may take a little heat amazon is targeting unclear. urban, not urban, we don't know. amazon is opaque right now >> david, today, this journal piece about how amazon may end up being the savior of the american mall to some degree after helping destroy it >> yeah, that's a bit of a mystery in some ways, carl

but, listen, they're everywhere, we know that every day there is another story about amazon there is full time reporters who do nothing but spend all their time but reporting on amazon and mr. bezos and the different things going on with him, whether it is amazon, yesterday, the times featuring that important piece about all the different subsidies, completely legal, but how aggressive they are for pushing for tax rebates and the like, wherever they decide to be whether it is amazon web services, jim, andy jassy on and so important in terms of the continued push in the cloud that so many -- that we see and then i'm here trying to learn a lot more about just everywhere. not to mention pharma, not to -- it goes on and on and on we can spend ten minutes a day on amazon? >> david, i'm so glad you're out there. one of the things -- people don't want to mention amazon they say, listen, they're out there. it is the unspoken presidency. andy jassy is the guy they're

talking about. they got 47% run growth on a $30 billion run rate who has that, david? no one has that kind of growth that's incredible. >> you think about risks to their -- amazon as an entity, like it is today, is it aws? is that the part you think that eventually people would want to -- >> that's the one. you mean if they make the antitrust -- yeah, i guess so. that would be tough. it is so tied in with prime. there are still a lot of retailers that are on amazon web services that are opponents to amazon what they realize is they hate oracle and getting off oracle. every time larry ellison has an oracle conference call, he mentions amazon uses us, so what is the point they'll be off of oracle david, i think it is going to be eye opening, exactly how much people fear the evil empire. you're the guy that first got that nomenclature from john malone, the death star. >> the death star, yeah, the

death star as he referred to it. that was -- yeah that was a couple of years >> that's not a disney movie people also will be focused on es espn plus and the over the top stuff. >> i'm here to learn that's why i'm out here this week, trying to understand a lot of different things. you come out four times a year i can barely manage it once every three years. there is so much happening out here, as we talk about every day and certainly hoping to learn a lot more about some of those key issues you just raised. >> yeah, i think that people don't understand when you're out there, they're not talking about the quarter for caterpillar. they're talking about the 2023 year and that's what benioff has a lot of time on last night. >> we're going to learn more about david's week out west in the coming days. when we come back, a bullish message from sales force's marc

benioff, what he told jim last nighten "mad money." premarket here, biggest one day decline since february 7 and futures waffling, close to the flat line. back after a break ♪ ♪ 'cos i know what it means ♪ to walk along the lonely street of dreams ♪ ♪ here i go again on my--- you realize your vows are a whitesnake song? i do. if you ride, you get it. geico motorcycle. 15 minutes could save you 15% or more.

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salesforce up. just shy of what many analysts had been expecting but last night on "mad money," marc benioff talked about optimism regarding revenue growth take a listen. >> here we are, coming up on a year that we'll do $16 billion on revenue i never have been more excited about salesforce than i am right now. and when i look at the short-term, you know, i see $20 billion right around the quarter. i see $30 billion around the corner we initiated a four year guidance today of 26 to $28 billion. >> today the journal says deceleration remains most dreaded word in the tech world. >> give me a break 2008, $749 million 20 10, $1.3 billion.

2011, $1.7 billion 2019, $13.3 billion. that's what you -- you look at the full year, the quarter is meaningless. he's giving you full year guidance, the fastest growing of any major enterprise software company. and if you take your reaction as the stock went down to 153 to what he's saying about the quarter, i grilled him repeatedly what is the problem? there is no problem. look at the full year. look at the projections, 26 to $28 billion in revs, this man was doing -- people are in awe of what he's doing you can sell it, short it, do whatever you want, you can come in and sell it, knock it down, in the end, the numbers of what he is setting he's exceeded for a year basis not a quarter basis, a year. that's how you judge him >> david, obviously for the city that you're in, company remains

both a physical and figurative >> yes heading over to that tower later today, actually. >> oh. >> jim, the research this morning, a chance to look through, almost uniformly positive on the stock, which had been down and then seemed to turn around. we'll see how it actually opens. i got morgan stanley talking about a $200 billion total available market, with billings growing 22% as you said year over year to $6.8 billion and talking about getting bigger in sas as multiple industry dynamics drive more demand than data to the platform goldman sachs, similarly talking about and reiterating their buy rating they got wall street behind them here it has been a good call so far, hasn't it? >> there is seven, eight, nine, ten, ten price target bumps off this and, look, there have been people from the very beginning who doubted this company now they're getting nine figure

contracts. and it has been the right thing to do that morning to short. yesterday morning. and then you got to cover after people say, oh, my god, headlines are bad. the headline writers are in control of salesforce and they are, like, must be robo. because they don't even wait they're like out there i get -- i look at the headlines and say, well, okay, so the first quarter, no, weak, weak, weak guidance weak. they haven't hurt them yet if anything we have to protect people from the instant analysis, which has been wrong so often and has gotten people out of sales for salesforce it looks dreadful. >> dreadful is an awfully strong word does the guidance not imply that the long-term compound annual growth rate goes to 19 instead of mid-20s. >> everybody wants to be andy jassy and be -- grow in the 40s. but the issue here is that it is

a dominant company and it keeps taking share from everyone and you may not like it, but this stock is up from 8 in the great recession. and it is because they keep taking share, taking names, adding cloud verticals i love a 20% grower that has got a $28 billion revenue. very impressive. not everybody can be amazon. only amazon is amazon. >> yeah. we'll watch sales force today. key name >> we'll get cramer's mad dash and count down to the opening bell, one look at the premarket before we get the opening bell in about 9 1/2 mines dot awhe. n'gonyer ut you should be mad at leaf blowers. [beep] you should be mad your neighbor always wants to hang out. and you should be mad your smart fridge is unnecessarily complicated. but you're not mad, because you have e*trade which isn't complicated.

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♪ rock steady steady rocking all night long ♪ ♪ we begin to rock opening bell is coming up. let's get cramer's mad dash. another name in retail today. >> kohl's, kohl's beat by 6 cents. michelle gas on the conference call just said that the first quarter is going to be a little bit below the range because february was soft. so now will give up the gain will it be down? the answer yes, it will be down. people didn't want to hear that. it is not as good as target. that's painful for me. i like target very much. trust owns kohl's. michelle gas is great. february being weak is not what people want to hear. it will take it down and then look at the 4% yield and people will come in and buy. >> all right this is becoming a pattern, isn't it >> yes. >> selling on short-term worries. >> and then coming back. >> right

>> and that is right it is a pattern. people give up 65, the stock was up 3 and then they'll take it down 2, because of the february comment. and then people come in and say, why did i sell it down 2 3.8 yield. the answer is because that's what people do it is a little problematic unless you are pristine and blow things away, gigantically, like foot locker did, people say, i don't like the february -- foot locker no weakness foot locker is an amazing story. it has to do with the preciousness of individual nike and adidas additions particularly jordans that's why the stock -- it puts money into their own version of stock exchange, which i think is going to be incredibly prescient called goat, greatest of all time foot locker is not quitting. >> in general, retailers, where do they fit? >> they're good. i think it was a little surprising your call to say weakness in february, because a lot of guys had strength in

february maybe they make it back in march. january was good that was disappointing i didn't hear that from target listen, you know, michelle gas, not the story people want. >> we'll watch kohl's as well as target and foot locker today we'll get the opening bell we all know what happened just a few days ago opening bell five minutes away your favorite restaurants now it doesn't matter dash. where you are. ♪ it doesn't matter what you're hungry for. it doesn't even matter how many you are. ♪ restaurants come to you. delicious at your door.

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u.s. bank -- the power of possible. you're watching cnbc's "squawk on the street" live from the financial capital of the world. opening bell in a couple of minutes, coming off of the biggest one day drop in about a month for the dow and the s&p and the widest intraday range since january. what do you make, the decay of short-term momentum environment, what happened? >> i think that there is -- you mentioned a good piece in the "wall street journal," president zh xi is supposed to be president for life the economy is slowing there i think the president is looking at the numbers, they don't have poll numbers, obviously, like gallup poll or anything, but i think he's looking at the numbers of the economy and thinking maybe we ought to be a little cagey

maybe those numbers are so bad, we can play a little hard ball they got rid of the 2025 mention. that's this world domination plan i call it the weakness in china numbers may make the president be a little tough and that's not what a lot of people want to see. >> even though the comp is running ahead of our own indices for the year. >> yes yes. and chinese are obviously very excited. they think there will be a deal. this is this whole -- you speak to the administration, who needs the deal more? i think the president is starting to feel, well why know what, the chinese need it more whoever needs it more does not have the bargaining position the president's eyes so i think that this belton road initiative, vice president pence hates it this is where you give these countries money, and then they get in trouble, and then you -- venezuela, venezuela so in deep to the chinese interesting to see if a new -- a new president comes in in venezuela, will they repudiate china? i think the president feels he

has a stronger hand than he did going into the year. that's why i was saying it is wolfin i waffling the numbers come out -- >> markets are hungry for some follow through on trade. there is the opening bell, s&p at the cnbc real time exchange the big board, women and etfs highlighting international women's day this friday, and nasdaq arena pharmaceuticals doing the honors china did cut their growth goal for the year to 6.5. that's, what, a three decade low? >> that's not lost on the president who probably feels the numbers are inflated to begin with the longer this thing drags out, the more companies leave, which then slows down their growth further. look, am i saying that china is not in power no china is incredibly powerful i am saying the president does not think that xi is the president for life now they will never talk regime

change there even when i provoked them, they will not go regime change. but they do say instability. and instability is a watch word. president feels he's more stable than xi is how about that how about that >> interesting transports remain a real focus, jim, because airlines are doing well today but airlines and truckers have in the done nearly as well as the rails in recent days >> trucking spot rates are down for the year and that's something people should be talking about. we talk about trucking shortage. they had a trucking shortage in the -- in the remediation waste, hazardous waste. delta reported top of the range numbers to delta has been disappointing that's a very, very good sign. we needed the airlines to contribute trains have been terrific. i was out at uber has a freight decision this driver shortage they claim will be solved by the fourth quarter.

as many new drivers come in, who are not part of the workforce now. who say, listen, i got -- they post roots minneapolis to texas, and then what happens is they come back and it is empty. you now post roots if you're uber and they're taking down, moving up grain, watch uber, uber is going to break the stranglehold of the trucking companies. >> we'll watch for that. in addition to the ipo dynamic david, there is plenty of activist news today, lb or pizza or some other names. >> yeah. on pizza, you know, we'll look and see what the stock is doing. and not unexpected, obviously still a large shareholder is mr. schnatter, but we spoke to jeff smith and the company's ceo a few weeks back when starboard took that significant stake and board seats, they at least alluded to the fact that they were trying to work in an arrangement with mr. schnatter that has happened, stepping off

the board as you indicated as for l brands, i'll defer to jim on that. i'm not familiar with the activists in question. they do not own a large stake. certainly, though, jim, i know there has been some frustration in terms of the overall performance of the company itself. >> oh, my. look, we knew victoria's secret was going down we knew bath & body works was going up pink was going down. what is really happened there is that a lot of people feel that no matter how good bath & body is, it can't carry what is going on with victoria's see credit. >> like the red lobster/olive garden. >> great analysis. some of the parts, a lot of people feel are dramatically feeler than where the stock is i disagree some of the parts aanalysis has been a sucker play what you care about is if it is in the mall, and it is not foot locker, it is losing look at what happened with children's place what a blowup yesterday. that was horrible. i really think that -- really, with the exception of foot

locker, i've not seen anybody with good numbers yet. >> although investors seem to like what gap did in terms of their own -- >> absolutely. there, you're getting two companies and one is taking advantage of the chaos and closing half of the gap stores it is not going to be gap. newco, this thing is not going to be gap. it is going to be some amalgam of sustainability. and, remember, athleta is b certified. google b certified so they understand, all these executives talk about sustainability, they're so worried about landfill, and you speak with them off camera, they have to keep saying they're purpose driven i go to benioff and say, you're always purpose driven. now everybody is getting purpose driven that's the world these vf corp. is the most purpose driven of any of the apparel companies. extraordinary. that's a winner. >> i haven't heard that yet. david, i wonder, kyle bass was

on worldwide exchange this morning. even earlier for you out west, but he did say he thought u.s. interest rates would go back to zero by next year. >> yeah. 2020, calling for interest rates to head back down and obviously weighing in as kyle seems to want to do a lot these days on china which he started to do with us, i think, joining brian sullivan this morning on this, as you said on wex and talking about all the issues we talked about so often in terms of force technology transfers, intellectual property theft and his view that the number one asset in the u.s. by the way, carl, is our ingenuity, intellectual property and our ability to innovate. but, yeah, interesting thoughts when it comes to 2020 in terms of rates headed back to zero haven't had a chance to talk to kyle about it specifically, so want to sort of fully understand

what underlies that, other than his belief that europe's headed toward a recession in 19, southeast asia maybe headed toward a recession in 2019 and the fiscal impulse and tax stimulus will wear off as well as this year moves along. >> yeah. rosengren, voting member, by the way, this year, says it might be several meetings, jim, before the fed can actually call whether these risks are risks to the economy are becoming reality. >> i feel kyle bass was extreme. there is a bit of hyperbole. i think that the next move in rates is going to be higher, not lower, if we get a deal with china. i do think that, look, as the economy -- is the economy great? people are starting to say margins are okay it is so great we got to stop doing this. got to stop talking about there is three weeks that were bad -- another thing, i keep referring back to benioff, he's saying, chuck roberts says this too, did we have a bad day? well, that was a -- maybe it was

a bad warning? how many times -- we can't play this game every second business is okay one of them that is really hard to believe, we're all trying to guess what amazon -- do you know amazon has not even confirmed they're doing this grocery deal. we already decided they're going to wipe out kroger but they haven't even confirmed it yet. i just think that there is a level of short-term thinking that is extraordinary. kohl's said something positive in the conference call it was bad it was good, bad, sister, mother, sister, mother, david, you know the sister, mother situation you've been there. >> i'm right near china town, yeah right. i'm going to check on the water supply as well >> forget it, david, it is china town >> forget about it >> just -- >> you're dressed appropriately. you look like jack nicholson here's david >> yeah. not so sure. you don't see him anymore. i miss him

>> all work and no play makes david a very dull boy. david, when you're out there, i'm not sure exactly who you're talking to, but does anybody acknowledge the fact that facebook is up 25 straight points and there is still, like, the bad actor that they were -- what is happening with instagram and facebook every advertiser i talked to, purpose driven advertiser, is saying, listen, we're stuck with facebook we want to be off of facebook, we can't, we're an instagram david, come on you know, can we still find a negative narrative facebookor did they win >> i'll ask around, jim, since i'm just starting here this morning, it is still dark, still, i don't know, 6:38 in the morning. i will promise to ask and, yes, your point is well taken what is the stock up, 28 plus percent this year alone. certainly performing very well in terms of the faang complex. i would imagine that there are still people who believe they have quite a few challenges ahead for them i'm happy to talk to them. i'm here anybody that wants to come, say

hello, have me come and say hello, i'm happy to do that. thanks, jim, for -- >> facebook was up 5 yesterday i think on a day when tech was all down, no one even cared. facebook was down 5, we would -- "the new york times" would do a story saying the reason why is because they sold your data to themselves we haven't had a sold data story in the last maybe four weeks >> and despite some negative news for youtube in recent days, needham today initiates google at a buy 13.50 target, not far from the october high >> wow >> they say using netflix as a benchmark implies that youtube's value is about 140 billion, representing 19% of google's value. >> i think they'll start talking. i think one thing that has -- is changing at alphabet, like when amazon, we had andy jassy on, these companies will start talking about how they're not doing as badly as people think because they're tired of the cloud kings just -- tired of vm

ware, tired of service now, tired of workday they are doing great stuff one thing that was amazing was i talked to benioff about google google is getting into the customer service business. i think that you're seeing these companies saying we're mad as hell and not going to take it anymore. >> going on offense. >> yes, going on offense they have not done that. they have held back. they didn't want to be part of the conversation i think that's changing. >> one last point, guys, this morning, regards the gold miners newmont mining ceo gary goldberg and brian sullivan talking about his rejection of that takeover bid by barrick take a listen. >> we reviewed it about our advisers and our board and decided that just whole approach didn't make sense. we still believe the best approach is for us to continue to pursue the goldcorp transaction as we are and to work with barrick on a joint venture that can deliver the synergy values to both sets of

shareholders. >> david, any thoughts on implications here? >> you know, listen, it is a fight. we knew it would be potentially. barrick did not do themselves that many favors by beginning it with a nonpremium deal but they're very much focused on the synergies, they believe they can deliver under the management of mark bristow. he makes that point time and again by merging the two companies' operations in nevada. they believe there is an enormous amount to save as much as getting to a billion dollars a year he's going to join jim, i guess tonight, right, jim? >> yeah. >> i mean, goldberg saying, listen, the goldcorp transaction is better way to go. offers up the olive branch of a joint venture in nevada, save money as a result of that. why isn't that enough? this is going to have to move to another phase here but to a point that was being made yesterday, by my guest jim woolery, there aren't that many large shareholders here. on the vote, on what happens in terms of these deals, and so

that's really the audience that is key for both bristow and goldberg to opine to >> yeah. well, as someone who has 400 olive trees in tuscany, i can tell you that you get a freeze, they all die and there is no one more frosty right now than bristow he is coming in with a fight, the guy is just -- he won't be denied bristow will not be denied >> okay. if you say so. i believe you. give him a hard time, though, will you, please give him a hard time tonight, all right? >> i promise maybe i'll insult him. maybe i'll insult him. is that what you want? >> no i like it when we -- you bring the mean jim >> i can't -- >> you were mean this weekend. >> i don't want to talk about it. >> okay. i was mean won't let that happen again.

the old cramer someone said that. don't bring back the old cramer. >> hide your kids. want to hear moreabout that later. dow is down 23 points on this tuesday. let's get to bob pisani. >> the old cramer was find by me not even on the advance/decline line a split open we stalled at 2800 on the s&p. so you want to watch the leadership groups for signs of faltering or breakouts let's look at the leadership groups what led in 2019 semiconductors, number one stalled out. banks, up 20%. kind of stalled out. industrials, flattish. energy, flattish the russell 2000, it basically stalled out 6 or 7 days ago, below is 200-day moving average. leadership group, there they are, stalled out 5, 6, 7 days ago. that's the problem we can't get the market really moving forward because we got a lot of issues i think the real action is in china. you see big political meetings going on in china now. and we got some moves up this is the best performing

stock mark net tet in the world, the shanghai, up again, shenzhen up, hang seng up fractionally. very interesting what is coming out of the big political meeting. they're talking about slower growth and a lot more stimulus over there the gdp is now 6 to 6.5% it was 6.6% in 2018. they're talking about a lot more tax cuts again and even more infrastructure spending again, this does not sound like a government that is confident that ending the trade war was going to solve their problems here. the global economic slowdown is very real. you see it in europe and china, and it is not all solved if we just get a trade deal. people have to understand the differences here here is the problem for the markets right now. we're up, what, 16%, 17% since the bottom on december 24th. we already assumed the positive outcome that the fed will be friendly with us but the global growth is a big wild card, independent of the trade talks. the dollar strength also somewhat of an issue, a little

bit less overall just bare that in mind we haven't figured this whole thing out yet. there are some serious head winds facing the markets as for the rest of the market, finally getting the rest of the retailers in target had terrific guidance for 2019 even kohl's, the biggest surprise, kohl's guidance was excellent. l brands, a lot of talk take a look who the winners and losers are most of the earnings in on retailers. very obvious who is winning and who is losing. the dollar stores, they're the winners, also winners home depot and lowe's home improvement guys. outliers out there, costco and surprisingly some people are surprised, i am, best buy, looks like they're doing fine. they're going to do all right. elsewhere, what else do you got? you got the apparel guys aren't doing that great and the department stores generally are not. kohl's was a surprise today. but, remember, kohl's has a great dividend some retail guys that pay a lot

in a way of dividend and attracting dividend buyers macy's, l brands, cody, kohl's, all 4% to 6% that's a factor overall. the other factor are buybacks. we have been mentioning with all this political talk around the buybacks, who is going on here gamestop is one of those severals doen severa s dozen in the s&p 500 that bought back, that have reduced their shares outstanding more than 25% since 2010 and gamestop is in that group here, they have reduced their shares outstanding by 38% and why am i bringing it up? they're doing even another one an even bigger one out there and that may reduce shares by an additional 20or 25%. huge buyback announced by them another one, delta also announced a fairly large buyback. reduced its shares by about 20% since outstanding by about 20% since then so this buyback story, it is as big in 2019 as it was in 2018.

we may have a record in 2019 if this keeps going at the lows for the day, down 60 points back to you. >> bob pisani, to the bond pits as well, rick santelli at the cme as well. good morning, rick. >> good morning, carl. 2s, 5s, 10s, 30s up a basis point. the long end has led as you see, one week of 30-year bonds as we hover at 310, open the chart up, these are the best yields going back to december of last year. now, i know that's not a long stretch, but it is the only maturity that is now yielding higher than it closed the last day of 2018. and if you continue to monitor 30 minus 10s, that widening has been a good indicator that rates are moving higher. year to date of the dollar index, also doing much better. do consider this, as we hover

right in the 96.75 area, the high for the year on a closing basis is 97.13 you're getting very close. and last year's high was 97.54 as many of you watching are aware of, it seems as though every time we get around 97, even zaps the strength of the dollar and that may be true, but the ongoing residual strength that always seems to emerge is something traders are highly aware of and let's look at some of the other cross currencies, shall we, dollar yen, look at how strong, best levels on the greenback since mid-december and finally, dollar versus the yuan, the chinese currency, it is not at the lows, but it is darn close to the lows of early july this is significant as we continue to monitor how that relationship trends as we all continue to monitor how the trade relationship is morphing carl, jim, david, back to you. >> thank you very much, rick

santelli still to come, former treasury secretary larry summers, talking the economy, trade and what he believes is a recipe for disaster s&p is down about 5. dow down 47. back in a minute in the meantime, look at this morning's top performing names on the s&p

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dow down 75 points some weakness in financials as well as semiconductors look at the worst performing mes on the s&p there's align and micron and western di gital

♪ it's time for cramer and stop trading >> the ceo of kohl's, buries the lead she's talked a lot about amazon. ongoing relationship this return business they have now she's saying going forward in partnership with amazon we've made the decision to transition from -- within toward concept to a more robust wholesale relationship with amazon 200 stores are doing it. and that turned the whole stock

around any time you can be affiliated with amazon rather than wipe you out. the death star has partnered with kohl's and that moved up everything it sounds like a very robust partnership and congratulations to michelle for pulling that one out. holy cow >> what's on "mad" tonight >> we have square. not jack, but we have -- used to have sarah friar we'll learn about square payments and jackie reses very smart and then isrg, the da vinci code they never do tv this is very exciting. that's only about seven years to get that one >> congratulations >> and how about david out there? >> yeah, looking good. no tie >> he's got the right look that tie always distinguishes me as someone from the irs. >> "mad money" tonight at 6:00 p.m. eastern time larry summers on markets, the economy and u.s./china trade. dow is down 67

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sara eisen faber is with us from one market in san francisco on a week's worth of coverage out west markets having a bit of a tough time getting out of the red. down 65 on the dow and down 7.5 on the s&p some data about to cross the tape including new home sales and ism services let's get to rick santelli >> well, not so old. on the ism nonmanufacturing, looking at february and, indeed, the biggest swat on the u.s. economy. we're expecting anumber in the 57 camp. we end up with a big number. 59.7 59.7 that's the best number going back to september of last year when it was at 60.8. and that number was the best going all the way back to '05 which was 61.3 and that number was a 20-year high this really is a surge now new home sales definitely an old number this is december expecting 600. we end up with 621,000

seasonally adjusted annualized units and that follows a downward revision. a rather large one from 657 to just under 600,000 at 599 which really boosts this number. puts it up to, what, up 599, 621, big number. like up 16 percentage. excuse me. 3.7% 3.7% so that's a biggie we want to go to diana to find out not only why we had such a large revision from november, but see if we're establishing something at the end of last year diana? >> i'm not surprised at all at the downward revision in november when it came out, every single analyst to a person that i spoke to said that number cannot be right. we did not see that strength in november so again, seeing in december then pop back from that lower number, you put it all together. home sales at the end of the year were very weak.

that's what we heard from the big builders across the board. dl horton, pulte, toll brothers. all saw weakness and now we're seeing that in the december seams the median home price $318,600 down from december the year before that's a good sign we're looking for builders to pull back on the pricing the question, is it also a mix issue as in, are only the lower priced homes selling builders have been in the move up in the luxury market because those lower priced homes are so expensive to build with the high cost of land, labor and materials. i would note analyst at evercore isi, steven east, downgraded five of the biggest builders saying the hope trade which usually comes just before the spring market is over because the builder stocks were so hard hit last fall that they bumped up, up 25% in just the last three months the money has already been made. now we're starting to get weaker numbers in and we're probably going to see weaker reflection in the stock going forward

as for spring ahead, it's going to be all about pricing. mortgage rates are lower we saw them pop up in the fall but they have pulled back now. are the builders going to pull back that pricing even more to get more buyers? in we'll have to see but the numbers for the end of the year show we did end up week because of the bump up in mortgage rates toward the end of the year >> diana and rakick, thank you our road map for the hour starts with mixed messages the u.s. and china telling two different tales of ongoing trade talks. china slashes its target for economic growth. we'll take you live to beijing >> retailers kicking off a big week of earnings target and kohl's higher after reporting upbeat results former vice chairman of target will join us we begin with the ongoing trade talks. mike pompeo expressing optimism in an address to iowa farmers. >> 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 under way will pay dividends for people in each of our two countries. >> secretary also says if a trade deal with china doesn't work, we'll keep banging away at it on the other hand, in china, the commerce minister is describing negotiations as difficult and overshadowing the national people's congress. china is slashing its growth forecast for the year. in beijing we find our own eunice yoon. >> they are difficult and demanding because the stages of development of the two countries as well as the cultures are just so different he said a lot more work has to be done and separately, the banking regulator also weighed in saying he believed there was no doubt that the two sides can make an agreement related to the opening of the financial sector here now both officials were speaking on the sidelines of the national

people's congress which kicked off today here in beijing. the premier presented china's version of the state of the union address where he acknowledged the trade dispute with the united states was one of the challenges that faced the chinese economy and that this year appeared to be, quote, a tough struggle now the gdp target has been lowered to a range of 6 to 6.5%. the cpi is expected to be manageable at 3% and the economy is also going to create 11 million new jobs this is significant because that means the government believes that the job creation is going to be worse than 2018. and the premier had said that job stability would guide policy so the deficit to gdp ratio was raised to 2.8% that means the budget is now going to include $2 trillion yuan, about 2% of gdp of extra tax cuts and lower fees, bank lending for smes will be a priority the government also said it's greenlighting local bonds, 59% more from last year which

surprised a lot of people to fund infrastructure. what was also interesting was what was missing in the report because there was no mention of the very controversial made in china 2025 strategy which has been raising a lot of eyebrows among trading partners, including with the united states and the premier's report, though, did say that one of china's top priorities is still to promote high quality manufacturing and strengthen technological innovation so the language may be different, but beijing's ambition is still apparently to become a leader in both technology as well as manufacturing. guys >> and eunice, what do you know about the new foreign investment law which seems to be sort of critical now in these talks that are shaping up and how big of a change is it? >> well, it's a big deal from the chinese perspective because this new foreign investment law which is expected to be approved by march 15th when the whole

national people's congress ends is expected to replace the current three jv laws. so that means, in theory, there won't be a need for jvs anymore and also is expected to address a lot of other issues such as forced technology transfers, no more forced technology transfers, according to this law. and the state also will be limited in illegally involving itself in foreign operations and then another part of this law which people especially in the business community here have been celebrating is the idea that under this new law, foreign companies can weigh in with a product standard so that's been something that a lot of foreign companies have been wanting, of course, including american ones. however, as is always the case in china, what is good on paper isn't always good when it comes to the implementation. so there's still a lot of skepticism about this law. also language in the law that includes a national security review, and that's not very clear.

so that's been confusing people. and then finally, even though this idea that you'd get rid of all jvs, it still conflicts with another regulation where american companies are still going to come under a regulation that involves a negatives list so if american companies want to get into certain sectors, they still have to get into that sector through a jv with a chinese partner. >> fascinating look. great context, eunice. the market works closer back to the flat line. for the closer look at the impact, alan ruskin is here from deutsche bank and jeff kleintopt from charles schwab. thanks for coming in i won't ask you to read tea leaves out of the people's congress are they more incentivized to close a deal now >> there's enough weakness in chinese growth, and considerable incentive for china to do

everything to bolster growth whether on the monetary fund we see on the fiscal side of things and, therefore, anything on the structural side that can help and the trade side, absolutely they're definitely incentivized to do thedeal. what costs them more, paying tariffs from here until infinity or changing their entire economic model >> there's some red lines in terms of changing their entire economic model i think the idea of providing underlying support for state-owned enterprises, providing some support in strategic areas, notably the military, those areas are red lines effectively. in other areas, you heard about things like joint ventures, at least paying lip service to providing protection for intellectual property. >> so now that we have some actual numbers, jeff chinese stocks were the world's biggest losers last year so far this year, the biggest winners. do you still buy >> no. i think markets have gotten too

excited this trade deal mineansa rebound in growth in china that's not been the problem in china. the latest numbers through january shows chinese exports are up 14% year over year. that's faster than the overall economy. china's slowdown was internally driven based on a tightening credit to avoid these zombie cities and bridges to nowhere and building of this debt mountain what they are trying to do now is implement western-style stimulus in the form of tax cuts it may work but there's no sign of that yet. china's economic surprise index continues to come in negative meaning economic data continues to surprise to the down size despite many months of tax cuts now. just not showing up yet. so i think it may turn around, maybe later this year, but the bet it's already a done deal just on a trade deal, i think, is getting too far ahead of itself in china. >> so you don't buy the argument if they get a trade deal done, the manufacturing numbers for instance, which shouhave been contractionary will turn around?

>> sentiment may get better but we've not seen a slowdown tied to trade main of china's asian counterparts have picked up. 14% year over year export growth maybe that would get a little better but that's not been the drag on the economy. it's been internal spending, government spending on state-owned enterprise and infrastruct are programs and that's not set to turn around according to the national people's congress which we've just seen laid out for 2019. >> if it's not trade, maybe it's cap ex or fixed asset investment do those things turn if a deal closes >> a little bit, but i would agree with the former guest in saying that credit is absolutely crucial here there is one variable people don't look at sufficiently it's chinese money supply growth it remains down in the doldrums close to zero. social financing, the broad measure of credit, it's finally taking off if that continues to take off, growth will follow in six

months if it doesn't, well, then you are still going to see depressed growth regardless of what you see on trade >> jeff, we got a solid number on services. biggest part of our economy for ism there. for february is that important? the markets seem to react to that does that give you any sense of where the u.s. is in this global slowdown >> the u.s. has been holding up better than the rest of the world as we know services may be a little less impacted by, you know, the trade situation than maybe some manufacturing companies. i'm not sure i think, again, sentiment tends to lag and with the rally this year, stocks have done well. that plays into the sentiment indices. some of that optimism we already know that's embedded in the market i'd be surprised if the markets reacted further to something embedded in a market reaction. >> how about some of the european pmis which some argue were shy of horrible, right?

>> absolutely. well shy of horrible and again, the story is services services are resilient the manufacturing sector is genuinely week the manufacturing sector is much more cyclical and tends to lead services services are robust enough particularly in the u.s. that i think all this talk about recession is distinctly premature. >> so which -- which market do you like, alan do you buy the u.s. in that it is resilient and has been outperforming, or do you look elsewhere on the fact it's been weaker >> i think the u.s. will be okay we've had a nice, strong rally in january and february. we are hitting resistance here between 2800 and 2817 on the s&p. it's been very tough going >> tough yesterday >> we break through there, at least another 100 points and grab your 100 points where you can get it not the kind of year you hit home runs. >> jeff, where in the world? >> a lot of ups and downs. i think you remain diversified in this environment of heightened volatility.

that's going to be the key to success in 2019. >> guys, thanks. jeff, see you soon >> see you next time >> it's a big morning for retailers. target up sharply on better than expected holiday quarter results. comps, also full-year guidance kohl's also trading up after beating the street on the top and bottom lines we'll have much more on these moves throughout the hour. what it signals about the industry and the state of the consumer former target vice chairman gerald storch will be here to join us. david? >> thanks, sara. our next guest is sporting some big name tech stocks n expects the market to pull back 5% to 10%. joiningous the phone to explain, alpha one capital's founding partner dan niles. always nice to have you. you are net short in your hedge fund, why? >> i think, you know if you look back on december 24th, we put out a tweet on this, and i think you had me on the air soon after

talking about the fact we thought the market was oversold. it has one of the seven worst starts in history for a q4 and so, you know, you look at that and say five of those other times were during the great depression and once when lehman brothers failed. market clearly got oversold. this rally has been 19% after a sell-off of 20%. and if you look back through history and we put out a chart on this under my handl handle @danieltniles, nearlily these bounces are about 15% over 38 days. this bounce has been 19% over 67 days there's been no 3% correction. so you talked about this, i think, in some earlier segments where optimism has gotten really high over this trade deal. people are excited that the fed doesn't look like they'll be raising much anymore but, you know, you look at some of the economic data still coming out it's notnecessarily that bullish. so it doesn't make sense for the market in my opinion, to hav

ripped up as much as it has, especially when, you know, you got earnings coming up soon. we're in the month of march. and i think you're going to see a lot of issues with some of these sectors that have bounced the hardest like in semiconductors >> you also seem to think we'll see issues overall in terms of the data points for global growth why? >> well, i mean, you're seeing some of it already we talked -- you talked earlier about china. they are forecasting 6% to 6.5% growth which is the slowest in decades. you are talking about them cutting taxes in certain areas, interestingly enough obviously a lot of the u.s. presidential candidates are talking about raising taxes. and you look at europe i mean, we're debating, is there going to be need for another -- their version of quantitative easing there as germany potentially is going into a recession. we still don't know what's going on with brexit so there's global growth in general is not that robust, and multiples of off this 20% rally

have gotten back to relatively high levels for the level of growth you're running. >> yeah, we'relooking at the names of faang which brings me to some of the names you're short. also nice to get somebody that comes on and talks about what they're short. let's start with netflix why short the stock? >> well, i mean, you have to think about it this way. netflix has done a fantastic job. it's my guilty pleasure. when i have to relax, i sit down and watch netflix. the problem this year if you think about it, you have apple coming into the market, streaming. you have other big players like disney a lot of what i watch on netflix is actually disney content disney will be pulling that content at the end of this year in terms of some of the new movies coming out. won't be on there, like "capital marvel" launching in a few days. and they'll have a lot more competition and don't forget, netflix still burns 3 billion in cash flow every year

and comcast coming next year and you have warner media, which is owned by at&t, obviously, coming later this year. so a lot more competition coming, but more importantly, a lot of the content you like to watch like, i like watching the marvel series of avengers. they're not going to be on that going forward. you'll have to move to some place else so those are things -- >> but the underlying assumption is that people will actually move off the platform. nothing seems to indicate that, even with the potential pliferation. you seem to think people will leave netflix. i find that hard to imagine. >> it's not leaving. it's a question of growth. if you'll sign up for a new service, and again, you can't look at -- the way i look at it, you can't look at shorts in isolation. you have to look at when you're running a hedge fund, which we

are, how are these matched up? we're long a fair number of stocks in the internet space we bought alibaba, bidue we like those names in china in baidu's case, down 40% from its 52-week high netflix is up 50% from its 52-week low. so there's balances to all of this we love electronic arts and think that's going to do very well in terms of streaming games. i think the new game that they put out, apex legends, is going to do fantastically well that stock is down 35% from its 52-week high they're at 50 million users i$5n a month. took fort nite 40 months to get to 45 million users. and with apple, back to being short that we got long that, believe it or not, in early january for our bounce which it did. we're back to being short it, but we're also long momentum against that which supplies all the 3d sensors so a lot of this is balancing out the longs and the shorts,

and on december 24th, we had one short. now we've got more percentage on the short side than we do on the long side. and so i think it's a matter of positioning. >> dan, it's sara. i know we'll hit apple in a moment just on netflix. this has to be a painful stock to be short up 50% from the lows, up 30% this year a lot of the reasons you laid out are not new. we've heard it from netflix. what do you think turns the tide and how painful has this been for you? >> hasn't been painful at all. it's a question of when you put the short on netflix actually was one of our best profit generators last year on the short side. but a lot of this is timing. we weren't short netflix on december 24th. the only stock we were short on december 24th was, i think, verizon. we just put this on very, very recently so some of this is, again, how you are matching this up for us, on netflix, it may be like apple apple people have blind optimism

up until about october and then the stock came unglued if you look at netflix it may be the same situation where you'll have to wait until you get closer to disney launching, to warner media launching, to, you know, later this year to apple putting out their streaming service, which i don't think is going to be particularly good, but, anyway -- >> no. >> looking at that, and it may take that to slow down the momentum in that name. for me, i like companies that throw off a lot of cash flow netflix is burning $3 billion in cash flow. so it's a great service. it's a great company it does not make it a great stock at that valuation, and that's what i'm trying to get across those 24 very different things and timing -- you would have been suicidal to be short this on december 24th at these levels, up 50% from its lows on december 24th, that's a totally different situation. especially if you are long other names in internet like an alibaba or -- that you like

better or electronic arts. >> right dan, we appreciate it. and that focus, of course, on those streaming services that are so vitally important as well to the businesses of at&t and disney and others, certainly something we'll continue to focus on >> yeah, and you are getting it at a much better valuation >> understood. dan niles from alphaone, thanks. when we come back, we'll break down earnings from target and kohl's what their results are signalling about the economy and the consumer former vice chairman of target is with us and later, former treasure secretary larry summers is with us why the left's embrace of mmt -- modern monetary theory -- is a recipe for disaster. dow is down 36

shares of target surging this morning the company delivering better than expected results for the holiday sales period headlines from the report include strongest same-store sales growth in more than ten years. five straight years of online sales growth above25%. target helping boost the overall retail space watching the xrt it's up more than 11% so far this year. target ceo brian cornell joining squawk box earlier talking about the health of the consumer tamping down his rhetoric that we heard from him back in august listen >> i think it's still a very stable consumer environment. consumers are shopping you are 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 right now i think we're seeing a pretty consistent consumer environment. >> very stable instead of the best he's ever seen. joining us, former toys "r" us ceo and cowen senior research analyst, oliver chen welcome back to both of you. jerry, target is really distinguishing itself. what is brian cornell doing right? >> well, this is really the victory for the omni channel model. we saw strong sales in stores and strong results on the internet it's the same thing we saw from target's bigger brother walmart when they reported as we've talked before, there's a gross margin hit as you grow e-commerce and you saw that in target's numbers and walmart. about 40 basis points. they were able to off set that with corresponding expense rate

to get the operating profit about flat that's the model going forward for people who can forward to invest like target and walmart have done so they can succeed in the future >> recently, oliver, target is a lot cheaper than walmart looking at p/e how does the valuation stack up to you >> yeah, we are recommending both target and kohl's target's p/e is 12 walmart around 20. target put out attractive guidance here. i agree with jerry in the fact is the consumer is in a strong place in terms of the low and middle end consumer and what's happening. low unemployment and wage growth is helping drive traffic the second major point is bricks and clicks and merging the stores and digital channels. and kohl's and target are doing a great job here finally, the cost of business is going up margins are pressured and competition with amazon remains prominent. over 80% of target shoppers also shop at amazon so it's something we continue to watch.

but overall, both kohl's and target, they've beaten raised. kohl's had some interesting tidbits. february was a little softer because it was colder. so that's something we're watching as well and they signed a deal with planet fitness which is a game-changer in terms of bringing people into kohl's stores as they did the standard to small initiative they can add planet fitnesses to some of their retail space that's very interesting as well. >> to your point, jerry, cornell quoted this morning as saying as the shake-out continues, the separation between those two can afford to invest and those who can't is real. so how do we know who can and who can't? >> we've been talking about it for months the winners will be those who offer real value to the customer companies like costco which had a -- we haven't got their actual operating results yet but got their sales. they were spectacular. almost 8%. so costco is very strong target walmart. i like tjmaxx or burlington or

ross stores. the dollar stores. these people will win no matter what and they have been doing things right. for those who can afford to have a great e-commerce operation, that's good, too one thing about kohl's, it's not the same as target they did well, and the ceo is doing a fantastic job but their situation is a little tougher. due to the characteristics of their product. they sell product that is relatively low priced. and it's very difficult to operate a profitable e-commerce business at kohl's there they have a much greater negative arbitrage as e-commerce grows. >> so many of these stores and target included this morning talking about the web orders where you pick up in store that seems to be the hot growth area growinger talks a lot about this walmart talked about it in their quarter. how are -- is this just a higher margin business than they thought? >> vastly better when you pick up in store. you don't have the delivery expense. the last leg blows away your expense rate it's terible to deliver something to someone's house to pick an order just for sara

and deliver it to sara's fancy address and to have to -- i mean, it takes forever it's outrageously expensive. >> is it a suburban thing? i'd rather it be delivered to my house. >> that's new york target said 75% orders were fulfilled from the store on e-commerce and some of that is simply they're picking from the store and shipping it to the home closer than having to go through and bear that expense to ship it to you >> oliver? >> regarding buy online and pick up in store whar, what you finds there's an attachment rate you go into the store, you buy something else that's a big helper. another game-changer is curbside pickup walmart is expanding this. our data says about 10% of people have used it. you drive up and pick up your items and they put it in your car and you leave. that's changing the game it's the next generation for how this wul woill work

it's expensive to pick and pack and ship direct to consumers if they can continue to get consumers to walk into the store you save on fulfillment and shipping costs, and customers like immediate gratification as well that's another positive. so this is a trend that we're seeing and really physical retail using stores to their advantage and the emergence of retail superpowers such as walmart, target and amazon and others rushing to build these capabilities which are anchored in speed very simply, people want their goods as fast as possible, where they want it, when they want it, how they want it that's the millennial mind-set >> is the speculation that this yet unconfirmed amazon retail concept is going to be pick-up heavy? >> absolutely. and that's why they bought whole foods, why they are getting heavier into grocery grocery is perishable. almost impossible to distribute that from a central location, though some have tried and not succeeded like web van and others this is what they know they'll succeed in e-commerce.

for food, it's going to have to be delivered from a nearby location or go to the store to pick it up, which is what walmart has been doing effectively. a big part of their growth was grocery pick-up. either in existing store or specialized areas for just grocery pickup >> apparently going into the mall, too. guys, thank you. jerry storch and oliver chen as we go to break, take a look at some of the top performing names on the s&p. willis towers watson, kohl's and target dow down 38.

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isn't just a result, it's a responsibility. emerson. consider it solved. good morning, everybody. i'm sue herera here's your cnbc news update a japanese court rejecting the latest attempt by prosecutors to keep former nissan chairman carlos ghosn in prison it ruled he can be released as early as tomorrow on $9 million bail after more than 100 days in detention. more bodies have been recovered from the helicopter crash in northern kenya that killed five people, including four americans

the fifth victim was a local pilot. the helicopter came down in the central island national park on sunday an investigation of the cause of the crash is under way north korean leader kim jong-un has returned home after traveling 2 1/2 days by train from vietnam where his nuclear summit with president trump ended without an agreement he was greeted by a welcoming proud in pyongyang and first lady melania trump is in washington state on monday as part of her be best initiative promoting online safety for children. she took a tour of microsoft headquarters where she got a look at how that company is using technology to limit teenagers' screen time and control the websites that they can access you are up to date that's the news update this hour sara, back downtown to you >> sue, thank you. up next -- former treasury secretary larry summers joins us on the economy, chinese trade and a lot more new op ed out right gog now inafter the left we'll be right back.

trade talks continuing as they work to come up with a deal two new studies out this week, from one the federal reserve of new york and one from former economists of the world bank show the trade turmoil is taking a toll on u.s. economy and u.s. businesses with us to discuss trade and his latest piece in "the washington post" titled the left's embrace of modern monetary theory is a recipe for disaster, former treasury secretary larry summers. good to have you back. good morning >> good to be with you >> this might be one case in which some of your critics often from the right are glad to hear from you >> hello >> mr. secretary, can you hear me >> yes, now i can, sure. >> okay. i was -- my point was after reading your piece, some of your critics on the right mighton your side on this one. >> well, i don't know what

different political actors think, but i think that one thing that every american ought to support is the laws of arithmetic and laws of arithmetic don't say you can't borrow money and, indeed, often it's a good idea to borrow money. i've been very much of a -- the persuasion that we needed more fiscal stimulus over some number of years to have expanded the recovery more rapidly. but this idea of so-called modern monetary theory that the government can just print the money it needs to finance itself and, therefore, it never needs to worry about paying its bills, i don't think that's a realistic calculus and countries all over south america have tried it with disastrous results it was tried by the socialist regime in 1981 in france and they had to reverse itself tried for six months in the late

'90s in germany, and they had to reverse themselves so, yes, fiscal policy is a very important tool whenever the next recession comes, we're going to need a lot of fiscal stimulus but this modern monetary theory idea where we can guarantee jobs for everybody or have medicare for all, just rely on money printing to finance it, i think that's quite a dangerous approach and i'm sorry to see that it's gaining more adherence what my column points out is that it's sort of the new voodoo economics. there was a valid idea 40 years ago that taxes had incentive effects which got transmuted into the invalid idea that cryo could cut taxes in order to raise revenue. supply side economics, all of that that turned out to be very costly and had to be reversed

when the united states tried it. and i think something very similar is true with respect to modern monetary theory >> so secretary summers, it's sara i'll play devil's advocate isn't that what's working right now? the ten-year treasury yield is super low. the fed has now been on pause, and we are running back up against $1 trillion deficits president trump funded his $1.5 trillion tax cut at a time of economic growth and market doesn't seem that worried about it >> the market is not worried right now. the economy is slowing or appears to be slowing. look, i am for fiscal stimulus i have been arguing for most of the last decade for more fiscal stimulus i think it would have been much better to fix the country's bridges than it was to provide a tax cut that's mostly financing stock buybacks

i think it's much better to support middle class families than to engage in the kind of tax shelter creation the trump tax cuts engaged in. but it's onething to say that appropriately managed fiscal stimulus is a good idea, and it's a quite different thing to embrace a theory that all government debts can be paid by printing money and it's that latter idea that you should just hold the interest rate fixed, that you should overwhelm central banks -- >> why can't they if we have the reserve currency that everybody wants right now and -- >> because we won't have the -- because we won't have the reserve currency forever if we do that. we had the reserve currency. it was tied and all the other currencies were tied to ours

then we spent indiscriminately during the vietnam war, and then we didn't. and we saw it. you know, the french thought they had a strong currency with the franc, but they were forced to back off from these kinds of policies in the 1980s. the united kingdom pursued these kind of policies and had to call in the imf we've seen these kinds of policies in latin america many times, and the result has been hyperinflation look, in all things economics is a matter of balance. and there's a balance to be struck the avatars of austerity aren't right either but that's not the same thing as saying we can rely on money finance for everything. >> as far as trade goes, the journal this morning has noted the phrase made in china 2025 was dropped from the premier's address at the people's congress obviously, continued speculation

about a deal signing in mar-a-lago are you impressed with what appears to be some flexibility from the chinese on industrial policy and trade >> i think it's a good example of the foolishness of much of this that it's being treated as an achievement to get them to stop using the words made in 2025 that points out how -- >> i think the administration would -- >> how ridiculous -- much of this discussion is it might not -- it might not end there, and we'll have to scrutinize any agreement that results. if the focus is on the bilateral trade surplus, then you'll know that something foolish is happening because that's something that's easily manipulated just by reorganizing trade. they buy natural gas from us we sell our natural gas to them. somebody else buys the natural

gas from somewhere else that otherwise would have been traded we'll have to see whether there are meaningful changes in intellectual property rules. we'll have to see whether there are meaningful changes in the rules on businesses entering, but above all, we'll have to ask ourselves, even if we see some change and even if they do benefit some american corporations, most of whom are aspiring to produce in china, not produce in america, employing americans, how large the benefits will be and whether the risks of the economic turmoil we've had during this trade war period, whether those were risks that were worth bearing i'd be surprised if our unilateral approach is judged wise >> secretary summers, back to the u.s. for a moment. so many proposals out there right now among some of the candidates running for president. all getting at this idea of taxing wealth, whether it is an actual asset tax, like warren or

sanders puts out there this new idea of a financial transaction tax. some want to go after buybacks which makes the most sense and which makes the least sense? >> i think that if we found ways to disallow interest deductions associated with buybacks, that would be a good thing. there's nothing -- it's okay to buy back stock, but if you borrow money and get government subsidized to do it, i think that's the wrong thing to do you know, i haven't made a definite judgment on wealth taxes. i'd sure rather tax carried interest i'd sure rather get rid of special benefits for real estate entrepreneurs like the president. i'd sure rather collect tens of billions of dollars a year in taxes that are owed but not paid i'd sure rather go after corporate tax shelters those seem like things that would make the economy more

efficient and would fit with everybody's concept of fairness. and i think we ought to look to those sources first before we look to having whole new taxes that are going to be very difficult to administer and probably very difficult for some people to pay because their assets are very valuable, but they may not produce any liquidity, any cash that can be used to pay the tax. so i wouldn't start with wealth taxes. >> mr. secretary, good stuff provocative piece in "the washington post. we'll see you next time. larry mms.suer >> dow down 68 points. "squawk on the street" will be right back i had a coach. math. ooh. so, why don't traders have coaches? who says they don't? coach mcadoo! you know, at td ameritrade, we offer free access to coaches and a full education curriculum- just to help you improve your skills.

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welcome back to "squawk on the street." rick santelli on the floor of the cme group. today we had our february read on nonmanufacturing ism. i had to touch on this let's throw up the chart this series is easy to get your arms around because it just

started in 1997 you could see there that anything near 60, slightly below, today's number was 59, some numbers last year were below that, these are cream dela cream service sector, anything can change this is an important number for many questioning the level of equity markets another issue, trying to handicap trading on trade is not easy, especially when there are glaring negatives. take china nonperforming loans wherever you look, whole cities of half done construction that's abandoned, stimulation on top of stimulation, now tax cuts and making it easier i get all that but you know what? when you really weigh it, trade blows all those away it really does trade is the issue let's harken back to when the wto welcomed china and all the conversation we seem to have

forgotten. one of the goals was china needs to be a consumption economy and u.s. needs to be more an export economy. all those are good things. those will signal new chapters of a global trade arrangement that are successful. in the end, the only thing bad about brexit is delaying it, in my opinion with regard to trade in china, if we start doing a trade deal that's even remotely better than what we had, i can't imagine we are underestimating the power of the stock market back to you. >> rick santelli thank you. let's send it to jon fortt with a look at what's coming up on "squawk alley" next hour hey, jon. lyft is in the starting blocks it is time to think about what will happen with ipos in the rest of 2019 had he had a sharp rebound since the end of last year, other stocks that went public. how big a deal is lyft and how it prepares to go public we have that coming up on "squawk alley. ure is not an opt.

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pretty packed morning, sara. what's coming up this afternoon on "closing bell"? >> we're talking to the ceo of chevron, michael wirth, they're having investor day today. and wilfred is live at a

conference, speaking with ceo southwest airlines, delta, and president of united, carl, an important time to talk to the ceos the transportation index is flashing bearish signals about the economy. had a losing streak. we get some thoughts from the airline ceos. "squawk alley" is coming up in a couple of minutes each day our planet awakens with signs of opportunity.

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good morning, it is 10:00 a.m. at target headquarters in minneapolis and 11:00 a.m. on wall street and "squawk alley" is live ♪ ♪ good tuesday morning welcome to "squawk alley." carl quintanilla with morgan brennan and jon fortt. the major averages