dplo things are indicating a roer open right now. dow futures look like they're down by 75 points. s&p futures off by five and a half, this then the nasdaq down by 18. this does come after three straight days of losses for both the dow and the s&p 500. the dow, the s&p 500, and the nasdaq are all on track to post their worst week of 2019, but that's not really saying much because we have been on a pretty shait straight shot up since then >> three straight days >> we are back, and we are still in the red >> people were in a bad mood selling. like unhappy just -- what's -- why don't i

feel happy today why am i -- what feels different about today? we were not together >> people on twitter speculating. >> i'm sure there were usually we work it better. i see benefits -- i see good and bad for us being gone at the same time. other times i think we get a break from each other when we're not there, but other times you take into the show, and it turns into msnbc when i'm not -- >> i'm just happy that she got to, you know, not have to -- >> what i just said about whether -- we probably didn't have anything to do with the market being down. i think that's a crock of -- >> bologne >> a crock of bol owny did you see that, andrew >> i did see that. i did. i heard about it >> we haven't talked about this. >> we're going to play it, right? we're going to go back over that >> when they picked the highlight for the interview, that wasn't it >> i know. i saw that with you see -- do you see melissa's face, though >> yeah. >> that was worth it

you saw that, sorken >> he has mentioned that word before >> i say shitzu all the time >> i think he was caught off guard. he thought he was not on mike. you know, this is the way it works. >> it's weird. i will say that the -- back to the serious nature of these things, the market, i'm reading a lot about how it's over, and the snapback -- what is that ring now i'm not being over >> this is the ora ring. >> it's new. right? >> i have been testing it out. yeah >> you can't come in here with something like that and expect not to -- i guess we don't need to involve everyone in this conversation anyway, tv the best january and february in, like, 40 years or something or 30 years, and isn't it -- >> the nasdaq has been up for ten weeks in a row >> we're writing this off already?

is it definitely a horrible year already? isn't it the 7th >> that's what i would say >> people are saying it's over saying that the bounce off the lows is over, and now we're -- >> it's going to have to turn north at some point. >> it's a good sign. i think. >> it was down by 2% overnight in asia, you will see that the nikkei actually ended down by about .6%. hang seng was off by .9%, and the shanghai composite closed just slightly higher up by over .1% in europe this morning there is some trading that's already taking place, of course, early market hours, and red across the board. it looks like the marnl averages there have declines of about half a percent to a little bit more than that

>> huawei is suing the united states government. the company says that a law limiting its u.s. business was unconstitutional this lawsuit marks the latest now confrontation between china and the u.s. amid the trade war and the arrest of huawei's cfo in canada at the request of the united states. we're going to get a live report from huawei's headquarters in china at 6:30 eastern time so many questions about what this ultimately means and also, does this lawsuit by huawei have the backing of the chinese government, which effective itly pits the governments against each other, or is this really a separate corporate issue sf. >> i dug a little deeper into it because i was trying to figure out where they were suing.

it's in plano, texas interesting to say, the separation of powers there i read through the argument, and it's going to be very interesting to see how this plays out because at first i thought, well, this is ridiculous the legislature can do what they want to do, but they are basically saying they've taken their rights away, and looking at the corporation as being individual rights too. >> does it strike you, is there any hint of irony that the chinese government is sort of invoking the u.s. constitution did that seem a little bit weird? there's a lot of things that they could look at and adopt that might make it uncomfortable. we just went off over there now. eunice was watching and said, oh, damn, now it's off again there are a couple of things in our constitution that are probably -- that all humans should be able to live under, right? they don't i don't know just was weird to me when i read that that's rich. you are using our constitution why don't you adopt it en masse,

and we would all be better off president trump met with top business executives from his new work force development council this group included ceos from apple, wal-mart, ibm, siemens, and lockheed martin, and they told the president they're hiring more mernds now without college degrees. this is a search to find increasingly scarce applicants for open jobs. that has me worried about the number tomorrow that we're diagnose to see. we probably are at a point where -- an inflexion point where it's going to be tough it's going to be a supply instead of demand issue. that could help bring more people back in if there are any that aren't -- there are still many in the -- that was the argument that no one was 25 to 54 or whatever it was mostly baby boomers anyway, the ceos of apple and lockheed martin said nearly half their company's hires last year did not have that four-year degree the federal reserve rolling back some of the post-crisis

bank regulation. it is scrapping what's called the kwaul takive test for u.s. banks in this year's stress test that was part of the evaluation that gave the fed discretion to fail banks because of risk management or operational failures, even if they had sufficient capital to weather a crisis the fed said that it is removing that test for u.s. banks because of improvements in capital planning it's seen as a big win for big firlz, including goldman sachs, morgan stanley, jp morgan, bank of america, and citigroup. u.s. subsidiaries of five foreign banks will still be subject to the kwaul takive test, including deutsche bank. credit suisse, ubs, barclay's, and td bank. also, amazon announcing it's going to be closing all 87 of its pop-up stores in the u.s. next month the pop-ups let customers buy amazon products like fire tablets. they are located mostly inside whole foods and some other stores, including kohl's the company is shifting its retail focus opening more of what it's calling its amazon books and amazon four star stores where they sell items

that only have four stars or more from the website. now, the e-commerce giant also has plans to open dozens of new grocery stores in major cities, but the first in l.a. later this year these stores will have lower price point, and the company's whole foods brand and amazon considering opening thousands of its cashierless amazon go stores that might happen by 2021. all this news sending shares of barnes & noble sharply lower in yesterday's session. the good news is they're out of one part of the business the bad news is they have even grander at businesses, which i think we appreciated before. separately amazon's joint health care venture with jp morgan and brookshire hathaway finally has a name it's called haven. this comes a year after jeff bezos, jaime diment are teaming up to being thatle health care costs. he is tasked with improving health care for the three companies. it will share its findings with outsiders. technically it's a not for profit organization, right i think so >> i think so, but i'm not sure

how it's been registered, but their goal is not to make a profit their goal is to try and find ways to bring in health care costs while grooufg outcomes for their employees. >> that was a tool who is now running it former doctor. i think he still is actually a practicing doctor, in boston, who is running that organization also, a brilliant writer for many years for the new yorker. >> also, a big interview in the energy sector. we sat down with exxonmobil ceo darren woods, and here's what he had to say about the message that the company presented at its analyst meeting, which is held annually at the new york stock exchange >> last year we lay out a plan that took us through 2025. >> five years. >> with a plan to grow our downstream earnings, doublure downstream earnings and double our chemical earnings and triple our upstream earnings, and we laid out a capital program to do that what we updated this morning was how we've been doing against that plan that we laid out last year >> okay. >> 2018 earnings are up 40% versus 2017. on plan there. cash generation, highest it's been since 2014.

feel good about that and then importantly, we're on our milestones that we laid out to double and triple earnings across our different business sectors. >> he also said that the company is going to be expanding its capital expenditures both this year and next. that brought some questions up on the street about what that means in terms of buybacks we'll talk more about that a little later with our exclusive interview with the exxon ceo darren woods that's coming up a little later this hour. >> okay. a lot more to come on squawk this morning we usually think of disrupters as working to bring up bigger. they've been taking steps to shake up their own industries. the office of goliath's revenge join us next as we head to a break. here's a look at the biggest premarket winners and losers in the dow. back in a moment - i think the best company's succeed as a team

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upload your logo or start your design today i can customize each line for each family member? yup. and since it comes with your internet, you can switch wireless carriers and save hundreds of dollars a year. are you pullin' my leg? nope. you sure you're not pullin' my leg? i think it's your dog. oh it's him. good call. get the data options you need and still save hundreds of dollars. do you guys sell, other dogs? now that's simple, easy, awesome. customize each line by paying for data by the gig or get unlimited. get $250 back when you pre-order a new samsung galaxy. click, call, or visit a store today. zbafrmts our next guest says the plarkt's true disrupters could be legacy brands a little counter untietive scott snyder is a partner and a fellow at the wharton school he co-authored a new book "goliath's revenge, how established companies turn the tables on digital disrupters."

this is a counter intuitive idea most of us think that you have to be a start-up to actually get outside of the group think at a big organization that's bureaucratic and has red tape and can't get anywhere explain yourself >> yeah. that's why we wrote the book, right? we actually believe established companies are sitting on incumbent advantages that sometimes they just need to think about and unlock in a digital world. they need to do that by committing to leadership organization and culture that with stand running at two speeds that means innovating around today's business, and also driving breakthroughs for the next generation of business. >> is this more of a call for action within big companies for how to -- for how to be innovative, or is this an argument, which i think it is, that somehow some of these bigger companies actually are more innovative than the start-ups? >> yeah. we would argue in some ways they're better positioned because of these assets and many case customer-based brand reach data assets that start-ups or

disrupters would kill to have or can only dream of, which is why in many cases you see some of the disruptors partnering with other companies because they have these assets where. >> you remember back in the dot-com era, like guys saying the real winners aren't going to be the pets.com. they're going to be the established companies that finally learn how to use the www and the worldwide web. i'm not sure it's so counter intuitive. why wouldn't you think that companies that are staebtd and have capital and have all this talent, why wouldn't you think -- >> because at times markets favor the darlings who don't make any profits >> what markets? >> they favor the companies that -- >> you mean the valuations, unicorn valuations >> this can burn cash that an established company can't do >> they're held to a higher -- or not to a stricter -- but you would -- >> you are -- one of the issues when you ino vyoe innovate is y often having to eat your own >> which is the two-speed part, right? you may be launching a second speed that in many ways drives tension about your current business model

right? look at gm, right? gm has invested in lyft and called a ride sharing company called maven in theory, the future of transportation says that if transportation is more efficient, maybe i don't need as many cars because they're autonomous, but by investing in two speeds, gm is positioning themselves >> it sounds like they're hedging their bets >> in many ways, but it's also being future-oriented. it's seeing where the world is going. >> in most of these cases, i think -- tell me if i'm wrong -- the invasion is coming from another company that oftentimes it's inquiring or making an investment in. it is germ of the next big idea rarely seems to come inside the organization >> which is why a lot of disruptors get bought out, but i think that's okay, right that's a big company saying whether rnd machine is inside or outside, our ability to tap into innovation and use our scale, use our assets, whether it's data, cash flow, and actually

scale these innovations because that's why many disruptors don't make it. they don't have that scale >> pharmaceuticals and biotech, for example. >> that's right. that model has existed for -- >> they ought to have with the amount of money and the talent pharmaceuticals have, why biotechs eat their lunch every time that's weird >> most biotechs don't have the sales and commercial platform. >> why do they -- >> how many biotechs are there >> but the big discoveries have seen a lot of them have come from biotechs. >> i think when you peel away all this, it also comes back to the technology wheel is going to keep spinning, right we're now in the ai block chain dominated buzz word era. it's going to be sun of block chain in two years really it's going to come down to how fast organizations and leaders can adapt. >> scott, take it and put it in the context of all of these entertainment companies that are now trying to go over the top to compete with netflix who wins in a scenario like that >> so i think the good news is large companies can take a page from netflix, right?

what netflix did under the covers is drive an alga wrorith advantage. the netflix gap can be closed for a larger company that recognize we sit on just as much data as netflix. let's take advantage of that >> final question for me at least. it's effectively a talent business that's the business. one of the things i'm curious about is the kind of people you think big companies attract relative to the start-ups? >> rule five in the book is value talent over technology technology is going to keep moving, so fundamentally you need not only enough 3d talent design, development, data science. that's critical mass every company has to have that you need new roles that shift away working, right? product incubation managers, behavioral scientists, people like ai specialists that live across your business that know how to translate that into hr

and it into your supply chain. those are going to be the roles that drive that, and at we're focused on leaders helping figure that out and also putting their talent in place to make it go >> scott, thank you. >> thanks. >> appreciate it >> goliath's revenge >> don't leave >> coming up -- wait to get out of here. is it that bad you got your book here it's good for you. stocks to watch, including a couple of big name retailers under pressure your list of morning movers is next "squawk box" will be right back. this is not a bed...

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>> american eepgle outfitters mean they beat forecast, but revenue is below expectations and same store sales were just in line with us. down a little bit. down about 3%. clothing chain said first quarter profit, meanwhile, will come in below estimates as it spend more on advertising and opening new stores shares down about 60 cents hugo boss says net profit rose 2% last year boss pointing to stronger momentum in asia and on-line

he surgerying allegan to put itself up for sale one month after emerging from bankruptcy, sears is being sued by stanley black & decker over the use of craftsman brand. stanley bought the brand for $900 million in march of 2017 giving receivers a limited license to sell some products. stanley is now accusing sears of breaching that deal by launching a new line of tools and calling sears the real home of broadest asort of kraftsman stanley says that tag line implies that other kacraftsman tools are somehow illegitimate they paid $900 million for the rights to that back in 2017. when we come back, huawei strikes back the chinese tech company says the ban on its products are unconstitutional we will take you live to the

company's headquarters for an exclusive interview with huawei's lead attorney right now, though, let's take a look at yesterday's s&p 50000 winners and losers so, servicenow put your workflows in the cloud, huh? mmhm.

your employees must love you. [ chuckles ] thank you. you could say that. i love you. servicenow works for you.

zblienks good morning, everybody. welcome back let's take a look at the u.s. equity futures the markets closed down for the third day in a row actually, on track right now to post their worst week of 2019, and this morning's indications aren't helping any dow futures indicated down another 73 points right now. s&p futures off by five and a half, and the nasdaq down by 17. right now it's time for the squawk planner the latest announcement from the eb is due today. europe's central bank is expected to slash growth

forecast and is likely so send its strongest signalets that fresh stimulus is on the way in the form of more cheap loans it will likely be viewed as a policy reversal. the ecb just ended its quantity taiv easing program and had signalled an interest rate hike for later this year. also on today's agenda, u.s. jobless claims numbers and fourth quarter productivity. >> chinese company huawei fighting back against a ban. it's a very big deal, and cnbc joins us this morning from china just outside of huawei's he headquarte headquarters good morning >> good morning. i just want to dig into precisely what this lawsuit is about. huawei is suing the u.s. government it's got particularly an issue with the law called the national defense authorization act. a section in there which singles hu ah wei out by name and forbids agencies from buying companies made by the firm they argue this is unconstitutional, and they say this amounts to in legal terms they're calling a bill of

attaineder where a company is singled out and essentially punished for -- and deemed guilty without a trial they say this is not withdrew pros they haven't been given a fair trial in this case, and they say that goes against the constitution of the united states i had a chance to catch up with the head lawyer for huawei on this case and asks him what he hopes to achieve let's listen to what he had to say. >> this law is hurting huawei's customers in the united states it's damaging huawei's reputation, and it's limiting the ability of huawei to provide its innovative products, including 5g, to consumers in in the united states, and what we're hoping to have come out of this lawsuit is to have the particular provisions declared unconstitutional congress hasn't followed the procedures that it's supposed to follow for enacting a constitutional law >> huawei hopes it can clear its

name and restart talks with the u.s. government. what's interesting about this is it's a bold statement from the chinese firm, which is really going on the front foot -- on the offensive after spending most of 2018 really under political pressure from the u.s. and other allies as well let's just get to the heart of what's at stake here should huawei be successful in its lawsuit, it should have a chance to clear its name, and it might convince other nations to take a softer stance against it, about ut if it does lose and it's condemned by the u.s., that could be tough going for huawei. this plays out in the context of the broader cyst-china trade war, and both countries, the u.s. and china, are in a very intense race right now for dominance in 5g technology, which is going to underpin a number of industries in the future back to you. >> okay. thank you for that it's very big deal it could have huge implications. for lots of companies that depending on what you think is going to happen here with both china, but possibly, you know, to the extent that we're going

to use national defense or other issues as a defense against foreign competitors. it's interesting >> progress -- speaking of chooirn, where progress being made in the u.s. trade talks with china, let's get insight on how much a deal could boost the economy in broader markets joining us for that ben, global strategist and the multi-asset solutions group at jp morgan asset management covering the economic angle u.s. senior economist at nat west markets unfortunately, ben, you think that the -- a lot of the good news about trade is already -- is already in the markets, and it's going to be disappointing when the news actually hits? >> i think there's a sense in which sometimes it's better to travel than to arrive. or maybe it's, you know, buy the tweet and sell the news in this instance i think a lot of the good news is priced in i mean, the good news is that there is good news in the first place. we've had a long-standing view that the entire trade conflagration ends in negotiated

solutions across the board, so, obviously, it's a good sign that that's happening it's just that it's tempting to think that if we do get to an agreement, there is going to be a sense of disappointment that sets in. a disappointment that it's a narrower agreement than originally thought this is not the comprehensive deal that solves the major strategic issues between the u.s. and china, so it's going to be what's next eventually, and then it's also a question of enforcement. i think there are big promises on the table purchasing $200 billion to $1 trillion of u.s. goods is part of it. that's the most measurable part of it, but there are others that are much more vague and hard to track over time. i think there's a question of enforcement that starts creeping in and probably has a negative interaction with the what's next question >> so you still like the u.s. better than other places, and you still like equities a little, i guess, but you are underweight equities i mean, you're not out, right? you like the u.s., but you're not -- you don't sound overly bullish or excited

>> i don't think we're swinging the bat in a big way at the moment, but i think that's all right. we're being opportunistic on risk as we move throughout the year we're playing from a slightly underweight position in terms of risk the trade news is good news at the end of the day the fed is opening space up. i think the main thing is that this expansion is not ending, and we're troughing in terms of cyclical momentum in a global economy. i think, you know, as we go through the year, our estimate is that global growth and industrial activity in particular, which has a disproportionate testimony on equity markets will trough, and thn a more up side opens up. right now it's a little bit balanced, and we're being tack technical and opportunistic about things >> let's go to kevin let's talk jobs. first, let's talk gdp. atlanta fed at .3% for the first quarter. the first quarter is going to be brutal it is all the time, it seems like, but it's -- >> it's certainly been a

recurring pattern the past several years. >> it's going to be scary for people that are calling an end to the expansion that it was a front end loaded tax benefit from the tax reform that it's dried up already do you think that's true a full year, or will we be? >> i think the base case is the economy is still in pretty good shape. you are going to dig a pretty big hole in the first quarter just because you ended the fourth quarter with consumption really slowing down at the end of the quarter so if you remember back a couple of weeks ago, retail sales really showed weakening in december, and, unfortunately, the trajectory for growth for the first quarter, you with got a pretty big hole to dig out of. i don't -- i wouldn't necessarily extrapolate. i mean, we have about 1 % on real gdp in the first quarter. we'll see. it's still pretty early in the data cycle that we've got for q1 data it's certainly seeming like the

recurring pattern that q1 is going to be pretty weak is likely to be -- >> so we got jobs tomorrow, and they've surprised everyone in it recent reports, but now you've got -- i would think it's kind of a double whammy you've got the specter of slower growth and it's tougher for people to find what they want. aren't those two headwinds that mean that sooner or later jobs are going to catch up with some of the other weak parts of the picture. >> i would agree i mean, i think tomorrow i think the expectation is more of the same trend of, you know, 200 or so thousand on headline pay roles. we have 225 on private pay roles and a drop in the unemployment rate to 39 you're right that you are likely to see a down shift in job growth we thought it was going to happen this year if you look at the last three

months average, 12-month average, you're right in the neighborhood of about two and a quarter thousand jobs a month. i would assume that job growth does shift down. >> why are you using that 31 let's say for argument sake, let's say you bet someone, like a dinner on whether it would be 3% >> who did you bet >> let's say it would be 3% or not. some guy who is on hannity, like, every night. goldsby. >> would you pay him if it was -- i said it was going to be three or above he said three below. would you pay -- am i -- do i have to pay him if you are

saying it was 3.11234. >> it was 3.1% on a -- >> would you go and pick up the check if you were me >> no. >>. >> i said it would be above three. >> right >> he says it's 2.9. >> you better have him pay for the dinner now because we'll get the annual revision in july, and perhaps that could slip back below 3% >> i don't know. he is just crowing already his twitter feed, it's all he talks about is me and his stupid -- it's like he has never had a meal or something. >> it's not the meal it's the bragging rights >> right i mean, it's pretty close. 2.9% on a calendar basis if you look at calendar average versus the prior val dar -- >> he is collecting. >> here in the states we often look at q4 over q4 gdp >> that's what i thought >> forecast gdp growth he acts like it was really more clear that we weren't talking

about that i don't mind paying. i really don't you know, in this economy -- in this trump economy, i can afford to pay i can afford to pay for -- i feel good about i many financial future i do >> it's not -- >> salt hurt so bad. i talked to my accountant again. no i'm fine we like taxes, andrew. we get goods and services. we get our money's worth thank you, kevin thank you, ben i don't know what to do with this it's like maybe we'll just split the tab. maybe we just shouldn't even go to dinner. >> coming up when we return, when is an ai company not an ai company? when is it exaggerating to attract investment we've got the results of a new study with some staggering numbers that should make investors sit up and take notice and, later, we'll hear from disney heiress abigail disney, on why she's arguing for higher taxes on the wealthy you don't want to miss it. stay tuned you're watching "squawk box" on cnbc

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be ai start-ups and have actually, if you can believe this, no connection with artificial intelligence at all it's according to a new report from vc firm mmc ventures, and found that the term ai had now uses a buzz word to attract investment the trick has worked, though they also found the companies that highlighted ai connections raised 15% to 50% more in funding. they secured higher valuations it's a little like when people have a dot come or block chain >> what surprises me is that it's happening in vc funding too. not just, you know, in the penny stocks or something where you would expect a drum trick like to work. you expect cv funding, they'll have to do more due diligence. money that gets thrown around. people are looking for investments. joseph

>> yes, andrew let's talk european union. approve the new law that forces assets managers, insurers, and pension funds to disclose environmental risks in their investments. it's meant to curb green washing when companies claim to be more environmentally friendly than they really are. it would disclose investments and assets that could harm the environment sich as pole outing wat water. >> exxonmobil, but the stob traded down. we had hear more from darren woods next right now, though, as we head to a break, let's take a quick check of what's happening in the pm markets this morning. red arrows across the board. declines of about half a percentage point for all three of the major averages.

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>> exxonmobil issuing new financial guidance, and assuring that the oil giant's potential for profit and cash flow look better than it was a yoer ago. i spoke to the ceo darren woods about the message that he had for investors. >> what was probably the most exciting discussion we had, though, was the up side that we've identified over the course of last year to improve upon

that base plan that we fut out last year, and that's $4 billion of additional cap ex from 2019 to 2025. with that $4 billion of capex comes an additional $40 billion of mpv over that same time ex cn of cumulative earnings over the same time frame and $24 billion of cumulative cash flow over the same time frame. so very productive capital on the base that we laid out last year for this plan to double and triple our earning as cross our different sectors. >> i understand the long term planning but the knee jerk reaction on the street is that stock traded down it was down 1.7% the last i just checked. and from anl ifalysts, they saye were looking for potentially more information on share buybacks and more return of capital to shareholders. what would you say to them >> for our business to be successful over any of those time frames, you got to have

productive value investments we're in a depletion business f you're not investing to keep your business, you're trading. that's an important part of the business that we have to basically continue to establish good investments as we go through time, the natural depletion of the resources the projects we put in the portfolio have very good returns and are advantage versus the rest of our competition. what happened when the prices came off in 2014, a lot of industry pulled back that's when we leaned in, found these opportunities and are now progressing those. i think in terms of short term prices, the market tends to move quite bate on any one day. i think the market in general is down what we found over time is we're talking to investors is they like the plan. one thing that we added this year is additional investments so as we loaded our pipeline, it's given us opportunity to work the existing inventory. so what we talked about today is

a program, $15 billion, which is a risk program and we expect that as that begins to mature and materialize, that goes back into share buybacks. >> that is part of the plan. as the assets are divested, you're looking athis the too >> our first priority is the investment in the assets we have a balance sheet that allows us to continue to do that so we looked at our balance sheet, objectives to grow dividends, keep a reliable and growing dividend and maintain a strong balance sheet question do all that in a white array of price investments >> the areas that you're looking to add include places like the permian basin. you also said you're going to step up production there drastically. up 80% over what you told us a year ago >> that's right. >> that's an important area because it's a highly profitable area what is the price you can get

return on invest snent. >> we said below $35 i think the big change from last year is as we brought that asset into our portfolio, that was an acquisition, we took it into the exxonmobil kind of machine as we talked about it today and said how do you -- if you step back and think about unconventional development, how does xoebl mobile with a exxonmobil bring that to bear in the unconventional development the plan we took people through is the exxonmobil advantages being applied at scale to the unconventional which has given us the growth. >> that's what i was going to ask you about. chevron made comments on this. they've been investing in the permian basin. and the ceo there said this is a scale game it's not for small players that you have to have the scale to really be able to make this make sense would you agree with that? >> i think there are opportunities for scale, no doubt about that and it's also function of what kind of acreage you have, how contiguous that acreage is the acquisition that we made

allowed us to approach this at scale. so we have a very long, long blocks and corridors question develop them like a large project. >> where are you putting at decisional cap ex you talked about today? is that targeted >> it has been what we talked about is actually the two areas that were already in our plans, giana which is deep watter in the permian as we work, we had more discoveries in guiana. so that continues to grow. we had discoveries since our last review last year. and in the permian, as we delineated that acreage and brought the broader exxonmobil advantages to bear there, we come up with different development plans which lead to more cap ex and basically capturing that value much quicker than we had in the past. >> guys, i think the big question is how much they're doing for the long haul versus

what some shareholders want to see right now. if you're investing for the long haul with capital expenditures going to $35 billion next year, you can stha ay this is for lon haul planning. they're expecting to see production increase by 5%. there are some who say they want to see more action on buybacks now. they'd like to see more information on that relative to the peers like a chevron, they haven't laid that out quite as clearly. he did say with the $15 billion that that's where they plan get to the money for the share buybacks >> amazing how much they keep fing finding. >> the game is now scale if you're looking the permian basin. chevron loaded up. they have an area about the size of rhode island in the permian basin that they can work with. if the properties are near each other and do a lot more nings than any of the other small players can do >> because we still got -- when you're charging your car, you still have to have -- but you

need some -- something to power the grid that's all i'm saying. >> i did talk to him about that. he had some comments on exactly what they're doing in the face of things like the new green deal we'll have much more of that interview with the exxonmobil ceo coming up in the next hour including some of those points >> did you see michael bloomberg proposed his law >> i saw the headline. >> it's not the new green deal but it's akin to it. he has some ambitious plans. >> you couldn't talk him into it >> a lot of people tried to talk him into it. >> unsuccessfully. >> i'm sure. we'll see what happens >> our loss. >> coming you up, is the trade war worth it our next guests will break down the real cost of tariffs and explain what it would take to get our money's worth on this. later, we're going to get results from grocery giant kroger before the bell the company faces increasing competition as it has for a couple years now from amazon the cfo will join us to run through the company's fourth

quarter. qua "squawk box" will be right back.

china trade talks in focus new fi new findings about effects of tariffs.

is the trade war with china worth it that debate, discussion is straight ahead. >> exxonmobil tells investors to brace for higher spending. >> we're in the short term demand is robust >> i sat down with darren woods after his presentation to investors. his thoughts on oil prices, the economy, and business straight ahead. >> plus, disney heiress why she wants to be taxed more >> we don't need it. >> the second hour of "squawk box" begins right now. ♪ live from the beating heart of business, new york this is "squawk box. >> good morning, everybody welcome back to "squawk box" here on cnbc i'm be

i'm becky quick. the dow is indicated down by 93 points s&p 500 off by 7.5 and the nasdaq down by 26. >> here's making headlines a couple big things. general electric exploring another sale to raise more cash or reporting that ge hired an investment bank to help in the sale of the 50% stake of a renewable joint venture. that stock actually -- i don't want to say down on that news but down marginally. amazon closing the pop-up stores the stores have been used to showcase products like the echo, smart speakers, kindle, things like that. these were in kohl's and whole foods stores and other places. the company using the whole foods and amazon go stores for that purpose so they're going to put an to end that however, they're going to expand a whole other set of brick-and-mortar stores. two pieces of economic data on the way this morning ahead of the opening bell we'll get the labor department which will be issuing the weekly

report on initial jobless claims and revised fourth quarter productivity figures both of those coming in at 8:30 eastern time you don't want to miss that. >> two papers released on the economic effects of the tariffs find that they're costing american consumers and the economy tens of billions of dollars. steve liesman joins us now with more steve, good morning. >> good morning, becky the two papers take different approaches both conclude the cost to businesses through different ways of the tariffs and the territories have been quite expensive really take a look at the first paper from a trio of economists from the new york fed, princeton and columbia $3 billion per month in added cost now those are sort of rounding errors on total retail sales it's this last figure there say that if these tariffs were in place for a full year, because $165 billion in trade to be redirected to avoid tariffs. a quote from the paper says this reorganization of global value changes likely to impose large costs on firms that made

investments in the u.s. and in china. the paper shows this chart, charting how they pushed up the price of major appliances in the cpi. the second paper authored by economists from ucla, world bank and columbia taking a look at larger and smaller at the economic effects losses on the total annual bases, $69 billion but they note there have been gains to u.s. producers. they got more business so that's plus $22 billion and, of course, there is tariff revenue of $39 billion the net loss to the economy, of course, paid for by consumers and businesses is $7.8 billion the paper also got down to smaller areas and found workers in heavily republican counties are the most negatively affected by the trade war joe? >> let's discuss whether the trade war with china is worth it joining us now, president of the trade partnership and william

rhine, the senior fellow at the center for strategic and international studies. bill is a former president of the national foreign trade council and former member of the u.s.-china economic security review commission. bill, let me start with you. you think that the president and china are getting close to at least doing something? is it -- will it be a net positive will it be -- will it have made what we went through worth while or not >> i think long term probably shot short term, a favorable bump for the market if he reaches an agreement. people will say, great, there's a deal trade war is over. i don't think it will be we're asking the chinese more than they can give he'll say it's the greatest ever but a year from now we'll see if it we actually moved the ball forward or not >> there are certain things they're unable to do systemically why can't it be better

the easy part is the talks it will be a big number and the market will react. the harder issues are the structural issues. we really want them to reform their economy, to, you know, channel credit away from enterprises, stop subsidies and the unfair practices that they're engaging in. most people agree is going on. there is not disagreement on the diagnosis. and the things that we're asking them to do though would reduce the party's control over the chinese people and the party is not going to do that >> so they're worth while goals but we're, you know, leaning against wind mills or something? >> yeah, i think so. i mean, there are limits plus, in a way it misses the point. what the chinese have said they want to do in their book made in china 2025 is they want to create world class competitors

to compete against us. our job is to be better than they are and our job is to run faster and that means we ought to be looking more at third markets, you know, we're going to go head-to-head with them in europe, asia, latin america and in africa. that's who we ought to be looking at it's not just about what we're doing inside china it's whether we can compete against them everywhere else >> i figure you -- do you wish we had done nothing? would we be better off right now do you think >> well, i wouldn't -- i'm not going to say we should have done nothing. my position is that when you decide to take a policy position like imposing tariffs to inventivize a company to do something, you should do that with your eyes wide open as to what impact that's going to have not only on the country that you're targeting but on the american economy >> i don't think anyone thought that it wasn't going to be

painful. and that i don't think anyone wasn't looking at the possible negative effects it could have on, you know, the country that's trying to push back against china, right you don't think we knew this was going to be -- >> i don't think was an appreciation of the degree to which the negative impacts were going to be there. for example, some government officials said early on no country would retaliate. they submitted to the president prior to the impositions of the first round of tariffs on steel and aluminum didn't eclude any assessment about the effects on other industries it looked at the positive effects that would happen to the steel industry it was very one sided. >> funny the trump administration is getting a lot of criticism that trade deficit is widening. a lot of the same people said you shouldn't focus on trade deficits and some of us saying the same people obstruct were trying to obstruct any efforts to, you

know, to reign china in. now they're point together trade deficit. look, it's not working how does that work what should we be doing, laura how do we counter their 2025 plans? >> there's a large group of american companies and businesses and policymakers who do -- who continue to argue that we need to approach it more with awe licenses with other trading partners the partnership that we pulled out, those sorts of approaches that would not isolate china but incentivize china to do it our way, if you will, in order to be a participant in a multilateral global economy >> i think we tried that that's part of the frustration

>> yeah. >> that is what i hear all the time we have to get other people involved and tread lightly i said wow, they ate our lunch they have a lot of people and the very talented and, you know, very good at commerce and trade zbl . >> you run faster or trip the other guy. >> hopefully the other guy is not roided up and cheating and, you know, he starts early. he doesn't run as far and he's, you know, he's got ped coming out -- you don't lose -- that's

not losing a race. that's being stupid and not, you know, not running a fair race. >> you hope he's making a lot of mistakes the chinese government is making a lot of mistakes in terms of the way they're running their economy. their growth is going down the reliance on the state owned enlt penterprises are the things that hurt their economy. you hope the other guy can win it's not a guarantee for success. sure you want to go after their unfair practices we've done that a lot. we've done that before the tariffs started on steel there are individual complaints product after product after product. you can use the rules. tend of the day though, you

still have to run faster we need them everywhere, not just here and not just in china. >> laur yashthank you. appreciate it. it's a tough intractable, i don't know what the right answer is bill, thank you as well. we have news this morning. just out of soft bank. it is announcing the launch of a $5 billion fund to invest in tech startups in latin america the fund will be headed by the former ceo of sprint he is now the number two at softbank he's the chief operating officer. we'll have more on this story throughout the program marcelo, bolivian born bright star in latin america huge success before he became the ceo of sprint. he knows latin america very well when we come back, tax me please that's what the disney heiress and filmmaker abigail disney says she is wealthy she wants to pay more.

she joins us to discuss that in just a moment. take a look at the futures as we go to the break. so with xfinity mobile

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consistent growth and free cash flow. they consider coca-cola a neutral and pepsi co underperform they said the stock approached the price target and sees little profit marge toinz grow at this point. >> when we come back, despite the stock market's rise, there's a lost generation of stocks that have never recovered from the peak in 2007 let's take a look. this is one of the name that we're talking about after the break. this mystery chart find out which stock it is and if it can make a comeback.

"squawk box" will be right back. ♪ just hold on, i'm comin' ♪ hold on, i'm comin' ♪ hold on ♪ don't you worry, i'm comin' ♪ here i come

welcome back to "squawk box. the bull run is turning ten this week it's been a rough ride getting back to peak performance

mike santoli is back this morning. there was a mystery chart that we showed you right before the break. do you want to help answer the question >> do you have a guess >> it's citigroup. and obviously was at the very center of the kind of excesses at the peak of the credit bubble it was the biggest recipient of government assistance in the meltdown and, of course, did a one for ten reverse stock split. and that's what you're seeing right. there it's down more than 80% from its early 2007 peak so what i'm looking at is the banks, the broader financial sector they outperformed since the low in march of 2009 which is ten years ago. that's because they were so washed out and almost, you know, at the smallest percentage of the overall market in memory really at that point so they actually are still down. if you look it at the banks versus the s&p 500 from 12 years ago, end of 2006, you see a 2% loss you should see about a 2% loss,

actually, more than that, 24% loss for the kb, s&p 500 index the s&p 500 more than recovered, up 150%. citi, bank of america, morgue an stanley are the biggest stories. j.p. morgan was the exception was before and after it outperformed the overall market since the end of 2006 if you look at the if manifinan you have a huge extreme, above 20% before the crisis in '05 and '06. i would point out that you're still above the very long term average in terms of how much financials have a weighting in the s&p 500. for those that say there should be a huge come back in bank stocks because they've been, you know, kind of so on the outs for so long. well, they're about what they used to be and i would finally point out that it reminds mef the big nasdaq leaders in 2000 if you look at 12 years later after the peak in 2000, you have the stocks down.

still, the nasdaq 100 was down 40%. >> wow >> 12 years later, you had cisco down 70% most of them slowly rebuilt that you get the exchange before major peak, the stocks do not leave you for years to come. >> wow >> mike, thank you >> good to see you when we come back, exxonmobil issuing new guidance profit potential looks great but they should prepare for an increase in spending in oil exploration. darren woods spoke to us yesterday after the company's investor day right now as we head to a break, take a look at equity futures. they're down about 60 points bfos&p 500 futures downy ur and the nasdaq down by 15. at leaf blowers. you d [beep] you should be mad your neighbor always wants to hang out. and you should be mad your smart fridge is unnecessarily complicated.

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huawei facebook putting a greater emphasis on private chats. the ceo mark zuckerberg said yesterday the company would encrypt conversations on more of the messaging services and make them compatible. he said in a few years direct messaging would dwarf discussion on the traditional open facebook news feed. and the move could limit facebook's ability though to generate revenues through targeted ads but zuckerberg said the tradeoff is worth it because users want better control of their data >> i don't understand. he's now just sort of coming around to the privacy thing. the first time in -- >> right the question is do people trust after breach that's we've seen to this point when you said you're going to keep this private? that is the question how big is the trust breach that's been built up and do you

gap that bridge by simply saying we're going to focus on privacy from now on? you need to show a little more instead of just saying >> i thought it was a revelation for him to suggest that actually the future of the company may not be what we think of as the classic and traditional version of facebook and that somehow mess efrpger, for example, will be such a huge piece of all of this and then you get to the money. i think encryption, you could insert advertising into that product? i don't know if you use what's app or any of the other products >> i have messenger. it's a pain. >> they're putting ads in it now. they're figuring out a what to insert ads into some of it >> i never understand any of the things like the confide app or anything if i want to know somebody's secrets, that's the app i would target if you tell me this is really secretive, i never understood that even with the places you go to dump. bring all your private document here's and we shred them up. that is the first place i would

go to collect secrets. some place you're storing all the secrets. all of these things, i was reading something about people who thought that their conversations on one of these services were going to be private and they were plotting a murder on it they thought the snap stuff would disappear. there is no such thing as ever anything ever being secret you want to keep it secret, shut your mouth and don't write it down anywhere or type it. >> good advice for all of our viewers. >> all right exxonmobil, the world's largest publicly traded oil and gas company spoke to wall street yesterday at their annual investor day the ceo darren woods talked about increasing plans this coming year, they're looking at spend 30g billion next year, $33 billion to $35 billion. i asked woods what that spending means for exxon's production >> if you look at the whole profile of the 2025 and you include the divestments, we're 5% per year. >> whap could potentially be something that would change that

plan when you look out, obviously, it's hard to look out to 2025. but what are you kind of watching in the past there's been issues for exxon in russia where you had to walk away from the deal because of political instability and uncertainty. you feel better about investing in the permian basin the other places you feel like you have a better situation going on >> the risk, i think, has always been with the industry they're inherent with a lot of the locations that we go to to develop resources. so our strategy is to always make sure that we have a diversified portfolio so that we're not putting too many neegs in any one basket. that is true in terms of geographical standpoint. it is also true from a resource standpoint it is true from the value change standpoint wlchlt we put money in the upstream and chemicals and down stream. so our way of mitigating that risk is to have this diversified portfolio and then options within that portfolio. so in the upstream, things are going to move. the projects are large they're complicated.

lots of variables affecting them as some things shift back or shift forward, we've got ways to fill those gaps. >> options is one thing. when you look at the united states, does that carry a lower risk premium than a lot of the other places or do you worry about that too >> i think every location has a set of risks you move around. i will tell you, i don't think is any developments that we have in our portfolio where we don't have a view of the risk associated with that and approach in how we mitigate the risks. >> let's fwauk otalk about oil . there are two things that go into the prices. one is demand and the other is smi. we talk a lot about supply with we look at the demand picture, you hear out of china that they're going lowering the growth forecast for this year. what do you see when you look around the world in terms of the demand for oil >> certainly in the short term demand is pretty robust. not seeing significant

degradation there. i think like the rest of the pundits, we see some slowdown across the globe as you go through this year and into next year looking at the trends that affect our businesses, demand for energy, that's all tied to economic growth, global economic growth and people's living stabbed ardz rising. and so that's a very long term perspective. the fund mentals are important and they're required to come on line twend to think about things in a longer time horizon. when you look at those terms, people around the world are going to continue to look to raise their standards of living. they're going to continue to look for the economic activity to support that. they're going to continue to need energy to make that happen. that tends to be what we focus on as we think about our investment in the investment horizons >> for more on exxonmobil and the oil industry, let's get to john killduff. he is a cnbc contributor

john, just the idea that they are investing so much more in capital expenditures they're talking about $30 billion this year, 33 to $35 billion next year and when you compare that to chevron, they're doing $18 billion in cap ex. is this the right time >> it is this is a low price environment. the cost of rigs off shore have been cut in half from two years ago. i mean you want to be buying low and selling high and over the past few years, exxonmobil had actually been doing the opposite they paid the top of the market for xto energy, for example t it hurt them a bit. it hurt the earnings the company was in a funk. but this new ceo is doing things and they're getting active in trading as well. i think it's a great move for

them >> he looks like he is going to do the right thing for decades there is push back that says where are my shareholder returns? where are the share buybacks >> the oil business is a complete dlifrn animal than cloud or making phones they're not sitting -- they need to deploy the piles of cash to be able to replenish their reserves i mean they're pumping stuff out of the ground. its gone it's not like a farm where you can replant. you have to find new sources of supply to stay on top of your game so it's incredibly capital intensive. with exxonmobil, you're talking about the law of big numbers by probably the biggest order of magnitude of any company out there. so they have to get big projects on the board to, again, meet their earnings targets and growth so it's a capital intensive business there's no two ways about it one thing he is right about, you know, we talk about china potentially faltering and slowing global economic activity en that does affect the commodity price in the short term but demand is stead lyn creasing we're pushing on 100 million

barrels a day of demand consistently we continue to see demand growth gets ratcheted down. but it is still demand growth year in and year out as far out as you can see, especially in the emerging markets like china and india. >> what does that mean when you hear things like the new green deal here? >> interesting you ask him about political risk in ghana. colorado, there is a big effort there to clamp down on their oil and gas industry and oil and gas drilling so also, too, to the extent that i can't imagine the new green deal coming into reality any time soon, but, yeah, that would be a negative. >> and woods did acknowledge that you think okay, the u.s that has to be a better place to be investing than russia or smfr the places in the middle east where they've seen investments go arichlt he said we have political concerns everywhere including the united states. did he talk about what they're doing to try and bob and weave around the edges in terms of looking at changes, new ways of coming up with energy more

effective ways and they've got a lot of plans we'll talk about that later in the show when it comes to where you see oil prices headed, what do you think? they say they don't follow it on a case by case basis they have to be willing to deal with it no mat whaert markter we market comes back. >> a fortress balance sheet for that an incredible statistic yesterday from the presentation. they're profitable, double digit returns at $35 a barrel. they're the only ones. i can tell you that. prices get down around $50, most of the companies are in the red zone and even beat chevron yesterday was talking about a $51 number. >> i read that $52 barrel a number differently it sounded like that's the number they need to hit in order to make all of the cap ex spending they're doing and buybacks and dividends and still be able to handle it and be a profitable company i thought that was around all of their investments not just the permian basis. >> i just meant that as far as just exxon to make that much double dinlt returns on $35 oil,

incredible statistic >> is that the case though is this a game of scale? do you have to be big to be the big players and make it that profitable >> it seems to be the case the smaller independents are hurting to a company there is also other issues out there now that are coming out about decline rates and some of the wells. some of the way that's they're handling the asset there, in terms of putting wells too close to each other. problematic. so, you know, its very important that to be able to have the scaleability and drive the costs down n the near term, getting back to your original question, i do see prices heading back down the slowdown in china is going to be particularly impactful it is very negative for oil prices especially as u.s. production continues to ramp up we're now at 12.1 million barrels a day. there are pipelines coming in later in the year. that is going to get the exports pushing forward. we're already at three

last week or two weeks ago we had 3.6 million barrels going out to the international market. there is big time pressure on all the oil companies and oil market from the surge of u.s. supply >> is there anything that opec and russia can do about that >> well, right now they're trying to -- they're willing to see market share to support the prices and support the market. the saudis in particular the real battle is going to be at point do you go scorched earth, open the sifaucet and see how long they can last around $35 or lower squeeze out the high cost producers. that's what it has to satake >> wow how long do they have to do it and who do you think the ultimate winner will be? >> saudi arabia for sure is the lowest cost producer by far in terms of what it costs thoem get a barrel out of the ground. >> how much is it? >> single digits so nobody can compete with that. sort of the rockefeller's beauty rose theory. >> the saudis can't compete with that either. they have too many needs at home they can't fund.

>> it would be a gut check for them, becky. again, they're going to -- they're only other choice is to keep seeding market share to the u.s. and at some point there is going to be a throwdown, i think, on that front but that's a ways off. >> john, thank you good to see you. >> same here thank you. >> thanks, john. when we come back, over a year ago disney heiress released this video on why the wealthy don't need a tax break the push now for new taxes on the wealthy. is she willing to pay higher taxes? i think the answer is yes. we're going to talk about it right after the break. and later, house majority leader steny hoyer is our special guest. so much to talk to him about what's going on in washington right now. ayuned you're watching "squawk box" on cnbc so with xfinity mobile

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customize each line by paying for data by the gig or get unlimited. get $250 back when you pre-order a new samsung galaxy. click, call, or visit a store today. take a look at a couple stocks to watch this morning american eagle as mentioned said the revenue missed clothing chain said first quarter profit will come in below estimates. it spends more on advertising and opening some new stores. amazon plans to close its 87 pop-up stores in the u.s they used the stores to showcase products like the echo speakers but will now market them in the whole foods and amazon go stores i had deja vu after reading those o two stories. >> because of -- >> because i read the identical story about a half hour ago.

no fine it's the 7:00. >> the fed approved a bank merger they received the federal reserves approval to complete the acquisition of mb financial. the deal entered into on may of o 2018 for $4.7 billion. and fuel efficiency has hit a record high according to new epa figures. the average fuel efficiency for cars and trucks is now at 24.9 miles per gallon. >> okay. here's what i know is going to be a fascination conversation. nobody wants to pay more in taxes except for -- well, maybe joe. but for members of the patriotic millionaires group joining us right now is someone in that very camp, filmmaker and disney heiress abigail disney. good morning >> good morning. >> so you want higher taxes? >> i do. i do i think that at least the wealthy need to. >> what does that mean to you. when you say higher taxes? >> well, i think that the top rate right now is as low as it's

ever been. and if i'm paying a lower effective rate than my assistant is, something is fundamentally not right. >> so what is a fair tax for the millionaires >> you know, i wouldn't -- i wouldn't put a number on it. i would say what needs to happen right now is for there to be a full conversation about what seems fair what we're driving, what we've been driving for decades now is a massive amount of inequality and so the bottom half of the united states, the working class, has been dipping lower and lower and lower. many of them into negative net worths and that, you know, given the 1950s and 1960s when my grandfather and great uncle built that company in a thriving economy, they had a middle class and working class that could send their children to school, could drive on roads that weren't -- >> is there an argument to be made that during the 50s and

60s, the uch.s. was a monday aprilly power. we could charge monopoly rents >> that's not the issue. >> hold on >> you always make this point. it was easy back then. there were writeoffs no one paid 90%. >> no one paid 90% effectively they still paid more they paid up into the 40s effectively. >> right now the top -- i don't know what you consider wealthy 1% wealthy or not? >> i would say the top .1% of people. >> okay. >> they're rolling in money and rolling in money in a way they haven't been rolling in money ever in the history of the world. >> buffet and gates own more than 50% of america. >> so the top 1% pay more than the bottom 90% >> right the top 1% also own and earn more than -- >> they pay 40% and they own 40%. >> yeah. >> so we have rules about private property and that's the way, you know, since the 17th century, that's the way things work that's the way you're able to own an idea, capitalism, all the

good things happen that gdp of the world fwrenwent from 200 a r to 2,000 a year based on private property ownership so do you want to do something with it? >> you are sort of >> no. >> let me ask you something. >> what i am saying is that should my effort of holding and owning stocks and making my capital gains off buying and selling those be taxed at a lower rate than somebody who works for a living and goes to a coal mine every day. >> you're talking about capital gains. >> well, should i be taxing ownership at a lower rate? >> if someone he masses a lot of money and then leaves it to charity, are they unpatriotic? >> no. absolutely not >> okay. >> they're not paying taxes. >> of course not but we have all agreed as a country, we have laws that favor charitable contributions >> then by definition, it's no the necessarily patriotic to pay higher taxes >> no, of course it's not unless

the tax rates are unfair the problem is that there's a systematic favoring of people who have accumulated enormous amount of wealth the problem is -- >> maybe it's an estate tax. maybe it's an estate tax issue then >> it is partly an estate tax issue, yes >> people do it out of hard work and paying ordinary income and able to own assets which then tax differently. >> many of them do but many of the people in the forbes 400 inherited money. >> what you would do to the estate tax >> well with, the estate tax, i would certainly -- you have to raise the exemption a little bit. and you have to index it >> so the current exemption is $11.2 million. >> right i think where it is right now, i think it's the whole mythology and it's how it gets broken up it affects four or five families in any given year. so that needs to be -- that narrative needs to be eliminated what happens if you lower the estate tax or you reduce as many

people say the estate tax, you get a concentration of wealth in families and you are -- i mean already we have an education system that favors the wealthy we have a segregated population of wealthy people who are further segregating themselves by living in gated communities and so forth we are creating a two tiered society which we should fear. >> what do you make of the argument that in a -- that we're in a much more mobile world than ever before? that if you look at what happens in connecticut, for example, and people have been fleeing connecticut obviously for other states in the united states. but if you actually raised the federal taxes in a remarkably meaningful way to the 70% kind of numbers you talked about, people would be on airplanes moving to other countries. >> yeah. you know, my feeling about that is the ones who leave because the tax rates go up here are welcomed to leave. frankly. we don't want them here. because what they don't want to participate in is a society that is structured around fairness.

we do not have a society structured around fairness right now. and the proof is in the pudding. look at the lives of working class people in america. i talk to workers at disneyland who can't afford their insulin because they're working at minimum wage this is unacceptable and i can't sit back and accumulate wealth because i simply a inherited it and b have the good sense to simply own it. >> but abigail -- >> at the expense of people. >> you're talking about a lot of different things >> i am. >> minimum wage being raised, estate wage being brought down, basic tax rates go up and taking the capital gains. >> of course and so it's hard not to conflate these things they're happening in the context of an add constitute and a philosophy of how economics should be done that favors wealthy people on the theory that a rising tide

lifts all boats. but some of the boats are super yachts right? some of those boats are getting lifting far more than others what we need to do is look at all the policies across the board and ask ourselves what kind of country we want to live in >> if the same thing naps a capitalist system where it's where people can do very well. the worst thing that happens is that a few people get, yes, the converse is that it's counterproductive to continuously take more money out of the private system with the very, you know, the intention of having it somehow make its way down to help the people that you're trying to help. but a lot of times, it hurts business it hurts risk taking it hurts the job creators that organically allow people to make more money did you feel like we got a lot of progress in the eight years where people were taxed more when the fed had to stay at zero all assets were marked up. so people like you made a lot of money. people like you made a lot of money. >> yes >> we didn't see any organic

wage growth. the economy was slow >> in 2008 we were faced with a catastrophe. >> i understand. >> that was the making of the previous eight years of deficit spending as the result of a very i i wi ill advised tax cut. >> everyone participated in it >> because of a tax cut that was not advised. >> one question relates back to the question that joe started with which is there is an argument to be made that actually philanthropy in america has been subsidized by the taxpayer very wealthy people are able to pay for the things that they want to contribute towards but are not necessarily contributing to the roads and schools and everything else around us. >> that's right. >> you would favor on the very wealthy some form of a tax or minimize the deduction or some kind of other program around philanthropy or do you say, look, what we want to do in this country is we really want to encourage this kind of

philanthropy and we don't want to up it >> philanthropy can't create fairness because the problems -- fairness is systematic and structural so philanthropists are wonderful people i do a lot myself. but they affect things around the edges and margins. they cannot make the large scale investments in what everybody needs. >> and then the other question, there is a disney shareholder meeting today as it happens. and bob eger's pay has been reduced by $13.5 million i believe. how much of this is about taxes? your mind or do you say to yourself, you know what, maybe corporate america is paid too much how do you balance those issues? >> i do believe -- as i say, it's hard to separate these things out they've been woven together in a system that, you know, systematically favors -- >> do you think that bob iger is overpaid >> i'm not going to say. that but i will say if you're ceo's salary is at the 700 time

the medium worker's price paid jesus christ himself is not worth 500 times his -- >> i never heard a good answer why don't you write a check. you're worth half a billion dollars. >> it's redig tlous say that, in fact >> that's your answer, it's ridiculous >> you're free to write the check though. >> the problems are structural my measly few hundred million dollars will do nothing to address roads -- >> neither will the 400. >> schools, hospitals. >> neither will taxing the 400 richest families is a drop in the bucket too >> the tax structure so that our 50% of americans are not living at negative debt -- >> or paying taxes >> they're paying taxes. >> not income taxes. >> let me say one more final question which is this you know, given what you just

said, how much do you think is about a psychological, philosophical view about making people in the country feel that the system unto itself is just farrer and how much is about actually raising real revenue? >> and how do you balance those issues >> first of all. okay, revenue needs to be in some relationship to spending and the spending is out of control. and we do need to real spending. i think that will make you happy, john. but i do think we need to be spending better on things that the benefit the middle class like education, infrastructure and health care. >> abigail disney, thank you for the great conversation and debate. >> thanks. >> it will continue. >> kroger just out with quarterly earnings the supermarket operator earned 48 cents a share for the fourth quarter. rev knee was also short of wall street forecasts kroger has also issued an outlook for the full year. $215 to $225 a share that is below where the street is now we'll have kroger's cfo will

join us next in the next hour. he'll discuss the quarter and everything else surrounding supermarkets and it's a daunting future with amazon and walmart, obviously. >> we also have breaking news from the ecb a few minutes ago, get over to steve liesman who has that news for us steve? >> yeah. thanks, andrew the rate is unchanged at zero. changing the language. it's going to remain at the current levels through the end of 2019. the previous statement said through the summer of 2019 the ecb also launching a in you series of targeting long term refi operations. of they will begin in september and run through march 2021 so they are quite seriously reversing course here. a central bank thought to maybe by this summer or this spring start to raise interest rates now going the other way here and all this in response to

considerable weakness in the european economies and we'll hear how they changed that forecast back to you. >> thank you >> coming up, house majority leader steny hoyer he joins us right after the break. sfx: [phone ringing]

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what happened to the rally after the strong start to the year markets are flat sibs tnce the middle of february and now the key dow transports are on the worst streak in ten years. >> whhuawei punches back. a live report straight ahead >> plus, trade and the democratic agenda. house majority leader steny hoyer will weigh in on president trump's tariff battle with china and top priorities for congress. the final hour of "squawk box" begins right now >> live from the most powerful city in the world, new york. this is "squawk box. >> good morning. welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square i'm joe kernen the futures right now paired their losses all the way down to

just 12 points i don't know the market is in a funk with "squawk box" and without andrew and joe, becky. you did your best. i it this markets missed us. >> somehow the s&p 500 turned around >> you don't think so? >> i wish i could say i was missed >> you have dilution in grandeur in so many other areas >> i have lots of dilutionelusis you know. >> if it's up today, it's because we're back he see how people explain market moves this is as good as anything. >> that is very true >> anyway, we're not necessarily hoping every day the market goes up but anyway, we're not -- that's terrible to be a cheerleader we'll see. down 15 1/2 now. down closer to triple digits >> okay. a couple stocks on the move this morning. american eagle out with fourth

quarter results. the apparel retailer earned 43 cents a share peting estimate business a penny revenue fell short of forecasts. american eagle also forecast weaker than expected current quarter profit also, take a look at drug maker allergen necessity treatment for depression staled. they were deeply dispinlted in the results. you can see the stock down right now over -- well, we'll call it just about 2% right now. and check out shares of a communications infrastructure company. the market cap, starboard value built a 4% stake in the company and sends a letter to it asking to consider a sale and that stock is now up just marginally. it's up 2% right now >> ecb just out with the policy statements saying that it will now keep rates on hold through the end of 2019 instead of just through the summer of also launching a new round of cheap lending to try to stimulate the economy. earlier than had been anticipated. we're watching closely at 8:30

when mario draghi starts talking to see how much the ecb slashed the outlook for this year and beyond taking a look at currency, you can see what is happening there. let's join steve liesman right now for some more context on all of this. steve, how should we read that >> take a look at the euro for context which has been bouncing around but now is substantially down lower. there you go that's the chart that shows the context. it is a weakening euro as really the ecb jumps and certainly with one foot and maybe with two back into the idea of stimulating the economy. there are two pieces to this, becky. one is the extending their guidance that is the old forward guidance you remember from the federal reserve they moved away. from ecb back in with this kind of extended forward guidance they had it in the summer that they keep their rates low until the summer now they extended that until the end of 2019. then back in with the tltros which are providing long term loans to banks

it's kind of a qe. it's kind of not it's more of a way to get banks to incentivize them to lend to businesses and consumers and i believe this is probably the best explanation for a bit of a turn around in the dow futures this morning they were down 70, 80. they now have come back. as you said earlier, we're looking for how much draghi and the ecb are downgrading the economy. there is talk whether they were going to do a full monte downgrade which is the best way to put it and goul go all the way down to a 1% handle on the growth outlook for the euro area this year or go part of the way. there italy is negative two quarters in a row. germany, negative one quarter. and call it flat the other and france actually has been the leading light in europe these days at least gdp perspective but a lot of troubles in europe. and honestly, it's not just europe it really affects our economy over here and part of the reason why the fed is on pause and part

of the reason why the down grades to the u.s. economy this year is because of what is happening over in europe >> so we just decided that it was because andrew and i were back on "squawk box" that the -- you immediately had to come up with some other reason why the market -- >> i heard the explanation earlier. >> and you just go right into, what did you say the market is moving on now? so it's not us >> it was a statistically difficult decision to say it because because of your return >> so you found something else >> i found something else. >> all right fine chinese telecom company whhuawei fighting back by a ban by the government we have more >> yes, joe. i want to dig into that lawsuit a little bit what huawei has particular issue is a law in the u.s. and national defense authorization act. and a particular sector in there which names huawei and prevents it from selling equipment to government agencies in the u.s

huawei's lawyers argue this is actually unconstitutional and they lay out a few reasons why they say this part of the law actually amounts to what in legal terms is known of a bill of tender where an organization is guilty of some sort of offense and punished without a due process. that due process, of course, would be a legal or a court action which huawei says they haven't been able to defend itself through the u.s. legal system and that congress has too much power and acting as a judiciary in this case because the ban is enacted in law. all of that huawei's lawyers argue is against the u.s. constitution i had a chance to catch up with the head counsel for huawei on this case and asked him what he hopes to achieve through this lawsuit. let's listen in to what he had to say >> this law is hurting huawei's customers in the united states it's damaging huawei's reputation and it's limiting the ability of huawei to provide its innovative products including 5-g to

consumers in the united states and what we're hoping to have come out of this lawsuit is to have the particular provisions declared unconstitutional that congress hasn't followed the procedures that it's supposed to follow for enacting a constitutional law >> there is a lot at stake here. huawei has a chance foeto potentially clear its name if the u.s. is successful in defending this, this they could put pressure on them to ban huawei in other ways this is a huge battle between the u.s. and china and who dominates the future technology known as 5-g back to you. >> thank you very much the trade war has been a big driver for the markets wall street is now looking for any clues about a deal being reached between the united states and china joining us right now to talk trade and much more is house majority leader steny hoyer. and leader hoyer, can i just ask you, did you hear this last report and you have heard about the story that huawei is actually going to be suing the

united states for congress' legislation saying that it should not be bought the products should not be bought by the government >> i just listened to it, yes. >> the what do you think >> i think that congress has a responsibility to ensure the security of our nation we know china has been attacking us in terms of stealing int intellectual property. huawei is a huge company in china. and there is a real concern that the products they're selling us may in fact compromise america's security so i think it was appropriate for us to ensure that our security was not compromised by the use of huawei products this lawsuit apparently is going to raise the question as to whether or not we have the constitutional responsibility to do that. i'm pretty confident that the court is going to find we do have responsibility and the

authority under the constitution to provide that purchases by the defense department or any other government agency are consistent with our national security >> they're coming a little differently at this they say that it was unconstitutional under a bill of attaineder they say they're being charged with a crime without having gone through a court system that found them guilty of that. >> i don't know that we charged twh them with a crime. i haven't looked at that finally in terms of the language what we did, however, was pass language that said we're going to not purchase equipment or products that may in fact compromise the security of the united states. i'm not sure that i would describe that as a bill of retainer it is a provision that tries to be very careful dealing with a large company and we know the close relationship between large companies and the chinese government to provide that we

are sure that we are not purchasing equipment which may compromise our security. so we'll see what the court says but i think certainly from the congress' standpoint, that was a policy that made sense >> leader, do you think there should be more transparency around what we or rather what the government knows about huawei to the public >> well, i think that -- i don't know the answer to that question the reason i don't know the answer to that question, a, i'm not sure what we know. i'm not sure how we found it out. >> part of the problem is that it feels at least like we have not seen evidence beyond statements from our leaders that there is a problem but we don't know exactly what the problem is >> well, i understand that and perhaps that will come out in court certainly the congress felt -- the committee felt that congress felt that we had sufficient information to raise very serious concerns about whether or not huawei's products compromise the security of the united states. and it was therefore, i think,

prudent to say until we didn't say this in the language, but that if we have concerns being careful is important for the american people and for our country's security so we'll see. >> back to the trade talks with china. where do you think things stand? what you would like to see happen >> well, i would like to see china open up. i would like to see china hold culpable anybody in the government or private sector that pricompromises our informao and steals our information " i would like to see china held to a standard in terms of foreign companies can operate in the united states. clearly china tries to put on very stringent restraints and also wants to compromise business knowledge, business models, business information so that they can take that information to compete with very companies they're taking that

information from so i want to see a trade deal with china if in fact that's possible that has them operating in a fairway as is expected in the international trading community. >> do you think the deal as it's been outlined to this point does that it certainly sounds like there are some concession that's ts te chinese are trying to make a year or two ago we didn't suspect they would are you pleased to seat process to this point? >> i want to be honest with you. i don't think i have enough information to make that judgement myself we're certainly going to be looking at it and we'll see what the agreement ends up being. and hopefully we will have accomplished the objective that we need to accomplish. i was talking to the president of u.s. steel and just happened to be -- see him and he was talking about how the china had so compromised and other countries as well had so compromised fair trading

practices that it was appropriate for us to confront them i agree with that and hoping that an agreement will reach a stage with china that will make them a normal trading partner as opposed to a trading partner who has clearly perceived by the rest of the world as compromising fair trading practices. >> steny, where do you think the geographic center of the democratic party is right now? if -- i wish we could go out and have a cocktail together just to talk about this. >> great >> you know what i mean do you think diversity is great when you have fighting between the speakers and maybe aoc or, you know, people aren't on -- is that good that there is so much disagreement i don't want to call you the old guard, but do some of the stuff you hear in private if we were having a cocktail, do you go, joe, i can't believe it either >> joe, let me tell what you i

think and i tell people. >> okay. >> if you were reading the papers and watching television, you would think there are three new democratic members of congress of the united states. >> yeah. >> there are 62 new democratic members of the congress of the united states. but three have gotten very high profile publicity from the papers and coverage. they are diverse >> that seems where the energy is though, steny how do you get a more mainstream candidate and whether you -- >> you're talking about the presidential candidates. >> yeah. >> got you >> how do you do it? is biden viable at this point or is all the energy -- >> i think joe biden is very viable as a matter of fact, i think joe biden is ahead in the polls right now. that doesn't mean a whole lot in my opinion joe biden has a very broad reach in the democratic party. he is very well respected and liked in the democratic party. the boy from scranton as we call

him, as he calls himself, he reaches out to middle america, working america, speaks their language >> you prefer that to someone -- to one of the more progressive candidates, younger candidates, steny? is that what you're saying >> look, joe, i'm not going to get into the presidential election right now >> i listen to you >> i think joe is a very viable candidate. >> okay. you think some of the candidates on the far left are viable >> of course we have a candidate, joe, we have a candidate from maryland, you know in, john delany who is a wonderful person, very bright, very able. his chances are obviously at this point not high. >> okay. >> we ought not forget john delany >> it will be something to behold for next couple years >> it will be. you're right on that >> all right thank you. >> good to talk to you >> see you >> coming up when we return, kroger shares getting slammed this morning company missing on the top and bottom lines for the fourth quarter. issuing weaker than expected guidance for the full year we're going to talk with

kroger's cfo about the miss and fresh competition from, you guessed it, amazon plus, fresh stimulus from the e krechltcb in the form of loans. we'll count down to the big news conference at 8:30 we see how bad the growth will get. we're monitoring that. stay tuned you're watching "squawk box" on cnbc this is decision tech. it's screening technology that helps you find a stock based on what's trending or an investing goal.

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news just out from softbank this morning it's announcing the launch of a $5 billion fund to invest in tech startups. this time in latin america the fund will be headed by marcelo claure he is softbank's chief operating officer. can you see him on cnbc. he'll join us for an interview at 9:00 a.m. eastern time. of course, marcelo spent a lot of time in latin america he's from latin america. and he has been with bright star, the original start-up which even sold for a fortune before going to sprint this will be very interesting to see what he does there >> when we come back, an interview with the cfo of the grocery chain kroger fresh off the company's fourth quarter earning this is morning. we spoke with him before and today is his final earnings report as cfo.

michael schlotman will join us and dovish comments from the ecb. we'll find out how much they're slashing the growth targets. that's what mario draghi will begin speaking we'll bring you the headlines as they hpeapn. stay tuned, you're watching "squawk box" on cnbc

#. welcome back to ""squawk box. kroger just out with fourth quarter earnings as far as the top and bottom line, a little bit light on both also weaker than expected guidance for the full year numbers cam at a time when amazon is making a push into more brook and mort area grocery stores joining us now, member of the cnbc global cfo council. there have been a few recently, mike its tough to navigate some of these waters, i guess. but what was it in the fourth quarterer? >> we actually delivered 1.9% identical sales in the fourth quarter which was slightly ahead of what the consensus estimate was. you know, there is some chatter out there that we missed the top line revenue, the fact of the matter is that retail price of fuel was about a dime a gallon cheaper this year than last year and we sell a lot of fuel every quarter. and that's all of the difference in the sale -- the total revenue number

i can tell that you margin per gallon on fuel is significantly stronger in the quarter. the highest we've ever had great contributor to the bottom line when you look at our bottom line, $2.11 for the year, the original guide for the year was $1.95 to $2.15 we made that in the first quarter eastern deliver that in the high end of the first year of a three year plan which we call restock kroger, we feel we built a great foundation this year to leverage off of in 2019 and 20 to deliver on our financial commitments of restock kroger >> mike, can you -- can you compete, do you think, with -- on a digital level we saw walmart we worried about their response to the digital competitors yet, they seem, to if you know, if you can't beat them, join them they've had great numbers based on sort of, you know, doing the same type of thing is kroger going to be able to compete that way, would you say? >> absolutely, joe

we've been working on that for quite a while. you know, over 90% of our customers to day have access either to pickup or delivery we would expect that to be at 100% by this time next year. with our launch of kroger ship that we made investments in the fourth quarter cher is part of the margin erosion, we expect to be able to serve 100% of the united states by this time next year through a kroger shift. we feel question do it so we're already very convenient to our customers we do as good a job as anybody as getting product close to their house and in an efficient and economical manner and for us it literally is solving the last mile because a lot of the people in a lot of that fulfillment happens out of our stores. we're very bullish on our biblg digital business we opened warehouses to help that even more which again those start-up costs go into gross

profit margin which is part of the erosion of gross profit margin in the fourth quarter but start-ups one time events and we'll be able to build off having the facility as we go fort so we're very optimistic about that business. >> tough day in terms of premarket trading. do you see any cost pressures at this point and do you think the fed is underestimating or overestimating what real core inflation is right now, mike, based on what you see? >> yeah. there's a little bit of food inflation out there. it hasn't all been passed on there say little more inflation at cost than there was at retail it's still fairly benign if you look at everything without pharmacy, it was less than 1% when you throw pharmacy n it was a little more than that but when you look at the full book of business, it continues to be a fairly benign environment. there is a lot of chatter out there, companies raising prices. but, you know, we've been doing a great job of negotiating cost

to goods savings and it's a great weapon for our corporate brands at this point in time they have a great cost structure and great price for our customers. >> mike, we have to run. appreciate it. thank you. we'll head back hopefully next quarter, check back. thanks when we return, breaking jobless claims and productivity data just minutes away we'll have the numbers and the market reaction. plus, ecb president mario draghi set to speak about the dovish turn, pushing back an expected teike ra hand launching similar measures don't go anywhere. we'll be right back.

welcome back to "squawk box. breaking news! the latest initial job claims. last week was 225,000. they ramped it up by 1,000 we subtract three. we end up at 223,000 for the current read always a weak in arrears continuous claims 1.805 million to 1.755 million fourth quarterfinal productivity, special sauce. up 1.9%. definitely better than we were anticipating

and actually, if you look at what's in the rearview mirror up 1.8, it's a small gain as well unit labor costs though a bit higher 2% we're expecting them around 1.75%. and the rearview mirror is 1.6 but that particular number was definitely more on the high side than originally reported up .9 so a little hotter on labor costs. productivity can always be higher but it certainly been moving in the right direction. preopening equities, you know, just a little bit higher i'm not talking fair value just raw data and interest rates, you know, a few sessions ago we were toying with two and three quarters. now toying with the bottom of the range from early last week in the low 206'60s. we just popped here. we'll continue to monitor. the ecb, let them eat cake more cake. they never get filled up too much with cake and maybe that's the problem. the stimulus really the answer on going we'll let the markets decide at least on the knee jerk reaction as mr. draghi gets ready for

communicating with the rest of the world. andrew, back to you. >> thank you appreciate it. want to bring two new voices to join us to discuss all the news this morning and market expectations for the all important jobs report due out tomorrow i shouldn't say new voices they've been here before but new voices to the conversation alley mccartney is managing director at ubs private wealth management and josh fineman, chief global economistist at deutsche bank. let's talk about the ecb for main and the implications of that then i want to talk about where we think the jobs number is going to turn out to be tomorrow. >> sure. i mean, look, we're years behind with the ecb where we were with the u.s. in terms of a conversation around interest rates. we expected them to stay when we talk about the jobs numbers coming out now, we have the word torrid used by our

economists so we're coppiming off a robust pace of job growth we expect to see a little bit lower. we expect to see it revised. i think the really important thing going back to the ecb decision is what this means about the fed moving forward right? december, we had sort of the worst reaction we've seen in a very long time and now we have a market pricing in zero rate hikes this year if we start to see a lot of both job growth but more importantly if we start to see tightness in the labor market that we'll see in terms of the secondary numbers around the jobs numbers that we'll start to see in terms of labor force participation then the market will react to data >> so good news could turn into bad news what number is required? what is the threshold for the fed to move in a way that may suggest the economy is actually in better shape but may ultimately have it own impact.

>> there is no threshold on any particular number. they don't look at one particular number. they take the whole package. i would agree. i think last couple months have been blockbuster job gains probably pullback from that. and also the weather may have adverse impact you have to always average through them i think the picture is still of the labor market that is, you know, got good momentum but probably cresting. labor market tightness though, the tightening of the labor market has shown signs of stalling out a little bit. so we'll see there that gives the fed a little more leeway to be patient and what's happening with labor costs. >> corporate earnings second half of this year. what do you think is going to happen >> you know, i think with corporate earnings we're coming from sort of a temporary slowdown that seems to be a little bit sector specific >> yea >> we see that again as a soft patch that is both temporary and as specific to some very idiosyncratic markets. we think that we're going to continue that. we're going to have some robust growth in the second quarter but it's going to take a while

to get there >> earnings should be okay i mean the economy is doing well but i think the pace of economic growth is moderating it's a little hard to see. we're getting mixed signals on that it's tough to read i think a little moderation there. so the most rapid corporate profit growth that we've seen -- we've had in the cycle is likely behind us and also the impact of the corporate tax cut is behind us we're not going to get that kind of rocket fuel anymore so i think corporate earnings should be okay >> therefore, you -- if there is no rocket fuel, what do you tell your clients in terms of investing. >> shouldn't be expecting the kind of gains that we've gotten earlier in the cycle we thought the market overreacted in the fourth quarter. the selloff to us looked to be way overdone the economy was not on the cusp, we thought, of a down turn the way the market was suggesting. so we got the recovery from that but from here, we're not looking for big gains. >> tend of january when we were in davos, there were so many people making the calls that we were going to see a recession in 2021, two years out, one year

out, that was the expectation then do you have any new expectation or do you agree that assessment? >> look, i mean, we're in year 11 of a bull market. i this i to say that there is going to be something that is not a bull market is a little bit stating the obvious. now the question whether it's 16 months, whether it's three years, i don't know. there are ability to have upside surprises. the trade rhetoric is priced into the market. if you have a trade resolution or progress faster or more meaningful, sort of bend the market is expecting, can you have an upside scenario. >> what kind of scenario are we talking about? >> investors are sitting on their hands. i think people are sitting on their hands and in and out.ing money to work. they're trying to figure out what's going on. >> exactly >> am i going to wait? is this -- >> the cycle sl mature, no question about it. by this summer, it will be the longest expansion ever the good thing about economic expansion is unlike people, they don't die of old age they die from a cause. some sort of imbalance, you

know, and right now it doesn't look to us like the kinds of excesses and imbalances that were harbingers of down turns are prevalent right now. for now, you know, looks to us like the expansion continues >> base case on the number what is your jobs number >> 150 >> a little higher, 175. >> any numbers beneath that? labor force participation? >> yeah, there are lots of other things to watch, of course earnings, unemployment rate, you know, the whole -- and of course, revisions. >> yeah. >> the last two months were blockbuster. we'll see what happens if they stick. >> i would say the things we're looking athe is labor participation. actually for the first time seeing that go up. more people are coming into the jobs market than ever before december they were actually more job openings than people to fill them that's really meaningful. >> we've been talking about how we're going to have bodies that can come back in >> so people are coming in the thing we're focused on again is because we're focused how the fa fed is interpreting the data and

how that data is the inflation being the main factor there. so job growth and wage growth below that is really something we're looking at >> okay. thank you. >> thank you >> let's take a look at some live pictures of european central bank president mario draghi you can see he is addressing people and making the comments that we've been waiting for. when we come back, we'll bring you the highlights of the news conference after the dovish turn this morning and we'll have part three of our interview darren woods from exxonmobil this time on new technology to fight emissions and split/demand balance in the oil market. stay tuned, u'yore watching squawk bachl right here on cnbc.

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welcome back to "squawk box. futures are up 34 1/2 points on the dow after being in the red for most of the premarket session. the s&p 500 indicated up four or so the nasdaq indicated up about 6 1/2 points >> ecb president mario draghi speaking literally as we speak the bank left rates unchanged but dovish turn. and steve liesman has been listening in on this news conference he has an update for us right now. steve? >> andrew, the ecb taking a whack to the outlook for gdp growth we suggest this is going to happen in the last hour. which is why they gave the big policy response that we talked about. they have now downgraded the outlook for year over year gdp for 2019 down to 1.1% that was previously at 1.7%.

he was just about to give the inflation forecast but he said that generally inflation remains muted. he thinks it will be coming down towards the end of the year. a couple quotes here this is a sizable moderation in the pace of the economic expansion that will extend into the current year he talks about the persistence of geopolitical uncertainties. the threats of protection are leaving a mark on economic sentiment and the weaker economy means there will be a slowing adjustment towards the ecb's only target which is their inflation target they're never even expecting to get to 2%. now they're going to get there even less, becky you can see that reaction in the euro you can see reaction in u.s. stocks you can see really reaction around the world to this new dovish stance by the ecb that will enable them in which they are saying they will keep rates low through the end of this year do a third round of long term financing operations and several

other aspects that really are turn about from where we thought they were going just a few months ago, becky. >> although, steve this was telegraphed over the last month or so i'd say. so there is some surprise in the markets to day but not nearly as much as there would have been had they made this announcement four, six weeks ago? >> there were two options. one is they would not bring the forecast down as much. and leave policy responses to the next month but if they were going to bring the policy -- the outlook down as much as they did, whacking 0.6% off gdp i'm still waiting for the inflation numbers which are out now. 2019, yeah, here it is 2019 inflation in the euro-zone, seen at 1.2 versus the early estimate of 1.6. so they lost 0.4 off the inflation. they took 0.6 offer the growth outlook. if they're going to do that, then they're required, i think, to really come up with a policy response and that is where we have it today and not next month, becky >> all right steve, thank you

again, you can see the euro right now at 112.57. >> exxonmobil is the world's largest publicly traded oil and gas company with operations around the globe after the company's analyst meeting yesterday, we asked the ceo darren woods about rising global demand for energy and how politics and even the green new deal could potentially impact his approach to consumers. >> energy is such an important part to people's daily lives and their standards of living that as you think about these big ideas and translate them down to smaller practical steps you take, people become very aware of what that impact is for individuals. as that starts to happen, i think people's views change as to how far they can go and how quickly they can go. our approach to that is to try to be part of the solution and engage with that we got a long, long history in this industry and really good perspective on the global energy system and we're a company that is grounded in science and technology and if you look at kind of the risk of climate

change and what society is focused on in terms of lower emission energy systems, we're going to need some technology breakthroughs. the conventional set of technology doesn't address all the gaps that are out there today. we think we can play a role in that that's where we're incesting veu technology. >> what is the most interesting thing you've seen on the potential for r & d on that front? >> well, there's a lot of different ideas out there. i think when we look at it, its got to be scaleable. it has to work its scale it has to be ultimately economic so that people with afford it. and it's got to be reliable. and so one thing that we've been working on for many years is algae, biodiesel from algae. we don't have a good solution set for commercial transportation and emissions from commercial transportation algae and biodiesel can do that carbon capture and storage is another area that has potential. today the economics are challenging. so finding more economic methods of capturing carbon is another exciting area.

we're looking athe how utilize the carbon capture what do you do with it store it underground and turn it into other products. we have a lot of research in terms of how you might use carbon and turn that into another product that society would use. so there's a lot of exciting stuff happening in this space. and we're participating pretty broadly in that technology space. we've got relationships with 80 universities around the world. we're working with the national labs we're working with governments around the world so we're trying to take plugged in to make sure that we're contributing as we can >> darren, what is the thing that is maybe most caught you by surprise over the last several months is there anything you've had to do to change the business from a macro economic scale, something that impacted you guys is it price of oil is it global economy is it tax laws >> one thing as we look at the world, we realize that this supply demand balance is going to shift around and it's very, very difficult to predict. in fact, we don't try to do that what i told the analysts to day is we don't base our plans on an

assumed price and we don't base our plans on an assumption that the market is going to help us and so we kind of come back to the fundamentals and say anything that we do has to be a low price environment. and that tends to be how we think about it so as the markets move up and down, i would tell you we're never in a position to really predict when that's going to happen but with he no he that it will and we make sure that our business is prepared for that. >> you may not be in the business of predicting oil prices there is a level where you say oil prices have to stay at this level for us to be able to make all the plans as we set up i think chevron said today that in order to continue spending at the pace they're doing and giving back to the share holder in terms of dividends and buybacks they plan, $51 is that price. is there a price that you kind of have in mind to say okay as long as oil stays above this on a global scale, we're okay >> i think when you translate it to a number like that, it's a very tactical way of thinking about it in terms of making sure that in real time, you know, year on year you're paying for that activity. i think the way we tend to look at it is we know we're going to

go through the cycles. actually, time to spend and invest is when you're in a down cycle, when you have less cash i would argue -- that's what we did when we had the last drop. we went out hunting for opportunities. we found those opportunities and loaded them into our portfolio and we're now progressing them >> we want to thank exxon chairman and ceo darren woods for speaking with us again, that was yesterday after his meeting with analysts. joe? >> all right let's get down to the new york stock exchange jim cramer joins us now this morning. jim, you know. you got your greatstreet.com and people have to write stuff every day, right i always see headlines about, you know, oh, this is over now the rebound we saw in january and february, this analyst is saying now get out it's over. >> a lot of negative people. >> negative really quickly, right? >> i'm not there but they are yeah there is just so many

technicians and they pile on there is an overall all sense of you have to be careful at all times. i'm kind of waiting for some of the stocks to finish going down. then i want to get in them i mean darren woods, look at that exxon i mean the guy completely trumps every everything i never seen a yield this big. the balance sheet is better than ever am i going to throw that stock away no you have to find the positives among the stocks that are crushed. great interview. >> yeah. a lot of interesting stuff out of that. do you think -- i don't know at this point i'm not sure how the rest of the year necessarily plays out in -- if we have a gdp below 1% and if earnings are really slowing, do we have an answer yet on whether it was the retail number, retail sales number or the jobs number that is giving us the right clues and i wonder if tomorrow is a weak -- i don't know whether it will be weak or strong it could be because -- go ahead. >> it's a great question sam zell talked about how we

can't forget the government shutdown was a negative. look, i'm positive coming out of this bear market, we're starting to get good numbers. march, a lot of good commentary about how end of february and beginning of things are getting better. malcolm x by any means necessary. that's positive. i just can't succumb to the negativity i see a lot of companies that did very well in retail this quarter. so i'm not throwing in the towel respecting the fact that i'm surrounded by towel throwers. >> i was thinking about one other thing. >> economy is good, joe. >> yeah. >> that's true news. it is. >> i'm also seeing everyone say that you got to buy the rumor, sell the news on the china trade deal. >> that's wrong too. they're playing real tough behind the scenes i'm being told

like this belt and road they're just moving into italy right now, the chinese, that's not what we want to see. we need to see china saying we're fine he needs to go to tim apple -- >> i love that, nice >> somebody pointed out that would have worked if he was talking to michael dell. >> right >> i don't know. >> that's good >> we hit a trade deficit record i see people say, see, trump's policies aren't working. >> you had to bring in a lot of stuff to run the 25% tariff there were a lot of companies who said, listen, we got to bring the stuff in so you have a

big trade deficit. that's another thing that's true news the fake news is it means that the policies are failing. >> in certain sectors we're seeing record movement across the southern border of illegal people coming in and they're saying that also shows trump -- these are democrats saying, see, trump's policies aren't working. it's weird to me they don't want to do anything with the trade policies but they get criticized for the deficit. they're obstructing any efforts to try to secure the southern borde border. >> that's above my pay grade >> given the conversation we had with abigail disney earlier, bob ieger's pay up for grabs. >> if he does 115 million, i'll give him a pay raise myself. the guy staid on because murdoch

wanted him to stay on. the guy is money i can't believe how good this disney plus is going to be espn plus is great les moonves made more money than he did i don't know, that seems ill-advised. >> thanks, jim >> absolutely. >> we'll see you in a couple minutes. don't miss a rare interview with the investor who called the 2008 downrntu jeremi grantham

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welcome back we've been watching what's been happening. stocks and currencies both on the move following the news conference today that started just about 26 minutes ago. u.s. equity futures are back down they turned positive for a while but now they're down about 45 points the nasdaq is down by about ten. in europe, we had seen early this morning that many of the stock markets were down by .5% in terms of the euro, we've been

watching that. it was right around 112.57 let's check back in with steve who's been listening to mario draghi >> i think everything that you might want to think about this flows from the chart that's up right now which is the euro/dollar chart. you can see the strengthening of the chart. the dxy shows the dollar versus a broader basket of currencies what does that matter for the u.s. obviously weaker growth is not going to help u.s. growth over there. weaker inflation is not going to help u.s. inflation. maybe most importantly is this change to the dovish idea over at the ecb i think is really going to handcuff the federal reserve. there's very little possibility

that the fed makes a turn and raises rates this year you heard the president this past saturday complaining about the strength of the dollar that dollar strength i think is something that's going to cap the fed's ability to raise rates this year given how dovish the ecb now is >> okay. we want to recap thank you, steve we want to do also a recap of some big news out of softbank this morning it announced the launch of $5 billion for tech startups in latin america. we're going to see what kind of investments they're going to make obviously softbank has made a huge impact in the tech world here in the united states. his original company bright star made a small fortune doing it

quite successful, then went off to sprint. >> shares of kroger are sharply lower this morning on a percentage basis and point basis, posting a miss on the top and bottom line, weaker than expected the numbers come at a time when amazon is making a push into more brick and mortar grocery stores the cfo pointed out one of the reasons the top line missed is simple as a lower selling price for gasoline. >> the big problem with the grocery business and why everybody wonders why amazon is going into it is the margins are so thin. when you have big guys like amazon and walmart duking it out, putting even more pressure on those costs at the same time people are wanting things delivered to their doors. it's a difficult operating

environment. >> he pointed out that the same store sales number was okay. it was up almost 2%. well, we had it up for a while with our return. >> make sure you join us tomorrow "squawk on the street" begins right now. ♪ good thursday morning. you heard the guys talking about the action we've seen so far this morning futures in a relatively tight range as the ecb does go dovish and announces some new monetary support, big itmplications for rates and the dollar yields here in the