>> announcer: live from new york where business never sleeps. this is "squawk box. >> good morning. welcome. becky is live from the baron investment conference with the legendary ron baron. first, we want to take a quick check on the markets futures at this hour, dow looking to open 25 points up nasdaq looking to open 37 points down s&p 500 looking like it is going to open down as well, off by 2.5 points right now, the 10-year at 1.775. >> so close to 1776. >> a huge line up. in the next hour, tesla chair will join us live.

congressman kevin brady will be with us at 8:00. >> for on hour on set. >> we have united ceo who will join us at 8:30 a.m. before all of that, we have two hours. >> we have a big show today. a lot of special guests. ron baron. i think this is the 11th year "squawk box" has joined you live you bring together the investors and ceos and talk to top managers, you also entertain

them big guest you'vecli included inh past have included rod stewart, and more the star front and center has to be the companies you are vested in let's take about your theme. why what's next? >> we are looking at faster growth in the future >> for the economy, stock market, what do you mean people have higher amounts of cash now central banks can't agree on

what to do there the fear is estimate those funds for years now a superstar investor can't raise enough to have a business that is viable they've done well 11 years now they don't want to give it back the stock market today is the same valuation as it was then. then, it was a mixed turmoil

everything was a mess. i have a lot of younger people in my office, we'll say tell me about the assassinations in the 1960s, they don't know there was turmoil then there was concern but the stock market then was 1,000 on the dow jones. it is now 26,000 or 27,000 the economy then and now is up 25 times all you had to do was believe the country would survive and you made 25 times your money i believe what will happen in the next 20 years and i'll be

older by then. and you can reach me at baron.com. interest rates today, nearly 4.5% it used to be when i was young, you would build a fact or for years. you have a platform or others using business in a cloud that gives you 70 to 80 to 90% of the margin >> right >> they have risk on these

things too >> low interest rates and technology making businesses grow faster and knowledge. knowledge is growing at the fastest pace it has ever grown it used to be that knowledge grew every 25 years, now it is every 18 months. now according to ibm it is on hours. >> i hear what you are saying. why isn't it reflected in the numbers. it is not reflected in

government numbers right now >> people are afraid the economy doesn't go like this it goes like this. people say, i better get out everyone is worried about something the big thing to remember is if you vested in the turmoil, you would have made 25 pes of your money. i think the growth will continue on average for the next 50 years. 620,000 on the dow the economy on 500 trillion. when people talk about well the economy is a little slower, if

youer thinking about now 26,000 and it is going to be in years for young people, 650,000 or 600,000. it is compounding. there was a really good interview in barons a week ago it was the head of investments for black rock talking about how people think about vesting now on a very short term basis you have to be thinking long term i ask, what is your biggest investment i'm not quite sure i think costar commercial real estate business. we vested in it 15 years ago people are thinking about tomorrow 15 years

it is up 40 times. we vested at 14 times. they've announced what they are doing with the revenues and growing 15% to 20% a year. we see opportunities now to grow faster we'll take $100 million to use it to spend on sales, stock goes down 10% charles squaub saying now they are going to take commissions and not charge commissions anymore. in 1992, they were doing 90 bits per revenue but maybe 80% in commissions. now they are probably doing 35

dips but making 50% profit margin they've got 3.7 trillion of assets cost of a dollar, stock is now 40 the stock is down from 50, 55. they announced no commissions, which they can make up by one hundred billion of extra assets. taking a little out of the margin to make the investment. when they said that. there were 7,000 stocks five or six years ago, now there are more getting information about these businesses they can't get elsewhere. they make that announcement, they'll take 1.5% on the margin.

any time the stocks are announced, we have a growth initiative as soon as we make that announcement, stocks go down we vested in tesla for five years and made little money. we made 60/70% with you about the stock grew business is up eight times the stock is up 40%, 50%, 60%. i don't know those things happen. if there were ten years we didn't make any money on costar. >> going to tesla. did you sell any of it >> what did you think of the earnings yet

>> short sellers since the beginning of the year are still up >> this is the whole idea of vesting and seeing through what is happening at this point in time they bought a plant. a billion dollar plant in freemont they say, this is great. i got this thichk. how does it work 0 what do they do here they weren't great initially on making cars. they overspent now the cost is 70% less to make a car in china than now. they were making $50,000 cars, $10,000 profits on an investment that was 2.5 or 3 times what

they were vested in china. i think. so the returns of investment should be going through the roof elon musk spoke about how the idea that he has is that they will be able to do in china, three times as much he announced 90,000 >> sometimes he overannounces. >> he always delivers. maybe not on time. he says next june. that's when we have the why. the why he said is going to do as much volume as the x, s and 3

all together they are going to make the same margin on that and everything else >> you are a long-term investor. >> for me, for the companies i investment in 10 or 15 years in that range, some hold for 20 to 25 years >> we've speaken at this conference before. you sold out of that stock someone else is coming in as ceo. you believe in founders and people who made you decide, okay, i'm done with this now >> nothing is forever. the stock price is not determine the value of the business. it doesn't tell you whether the business is doing well or poorly we were working on underarmor,

we saw a growing of growth costs were pretty high it just felt tougher competitively. it wasn't what was going on in the stock. if these fundamentals were not quite what we thought they were going to be and we sell. as soon as we changed our mind with the fundamentals, then we don't sell i really like kevin. i'm hoping he can do better in the future than he has there is a chance for that i'm not up to date i haven't looked closely you had ed stack on the other day. >> yes >> he's one of my favorite people also. >> the ceo of dick's sporting

goods. >> yes >> he listed he's such a nice man i said, you know it just doesn't fit anymore for me i think your strategy is interesting. he said, when you get finished selling, please call me. i enjoyed having you as an investor, please call me and let's have dinner. for very long periods of time, we are able to hold our investments. things change you just have to

be focused it doesn't matter about a quarter. nobody can remember what the quarter was. was it the third or fourth now you are vesting on this company now thousands in sales the question i have now is what happened with model three. they put on model three, they could become what they were doing. now they are doing model y and it is going to be as big as all of the other cars by the way, there are 42,000 people. he's surrounded himself with

young people they've been there 10, 15 years. one guy, i overwhelm in love with jerome gill y jerome gillam. he's in charge of manufacturing. he tiekz every simple. he says, no, we want to keep things simple. >> keep it simple stupid >> one instance, they had a convey pel every time we go out there and meet, they say, man, how did we get so lucky >> lots more to talk about today. we'll talk more about chess law.

robyn will join us ron is here and he will be with us until 8:00. back to you. >> we have amazon we want to talk about coming up the company's report is it back to veftding at the expense of proftz in this latest report relevant of. it is hard to dlafr thinks in one day. don't miss the "squawk box" interview. we head to break looking at the bigge biggest winners and loses

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if it's connected, it's protected. call, click, or visit a store today. >> shares are slumping weaker than expected guidance issued for the upcoming holiday season joining us now, analyst with us. in the past, with amazon, if you had deferred to jeff bezos about what he was doing. if you had just gone along with him all those times, it would have paid off. >> i do, joe

the one-day delivery we are seeing prime members are ordering more in terms of volume and value so far seem to have justified. so, yes, a return to heavy investment is something we can live with. if you can get it the next day, that is causing people to buy more and order more on that order. you need more warehouses >> that's right. you you are seeing more escalate this current q 4, they are guiding to impact the results by

$1.5 billion, which is double. some say analysts will be looking at margins there beg hurt on shipping, will that continue >> aws has been phenomenal the secular trends there are very good. >> should be 37 to 40% >> now on that run business, amazon is almost half of the value of the entire company. remember, this is a unit that has built the eco system

they are deploying all these technologies i think we are seeing amazon now shifting to higher margin revenues this is a fundamental shift to areas like cloud and third party margin >> you have rating what is the rating, do you have a target >> we did reduce to 13.5 that's the investment cycle we are talking about. >> it is a short term, long term story. it always has been the 100 points are the short term people. you would say long-term people hold that's right >> thank you >> facebook revamping the way it shays news much more when we return

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>> welcome back to squauch facebook announcing news on news announcing the new product facebook responding to add business starting to test a news tap. there will be sections featuring articles on business, entertainment, health, sports,

science and tech it will allow people to link to the stories. launching wall street journal, new york post, washington post, buzz feed and others facebook is reportedly paying partners as much as $3 million a year to access facebook users then click on a next article, then those facebook users will be asked sto subscribe. facebook head of news said, quote, we hope this will aid in our effort to sustain great growth and democracy mark zuckerberg was questioned on capitol hill. this afternoon, zuckerberg will take the stage here in new york with robert thompson he has criticized facebook from profiting from his content without paying for it.

they'll join together to talk about this >> you think this is a fundamental shift here >> he said has, people don't come to facebook for news. they come to see babypictures. it is a meaningful deal for those so frustrated with facebook for so long >> the media has been angry and upset with facebook not just for the things we talk about around privacy and everything else but the idea that they are stealing their business this is something they've been talking about saying facebook has taken our content. google will be next. they've made some is changes we'll see what happens after that >> thank you >> coming up, a big lineup from

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>> announcer: welcome back you are watching "squawk box" live from the nasdaq marketsite in times square. >> good morning futures are up 27.5 points on the dow amazon shares down 100 points. s&p 500 down too there are wildfires continuing to rage in california. san oklahoma county. the kin kate fire burning. thousands were forced to

evacuate pge reported a fall function right at the time. they are investigating whether its equipment did start that fire further south, the fast moving tick fire forcing evacuations. as of last night, that fire put out near 10% an off shore wind event expected to move through saturday >> citi group has promoted jane fraser she has been is the citi for 15 years. first running client strategy and recently in the land and

america's business credited with its recovery after the financial crisis saying the promotion did not suggest the ceo change was eminent but remember that name and picture. i think we might be seeing more from her do you remember michael corbat was one of those who had to put up his hand. they were asked in the senate whether the person who would take over would be a woman now back to becky. >> a lot still to come this morning, when we come back, we'll be joined by brookfield asset management ceo later, don't miss msci ceo and

his response to the push for divestment from china and tesla chair will join us in an exclusive squawk interview we'll be right back.

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was in an accident. when i called usaa, it was that voice asking me, "is your daughter ok?" that's where i felt relief. we're the rivera family and we plan to be with usaa for life. see how much you can save with usaa insurance. >> welcome back, we have live at the baron investment conference in new york city one of the companies in the baron portfolio is brookfield asset management joining me is the ceo of brookfield our guest host is ron baron, he has been an investor in brookfield since 2007. let's talk about what you see in the environment out there and the best opportunities

>> i'd start off by saying the macrosituation -- there seems to be a shift going on. in the last 12 months, people thought interest rates were going up if appears they are going down for a while. we've shifted the curve down what that means is asset values for areas, for tangible things that produce cash flow will be worth much much more globally, they really can't fix terms. it is a very attractive way for us to receive more for the port foalor >> yes bruce was telling me how he was

financing a building in london for 70 bips. so interest rates are extra ordinary the economy in europe is not doing well the united states can't be the only place with high rates they have to come down >> if you see opportunity there, what else do you see is. >> our business is buying globally, infrastructure and real estate. they all provide cash. we try to raise large sums of money. have the operations around the world and go to places where there is lack of capital one spot where there is very attractive opportunity because of lack of capital, that's

india. india is undergoing financial stress in their banking today. that generates opportunities the biggest thing is being able to biuy assets at less than a cost than you could build them that usually means you have a margin of safety at your side. >> i remember talking to the ceo at the time george david who said at the time he would rather buy in china than india because of getting through all of the bureaucracies. >> i like them both. they have different nuances. one is more difficult from a larger perspective india is more difficult from a

microperspective these are billion people markets. they are growing people are getting richer. the middle class is growing larger we have been slowing 20 years from now, we'll have a larger perspective >> how has the risk in china changed. >> we don't tend to think about the next year. the projects we build or buy and own, we own them for two, five, 10, 15, 100 forever. what happens tomorrow is irrelevant >> if we are truly talking about a different paradigm relationship between u.s. and china where tenses get up.

>> so we are a local investor in every country. we go there, we bring investment in trade doesn't really matter. long term positive business conditions in a country are important. if it changes the paradigm for that, it would matter. with he try to pick great countries and go there for a long time. >> what describes a great country? >> rule of law country respecting capital >> i don't think china qualifies on either of these >> size with the standards that can operate around the world china, yes, isn't like the united states. it is improving. we've been slowly working into

those markets. >> what else do you like that you've heard you mention the 70 basis points in london to get the capital >> wherever he goes, i go. >> all right let's talk more about the infrastructure that is an interesting play. a lot of it is governing money there. >> governments are overindebited. that has gotten worse. money had to go into the banking system into governments. that means they have to get money. where big money gets spent in countries is in infrastructure over the next 50 years, virtually all infrastructure from government spending to

private hands. there is an enormous amount of capital that needs to esh earn 5%, 6% return. >> that is going into client's hands. >> you could make 8% return? >> wow really >> in california, governments can't make 8%. >> i know. we had bruce on last week. private equity, what kind of returns do you anticipate getting over the next decade or two? >> our last sfrl years have been circa 20%. even though rates come down, this is the great value, what

institutions see in real estate, private equity the spread between what you can e. the spread to earn compared to treasuries is still very, very high as a result of that, they are very a take tiff thank you for your time. ron will be with us the next hour and a half or so. >> when we come back, some big tech companies reporting next week our next guest is an investor in all of them. more about what you should see if should be looking at your own portfolio. so ...how are you feeling?

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welcome back to "squawk box. a huge week for earnings joining us with an investment

idea and a look at what's working. john pence is here with pence wealth management. we want to sort of go around the clock because you have big investments. want to start with a stock that's not working though this morning. you are an investor in amazon. the stock falling on a weak q3 what's your take >> this really doesn't concern us this is a short-term pull back. >> are you buying more >> new money is buying into the models >> broadly >> broadly >> because >> the market is topee and we look at headline volatility. we'll get another one of these bumps that we always get. >> does that mean you're sitting with a little bit of cash waiting for the moment >> absolutely.

absolutely. >> what does that moment look like >> like we could run into a 5 to 7 pull back. >> 5 to 7% pull back >> maybe an echo of what happened last year >> echo of last year would put you down close to 20%. >> as i said, an echo but not the actual noise you could probably fall back somewhere between 7 and 10, somewhere in there that will be a good opportunity. new money is getting amazon and in terms of jumping back in, we'll wait and see what the price action is. this particular move doesn't concern us at all. >> let's talk about facebook as well i know you're an investor in that company it has a dedicated news section today and it will report new earnings next week mark zuk wckerberg speaking tod. >> it's interesting all the politicians ganging up on facebook, we're heading into political season

there will be a ton of money spent on political ads these things are going to be drivers. >> you think political advertising is that important to their underlying business model? >> i don't think it's important to the underlying business model but i think it's certainly additive to overall ad spend and they're very dominant in ad spending. >> how unhappy would you be if mark zuckerberg announced he was not going to accept political advertising? >> i don't think that will happen. >> i don't think so either >> we would back off from a little bit of looking at the earnings as a marginal contributor. it won't change our position on the stock. they are absolutely dominant long term. >> you're an investor in apple and that company announces next week we'll launch apple tv plus next friday are you stockpiling more >> we are still acquiring apple. new money gets it, absolutely. apple is being very successful

in increasing their subscription levels, they're increasing all of their other types of revenue sources. we think long term they will continue to be dominant. the iphone 11 is selling. >> boeing. >> give me the boeing story here >> sure. sooner or later the 737 flies. boeing has a 50-year history of fixing these problems. sooner or later it's going to fly and when it does some of these things will kind of fade into the background. so we think sometime in 2020 they're back in the air and -- >> if it's back in the air the stock is at what 343 this morning >> significantly higher than it is back where it was. probably in the mid, you know, 400s how long it takes to get there is hard to say that's a timing issue. they continue to do very well. people forget the defense component of boeing. >> fair enough john pence, thank you. becky, want to get over to you what's going on? what do you have coming up >> reporter: still to come this

morning, we've got some high profile guests still to come from the baron investor conference including msci chairman, henry fernandez and the tesla ceo. we'll talk to her about her relationship with elon musk. as we head to break let's talk about the futures at this hour dow up 32 points s&p down by a point and nasdaq 'vgo 31. wee t a lot more and we'll be right back. it's been reported that there's a cyberattack on business every 39 seconds. ouch. i don't even want to think about it. comcast business has a solution. we go beyond fast with a cloud-based security system that automatically updates, so you always have the latest protection. phishing. malware. risky sites. it can help block all of that.

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the new rx crafted by lexus. lease the 2020 rx 350 all wheel drive for $439/month for 36 months. experience amazing at your lexus dealer. power players in the big apple. we are live from the baron investor conference. in this hour the chairman and c of msci weighs in on index funds plus an exclusive interview with the chairman of tesla. washington and wall street return to saudi arabia the big investment conference kicking off next week. a list of who's attending and what's changed all straight ahead. earnings from verizon ready to hit the wire. the second hour of "squawk box" begins right now welcome back to "squawk box"

on cnbc. it's friday and i'm in love. we are in love, folks. good morning >> wow. >> welcome to "squawk box" here on cnbc. love is in the air we are live at the nasdaq market site in times square joe, are you in love >> i'm in love with this show. >> welcome back to "squawk box" on cnbc. >> becky is joined by none other than the one and only ron baron who has a lot of love himself. she'll be bringing us two great interviews this hour along with ron's investment ideas first up, henry fernandez, the chairman and ceo of msci and robyn denholm. joining us, walter isaacson, a cnbc contributor and author extraordinaire u.s. equity futures at this hour, let's show you what's

going on dow looks like it would open up 35 points higher nasdaq looking to open 31 points lower. a little bit of amazon in there. s&p 500 off about 1 point. joe? >> we haven't mentioned how great intel's report was that's not offsetting the weakness in amazon verizon, we've got to tell you, just crossing the wires. profit came in at $1.25 a share. 1 cent above expectations. it was helped by growth in the wireless business. revenue above analyst forecasts. and starting on november 12th all new and existing verizon customers will get a year of disney plus for free for more on this and facebook unveiling facebook news let's bring in our guest host for the hour cnbc contributor walter isaacson a professor at two lane and an advisory partner

did you watch the zuckerberg testimony? >> i did partly because i have a class at tulane and i assigned it to them because the class is on digital revolution and the question that's facing facebook now is three fold one, you've got a lot of attorneys general around the country trying to do the antitrust. and so we're studying how does it fit into standard oil or u.s. versus microsoft where you dominate some fields and then try to use that to dominate others secondly, it really fits in when it comes to what do you publish? should they be taking prove bring false ads that elizabeth warren puts on or should they be allowing falsities to spread we study times the times v sullivan it's not a news story, it's about an ad that they ran.

i think this is a lead story. >> ada loaflace? >> she invented the algorithm. >> i misunderstood. >> some generations hear that name and think something else. most people understand that she was -- >> most people think you're a pervert actually when you say that. >> no, she came up with the general purpose computer in the 1830s. >> okay. >> but looking at how punch cards were making patterns -- >> in the 18 -- >> she was lord byron's daughter and she looks at the punch cards doing these looms and says, they could work with my friends with the mechanical calculator. >> i want to talk about where we are today which is the news of the day on facebook is this deal with news publishers like "the wall street journal" and others. >> right. >> what do you think -- is this -- >> this is a big deal and it's going to help them. >> is it too late? >> it will help them

why didn't they do it five years ago? >> they did it wrong five years ago. they tried to get them to post them on facebook which means facebook would have controlled the eyeballs, they would have controlled, you know, the people using it, the advertising and everything else. if you're a publisher, if you're "the wall street journal" and the washington post is coming in on it, too, in the announcement. >> right. >> you want facebook to be sending readers to your site not you putting news on facebook's site. >> how do you think this changes the dynamic in terms of reporting around facebook? >> oh, i don't think it changes it at all. this goes back to the future meaning in the early 1990s we got paid this amount of money, $1 million a year, and working with aol do you remember what aol was >> of course i do. >> compuserve.

we were good covering aol until they bought time warner, that confused things a bit. i think reporters almost bend over backwards to show that they're going to be tough. when zuckerberg testifies i don't think you're going to see the washington post being soft on them because they have this content deal maybe i'm being naive. >> i thought it was really great that for me you didn't automatically say so that someone supporting trump can put lies on facebook you used elizabeth warren for the example in a fair and balanced way to say both sides lie. >> i covered louisiana where we had a wonderful politician, john schwagman and old howie -- >> it's easy to tell when he's lying. >> how do you know >> you look at his face and if his lips are moving, he's lying.

i think it comes from all corners. >> facebook somehow, i was talking yesterday, it's bipartisan both sides have bones to pick with facebook. >> facebook's in a little bit of trouble in terms of the antitrust, both sides from josh hawley to dick durbin and others. >> democrats hate him because of the 2016 election. conservatives hate him because they think everything is censored. >> let me ask you a simple question i'm not on facebook so i may not be able to answer. i'm on twitter. >> suppose somebody wants to put an ad on facebook, i'm a democrat, i've got a republican running against me i want to put an ad saying this person is secretly for the green new deal he voted for the green new deal. >> right >> that is a total lie should she be allowed to put that ad on facebook? >> my default position is i'm a big boy and i'll look into it myself because i don't think

they're ever going to have the capability to ferret out every single lie you know what you said about lips moving, when politicians talk i pretty much assume i need to check into it whether it's true on either side. >> that's what mark zuckerberg says we can't be the one to help the buyer and say this politician is right or wrong. >> right. >> but on the other hand, other outlets, you could not run on cnbc or in "the new york times" an add that got proven false getting back to what andrew was saying, facebook has become more and more of a publisher. this move today, this announcement with "the wall street journal" makes them even more of a publisher. there are two categories in the american law, a platform and a publisher. a platform means you don't have to take responsibility for what goes on, like an internet bulletin board publisher, you can be sued i think this is going to move them so they have to take

responsibility, just like "the new york times" did in times v. sullivan if somebody sues them and says this is wrong i think mark zuckerberg wants that because it helps facebook in a way they can handle it they have the size, the lawyers and it will hurt others. >> walter, thanks. you'll be with us for the rest of the hour. >> all right >> let's get over to becky as we just said. at the baron investment conference taking place at lincoln center becky is there with a very special guest. becky. >> reporter: hey, andrew fascinating conversation ron and i were both listening in ron baron of baron capital management is going to be here we're going to ask him to weigh in on the tax debates that played a big role in the democratic presidential race ron, we've heard a lot of what's been going on with this. we've had a lot of billionaires who have come on the show, talked about their views some of them have kicked a few fire storms, specifically lee

cooper man who was a guest of ours just last week. he weighed in on this. here's what he had to say when it comes to some of the wealth tax ideas. go ahead and play that, guys >> stop portraying billionaires as criminals our economy would be better off if we had more billionaires. just tax them. >> reporter: again, that was lee cooperman who was on "squawk box" talking about his views on some of these issues he just got into it with elizabeth warren the other day he said to ben white from politico, this is the f'ing american dream and she's blanking all over it warren said, come on, leon why don't you give back a little bit more why don't you give back what you've been given. what would your response be to that >> lee's a generous man. he's already committed to giving away at least half of his assets and i think he's probably giving away more than that. his dad was a plumber, died when

he was lugging a refrigerator up a flight of stairs he was a really good guy very generous man. very helpful he gives away a lot. and if you live in the northeast and you have a high income, your tax rate is higher, very, very high. >> what's your tax rate? >> 52, 53%, something like that. it's over 50 and so -- >> that's your federal tax rate? >> that's everything you pay a lot against your salary so they're trying to say, i think, that if you have saved and are judicious about the way you spend and invest it to create business, a business that's benefitting a lot of families, then that is -- it should be taxed more highly than

if you just take your income and spend it and buy a boat or a house or a vacation. so they're trying to encourage more consumption so bernie says you shouldn't have any billionaires. elizabeth warren says if you're successful because this country has allowed you to be successful, well, you shouldn't be as successful as you are which just means you are taking jobs you would have created otherwise and give them away my business has 165 people or 166, 167 employees and we grow about 10 or 15 people a year and we started our business in 1982 with three people. so three people with $10 million. then we had 100 million in 1992 and it's 29.5 billion. we are growing 16 people a year, 10 people a year every year good times, bad times. market's doing well. there has never been a layoff at baron capitol. not ever

all we're doing is hiring. if you're telling me i can't have as much money in retained earnings, i can't hire as many people how does that happen >> ron -- >> i should take my money and buy something. >> let's explain to people who don't know you you are a long-time democrat you've supported democratic candidates throughout this a little different than lee and some of his political leanings if they need to raise more revenue what would you suggest they do? >> do a v.a.t. in europe they tried to do a wealth tax and it didn't work. people figured out how to avoid it the lawyers in private practice are real good at figuring out how to do all sorts of things that are legal so all you're going to do is encourage people -- >> and a value added tax, by the way, would catch people who are spending it, based on consumption. >> that's a regressive tax because those at the lowest part

of the scale have to spend all of their money just to survive >> so i think that -- so i'm not -- when the president got elected, i know him -- >> president trump >> yes and he said, so what do you -- right after the election he said, what do you think i should do i said, i don't know what you should do. that's not my bag. i just think that -- and i said, i'm a democrat my whole life and i always will be and my grandfather was an immigrant, my mother's dad he once told me he came from russia, had to leave and everything he said, you know, ronnie, i'm a democrat why? he was working for james roosevelt, the president's son running for mayor in miami he said, well, they all just take from you, the democrats just give you a little bit back. that was his theory. and so i think that you should be encouraging people to invest

and you should make it as fair and equitable in all business as possible it's not my job to figure out what policy should be. i just figured out how to do the best for employees and for our clients and whatever it is it is i don't think elizabeth warren would be successful in getting -- it doesn't matter how many people are going to be elected or democrats, she won't be successful if she were chosen president as getting through the policies i think we're pretty nuts. >> we have a lot more with ron here at the barch investment conference joe, for now we'll send it back over to you. >> thank you, becky. let's -- >> what did you say? >> no, i was talking -- walter was trying to something wrong. >> he was spelling my name wrong, a-a-n. >> it's n-e-nn-e-n. >> it's a-a-n. >> let's check on the futures

this morning up about 26 1/2 points or so the nasdaq indicated down 33 the s&p indicated down 2 people send it to aaron.sorkin. >> still to come from the baron investment conference, responding to marco rubio's criticism of how the firm picks china stocks for their indexes. later, tesla's shocking quarter has sent the stocks soaring. we'll hear from chair woman ron bydenholm later. we continue after the break. ♪ ♪

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you must be steven's phone. now you can take control of your home wifi and get a notification the instant someone new joins your network... only with xfinity xfi. download the xfi app today. you've specifically targeted mcsi they're a global funds provider. what have you heard from that company? >> we got a letter back. they did admit they don't do any sort of vetting in terms of the companies being invested in. they're not comparing their list of investments to companies sanctioned by the united states or the international community companies that are actively involved in egregious human rights violations. at a minimum there should be a disclosure. >> that was florida senator marco rubio who joined us on "squawk box" on wednesday.

rubio was part of a bipartisan group of legislators that are pushing for divestment from china including the index of our next guest let's welcome msci chairman and ceo henry fernandez. and we're here with ron baron. thank you very much for joining us today. >> thanks for having me. >> that was a sound bite from marco rubio. i'm sure you're familiar with what his concerns are about companies that have invested in chinese stocks some of your indexes are allowed to do that in chinese firms. why didn't you explain how that works and what you think about the criticism that comes from that. >> the first thing to say is msci is not an investment, not a manager, an advisor. therefore when remarks are made as to how we direct funds one way or another, we're not a principal. we are an intermediary, helping our investors figure out how to invest around the world in a good way indices are constructed for

every investor to be able to look at a market the only criteria is can you buy and sell the shares in the market are the companies big enough do they have enough liquidity? do we have enough size a lot of our clients are institutional investors. it's not let's investigate this company. it has ties to the french government or this company it has ties to the turkish government or anything like that that is for investors to do themselves ours is more like a shopping list think of it like that. ours is what is the universe of potential investments and you can decide whether you like the investments, whether they have good value for you, whether they have links to other parts of the government or not. >> you know, his concern though, marco rubio's, as he laid it out for us, these are investments in companies that are doing all kinds of things that they shouldn't be doing by the way, they're not held to the same accounting standards. it could be risky for investors to boot. i realize that you're just a

middleman for some of these issues you do make decisions when it comes to esg on things you think you shouldn't be investing in. how do you put the juxtaposition of those two ideas together? just a middleman, just offering people advice. there are some things that we think are bad that we wouldn't have people invest in. >> do you tell people what they should invest in or give them parameters >> we definitely create the tools for people to then use them to figure out what are their decisions because we cannot tell investors what decisions to make. we have two clients. we have the market capitalization which is the straight up and it says here is the total universe, complete total universe of securities in the world that you can buy and sell and here's how they perform so that you can then make a reference as to what your performance can be relative to the market the seconds product line that we have is the sustainable investment product line. it takes that universal

securities and say what companies do they have governance, do they have good environmental records, good social records and so on and so forth and we create indices out of that. the four investors decide if that is a good product line. we offer choice. we offer investor's choice for them to decide what they would like to do. >> if there is a law that's passed that rubio would like to have happen, how would you respond? >> we have to -- we our self and our clients, which are investors, they need to comply with the law of their applicable country. when you're in france you have to comply with the law in france or japan if there is a law that restricts the flow of assets by the u.s. into some country, then those we will create a specialized indices for those clients in that one country that take those legal and we're going to throw restrictions into account. >> can i ask just a question in

terms of the potential risk for let's say a calpers or somebody who might be using some of these indices. my understanding is in china you can put it in but the rules on divesting are more complicated. they may not allow a company to take out money if they're seeing constraints on capital or other concerns it could get gated, so to speak. is that true >> no, it's not true you can buy and sell in china -- in the asia market in china. we're not talking about the off shore market in the asia market you can buy and sell there are some limitations as to how much money you can put in, how much money you can get out that's why the wait is very small relative to the size of the market it's an emerging market and they say they can impose restrictions on the flow of capital so does brazil put restrictions on the flow of capital argentina is putting restrictions on the flow of

capital. there have been threats by the turkish government to put restrictions that's why it's a risk investment it's not different than russia, turkey, brazil, other places like that. >> to take what senator rubio is proposing and play the devil's advocate and if he were successful in accomplishing what he's trying to do, what kind of impact would have that on capital, on trade? take us through a little bit if he were successful, what would happen -- what impact would this be on markets? >> devastating devastating because right now there's a trade war going on in the world and that affects supply chains. when you start having a finance war in which you're restricting the flow of capital around the world, that disrupts the financial system of the world so i believe that whatever caused the great depression, nowadays the amount of investments on flows, capital flows around the

world is vastly higher than the amount of trade that happens in the world. so if you gibb begin to say the economy, it has the most liberal economic and democratic society in the world, is setting an example to create severe restrictions on the flow of capital in the world, other countries will fight for that. if that happens then we're going to have a world in which this -- the fuel that lubricates economic growth and prosperity in the world is cut off. the oxygen gets cut off and therefore you end up with a global economy that's significantly swallowed. >> your company has had an amazing run, up 10 times since 2008 >> we went public at $18 a share and it's 220 today. >> what is it about indexes and investing that -- investing in these indexes that is so popular today? how do you see that going from here >> i think what drives the growth of the company and what will continue to drive it in the

next generation is not just indices. what we are is an investment tools company. we provide the mission critical investments that are necessary for investors of capital, allocators of capital, traders of capital to make the process more -- less friction, with less friction so it's sustainable investing, private real estate investing, whether it's factor investing, passive investing, global investing, we give you the tools. we want to be the category killer, the largest supplier of all tools in the world that make the job that baron and his team have a lot easier, and that is an incredible opportunity. >> esg is a really big deal for them. >> henry, i wish we had more time to speak with you i appreciate your being here with you. >> can i do one thing before he leaves >> yes. >> henry has established a very large net worth for himself

because of his role as a founder and because of his investment and ownership continuing in msci and about, i don't know, six months ago when he -- when msci -- so companies have a hard time often time getting their founders, getting their directors, getting their executives to invest in the businesses henry has his whole net worth in his business his board actually said to him, we'd like you to sell a little bit of stock, henry. henry said, i'm not going to sell stock i think i'm going to make three or four times my money what am i going to do with my money? so here's a guy whose board asked him to sell stock and he had such a large investment in the business. >> we're so happy to have you as a great shareholder in msci. >> i definitely am. >> we appreciate your time andrew, back over to you. >> thank you, becky. coming up when we return, wall street and washington returning to the saudi arabian

investment conference. we'll look at who will be attending and why next on "squawk. time now for today's aflac trivia question. this forest products company was created in 1900 and was named after its founder. what is it e sw wn bcsqwkthanerhecn "ua box" continues aflac! coach saban we have health insurance. did health insurance pay for everything? no, we still have bills. aflac gives you money directly to help with those. aflac! and your deductibles, knee brace, whatever you choose. aflac sounds like a winner. umhum... umhum... we try. get help with expenses health insurance doesn't cover. get to know us at... duck: aflac! dot com

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cool. here, hello! starts with -hi!mple... how can i help? a data plan for everyone. everyone? everyone. let's send to everyone! [ camera clicking ] wifi up there? -ahhh. sure, why not? how'd he get out?! a camera might figure it out. that was easy! glad i could help. at xfinity, we're here to make life simple. easy. awesome. so come ask, shop, discover at your xfinity store today. welcome back to "squawk box" here on cnbc live from the nasdaq market site

here i'm joe kernen becky is attending and anchoring from the baron investment conference we're going to be hearing from her in just a couple of minutes along with her guest, ron baron and the chair woman -- the chair of tesla, robyn denholm. >> let's talk saudi. >> we have that next week. it's now confirmed and despite the backlash. >> went to this. >> we were there in 2017. >> 2017. >> yeah. >> got out of it last year. >> that's right. >> after the khashoggi murder.

a lot of executives said they weren't going now we're going back. >> yeah. it does seem like what a difference a year makes in the case of wall street here you'll recall last year, i believe it was larry fink and this was echoed by jamie dimon, pulling out of the conference was not going to make a huge difference jamie's not going this year but larry fink is. according to axios, mike corbett is going, ray dalio from bridgewater. we've confirmed others john waldrin, the president of goldman sachs is going for the first time. >> what does this say though what does this say about last year what does it say about this year what does it say about our relationship with the saudis what does it say about our moral issues. >> i talked to steven cook and he said people never really stopped doing business with saudi. they want to be there. they want to continue the relationship going to the future investment initiative is one indication of that the aramco ipo, much discussed

for literally years now. it's a critical part of mohamed bin salman's vision 2030 people think it's going to work out. it's going to come to market maybe even as early as next month. this could be the biggest ipo in history. you have a lot of major international banks including citi, jpm, morgan stanley working on it. >> walter, what do you think, there was a big part of the public that actually applauded a lot of these executives last year. >> you wrote about it. >> i wrote about it. >> no, and people considered them to be states men when there was a view that somehow those in washington were not. >> yes >> was this just show and pr spin >> is it again this year that you're not going and everybody else is and you'll go next year? give it one more year to simmer? >> by the way, it's a genuine question i don't know the answer. >> are you going next year >> i don't know. >> will you ever go back >> that's a good question. >> it was a good question because as he said, nations, it

happens to companies, they don't have permanent enemies they don't have permanent friends. they just have permanent interests. after a while you put something in the penalty box but you have to say, okay, i'm going to now do business with china, i'm going to do business with saudi arabia, whatever you can't permanently do it. i do think that because the saudis, you know, have aramco coming on and everything else -- >> right. >> -- people are a little bit too worried and they should be kept at arm's length yeah, of course they're going to go. >> i think there's a legitimate business ethics question you had the horrific murder of jamal khashoggi and there's clear indication that saudi officials were involved in it if not ordered it even before that, don't forget, you had the prince, among other elites, locked up at the very same ritz carlton where you and i were having tea at the conference in 2017. >> nike in china was impressive

to you >> no, what i was going to say -- >> you have to be cynical to look at the business world and understand in the real world how things -- we wouldn't be able to trade with anyone on the entire globe if everyone who murdered -- what about klein na? how could you possibly do any business with china? >> well, i think there could be growing fallout with china, especially on the terrorist rights and human rights. what i was going to say, there is an argument, and some people would make it, that you're better off being at the table. larry fink has said this if you want to be global actors, you have to act like you're on the global stage and having a dialogue and being a business partner is perhaps part of monetizing the economy. >> middle east, saudi arabia is a kingdom still. kings do -- you look at the type of punishment that gets meeted out in countries all over the middle east. we are horrified i don't know how we try to export our value system on places what do you then --

>> it's a longer debate. come on back. >> can you still get a flight -- >> this year -- >> i want another picture of you barefoot in the desert. >> thank you >> thank you. >> we're coming right back in just a moment. still to come, tesla chairman robyn denholm on the future of tesla, the state of the economy and what she's hearing from investors that interview is just minutes away "squawk box" will be right back. ? it begins with a distinctive approach to managing money. that for over 85 years has focused on keeping confidence up when markets are down. an approach where portfolio managers work well independently. and even better together. who don't just invest, but are personally invested. can i find a proven approach designed to deliver results? with capital group, i can. talk to your advisor or consultant for investment risks and information.

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welcome back, everybody. we are here at the baron investment conference in new york city with ron baron and we've been meeting with many of the companies that ron's been a big investor in. right now it's time for our exclusive interview with robyn denholm. she is tesla's chairman. ron is here. baron's been a big backer of this company for four or five years. >> five. >> we want to thank you for being with us. it's a pleasure to have you with us. >> thank you. >> this is the first time that

cnbc is sitting down with you. we're almost at a year from the time when you were tapped to come in and be the chairman at tesla. >> that's right. >> obviously that was a very interesting time elon is the biggest shareholder in the company he agreed to have separation of the ceo and chairman roles because there was so much pressure coming from the sec and from -- i guess from investors as well. at the time people said you were going to be the adult in the room obviously that's a little insulting to elon to think of it like that but why don't you tell us about your relationship with elon how the two of you work together and how you've worked together for the last year. >> i was on the board for five years before as of this point in time so we formed a good working relationship and actually i think it's a joy to be in that environment, both from a tesla perspective but also working with elon as well. >> you knew him for a long time beforehand how did your relationship change or the way you worked together

change as you took on the role of chairman? how often do you see him how much do you interact >> obviously we have our regular board meetings, but we also have conversations in between so they're relatively regular but, you know, sometimes there are more than others and, you know, it's a good working relationship. >> you are somebody who's got an incredibly impressive background, both in technology and in auto companies as well. you worked at toyota most recently before you took this job you were the chief operating officer at telstra you have a very good working knowledge base, somebody who has looked over so many different issues and so much experience. what types of conversations do you have with elon what types of things do you talk about now? >> yeah, my background in terms of both operational and financial roles, and as an exec between the two, irrespective of which company, and i've always been very focused on making sure that we're driving long-term

shareholder value for the company. and so as a board member i take that responsibility very seriously, as do the rest of my peers. and, you know, in terms of conversations, they can be very varied they can be, you know, things that are going on in the company, you know, whether it's from an employee perspective, future plans in terms of different things, different operational issues or financial issues the team's very focused and very accomplished in doing many things as you can see from the results yesterday, they're doing very well. >> so elon is totally focused, laser focused on costs of operations and what he does from my observation, he listens so when you say something to him, it makes sense, he listens. in fact, he has his teams of young people throughout the organization telling him constantly, elon -- jerome, for example, will have regular meetings with the staph and say, what can we do better?

they come up with an idea, they show it to elon and then he does it >> yes. >> presumably he listens to you as well and listens to ari ellison for ideas. >> yeah. i think the board's got a great background in many different uchb dus stris to ron's point. i think that tesla is any ceo who actually can continue to grow a company the way elon has with tesla is going to listen to all points of view that are going to help the company move forward. and i think that's very true in this case. i do think the team is fantastic. it's the best executive team that i've seen in the many years i've been there. whilst they may be young in age, they're absolutely experienced both in terms of the way tesla works but in terms of the areas that they're focused on. i think that, as i said, the results yesterday show that it's a point in time and obviously

we're here for the long term, but i think that, you know, just incrementally continuing to do better and setting a.mbitious targets. i'm ask both of you, are you glad he's not tweeting as much >> he is a very disciplined individual i think that the way he runs that company is it phenomenal in all aspects. >> when you talk about listening, one of the directors had told me a year ago that he had come up with a chart and the chart was when elon tweeted, what the stock had done and when he hadn't tweeted what the stock had done. >> it outperformed when he wasn't tweeting? >> yes >> did you tell him that >> yeah, that's what this director did so talking about listening, so he listens to robyn, he listens to this other director, he listens to everyone. that's how come they're able to be as agile as they are. they have 42,000 employees

42,000 this is not reliance upon one man. >> right. >> he has empowered people to be able to make decisions and to be able to do what's best for the company. and for people to figure out how they can perform and reduce it, he says, do it you don't have to go through chain of command he was telling me how they were trying to make batteries for other people and they said it was terrible daimler and toyota, i guess it was, tesla was doing things for them and they would say, okay, so we need a battery that can have zero fault tolerance. well, zero, it can have 5% or 2% we can do it at half cost. telling toyota no, no, this is what we have to do we have -- so it was done. tes tesla, what they do, they're able to act quickly. that's a big, big deal when you are trying to grow the way you

are. >> andrew's got a question here, too. robyn, if you look at this question when you answer it. go ahead. >> thank you for that, becky you chair the company, obviously. you're also chair of the audit committee. i wanted you to speak, if you could, to some of the critics around the accounting at the company. and one of the questions that came up, tuckly this quarter, was this idea of -- that the company had a big profit swing, as you know, $550 million sequentially, but it did so on declining revenue. how does that happen and is that a repeatable event >> well, as we've talked about, the ompany's very focused on growth and very focused on cost reduction at the same time it's very unusual to find a company that's focused on both at the same time tesla is focused on that and so in terms of the chairing of the audit committee, i have been the chair of the audit committee since i joined the board in '14 and i'm very happy

with the way the company handles all of its fiduciary responsibilities and its accounting >> so i would also add that the price that tesla received for their average car in the last quarter was $13,000 less than it had been and they made $2,000 less in profits than they did so, therefore, they're really focused on costs that they're able to achieve. and in fact right now prices on their cars are actually going up so every time someone else offers a new, competitive car, tesla sales increase is it tayan? >> taykan. >> when they introduced porsche, it's going to be a lovely car, tesla's orders increased and the prices in tesla cars are going up and they're getting people worried about the x and s, they

had old inventory in the second quarter, profitability, lower costs, but now what's happening is they're charging higher prices for the s and the x than they had before. prices going up, product's demand going up across the board. wherever they're showing product in the european markets, sales are going through the roof >> as ron said, in terms of the demand that's happening, it's strong across multiple geographies at times and we talked -- tim talked about the revenue decline as a result of also the leasing proportions. so if you go back a year ago, the leasing proportions that we had or cars that were particularly being replaced, model 3, was a very, very low percenta percentage we've been increasing that over time. >> what i wanted to follow up on you've spent a lot of time of your life in asia. i want to talk about china

the factory in china that tesla owns, who owns that and what's the relationship with the chinese government >> so tesla owns the factory and the reason why the company built that factory is we see a huge opportunity for the growth in china. it is the largest market for mid-sized vehicles in terms of is he dance and suvs as we bring that in line and you heard on the earnings call we're in trial production today, only 10 months after we broke ground which is a phenomenal achievement, we plan to introduce vehicles in china for the chinese market and take advantage of that market we see in the growth there. >> robin, just in terms of the ramp up there, we had an analyst on who says, yeah, it looks pretty promising what you're doing in china in the past some of what tesla has done is bring in a ramp up, scale back as you see what

demand actually shapes up to be. he pointed out that that's not the way that it works in china, if you are working with chinese companies, with chinese employees you don't have that flexibility. what do you say to that and what does that lead you to believe in terms of profitability or how you're able to be flex anybody that market? >> i would think all of the learnings that we've had in terms of the ramping the company both in terms of model 3 and s and x is being done in china the team on the ground, whether it's tooling, work force, or even how we interact with our suppliers have all been put into place as we're building the china factory. and so the team's done a phenomenal job, jerome before, he and the local team in china have been working hand in glove to make sure that we take advantage of all of the things that we've learned over the last three years. >> we're also talking about scaling back this first plant. >> making sure you have enough

employees to get it off the ground and then changing the size of the employment group. >> their first operation, which is just opening, is to be able to build 3,000 cars a week that's 150,000 cars a year on this conference call yesterday or the day before? >> day before. >> elon said they were going to triple that amount so basically instead of 3,000 cars a week, they're on their way to 10,000 cars a week or more in china. >> let me ask you about that, robyn. sometimes he over promises and under delivers and ron corrected me let me ask you about those numbers. the delivery goal between 360,000 and 400,000 vehicles, is that -- that's the full year vehicle forecast do you think that's an achievable goal? >> yeah. the way i think about it is to achieve what tesla has achieved over the last five years, over the last ten years you have to set audacious goals and big goals to actually -- and then have everybody in the company work like crazy to get there

again, if i look back over the last five years, nobody had predicted that tesla would be where they are today in terms of producing 97,000 vehicles a quarter or building a factory in china in ten months. so the team is awesome and i think part of it is setting those very big goals so the company can rally and get behind them and move forward and move the whole industry forward. >> robyn, i want to thank you so much for your time, being so generous with us ron, i want to thank you foryour time in joining us here. >> thanks for inviting us. >> it's been amazing having you here thank you so much. >> yes, we'll send it back over to you. >> thanks. we want to thank walter isaacson, becky, for being here for the hour >> joe, appreciate it. >> i might have to read about aida. >> aida lovelace. >> my daughter taught me about it. when we return, taxes, trade, and china

congressman kevin brady joins joe and andrew for the hour. plus, we'll hear from outspoken new jersey lawmaker josh got heimer and the ceo of united airlines, oscar munoz when it comes to your customers' expectations,

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>> customer service today. the ceo will join us live. >>. shares of amazon getting slammed. live from the most powerful city in the world, new york. this is "squawk box. good morning and welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square. we were positive with the futures earlier. we're almost ready to go lower i'm joe kernen along with andrew ross sorkin and becky quick as you have seen is at the baron investment conference this

morning. our guest host this morning seated next to andrew, republican congressman kevin brady. >> he's carrying a hat very insulting to those of us in new york. >> this is it. world series champs right here. >> right time to turn that baby inside out zpl we need rally caps. >> i have a lot of faith in these guys when their back's against the wall, that's when they play the best got a lot of faith in them. >> nothing better than the seventh game of any series but it's not going your way, at least so far but your -- brady's over next to you. i have josh next to me he's sort of -- you're in the a real hard core -- you're kind of a blue dog, aren't you >> i work with both sides. >> he said he liked you. >> yeah, great guy. >> all right we're going to get -- >> so, sorry, we're not going to fight. i'll only take him on about his baseball team. >> i'll tell you something, joe, too, i brought you something from cincinnati. your old buddy >> is that a new kind?

>> is that the original? >> yeah. barbecue sauce. >> we've had these ribs. >> that's your hometown. always in your heart >> thank you >> sweet and tangy just like the show. >> butter you up. >> i am. >> bit sweet and tangy at times. up about 3.5 now on the dow. the nasdaq has been down the entire pre-market session because of amazon. at one point it was down actually 100 points because it's up in the 17 -- 1600, 1700 area. and then we have the s&p down about 4.25 let's get right to this morning's big corporate stories. stock movers dom chu joins us now probably will see amazon you've got intel there too, dom? >> i'm going to focus on this morning's. let me say i got a warm and fuzzy feeling by all the harmony that was on the "squawk" desk this morning let's hope you can keep that up. i'll feel like my friday can kick off just right. we'll start our tgi edition off

with a check on shares of verizon. roughly 19,000 shares of pre-market volume. this is america's second biggest telecom company by market value but its biggest one in terms of wireless carrier subscribers it posted an earnings and revenue beat by more of the post paid wireless subscribers than expected those are all the folks that buy a monthly bill they're up in the premarket. next up shares of vf corp moving in the opposite direction. down 4%. roughly 22,000 shares of pre-market volume. the apparel company like timberland, north face and dickeys. posted profits below sales the shares of vans shoes moving in the opposite direction. then we'll look at shares of phillip 66 which are higher by a percent or so. the oil refiner, transportation company and marketing firm posted profits atop expectations

but sales were very, very narrowly below consensus forecast phillips 66 helped along by stronger results in the fuel sales operations that includes the namesake gas stations as well as 76 and conoco brand to your point, joe ending on a quick check on amazon roughly 110,000 shares of pre-market volume. this on the heels of the earnings report last night we want to point out as of yesterday's close the online retail giant was already 13% below the record highs that it hit. you can see there back in september of last year if you tack on another 6% today we could be flirting with what some traders call, andrew, that bear market territory or 20% drop from its highs. back over to you guys. >> thank you for that. we're almost two years into the president's new tax law. while republicans continue to taut the president's new policy, some democrats in high tax states are feeling the salt being rubbed in their wounds joining us right now is our

guest host ways and means ranking member, kevin brady is here new jersey con man and financial services committee, josh gotheim is here. thank you both. >> thank you. >> let's talk about the salt issue. you're living with it. >> it's killing us. >> you think it's killing -- this was your creation so -- >> it was. >> -- what are you going to do >> it's the state and local taxes that are killing people in new jersey by the way, new york, new jersey, connecticut, high tax states fantastic states great economy. they are brutally taxed. and repealing these taxes would be a huge give away. about half of it goes to millionaire households, josh's district, average family of 4, tax cut of $5,700 that helps them. >> now you don't like millionaires either? >> no, i like millionaires this tax break was focused on middle class families and raising them >> you like -- >> listen, i appreciate kevin's work on this and also the

reduction of taxes for businesses of all sizes. i think that was a good step the concern is for states like mine, in my district everyone's taxes went up. so the problem is other places maybe got a break. all i know is in my district our people are really feeling it home values are way down new jersey number one out migration state. of course we can do more to get our taxes down in jersey, i'm a big believer of that jersey is taking care of other states right now we're literally paying their bills, these moocher states which i talk about we're lifting them all up. now we're lifting them up even more that's my base issue if these states say, listen, we're not going to take a dime more than we put into the kitty, that's fine. right now the problem is we're paying for all of these moocher states and that's my fundamental problem. >> you said you weren't going to argue. >> we're not. >> texas is a donor state. >> there are a lot of states mooching. >> yes, but it's not because of the tax bill 80% of new jerseyians got a tax

cut just like in new york. texas has high property taxes. the difference is our whole approach is designed to attract jobs and attract people. new jersey brutally taxes -- josh, you don't do the taxes in your state but you have the worst property taxes in the world based on the highest rates and your governor after the salt was in place raised taxes on families and businesses and wants to do more can you imagine what he does if salt's repealed. >> i certainly wouldn't agree with that. here's the deal, mississippi, alabama, they take $4.38 for every dollar they pay. their budgets -- they start their budgets and say, what are we getting from the federal government this year to help pay our way? that's where they start and then they expect us to write them the check every year what if we do this crazy idea? they don't take a nickell more than they pay in >> let's equalize medicaid new york, new jersey about 5

times what they are in texas let's even all of this stuff or we can do this everyone pays their own taxes. that's what we did in tax reform we essentially said we don't care where you live or how your government's taxed, you're going to pay your taxes. some of the state isn't going to new jersey governor wants to raise taxes on families. a single mom who doesn't itemize shouldn't pay for it nor should the single mom in new york or iowa pay for it. >> the double taxation idea, that we're getting whacked twice. my concern is we're paying taxes twice on the same income jersey wants to do it, we shouldn't get hit twice. >> you're not. >> push back i don't know if you believe in raising carried interest, not carried interest, capital gains. >> i don't think we should be raising any taxes right now. >> i'm so confused you're the democrat? >> we can't -- >> the republican hates millionaires. >> we just didn't create this tax break for millionaires,

that's all. >> andrew, are you confused? >> i'm not confused. i get what's happening here. >> really? >> everybody's representing their own interests here >> how much do you have to make before the salt really hits you in new jersey? it's not the people that you're talking -- >> a quarter of a million. >> if you actually look at it, every county in my district pays over $10,000 in salt, right? the verage so they're getting -- >> from a very rich county. >> it's an expensive place to live. >> get rid of the pretenses here forget about the philosophical views here i want to make the case that you have a view that maybe it's philosophical, maybe it's not, but this tax plan benefits your state and i believe that your view of how you want the tax policy to be -- >> all politics. >> that's our job. we're representatives. >> but it's not anything more than that. it's not ideological -- >> andrew, i disagree.

this wasn't about blue versus red states. >> oh, come on. >> look, jeff's just made the point. their property tax is over 10,000 that 10,000 figure is double the national average. >> yes, it is. >> so these are states that are brutal taxing states and i think josh -- >> because the cost of living is very high, right >> because in part your taxes are so high. and i think you would agree with me, the state legislature and the governors and others should be lowering taxes. >> i think we should be lowering taxes. >> you want lower taxes for your wealthy constituents the entire platform of every nominee is higher taxes for wealthy people are you not on board >> if you live here the cost of living -- if you live here your cost of living is higher so what seems like a higher number in parts of texas, mississippi, alabama -- >> you don't want people to pay more in taxes? >> i want to make sure people can afford to live in my district >> let me ask you a separate

question. >> what about the wealth tax >> i don't support it. >> do you have a nominee bloomberg? >> no, no. i just don't -- >> you like hillary to run against you so she can run again? >> i don't support raising taxes. that's the bottom line. >> what i was going to say, i did an interview with george soros, i wrote a column for it i know that's like a dog whistle for you. >> no, i heard it. that was loud and clear. >> he said that he believes that the most -- that the candidate that is the most qualified is elizabeth warren and then went on to say that he supports taxing the rich and a wealth tax. what do you make of that >> i don't think that's -- i do not believe that the answer -- >> a long-time supporter. >> i don't believe the answer right now is to raise taxes on folks. and my -- right now in my -- to your point, in my district and my state where we have a huge out migration, costs are too high, the answer has to be to cut taxes to get spending under control. we have to look at our deficits.

the tax plan -- the tax plan added $2 trillion to deficit gdp growth isn't where it should be and where we thought it was going to be. so i'm concerned about long-term viability. the idea of just whacking people more with higher taxes is not -- >> the debt issue. >> repealing salt adds $600,000 to the deficit you can't talk about doing one and not the other. it adds $600 billion we use that to lower taxes on working families we did in my belief the right thing. by the way, just so you know, revenues this year in washington are up to the highest in u.s. history. inflation just the second highest -- >> that might not be true. >> the problem isn't you're sending us not enough money, the problem is our spending especially in automatic pilot programs. >> we did so many interviews probably two or three years ago when all of this was being put together we would ask you very straight up is this going to pay for itself you very straight up would say yes. >> what i said was over time we

believe, and i think we'll know year seven, eight, nine, we'll have the true picture of how much of that that we recouped. i believe there's a very good chance it's too early. >> if the revenue is above -- >> 3.5% above. >> you cut taxes but the revenue is still above, you don't see how that could sort of be implied. >> 1/10th of projected growth. >> far exceeding. >> kevin, one thing i'd say, you can fully reinstate salt without actually adding to the deficit. >> i live in new jersey. parts of -- >> no, we know there is impact look, we are not -- -- >> no, i'm actually okay with it i believe the profit and spending of new york, you deserve this >> listen, i think we should get spending down and get taxes down, but i also think it's ridiculous that we're paying for everyone else. that's my principal problem with this that's what bothers me >> you've got to take everything into account. >> equalize it.

>> i'm fine with looking at everything i would say this there's a way to do it, to address steps and issues, get our taxes down and promote growth without whacking people. >> what can be cut you say a lot of it is spending. we can't cut anything. the trump administration has no interest in entitlement reform why not? next term? >> look, all the projected deficits, there is some for military buildup josh has been a big supporter. >> that, too >> that's a basic thing, you want to make sure the country is secure most of the spending is in the automatic programs we have to figure out a way, both parties, how we save social security for the long run, medicare's hospital fund goes bankrupt in seven years. this is one of those neither party can do it themselves we're going to have to figure out a way. >> we have to get through trade, different drug costs down. there's a way to do this. >> what do you think salt's -- high salt states like new york,

like new jersey should do? assuming that nothing changes? everything is going to have to happen >> you obviously have to get costs down to make sure you can still provide the services you need you have to take a very, very hard look at it, right make some decisions that are tough decisions, right these are tough decisions the state legislatures need to make. i think we have to keep actually -- i believe we're going to get more salt back. i think we're going to work this out because i think there's certain extenders that republicans want >> where is there a middle here? i have not heard about the middle. >> i respectfully don't think that's the case. i do think these high tax states have got to make decision. they've been losing -- new york's been losing $100 billion over the last 20 years lost 120 millionaires the year before i think the states have to fundamentally change the way they tax millennials are fleeing new york, new jersey, california, illinois they love living in those states, they just can't afford it anymore >> exactly

listen, i agree we have to get the costs down the salt issue killed us it totally stuck it to certain states that's my fundamental issue. we disagree. why don't we go back i think we need to really look at what's going on to all of these states take a look at that. try to get the reliance on other states on jersey down and new york >> your party wants to go to socialism and you don't like moochers i don't understand who you are how long have you been in washington >> that's not all our party. you know that. >> come on. >> that's all i hear every candidate running. >> kevin -- >> nationals don't do it for you? you're in washington. >> what? i'm an astros fan all the way. >> you live in washington. >> no, we live in texas. woodlands, texas. >> how much time do you spend? you don't like washington at all, the nationals at all? >> they're a great team and they're real, but i live -- my family and i commute, what have i got, 2 1/2 million miles. >> i'm not a yankees fan. >> yankees -- >> no, come on, man.

they're real i know that. they're real. >> by the way, kevin is a very good man >> now now. >> no. no >> right back at ya. >> actually, it's okay to disagree about ideas you shouldn't scream at each other. >> what about social -- you can keep promoting this agenda of yours. i'm against that. >> congressman, thank you. >> i watched the debate. i learned everything from -- >> don't paint us all the same. >> you have to come on back because we do have to have a conversation about the future of the democratic party because it feels like there's two different parties. >> i'm happy to come back. >> there's everybody else and him and the other party? >> no, that's not true. >> most americans are somewhere in the middle. they're not screaming from the wings. the people who watch your show are not out there. >> they're in the middle. >> they're in the middle. >> you've got a problem. coming up, citigroup named -- >> thank you >> thank you, kevin. >> named a likely successor to mike corbat. don't forget to subscribe to our

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coming up when we return, california's largest utility has been implementing rolling blackouts in an attempt to avoid wildfires. that's leaving consumers looking for power in other places, including generators and generac ceo joins us next. (impact, click) who is with me for the long-term. who understands i'm dealing with lives, not only livelihoods. that in order to help people, i need more than products, i need quality support and insights.

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welcome back to "squawk box. fast growing fires throughout california are forcing thousands of people to evacuate their homes. nbc's jennifer bjorklund joins us good morning, jennifer. >> reporter: good morning. it's been a difficult overnight period for fire crews that are chasing embers and fires all over these neighborhoods north of los angeles in the santa clarita valley right here behind us you see a house that's been burned out

it has been reigniting itself over and over throughout the night. at one point a fire truck pulled up and tried to put it out, not to save this house but to prevent it from spewing anymore burning embers into the air to start more fires we're watching a fire burn on the hill across from us and we're hearing some aircraft overhead we're knowing that it's been just a chase it's a cat and mouse game as fire crews try to keep up with the wind gusts right now we're told there's a 5% containment line in southern california which at this point is meaningless the fire is spotting everywhere. they're working to try to stay ahead of wherever the line is advancing. in northern california they've made a little more progress on a fire that is four times this size but the weather has cooperated a little bit more in the last 24 hours.

>> all right we're going to continue along on this discussion. the pg&e blackouts you're referring to have led to a surge in demand for backup generators. one company poised to benefit, generac. stocks up 80%. the ceo at generac holdings. have you seen that chart, sorkin >> not bad. >> i'm not going to say that you flourish in the face of some adverse weather, but you flourish in the face of adverse weather. >> certainly, you know, those are the things that drive outages whether it's a hurricane, ice storm, in this case the wildfires are a totally new element for our business just the idea of having to shut off power. >> deliberately turning off the power. >> what kind of increases have you seen in the areas that that's happening. >> 3, 400% increases >> you're kidding? >> no. >> the power quality has been

pretty good. they don't get severe weather, the snow, so quality's never been a real issue out there. this caught us totally off guard. we didn't see the largest utility in the u.s. coming out and saying, look, our only solution is to turn the power off. that's -- the ceo came out i think a couple of days ago and said a decade, could be ten years of this kind of activity >> so on a -- kevin, we were talking about what happens down in texas you don't have a generator people think of it as really exorbitantly expensive what could you do a three bedroom house for? and it's a generator hooked up to a natural gas. >> fully automatic 7, $8,000 all in totally installed. you know, from -- when you look at it in the context of the cost of your house, the things -- >> cost of hotel rooms. >> exactly exactly. so i think it's pretty affordable a lot of people are. these things are flying off the shelves right now. people can't get enough of them out here in the northeast.

florida last year, obviously a big market for us with some of the hurricane activity but i think what people are coming to grips with, whether it's the weather itself that causes those outages or people are worried about cyber security issues with the grid, those are becoming the things people are thinking about in terms of how do i protect my family, how do i protect my home? >> how many mission critical businesses are still without this, too? i know back here in new jersey, i think it was actually a while ago now, when we had a long spell of no power, the gas stations couldn't pump gas. >> right >> and there was a -- someone was going to put in a law that they had to have backup generators supermarkets aren't there a lot of mission critical -- >> nursing homes hospitals. >> are you 100% penetrated >> not quite 100%. cell phone networks. what's amazing, most people don't realize, they are learning in california, you can't even get some of the basic services everybody uses a wireless device

now. those networks go dark when they don't have power we're one of the largest suppliers of backup power to all of the major wireless carriers but the penetration rates are still very low, less than 30%. >> seeing people with gasoline powered generators not being able to pump gas into their can that they're waiting in line for. >> right, no power. bizarre. >> what do you figure the entire market that you're looking at is and how much have you got? >> the residential market today, we've built it into a billion dollar a year. we dominate. we created it 20 years ago. >> a multiple of that? >> it is the market if you look at the number of homes out there, 52 million single family homes that a generator could be installed on today there's 2 million in the field. we've installed 2 million of these systems. >> aaron, thank you. >> you're welcome. >> if you're a big client, james, you're a believer, you're not going to change your

lifestyle, you should get this. >> we can see you getting a -- >> i'm not kidding you have an apartment, right get the building >> get the building online. >> thank you >> piling on you, andrew. >> i'm aware i'm aware. >> we have two aarons today. >> aaron sorkin. >> coming up, united airlines ceo is here to talk ouabt how he plans to improve customer service. right here on cnbc

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♪ ♪ seems like a little hands up >> you can do that. >> i'm not going to do that for you. no no. >> welcome back to "squawk box" on cnbc. we're live with the network. >> he's doing it >> i'm going with you on that. >> hands up. >> is that what people do? >> when people say hands up. >> that's the song >> yeah, that's the song >> okay. >> okay. i was listening to -- >> we are here at the nasdaq market site in times square. united airlines is hosting a media event in chicago with a

big push to improve service and customer interaction so hands up for customer service. phil lebeau joins us we'll see whether they'll put their hands up as well with a very special guest right now phil >> reporter: thank you, andrew i am joined by oscar munoz, ceo of united airlines i first want to ask you about the announcement from boeing this week, that they are sticking with their guidance on the 737 max getting at least designated for return to service in the fourth quarter and then hopefully early next year you and other airlines will start flying the plane are you comfortable with what they said? >> i don't think anything that anybody has said or read does anything from the course we've set a few months ago as we've talked about constantly, safety of our customers and employees is paramount our schedule will follow what the regulators do. we look forward to that time really nothing has changed for united anyway. >> there's a concern that was highlighted by a number of

analysts that when the max starts coming back, you see i wouldn't say a flood of airplanes, but you're going to see these planes coming back on, that there's going to be too much capacity next year and that is really going to screw with the pricing for the industry what's your sense there? is the industry set up to potentially have too much capacity next year >> there will clearly be the return of the max will create some of that with regards to the issues of pricing, that's not something we really talk about publicly there will be some pressure but there's always pressure in our business this is an industry that not a single day something exciting isn't going on for us. the plan is to have a plan, conviction, focus. we talk about our uniquely united aspects about the future. as we look forward in the next couple of months, december is looking like such a strong booking month. we're excited about the demand for our product and the exciting new enhancements we're going to unveil today. >> reporter: does december surprise you a little bit? >> yes, to the good. we saw the strength building but

at the point we have the viewpoint into december, it's looking even more stronger than we thought yes, it is a bit of a surprise to the up side. >> reporter: let's talk about you're vent today. customer service you know when you became ceo of united airlines, you had several high profile events earlier in your tenure, it's not been a strong point for united. it's never been a strong point for united how do you change that >> it's what we've been doing over the course of the last four years. it's been around re-engaging, building trust with our employees. they can connect with our customers. operational reliability was the next level and when we built that nice base of running our airline in the right way we introduced our growth plan that's always an exciting issue. same issue with capacity and yield and we've proven above all that the uniquely united approach and strategy has been working for us the customer service sort of enhancements and work that we've been doing were accelerated by those events that you mention. i talk when that constantly.

it was a watershed moment for us it accelerated the moments that we want to do. one of the things we wanted to do introduces those enhancements >> you and i have not by plan but by circumstance have been on the same flight together i've seen you walk up and down the aisle talk to customers back in coach or wherever they are sitting on the plane how often do you do that and what's the main thing you're hearing when they fly unite snd. >> interestingly enough, we do this all the time. not just myself, all our leadership team. we talk to our folks on board and our customers. you hear lots of different things mostly people want to fly more places they want to be more comfortable. they want to feel better about the flights they take. any amenities, anything that makes that easier for them to travel, stress on travel is another issue. it's a myriad of issues. that's part of flying 160 million people we have 160 million opinions on most of that stuff what we've been doing is listening, listening, listening and have a steady drum beat of

announcements over the last couple of years. today is another exciting day where we're going to pull back the curtain and unveil several enhancements that will inundate you. it's just kind of us i'll give you a little clue. it's about the customer and it's about -- a lot along the journey of the customer from boarding to the aircraft to the food to everything. >> sure. >> so we're real excited about having 120 folks, traditional media, digital media here. we're excited about that. >> oscar mun oz, i asked him repeatedly to tell us what will they be announcing >> no, it's a surprise we'll be here all day long. >> phil, thank you thank mr. munoz. that was awesome vice president meanwhile mike pence slamming the nba for acting like, in his words, what he called a wholly owned subsidiary of china. he took a shot at businesses

doing business with china, including nike. >> far too many american multi-national corporations have cow towed with the chinese they have muzzled affirmative expressions of american values nike promotes itself as a so-called social justice champion but when it comes to hong kong it prefers checking its social conscience at the door. >> the vice president said the u.s. is ready for a new future when china practices. we have kevin brady here, ranking member of the ways and means committee. we've come a long way towards i guess agreeing with some of this in the last year and a half. >> yeah. >> we've all benefitted from cheap goods from china for 20 years. everybody does business there. our inflation rate was a point lower over 20 years because of this symbiotic relationship with china. it's tough to break that

>> it is look, there's always been a tradeoff, you know, for companies doing business in china and chasing customers there and consumers who buy. we know that i think it's become a star contrast here. people know this more vividly than they did before, but i do think we -- we have a moment in time here where we can reset that trade relationship with china. i sense that these discussions are on the right path. looks like they're making progress in this earlier this week china sort of to echo what we're hearing about the negotiations came out with two new regulations dealing with intellectual property, forced transfer, protecting trade secrets, exchange type issues. that's not a solution. the point is there seems to be pretty solid progress towards this phase one, not that it's -- not that it's a done deal yet. >> kevin, the -- i see china kind of being dragged kicking

and screaming into this. >> no doubt. no doubt. >> do you think in the back of their mind, and i don't know who they is, president xi, the communist party, whomever, do they know some day they need to conform with general rules of global trade or do they want to keep this as long as they possibly can >> yeah. so it's changed. i think for the past decade there was an assumption that they wanted to move to market on currency, on rules-based trading. now they're questioning do they ever want to get to that point again? i think that's why these negotiations are important i will tell you, i still think that long term it is better to have american companies competing in these countries because you are exporting our values but i'll tell you right now, i think those tradeoffs are pretty tough. >> you think the status quo for china, did they do much better the way it is right now than if they were to reform?

>> no. >> i know they don't want to but they're going to have to if they want to be, you know, sort of a -- whether the reserve currency, they want to be the economic leader of the world, they have to trade their ways. i think long term here's something that's sort of striking me right now. i think whoever is advising them that this is -- this really isn't how america feels, this is a temporary trump type issue, i don't think they understand the sands have shifted in the u.s. this is not a short-term point that's being made here it is going to be a long-term dispute. it's in their interests. >> you said we could go it alone without china easier than they can go without the united states >> it doesn't make sense to decouple here. these are big economies. different value systems but, no, i think -- i think we've got a chance to reset this. >> do you think they could do i.p. and other reforms without human rights reforms when does that come? >> it's always tough to tie those civil society issues to

trade issues but a good start would be not ripping off people's ip, not forcing tech transfer all of those things. if they're playing by the rules at the end of the day, long term i think they benefit >> right. >> do you think we get anything out of the trade deal? andrew is a little bit skeptical? >> i'm skeptical anything is coming i have a view the chinese government has their popcorn out, watching the movie and they're going to wait until at least november of 25020. >> yeah, they may. so i'm optimistic we're actually going to reach agreement not overselling it but i think some pretty solid steps. again, a misread in a presidential year, you think people are going to go softer on china or even afterwards you think democrats can be less tough? >> the flip side of this is elizabeth warren or whoever you think is going to be the candidate on the other side, whether you think they are even more hawkish. >> well, people don't remember chuck schumer.

>> chuck schumer. >> 25% tariffs on china. obama. >> all the way out completely. >> i think their chance to reach agreement, they're in the sweet spot now >> all right thank you, congressman. >> a lot more on "squawk" ahead. amazon shares getting punished leaving investors to wonder what a faang ocstk fumble means. we're going to debate that when "squawk" returns right after this ♪ ♪ ♪ ♪ ♪ ♪ ♪

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amazon is getting crushed this morning following the release of quarterly results josh lip ton joins us on the west coast with some of those numbers. clearly surprised investors. josh >> andrew, there were positives in the quarter amazon's q3 clocked in ahead of investors. they didn't focus on that. instead they got nervous as they offered q4 guidance that under shot the street and operating income brent till at jeffries says that's 30% below consensus at the high end it would represent he says the lowest margin for the company since 2017 stock got shelled and the company quickly lost nearly 60 billion in market cap, about the size of target stock so what's weighing on the bottom line amazon is in investment mode spending money to make good on its goal to offer prime members one day shipping

in q4 the company says it will double what it spent in q2 to expand one day delivery or $1.5 billion. amazon's cfo on the call explained the expenses and the benefits he's seeing >> costs for deploying inventory closer to customers, atial costs the most expensive is the transportation costs we built that into q4. we're very pleased to the one day. you can see it in our revenue acceleration and growth acceleration >> it's not just delivery though amazon is also spending more on aws. its cloud business hiring more sales and marketing personnel. in the quarter sales came in at $9 billion just missing expectations rising 35% guys, back to you. >> josh, thanks. the big question, can the broader stock market move higher without the fang stocks?

joining us now paul christopher, head of global market strategy for wells fargo investment institute and senior markets commentator mike santoli mike, i mean, we're not ready to -- the faangs aren't going away. >> no. >> some of the biggest -- i mean, they have been a big part of the market f.a.n.g. stocks a on average 15% below their all-time high. i think that includes what amazon did going into today. and yet, the overall s&p 500 is within 1% of its all-time high it's a bigger struggle if you have this large a chunk of market value that's not performing all that well, but i think as long as it's not purely all growth stocks are for sale, if semiconductors continue to work, stocks like visa, which reported last night, big growth stocks that are quasi-f.a.n.g.,

then the market has a path, but it's a tougher path if these stocks are in the penalty box. >> i don't know where you are, paul, but every time we have -- every six months people say i'm value now. i think f.a.n.g.'s had its rung. and f.a.n.g. always seems to reassert itself. is this really the time now to lessen that exposure >> we agree that we wouldn't focus on the f.a.n.g. stocks per se we would focus on the broader sectors, consumer discretionary, info tech. those are 33% roughly of the market cap in the s&p. they account for 50% to 60% of the returns, whether you look back six months or 12 months they're here to stay we think those are going to be sources of growth for the market, and that's what's going to drive the market not a lot higher, but we are looking for mid to single digit gains next year we think those sectors will be a key part >> you talk about value, rotation into value, it's obviously been pronounced. there's been some traction in

more cyclical stocks and financials in particular, but the two biggest stocks in the s&p value subindex, apple and jpmorgan so apple hitting all-time highs, kind of part of the broader f.a.n.g. universe. it's, i guess, technically value. so many people think of it as beaten down, cheap, no-growth stock. there's subtleties in terms of the definitions, but i think you don't necessarily have to be all in on one style of stock >> paul, the law of large numbers should have taken over with apple about $500 billion a market cap ago i don't know whether we need to get some new ideas of what's big and when the law of large numbers takes over because there's going to be a lot of trillion-dollar companies before we know it >> that might well be, but the growth is still the key, and we think earnings growth will be about 6% next year that should bring along a lot of other stocks as well

>> okay. all right. we had a lot going on today. paul, thanks for being our guest. santoli, you have to be here, i think, but thank you anyway. >> let's get down to the new york stock exchange. jim, earlier this morning, tesla chairman joined us live. i want to show you what she had to say >> the company is very focused on growth and very focused on cost reduction at the same time. it's very unusual to find a company that's focused on both at the same time tesla is focused on that and so in terms of the chairing of the auto committee, i have been the chair since i joined the board in '14 and i'm very happy with the way the company handles all of its fiduciary responsibilities and its accounting >> jim cramer joins us now at the new york stock exchange. do you have any new views on tesla this morning >> i think the biggest complaint

the bears had was it's inconceivable you could have this company have revenues go down and earnings go up. i think the company actually put on a pretty good show of things because think about all the auto companies we talk about. demand, demand, demand is a problem. these guys don't have the demand problem. they get the costs of the factories down, which is what they're doing. the chinese factory they've got down i'm not pounding the table, but i thought that sometimes you have to just say, you know what, they got it right. this was a got it right quarter. i appreciate the fact that this thing could be -- one of the analysts said, hey, listen, this could be a bull case for a little bit i agree with that. i was comparing it with ford everything ford tries to do seems to go wrong. everything that tesla is doing seems to go right, right now >> let me ask you separately, the other big symptom on the move this morning is amazon. it is not on the move up it's on the move down, in large

part because of the miss how do you think about that? >> buy >> chalk it up to one quarter? >> no, buy look, here's another one where they've got such demand for a product, this one day. everyone loves it. they're going to get it right. i think christmas is going to be really big for them. the people throwing it away are the people who are then going to buy it back at 17.50 maybe it doesn't rally this morning. maybe it doesn't rally on monday but while this is just a great story -- when i hear investment, from almost any other company i get worried. not these guys this is a gift they really have their destiny under control. i think there's people who just look at their forecast and say they're down beat. i'm telling you they are not down beat. they're very excited it's a buy >> okay. jim cramer, we'll see you in just a couple minutes. and later, we should tell you, you don't want to miss this. intel ceo is going to be on

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our guest host today, we've had the pleasure of spending time with congressman kevin

brady. i'm not going to say i told you so, but u.s. mca, i told you they're not going to give trump a win. i don't think -- i saw speaker pelosi yesterday or the day before and she goes, oh, you know, we might but i need to be convinced. some gobbledygook about where they're not going to do it they're not going to do it >> so i think they are >> you said that last time >> and i'm even more confident last time i was here, they were making good progress toward common ground here i think we're a couple weeks from getting the green light for the president to sign it up. i think we get it done this year >> you really do >> here's why. this new trade agreement is everything democrats dreamed of for labor and environment. they've never sniffed the kinds of reforms they're seeing in this agreement and for her moderate and competitive members, they can't go home with just impeachment in their pocket >> after four years. that could end up -- that could be it. that could be the entire

legislative agenda for the last four years >> this is growth. this is customers. this is what we need, more trade certainty at a time we need it >> did you enjoy -- >> i loved it. i really enjoyed spending time with him i thought it was a great show. >> you know what else? weekend, right now >> hands up for the weekend. >> i'll do that. all right. make sure you join us on monday. squa"squawk on the street" is nt >> thank you ♪ ♪ good friday morning. welcome to "squawk on the street." i'm carl quintanilla david faber and jim cramer more china trade and brexit uncertainty today. europe's mix despite some talk of stabilization in the german confidence report. we'l