what the housing should be. >> it is always a pleasure having you here. we really appreciate your time and we look forward to having you back again soon. sam zell melissa, mike, thank you for being here today too that does it for us today. join us back here tomorrow right now, time for "squawk on the street." ♪ everybody good wednesday morning welcome to "squawk on the street." i'm carl quintanilla with jim cramer at post nine at the new york stock exchange. faber at one market in san francisco. futures suggest another close call at the open a tight range here this morning after five losses in six days for the dow and the s&p. europe is mixed as well. ten-year 271, adp was in line. the trade deficit for the last year coming in at a ten-year high watching the trade tea leaves. researchers looking for clarity. ge cuts the price target, cash

flow negative this year. toss the custom suits. why goldman sachs is ditching its dress code first up, u.s./china trade talks in focus the trade deficit did widen in december to $59.8 billion. that's the largest since october of '08 the gap with china widened to an all time record in 2018. tariffs were meant to have the opposite effect. what is happening here >> when you speak to an outfit like dollar tree, which imports a gigantic amount, talking about billions of dollars from china, there was just a gigantic belief that the 25% was going to come in so let's just get it in beforehand there is warehouses brimming with chinese stuff that number is, i think, is inflated by a worry about the march tariffs that never occurred and so i think -- by the way, the railroads did well because of that. now they're coming off that, hence that question you asked me, i've been spending a lot of time on, the transport weakness. i can explain this by a bulge in inventories because the dollar

tree says it is -- that stock is really hot today >> dollar tree did come in, beat by a penny, 1.93 you're saying you need to have tariffs like -- until the road keeps going and people need to believe they're going to continue. >> yes. >> yes i think, look, it is -- it was very tough for a lot of retailers. a lot of retailers refer offline. they took in a lot of merchandise, betting they would get hurt let's not forget, you cannot get stuff just moved to thailand there say lot of movement to vietnam. it is funny, you know who is running the vietnam factories? chinese. >> david, we're going to watch this closely so much to look at in terms of u.s./china trade, the times today says if a deal is likely, how much of this tariff pain we have been through was worth it in recent months >> that's a key question, i think, carl. i'm looking forward to when we start the show without having this conversation about china trade when perhaps to many of these questions we have are

answered at this point, that's not the case you know the same reporting that we're all looking at in terms of president trump's desire to continue to see the stock market rally. and what impact if any that will have on his approach here. and the hawkish side we talked about so often, jim, of course, that is out there, it is fairly large. even with the business community more and more, this moved along, saying hold the line if it is not going to mean that we don't really see them back down on the structural changes we want to happen in the chinese market about intellectual property, about so many of the things that have to do with innovation and the ability to control your own innovation as opposed to have to give it up >> i had a great company on last night, they make da vinci machine, anyone who has ever seen this, it is -- you can move your hand and gets it right, if your hand is shaky, doesn't do

that, the demand for them in china, remember, they have hospitals that are 500,000 patients, three of them, three of them in shanghai. they want this, but they have a quote on it. they want it, but they pair them with some company in china as a joint venture. they don't need a joint venture. this is the kind of stuff that has to end it is the textbook of what must end if you're going to have a serious, serious windfall for the u.s. >> you saw this sort of controversy regarding model three labeling. >> how do you like that? >> jonas over at morgan stanley today, guys, has a note saying, all right, this issue appears to be resolved. but we think it highlights the risks inherent in u.s. auto and tech firms conducting business in china, in high value imported products because of the risks related to cybersecurity, data privacy, ai, robotics. >> you can't have this kind of bogus gain of our products as they hold things back. this is like 1950s kind of

negativi negativity the chinese are playing hard ball and they're not changing their ways and if the president wants the stock market up, he has to accept that they're going to hassle at the border with tesla, nio's numbers are bad, they're pressuring tesla tesla is prurg theessuring them. we need american express to come in and say it is alls your we're not going to have a company with you, but they steal all your technology on how to do the best fin tech. >> we'll keep an eye on the china story as it evolves. >> david said at the beginning, he looks forward to the day, we talk about china i look for the day you wear a tie. it ain't going to happen. >> no, apparently not. and goldman sachs, i don't know, i'm interested to hear that story later. i'm not going to wear a tie while i'm out here, jim. no one wears a tie out here. no one >> they don't know what they're doing. you wear ties.

>> you're going to be the only man left in america wearing a tie. you're going to be the only guy. only guy >> i know. >> carl knows this we have dinner with him on friday night at 8:00, he's wearing a suit and tie. >> i wear a tie until i go to bed. i do not have any casual clothes. there is no need for that. i wear a tie on saturday where did i learn that at goldman sachs that's where i learned it. they're all changed. that's not a business gap. >> we're going to get to the goldman dress code a little later this hour, guys. next up is ge, extending its losses from tuesday's 5% drop, talking with steve tusa, jpmorgan at that firm's conference yesterday, larry culp said the company's industrial free cash flow this year will be negative amid weakness in power. culp added this is a multiyear turn around in power, i don't want to sugar coat that in any way, shape or form a lot of work, it is a game of inches and then tusa comes out today, guys, and says our price target remains six and that looks

generous after today's news. >> i went out with a group of portfolio matches last night all we can figure out is how bad it was versus how bad it was and there is this abbott and costello game coming on. do you mean negative cash flow no, i mean negative cash flow industrial negative cash flow company, no, i said it could be the company i'm, like, listening to it, saying are you kidding me? come on. you dropped the bomb on my head. and i don't really care that it was 50 megaton or 70 megaton it was really sobering and, you know, tusa delivered again. you just don't want to have a chat with him. don't chat with him. unless you want to chat with him about having a steak dinner. >> he did go on to say, we're no longer willing to engage in a debate where the bull cases that power is not that bad. >> yeah. it is interesting. you remember we had tusa on,

what was it a day after the big rally on the danaher deal, the sell of biopharma for more than 21 billion, still a very small percent of revenues. it seemed to change momentum to a certain extent and even psychology at least somewhat tusa came on with us that morning, jim, and just said, no, you know what, i -- i continue to see the numbers and i continue to believe that they will be less than many people expect and i can't get away from that in terms of his fundamental view that the multiple, whatever it may be, based on the numbers for this year and next year, simply does not just a price that was briefly at least touching, what, $11 a share, again, on the very well received deal to sell that unit to danaher. and here we are, do you believe the psychology has changed again, jim, when it comes to ge? >> i think it got ahead of itself nick cayman was on "squawk" this

morning. he was talking about how they have to pay down more debt and you'll see if they can do it they have things to sell david, when you listen to tusa, what tusa is saying, they're selling the crown jewels you shouldn't be doing that. >> you really think that's the case they are selling certainly a very fast growing part of their health care business even though as a percent of revenues it is relatively small, high margins, it is not that high a multiple when it comes to -- high, but not that high when it comes to the actual multiple on profits of that unit there is plenty of other things there in health care that people focused on when you talk about jewels, you always refer really to aviation. >> right i think what the rap is not that what we have seen yet. i think the trade to danaher was brilliant. and larry did great and danaher did great. i think what they're saying -- what the undertone is the next sale is going to be a bad one. it is going to hurt. because they got to raise, i don't know, the numbers that

haymon was tossing around, 30 billion. there is no 30 billion without selling something great. >> no. although the 20 plus billion was going to be and is very helpful in terms of giving them more time they continue and i don't know to what extent culp in his conversation yesterday focused on this, but overall ge and i think its board continue to believe they have given themselves more optionality when it comes to those things and more leeway. and so therefore they don't have to make a deal perhaps that some would see as a bad deal simply to reduce leverage beyond what they're going to be able to from the proceeds from this sale to danaher. >> i think david is right. you talk about momentum, i think a lot of people held out for a good 2019 last quarter and that was taken away. the up side. optionality in, up side out. >> tusa would argue if this is really not a 2020 story, but a 2021 story, he's tired of what he calls the cut numbers reiterate buy approach, which he says is endemic to the sell

side. >> he's right. >> that's what b of a does, they cut their target to 12. >> take it down to 6 and get this thing rolling tusa was great yesterday tusa was on his game tusa, matt boss, we're seeing some stuff at jp morgue than is exceptional research, exceptional. >> it is worth mentioning because no offense, but there is a lack of rigor and a lot of research that is out there you and i both lived through the days, of course, in the late ' 90s where analysts were bought and paid for by banking and those that didn't toe the line were sent packing. it is difficult to find analysts who dig into the numbers in a real way and are willing to stick to their thesis, jim and we understand the pressures on them. it is not about banking anymore necessarily. but you can get cut off by companies, you still can be influenced by shareholders there is say lot of different cross currents, not to mention

doesn't pay as much as it used to, some of the best and brightest moves on to other professions or other parts of the financial services profession. >> there are people who feel, david that tesla does a lot of private talking. there was a moment, tusa is also a reporter and if you remember, david, talking about the h frame and the problems, and at the time, people didn't think anything of it they came up it came up matthew boss does satellite reporting. tusa does reporting. they supplanted journalism they the web wieped out journalists. >> giving it a shot here still giving it a shot, jim. >> i know. david, you're a triceratops, because carl can pivot and do a little popular culture he's actually present. he's in the present. >> true. >> we are paleo. >> i don't wear a tie. so, i mean, you know, i may be a triceratops, but you're a tyrannosaurus rex.

>> i got to tell you, if i could wear a tie instead of pajamas, i would go for it. >> i don't doubt it. >> i would i feel uncomfortable taking it off. it is my armor i'm not sleeping without my armor. >> after more than three months behind bars, former nissan chairman carlos ghosn is out of jail he was released from a japanese prison overnight after posting bail ghosn, who was wearing a workman's uniform, face mask, blue cap and glasses, walked out of the detention center and into a waiting car. the auto executive put up $9 million in bail for his release. he must remain in japan, surrender his passport, agree to extensive surveillance, ghosn was arrested back in november for allegedly underreporting his compensation and what a story this is. >> i talked to the auto execs, my paleozoic time frame. some of them said, do you know what he did? he's acting like he's a homicidal maniac what did he do

a lot of people are concerned this was just -- there was no justice here and a lot of people liked him, i guess maybe that's what it was >> monitor developments overseas. when we come back, this battle over bristol-myers celgene, bristol and starboard out with duelling shareholder letters. dow and s&p coming off of five of six losses, on pace for the worst week of the year obviously. futures have gone green. we're back in a minute this is huntsville, alabama. aka, rocket city, usa. this is a very difficult job. failure is not an option. more than half of employees across the country bring financial stress to work. if you're stressed out financially at home, you're going to be too worried to be able to do a good job. i want to be able to offer all of the benefits that keep them satisfied. it is the people that is really the only asset that you have.

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stay connected while you move with the best wifi experience and two-hour appointment windows. click, call or visit a store today. welcome back the continued back and forth between bristol-myers and a couple of its shareholders as the vote, of course, on bristol's acquisition to celgene approaches, april 12th is the date for that. a lot to go on between now and then but no shortage of, well, fulsome debate if you want to call it that in terms of at least the view of starboard, the activist investor that owns a relatively small position in the company, but is seemingly joined by a new quiet wellington and other shareholders in its

opposition to the deal and, of course, bristol's continued attempted to make sure its shareholders when they show up vote in favor of that $70 plus billion acquisition of celgene. this morning, another very long and large investor presentation from bristol-myers, guys, in which they hit a number of different themes in order to try to show and respond really to what they believe are wellington's concerns, even though wellington frankly since it came out in opposition has not in any way articulated what the concerns are publicly. and of course starboard which has been more public with its, talking about the idea that, you know, a string of pearls acquisition, jim, buying smaller companies doesn't make sense for them on pages 13 to 14 and really coming back to the idea that they got the pipeline they believe at celgene very cheaply and trying to make that case they talk about managing through the revlimid patent expiration and how they'll be successful of

that here is the components of value of the deal they're talking about in terms of current products the overall transaction value, and the pipeline as well and so responding to the extent they can and any number of fronts, including saying, hey, we did way more due diligence on this deal if you want to go to page 42 in the deck, than other large pharma companies have seemingly done when we have gone through their background of the merger on their deals. so anyone criticizing us for saying we move quickly into this is mistaken in that. jim, we'll see what happens, of course, in the days and weeks ahead. iss, the influential proxy advisory firm will be at the center of this, probably start their meetings fairly soon, we'll hear from them in the not too distant future and they could be influential given the preponderance of stock in the hands of index funds and a few other large funds as well. >> there is some -- i do have

giovanni caforio on tonight, caforio is the man who i met at jpmorgan with celgene. there is a lot in starboard's note that i just find to be right up your alley. i don't know they say that this was -- that giovanni was -- did this hastily, and perhaps done to thwart potential strategic interest in bristol-myers. and they want to stay independent. david, they're basically saying there was a bid and the way to wreck the bid was it buy celgene. i don't think giovanni is doing that, do you >> i have not been able to determine that that's the case, jim. and i would remind people sometimes we hold these hedge fund managers on a pedestal that somehow they know all, they don't know, they don't know as much as i know typically about mergers and acquisitions and if they do, they shouldn't, because they're not in a position to know and the fact is that they may speculate that there is a bid out there for bristol. i have not been able to determine that's the case.

doesn't mean it isn't. but at least every path i've gone down for large pharma to say would there be interest, has there been interest, were there talks, the answer has been no. >> david, stay humble. stay humble. >> we'll get cramer's mad dash and count down to the opening bell in a moment take a look at the premarket on this wednesday don't go away.

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minutes. cramer's mad dash looking at the ev space once again. >> a lot of people say, well, listen, i want the chinese netflix, i want the chinese search engine, i want anything chinese, analog, well, one of them is nio. we saw it featured on "60 minutes" a couple weeks ago saying this is the one, the value, and social conscious chinese are buying their electric vehicles. bank of america takes it from hold to sell saying that shipments and average selling prices are coming down they're saying there is huge downside risk. it is so negative, this piece, that this is the kind of thing you get. i want to warn people, when you buy a chinese stock, you can get this people were buying this thing based on the fact that it seemed, wow, it is going to be the chinese tesla. well, carl, it doesn't have that kind of short base, and it doesn't have elon. >> even in tesla's case, barclays has a note out today, this narrative built premium pricing, you nik retail, the

apple model is not how it is turning out. >> it is not this is the first time i read this, i said, you know what, this is a different narrative for tesla. this is a sales weakness and that is typically not the one that we hear about we may hear about the eccentricities of elon, this is price cuts and price cuts are not -- that's ford if i want ford, i'll take ford chinese ford >> see what is happening with nio this morning we'll get the opening bell in just about five minutes. don't go anywhere. 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.

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whatever your financial goals are, a u.s. bank wealth management advisor can help make them a reality. talk to one today. u.s. bank - the power of possible. you're watching "squawk on the street" live from the financial capital of the world the opening bell in just under two minutes' time. it is wednesday, march 6th, 2019 the ten-year anniversary, jim, of the s&p's intraday low, 666.79, ten years go today i think mark ended up calling it the following day. >> i think people have to celebrate which we don't do anymore. ever since the 2000 top in the nasdaq, we tend not to

celebrate. there is a lot of money been made i think it is not just in faang. a lot of money made in the s&p if you don't want to own individual stocks, i totally endorse owning an s&p index fund you cleaned up versus cds. and you kind of participated in what warren buffett calls the tailwind that is america i just thought it was good for capital. >> some are -- with worries about government debt, we see what the budget deficit has done so far this year, year on year, up 77% >> it is funny you mention that. a workday conference call, he said, look, people demand strong corporate demands strong governments worldwide, wild cards to the downside. governments are the problem, not the consumer, not the corporate. who would ever think that could

happen. >> absolutely right. meantime, ready for the opening bell and the s&p at the cnbc real time exchange, the big board. it is the new york city football club in advance of the 24-hour game at rockefeller center at the nasdaq, the new york stem cell foundation, research investments that resulted in 18 therapies moving to clinical trials interesting. we should get on the record that the oecd did cut global growth forecast around the world including u.s., not by a lot, but go 27 to 26. >> this is what is happening and what people react to yesterday in the ge conference, also 3m, big worldwide company, things less sanguine than people thought. you would expect that the health care stocks would be doing better in this other than lily and maybe merck, doesn't have much going but there is a belief that that's the forward looking and there is a belief that's the backward looking, listen to sam

zell, told us -- reminded us the government shut down let's not extrapolate that i'm a little more bullish in the numbers. i think retail will be very strong in the spring >> we got a ton of decent retail, revenue ahead at bj, at ross store, at dollar tree, at anf. i think only urban had it basically in line. >> urban conference call was so negative because they were so hard on themselves matthew boss saying get out of the nice call. i have to tell you, i thought ross stores was much better. they brought back a ton of stock. one of the underlying themes, how much money -- urban is not even down. that was a negative conference call, that's rather amazing. ross stores was a negative conference call. everyone calling out women's apparel. this is strong this is what i wanted to see buy the stocks, when they're down, they're buys, they're not even down. that's a belief that the future is better than the past. urban out fitters said hang in ross stores said hang in and people are hanging in. which is really rather remarkable most people don't have the

temperament. >> yeah. i think bj comps up 2.9. american eagle tonight >> costco good >> anf, abercrombie, very nice. >> comps up three, double the estimate >> so this is part of the renaissance. there is a lot of talk, when are you going to start doing better when the other stores go out of business, like payless went out. is that good for ross? what ross said is, listen, every time somebody goes out, the rest have good numbers. but, remember, children's place, you close 500 gymborees, a lot of inventory children's place i think is a buy. down too much. you have to own it through the inventory like hasbro and people got tired of owning hasbro. >> got to wait for that, the walmart toy dynamic, right >> yeah. >> yeah. i guess you do guys, few things i'm keeping an eye on here, one of which i wanted to get to because when was mark bristow on with you, jim, sorry was it last night or the night before from barrick the night before, right?

>> perfect barrick, he canceled, man. he canceled. >> he canceled >> yeah, he canceled. >> oh. didn't know that i didn't know that >> tv thing. it was a tv thing. it was, like, he was -- >> canceled, they had this dinner between -- >> no, he can do what he wants bristow is money there is no -- look, he would never miss my show he won't come out for a camera unless it is "mad money's" camera. >> executives from barrick and newmont talking about the potential deal, shareholders perhaps happy about that unclear exactly how much progress was made. but it is interesting to see companies willing to sit down during what is certainly was an unsolicited if not outright hostile, you want to call it that, i don't know, if we can, yes, of course we can, and has been rejected already by newmont. they're talking.

unclear where that goes, i think there is hope in the barrick camp, jim, that they can use this opening to make real progress and if they find they haven't, then perhaps this whole thing ends in the not too distant future as well >> i was shocked, david, that these guys sat down. you know, that's really a sign, we cover deals where we're hoping that insurgence would sit down with companies, but hostile bid, you break bread, highly unusual. >> it is sometimes you'll see that in order to meet the objections of shareholders or -- and/or tell them, well, we tried but nobody actually sits down with the real objective of getting to a deal. this, though, is being described as constructive. now, they're saying in published reports that mr. palmer said they were talking mostly about the nevada jv and listening rather than jumping to any decision but nonetheless, you're right, the only time typically we see that in these kinds of things is

when company b, the company that is being sought feels like, well, it needs to say it tried, even though it has no intention of trying. that does not appear to be the case here. but we'll see. >> all right look, i like gold, sam zell likes gold mark bristow is creating an etf for himself of senior gold companies. i think it is very exciting for people who want to get on board with gold, like it a lot >> in the realm of another produce, exxon talks to the ft and says they see capex going up 30% between 2018 and 2020 as they try to ramp up production in the permian got other stuff in ghana, a big capex story. >> look, slumberge, i couldn't have been more wrong, capex has been so -- so depressing core lapse, same thing if you believe exxon and the

guyana, if you believe them, you see by the company, i think exxon is reliable, but i think it could be an outlier there is no spending going on that i can see that is above what it was the previous year. even though paul kipsguard, the ceo, was saying things have bottomed i bought on to that. now i'm at the bottom of a big oil rig wearing cement glosses >> transports down, longest losing streak in eight years. >> now even talking about precision railroading anymore. i think that freight is still an issue in a lot of the economy. the rising freight costs came up in a lot of the apparel companies, but i got to tell you, i continue to look at, maybe people are judging what is about to happen with this revolution with uber and uber freight, where they're going to solve the problem. i believe them >> you mentioned this yesterday. >> i believe they're going to

solve the problem of tight transports there are a lot more -- one thing that uber freight said is there is a lot of sikhs and hispanics who they believe are underrepresented in truck driving. you'll see prices come down dramatically for freight i believe them anybody who thf medallions, a lot of -- was it -- was that a medallion issue. what did he talk about was it uber? >> yeah. it was -- the medallions hit him hard the price of a medallion as you well know, mr. cohn, of course in his testimony last week, a large holder of medallions, taxing medallions in new york which, for a while, a long period of time did nothing but go up in value, extraordinarily valuable because they capped the number of medallions you could own. then uber comes into the picture and, well, medallion prices dropped precipitously over the last few years interesting on uber as we get ready at some point to see them

come public, lyft will be first out the door, probably within a few weeks, you know, perhaps as soon as the end of this month, and that will be an important test for uber. certainly got to believe they're going to want it to be positive. it won't help uber if the lyft ipo is not well received but uber, you know, not just freight, uber eats also. you focus on this area as well it will be interesting to see, you know, will there be consolidation among the providers of meals taken to your door, this whole idea of cloud kitchens, which is fascinating, which the founder of uber, travis calinik is focused on as well that's what we'll talk about as we get closer to the uber ipo, whenever it may come. >> not enough drivers. someone who is intvolved, grubhu doesn't have enough delivery people door dash, too many companies in this thing uber eats, it is a bad business.

now you can't -- bad business for the following reason if you can't get that burrito to the customer in time, it is soggy. and it gives your place a bad reputation anyone thinks i'm kidding, it is time to market >> you're alluding to the labor market adp did come in 183. estimate was 185 and they revised january up zandi did say he -- adp feels job gains have peaked for this expansion. >> i don't know why they think that i love carlos, he's fantastic. watch cintas they own the -- they actually own the uniform business, they let number one merge with number two and didn't think anything of it if it takes out 217, the september high, don't bet against the market >> david, little bit more before we go to pisani? >> yeah, just wanted to hit aon. a weird day of trading yesterday.

now the stock is up today. bloomberg ran a story saying that aon was considering a bid for willis tower watson, which is an irish company, and as you may know, irish takeover law similar to uk takeover law, when it gets into the press, the company is obligated to say whether or not it has actually considered it or has anything gone on. so aon came out and said, yeah, we were thinking about it. i'm told there was no real substantive engagement between the two companies, not like they were exchanging information, but aon was considering a deal, a lot of people yesterday coming out with pro forma on what the combined company would look like, and this morning we get news that, well, they're no longer going to pursue this. aon and, by the way, you say that under the irish takeover code, you're done. you're done for at least a year,

so it doesn't appear there was ever a substantive exchange of any kind and now aon said we're out entirely not pursuing any sort of business combination with willis and the stock is now up almost 5% >> you know, aon is quietly built this great empire for insurance. this is an area, david, you know, we just don't follow insurance. we all think it is really borg b but we all pay. aon has a great business i'm surprised they wanted to do this since they're the king of their own business. >> yeah, you know, the synergies, again, would be significant. interestingly it would be, if they were to do it, again, they're not doing it, most likely been an all stock at market kind of a deal. so not clear why aon suffered so much yesterday as a result of people wondering about it. you can see now both stocks reversing on their moves from yesterday. >> david, thanks let's see what's moving here dow is up 3 points, s&p is down

3. let's get to bob pisani. >> we're having the same problem we have been having really for the last six, seven, eight trading sessions that's the market leadership is petering out and the s&p, for example, is stalling around that 2800 level take a look here what has led us from the market bottom on december 24th? banks? semiconductors, home builders have been strong, energy stocks, industrials, and, again you see here today, flattish to slightly down for those leadership groups that's the problem the market is stalling out in general. transports today, either side of positive or negative, overall down another 20 points in the transports but you see some of the american airlines on the up side, weak recently, the railroads stronger in outperforming, down today overall, there has been a lot of concerns we spent the last two days talking about the transports topping out. they rolled over a little earlier than some of the other ones truckers are down 7%

this is the last couple of weeks. airlines are down 4% the railroads as i mentioned holding up better, only down 1%. people are concerned this might be presaging something but the overall market has stalled out f y if you look since the last couple of weeks, the s&p is flat semiconductors are flat. the russell 2000, big market leader, from the bottom on december 24th is down 1% banks which were up 20% on the year have rolled over. they're down 1%. and the industrials, which is a trade play, primarily, they're down as well so it is not just the transports, it is the overall market has flattened out in the last week and a half why has this happened? the question is, we had a huge move and how much room is it to rally on the fact naz s, as they are standing in frond t of us. is it 100% priced in or 90%?

we don't know. vast majority seems so we had great cheap pricing in the end of december, that's gone away the market is pricey right now, depending where your earnings estimates are, you're at 16.5 or 17 times forward multiples, that's a lot on flat global growth the leadership is a little overbought we bought a lot of stuff in on technology stocks. and we had that weak global fundamentals i keep pounding away on it, the oecd did it today, gave us the same facts as we have been talking about all week taking down their numbers around the world, 3.3% gdp growth for the world, from 3.5. the u.s. is going down china is going down. germany, 0.7, they were at 1.6 they're really concerned about what is going on in europe and their key point is what we have been saying all week on cnbc, which is even if the trade talks are favorable outcome, we still have the global economic it doesn't go away here is what they said high policy uncertainty, ongoing

trade tensions and further erosion of business and consumer confidence are contributing to the slowdown it is not just getting rid of the china trade issues there are other issues that are out there. they're talking about lots of stimulus going on in europe. that's why the market is stalling out we need better economic data, more stabilization inchina, better stabilization in europe and then all of the earnings, downward earnings revisions we have been seeing, that will stop, that will help the market move forward right now, still stalled around that 2800 level. >> bob, thanks bob pisani bond pits as well, to rick santelli at the cme group in chicago. good morning, rick >> good morning, carl. everybody, of course, is continuing to smart a little bit based on that trade deficit this morning for the month of december whisker shy of 60 billion. red ink. open the chart up, this chart starts in early '08. we comp back to october '08 last

time we saw this one this large, a smidge over 60 billion this obviously is important. there is so many directions to go on. if i was an investor, i would be thinking, well, our economy has to be doing pretty well to be taking all these imports in, for one thing on that distortion the second is oecd, everybody is talking about that as well maybe 2.6 read for the u.s. isn't 3% but i tell you, you got to go back and look before some of the repealing of some regs and tax reform, we weren't anywhere in the zip code of a year like that so we do have to really take a step back and look at the macro. if you look at intraday of ten today, you can see 8:15 eastern, came down, saw the adp revision, moved back up. methodologies change on adp, people scratching their heads. one week of 10s says it all. we failed as we get close to the

high for the year, which on the year to date chart was just a little bit right in between 278 and 279 on the 18th of january but, look at one week of bund yields okay see the way they're melting? 13 base poiis points. tomorrow is mario's big day. listen, certainly we would like a three handle on our growth, but imagine being in europe's shoes, bob referenced the main engine of growth in that group in the form of germany there are a lot of structural issues that have been ignored, not the least of which is just the monetary policy which in many ways bidding north. will be interesting to see if mario draghi has any rabbits left in that hat carl, jim, david, back to you. >> busy week rolls on, rick. thank you. still to come, the ceo of seimens usa, they're meeting today, trying to get an update on that as the dow has a flat open, down 5 don't go away. (baby crying)

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like a tv anchor on west coast goldman sachs taking on a relaxed look saying suits and ties are now optional. the flexible dress code offered yesterday is due to the growth of a more casual work environment. worth noting that 75% of goldman's employees are members of the millenial or again-z generation they say in the memo we all know what's appropriate and we trust you to abide by that. >> in 1922 i worked at summer associate, and i came in with that -- you know, with that marshall's corduroy seat, peeled off $500 said i was an embarrassment. if it had $1,000 i would have gotten the silks

are you kidding me i had a button down collar, pocket and go get a french cuff. go get some cufflinks. i learned and i loved and i never forgot it. just like my mom checked before i went to school when i was in charge of teaching summer associates, i looked at everybody's clothes and i sent them home. sent them home if they are wearing button down or got the wrong suit this is ridiculous this is a ferragamo tie that's so bad it's ferragamo at least i have guts to wear 200 count, david this was allowed. >> i'll be back there soon enough wearing a darn tie. the oxygen getting to my brain is very helpful. can only imagine what's going to happen to jim if he doesn't wear a tie, even more it will be crazy, yeah. >> i went to brunello

cuccinelli, now that's endorsement. i'll lend you some money that outfit is what the heck is thatle? work at goldman, george lee, what are you doing trying to get some into the investment banking business. >> i'm going to visit all of those guys and none of them will wear a tie. >> we'll get "stop trading" with jim after a break. so grant met his insurance: you are caller number 12. which didn't quite cover the steinway. but what if he'd met pure insurance? owned by members. he'd have met: lisa, your member advocate. who'd introduce him to gustav: leave it to me. a temporary address, temporary ivory, and help him get tickets to the mozart festival. excuse me, grant likes beethoven! uh, the beethoven festival.

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time for cramer and "stop trading. i want to focus on the fact that disney, a really remarkable note out by jpmorgan. they don't write the stock i've got to tell you, this is the most positive note i've seen about disney they ever talking about having more than 100 million disney plus customers that. says go buy the stock or wait for the meeting. everyone who owns disney should read that note it's the most bullish thing i've heard about disney in years. >> that's a big number 115. >> really big. >> tonight >> bristol-myers you know i think that, you know, giovanni is going to tell a fabulous story. gary philbin, he put up unbelievable numbers for dollar tree, and he's converting the

family dollars at a fast rate. the stock is going much higher all i do is ask they reserve balloons for mother's day which is a huge day and i love dollar tree balloons and there's a helium shortage in this country. >> i just learned three things in the last ten seconds. jim, we'll see you tonight. >> i'm going to clip my tie. give david a clip. >> "mad money," can have p.m. eastern time. when we come back, consumers and businesses of alcoholic businesses wilspl eak to the ceo of suntory with the dow down 13. or an investing goal. it's real-time insights and information, in your own customized view of the market. it's smarter trading technology, for smarter trading decisions. and it's only from fidelity. open an account with no minimums today.

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good wednesday morning welcome back to "squawk on the street." i'm carl quintanilla with sara eisen at post nine here at the new york stock exchange. david famer out in san francisco. take a look at the markets a bit of a push and pull between the bulls and bears. dow down 21. >> and the road map for the hour starts with the wait-and-see approach investors searching for clarity and includes on u.s./china trade

talks. >> and ge says cash flow will be negative later this year. >> and later we'll speak with the ceo of beverage giant suntory to see how tariffs are impacting that company's bottom line. >> stocks lower with u.s./china trade talks still in focus government data just released showing the trade deficit widening in december to nearly $60 billion. largest since october 2008 despite the concerns, stocks still off to a strong start for the year with the s&p up more than 10% so far. this as today marks ten years since the s&p hit its intraday low of the financial crisis. it was back in 2009 s&p hit 666. hard to believe. it's been quite a journey. can stocks continue to climb joining us now is the global chief market strategist at cantor fitzgerald and kevin krohn, senior portfolio manager at washington crossing advisers. gentlemen, good morning. the bull market anniversary raises the question of how much

longer can you make money in this stock market? >> i love anniversaries. you know, look, i -- i've been of the mind since late last year can when we got the very severe selloff it was really about central bank communication and my rationale about why we would rally is around central bank communication, optics on trade, perception of more valuable valuation and in fact, yesterday, we put out a pretty strongly worded note that we thought that equities were probably at best fairly priced here and that with the rollover in global growth which was in fact confirmed by the oecd this morning from 3.5% to 3.3% that exlist are likely to take something of a breather here in our group. >> you're talking u.s. equities. >> u.s. equities, a breather but the end of the bull market >> i think so. i really don't see a catalyst on a go-forward basis given where we are in the psych. i think the fed is quite constraint is how much you can move to cut rates, and i think it's hesitant to do so because

we're so close to zero balance on the interest rates. the best that the fed can communicate it will stop shrinking the balance sheet and at worst as the economy slows, it's not going to be able to cut or won't want to cut very much, and that's going to make it difficult for equities to advance from here given that earnings are starting to roll over that's pretty clear. >> things may have changed in recent weeks, but are you still on the street low for '19 target >> still am. laxed nuance because we called for a rally to 2800 in the first half i think earnings are closer to 160 than 170, and the conaccepts why is come down from 177 so it's moving in the direction. >> 2300? >> 2350 to 2400. >> are forecasts gloomy? >> we've increased our equity allocation, but that's from a more significant underweight in equities to a less significant underweight in equities that

being said, it is a first step for us in terms of increasing our equity allocation for some time, and i guess the main reason is that we've already seen markets adjust over the last year or so to pricing in more risk, to think about slower global growth and even contend with somewhat higher interest rates, so if we are to get some kind of positive momentum going at all, maybe because of a breakthrough or a deal on trade. that could feed back into investor psychology and give us a little bit of a lift we're still somewhat cautious, but we're a little bit less cautious than we were a week ago. >> the specific news today came from a bloomberg report saying that president trump is pressuring his negotiators to cut a deal because he wants to see a market rally, and he's concerned that a lack of an agreement could drag down stocks that's according to people familiar kevin, is that a good thing for the market to hear something like that? >> yes, because when you look at

global growth, that has been -- trade is obviously been a dampening effect on global growth for the last year or so, and the pickup in volatility has been related to that and some hikes in interest rates over the last year, but the pause -- the pause on interest rates and a breakthrough on trade would do a lot in terms of psychology if not actual profit growth and investment spending so that would be a very dig positive in our view, yes. >> if we do get a deal or at least trade tensions would bring the temperature way down, you get china stimulus starting to kick in. we've already got a fed pivot. even if it's priced in today, doesn't it change the trajectory of cap "x" and, therefore sentiment later in the year? >> two things. i would take a little bit of the other side and i would say negotiating a trade deal based on what the market is doing is a horrible idea because that's likely going to end up in a deal that's not as durable or rebust as a deal that was negotiated in

the absence of that consideration, so that's point number one point number two, any deal that's going to get done, at least in our view is not going to be as impactful to gdp or cap "x" as i think many of my peers believe. i think, you know, it's only going to be a modest benefit even if things go perfectly well about $150 billion which in the context of gdp really isn't enough to offset the other forces at work, you know, higher rates, slower global growth. >> cyclical forces >> but isn't the main reason for the slower global growth the trade war. >> no. >> i don't believe it is i believe it's tighter financial conditions and it starts there the trade war is an exacerbating factor there, but there are other things that are going on if we look at europe not just about the trade warnings yes china has clearly helped slow europe but that started before the trade war started and really started when global financial continues began to tighten. >> kevin, some people argue -- >> i would add to that that -- i

would just add to that that it certainly doesn't help that anybody who has been trying to plan businesses or look at companies' conference calls, companies have been very worried about this for the last year so whether or not it's actually had a material impact on gdp growth we would agree that it's not had a big impact yet, but it certainly has impacted psychology >> right and i guess the question is you don't believe psychology will change much from corporate treasurers and cap "x" managers because what, they have touched this hot stove of tariffs once and they don't want to touch it again? >> well, the -- yes. the -- the overall picture is one that if you can't plan your business and you have a really hard time understanding what the regime is going to be for taxes and trade in the next two three years which is the planning horizon for long-term capital investment, it makes it very hard to get things done. so ultimately that's going to be

a depressant on overall growth, even if nothing has actually happened in a material way, and there really hasn't. we've put tariffs on the chinese have devalued their currency and it's been a net wash as it relates to u.s. consumers and prices here in the united states. >> well, i mean, no, i won't disagree with that obviously, again, it's a matter of how much you weigh that, but at the end day china is in the middle of its congress and they lower theed their growth target from 6.5 to 7 to 6 and 6.5. we expected them to do that. they have been managing the currency stronger in our view. the fact of the matter is china is slowing outside of the trade war. it's a function of their move from an export economy to a consumer-driven economy, and it's not going well. defaults are picking up in china, and the stimulus measures they are implementing are simply filling holes rather than working to stimulate real demand. >> i don't think that you can argue that the trade war isn't having an impact on our gdp after seeing the trade deficit exports were down. when you launch a global trade war global demand suffers for

your products and your imports go up. >> was that a shock to you wasn't reason' shock to me. >> completely the opposite of what have president trump has said. >> right. >> he's blamed his predecessor's weak trade policies. we didn't care about the trade deficit. he did, and now it's ballooned and it's a weight on economic growth. >> israel, i mean, one explanation was just a surge in inventories, right, to avoid a wave of tariffs coming later. >> exports were down. >> exports were down, and this goes back to my initial point which is that the trajectory of growth globally matters most the u.s. is relatively strong right now because of fiscal stimulus, ie tax cuts. the rest of world is slowing more quickly therefore, we're still buying more from us than they -- than they, are so -- so that's the offset, and i think that's the real reason, and it's exacerbated by the trade war. >> and our tax cuts which made the imports go up. >> peter and kevin, thank you. >> thank you >> thank you >> meantime, some reports out that the president, as sara said, is pushing for a trade

deal in the hopes of fueling a rally. kayla tausche is at the white house with all things trade. good morning. >> reporter: good morning. this is a dynamic playing out behind the scenes for weeks at this point trump communicating to his adviser that he wants to enter the re-election season with markets surging and advisers agree that the argument that president trump's economic agenda is working is harder if you don't have the market having risen, if you don't have the average voter feeling like their 4 401(k) is doing better than the year before but idea of using the trade wars to get the markets higher as the president has been communicating it's having a bigger effect on china's stock market if you look at the markets from december 1st when the two countries agreed to the existing state of play, this trade truce we're currently in right now the shanghai composite is up close to 20% while the s&p 500, the broad-based index is up just close to 1%, so certainly we're seeing an outsized impact in china. and you were just talking about

the trade deficit as well that data certainly does not support this idea that the tariffs are working to lower the trade deficit. the goods deficit with china, which is what the president and some of his china hawks are myopically focused on, that goods deficit with china grew last year and that's a record. and you can see the direct up and to the right for the last several years that certainly doesn't augment the argument of the president but that's one reason why he's pushing for a major part of this deal to be focused on china purchases of u.s. goods, of soybeans, of natural gas and a handful of other items to try to close that gap, though critics argue that if you keep having u.s. companies buying as much as they are buying in chinese goods, then it's not really going have that big of an impact so we'll see how this all shakes out and comes out in the wash. >> excellent thank you so much. kayla tausche at the white house today covering the china trade

angle. when we come back, shares of general electric continuing to tumble though off of the pre-market lows. lar larry culp did say the cash flow would be negative and we'll see how trade is impacting suntory's bottom line and the safety consumer as we go to break, take a look at the top performing names on the s&p. t the dow down 11. 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. boom! mad skills. education to take your trading to the next level. only with td ameritrade. hey, how ya doing? uh, phil. are you guys good with brakes?

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shares of ge extending its losses from tuesday's 5% drop. speaking with jpmorgan about the firm conference yesterday the chief larry culp said the industrial free cash flow would be negative among weakness in its power business our morgan brennan is with us to talk about what culp said and how the streak is responding. >> stocks down 3.5% and we're down 13% just since the start of the week we don't actually have full 2019 outlook or guidance from ge yet. we're not getting that until next thursday so these comments from ceo larry culp yesterday about the fact that industrial free cash flow will be negative for this year was probably the most detail we've gotten in terms of the year. that was not taken well. obviously we're talking about a company that's in the middle of what is going to be a multi-year turnaround, but just the fact that we got that detail i think after the stock have risen something like 45% since its december lows definitely sent a

shiver, if you will, and so it is -- it's putting a lot more focus again on power, on how long the turnaround there is going to take and also it's putting more focus on ge capital because you'll recall that had been an area that had been adding cash to the broader ge company and in the last two years has been sucking cash and that, too, is likely to continue >> so where are we in terms of the street's optimism versus pessimism after we had the strong comeback rally for the stock this year? >> i think it's still a mixed bag. the last couple of hours i've been combing through some of the different notes from wall street analysts i mean, your bears on the street like jpmorgan saying the price target remains $6 and looks generous after today's news, you know, similar sentiment from gordon haskett who says absent free cash flow is zero after dividends will be substantially negative in 2019 and possibly still negative in 2020 and believe the debt rating

downgrades have decreased and you have other analysts over at rbc that say let's be clear here not necessarily that big of a shock. investors should not be valueying ge on 2019 free cash flow similar comments from nick heyman at william blair on "squawk box" that this could be a $14 to $16 a share company with nothing for power so still very much a mixed bag. "the wall street journal" did a good job of breaking this down today is the fact that you have seen a shift in terms of who has opinion investing in this company in recent months you've have a lot more longer term potentially value play investors who probably are in many cases looking at this as more of a multi-year story >> yeah. not so much widows and orphans stock to a large degree. >> keep in mind that we do get an insurance teaching which is part of ge capital and more will be revealed there and next thursday as well. >> a big question for investors is trying to gauge how much

firewood you have to sell in terms of asset sales and whether you have to burn any furniture in that process to stay warm >> yeah. i mean, it's a great point, carl i think after the danaher deal was announced i think there was relief on the part of some shareholders in part because there was a feeling that bringing in that $20 billion plus would give the company more optionality and not have to feel as though it had to move quite as strongly in terms of selling other potential assets to reduce leverage given how much it's going to come in in proceeds from that deal my sense is that is still the case can you know, morgan, i guess the question so many still have is power. >> yeah. >> i don't know what culp spoke about specifically yesterday in terms of the continued turnaround there or whether he gave sort of any articulation of t