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'll get final michigan

sentiment in about an hour our road map begins with amazon's rough quarter, reporting its first year-on-year profit decline in more than two years. shares down 6% ahead of the bell is now the time for investors to get in >> plus, turnaround for the chip makers intel delivers a big earnings beat demand far outpacing production. >> and the case for wealth taxes. what lloyd flablankfein says he be willing to pay higher taxes for. let's start with amazon, though. earnings miss, disappointing holiday quarter guidance weighing on the stock as the company ramps up spending on one-day shipping amazon's earnings release, jeff bezos said, quote, customers love the transition of prime from two days to one day they've already ordered billions of items with free one-day delivery this year it's a big investment, and it's the right long-term decision for customers. we've been down this road before and their track record, jim, historically is pretty good on this >> yes, i think that there's a perception that they were down beat i think that perception is wrong. i think that they are quite

confident that they have what people want. i think they think it's going to be a great christmas if that was somehow lost in translation, that's a mistake. now, there are people who are selling it my experience is when you see this stock selling down like this, usually the brokers have got some order saying sell down to 1650. so they nail that. then at the end of the day, they bring it back here and go to the customers and say, hey, listen, i did better than the average price. this stock is a buy, i believe, by next week, midweek, when we realize what they're doing is what everybody needs to do, which is one one day one day is all we want the customer is always right they're going to give you what you want >> they're backing it up with the spending >> don't you love that >> 100,000 people hired in the quarter. >> because they're a juggernaut. >> 100,000 people. >> that's a lot of people. >> a lot of people >> they have a lot of business you know what, this has become a very anecdotal story

there's questions of people saying, hey, i see a lot of your trucks on the road is that costing a lot? what is this, fifth grade? it's costing what it needs to cost yes, you see amazon trucks all the time that's because they're taking product to where it has to go. so i think this is ridiculous. i think they put out these numbers and people think they're down beat and they're wrong. >> there's a couple silos of worry here one is revenue guide the others, aws deceleration 35% is the lowest since they've been giving us that data >> if you asked me what the negative is, when you look at azure, are they doing better but azure, amy hood said, listen, we're have a little slowdown too, but it's a slowdown versus incredibly large numbers. take a look at intel and what they're saying in the data center and you know data center is on fire we haven't heard what google's saying >> we're going to find out this week >> i think that's going to be the most important one because if google really started taking share, you'll suddenly have an explanation for this right now i say it's all systems go the people are worried about

amazon are the same people who turn out amazon time and time again. days like today where they take it seriously and say, wow, av amazon's in trouble. amazon is not in trouble amazon is doing what the customer wants, then it tries to figure out how to do it more cheaply. it's brilliant >> i think there are some that would expect it because they've had a deceleration in this quarter in the past. there's also a holiday in india some people are citing that has perhaps depressed some business. interesting when you think about the long-term prospects for this company. ten years ago, even five years ago, we're not really talking a great deal about amazon web services or about advertising, which are now the key parts of the profitability of the business >> so glad you mentioned advertising. very good, by the way, in the quarter. >> up 45 >> 37% growth rate last quarter.

>> but it's the gloom thee tsis' trying to bust they're not gloomy they're not worried. they are just matter of fact doing their job, getting their assignment right they are belichick they are the patriots. if you think they've lost it, if you think brady is retiring, if you're upset the fact someone stole brady's jersey, forget about it it's fine. they're going all the way. they have home field advantage they're going to be in the super bowl go out and buy amazon. >> super bowl 100 days away from today, believe it or not >> it's amazing to have it already be green bay versus the -- but i just like amazon. don't buy it now the people who are selling it, they're going to sell it all day. >> bespoke today says they've had 72 earnings reports since october of i think 2001. the past 72 reports, it's gapped down six plus, about a third of the time so this is not unusual >> boy, that's good information.

what it says is i always feel like the people look at their projections and decide amazon's worried or not and what amazon -- amazon is just, they're not as bad as netflix on protections, but amazon is very excited they know they have a winner with one day then they have to do one day then they figure out how to make one day cheap. suddenly you buy it and the gross margins fly up and advertising margins are good a good job on web services you say, hey, i got a chance to get in that's what i think. >> doesn't mean walmart can't be making end roads >> walmart is definitely doing well but there's so much business walmart is doing well. goldman downgraded target today. but it was really just saying, listen, we've been right on it i think the american consumer, and if you judge by what visa said, really big numbers on consumption f you go back to what jamie dimon said, the american consumers are spending their head off, and a lot of it is going to amazon but there's enough to go all

around there really is. costco, by the way, having a very good quarter. >> you don't begrudge the target call, do you it's having its best year since the '90s >> i love an analyst that says, look, this is going to perform the best, then it does perform the best the analyst says, okay, i had a conviction buy on it now i'll just make it a buy. i still like it, but i'm declaring victory. that was a fabulous call they made on target fabulous i really still like target target is good >> it's had a very good run given that last earnings report. >> that was a great -- you know, brian cornell has put it together these companies are pulling away from the pack. i want to see what what -- it's interesting. nordstrom had a pop for about 38 hours, right kohl's had a pop for about 15 minutes. it's these companies you buy every time they're down. >> i'm glad we put it up some people may hear it and not know what you're talk about. that's what we're talking about. >> we're not putting up macy's or vf corp. today. >> let's talk about vf corp.

on the call, there's a sense that the negativity is being busted, the negativity has to do with granularity the beginning of the quarter was not as good, and it got better i think they'you're going to se people rally toward vf a very big slow down in vans apparently they're saying things very reassuring on vans. so i don't think you should throw that stock out it's been a winner they got rid of jeans. i think we're going to come out when the smoke clears. this has happened all week the conference call is going on while we're yapping about it it turns out they're saying better things than people realize. so don't throw away vf so fast because of vans. >> a div hike out of vf and visa >> the problem with the visa call is your eyes glaze over they talk about challenger banks. they talk about wallets. they talk about all these different partnerships the thing they should talk about is the 12% increase.

that's what matters. 12% increase in commerce al kelly -- >> so it's a little boring >> no, i'm talking about this is like -- it's the jets playing the skins. oh, look at this it's so boring i don't know al kelly has succeeded anyone who's having sleep problems, there's lunesta. there's cbd, david then there's the visa conference call >> i will keep that in mind because i have been having a little trouble >> you read this call. you will not get past page -- >> i get to page three and i'll be back out. >> if you can get to page eight of this visa conference call, i'm telling you, that's because you have pins in your eyes memo to al kelly, please, just give us a little something that's more interesting, please. >> i'd rather read that than watch the jets >> well, i mean. >> meantime, there's intel

better than expected quarterly results, as david said earlier company saying its data business turned its best performance ever, boosting the full-year guide. we'll talk to bob swan later this morning >> you're going to have fun. >> i think it's already been taped, but yeah. >> i had a little to do with bob because he came on, didn't want to take the job, then he took the job. in retrospect, it was a great job to take. any time you have more business than you can handle and you start making the right product -- by the way, please do not sell amd on this what he's saying is business is fabulous there's tremendous demand. and by the way, data center is really good. so the read through to nvidia on the high end does make sense >> data center is the key here, which goes back to our discussions about azure or aws and even google's cloud

offering >> they're talking about -- >> excuse me >> that's what they call the guy who runs it. apparently the guy is really killing it there's so much more business. there was a pause in data center everybody admits it. no more pause. the spending is back there had been a saturation. now the spending is back look, intel has every single product line they spent a lot of time talking about their mobile >> chip business >> is automotive the outlier here >> they're saying don't worry about automotive industrial is pretty good. texas instruments is in opposite world. it really is the data center side by the way, that was a punchy conference call. i kind of liked it, if we're talking about conference calls that can keep you awake. the intel conference call was a good one it was orchestrated much better. swan did a good job. i think you're going to have a great time with him. >> it's on tape, but we're going to enjoy watching it >> oh, tape?

>> yes, it's already been taken care of. >> live to tape. >> sometimes we do that when time is at hand. >> i've never seen you do it >> i try not to. >> i always love it when david is uptown. you know what's really important. first of all, no tie second, makeup kind of shady >> no makeup at all. >> i always say you look sallow. maybe something happened maybe you ate something bad. >> do i look sallow? >> yeah, you look sallow >> there's no makeup on me >> well, you break in with sallow comments. >> the story speaks for itself typically when i come on later in the day >> anyway, i just think that intel has a very good quarter. we haven't talked about wework yet. >> why would we? >> there's always news there >> "the journal" piece is crazy town jeffries does cut softbank to hold today >> and bloomberg is reporting about a vision fund. listen, there are any number of questions in terms of softbank you have to raise them given the

13, 14 billion that's equity, really, not to mention the debt part of it they put into wework for what's going to be an 80% economics of company that had new money valuation of 8 billion now that's not going the right way for them we'll see what they're capable of doing whether they remain in place and whether or not they can actually forge a way towards profitability. >> profitability >> profitability >> profitability profitability? >> marcello was personally engaged in negotiating that exit, which has gotten a ton of controversy, as we know. >> i believe that to be the case you're going to have thousands of employees out on the street who are going to receive severance, who are going to start talking even more, raising perhaps a cacophony of some kind >> the work force needs them we're short employees. >> well, they can go work for amazon apparently. they're hiring >> what kind of jobs do they

get? remember david's famous 13th amendment piece that you did, violation of slavery, remember that piece >> yes >> still unbelievable. what town was that >> in pennsylvania, i believe. >> people were working 26 hours a day. that was grim. >> but amazon has gone a long way. responding to the likes of bernie sanders and his criticism. >> i'm glad you said that. >> of course, there are many extremely high-paying jobs, the likes of which would have found a home here. >> they should do hearings in washington about companies that are gems amazon creates a lot of jobs and david, one day -- that's remarkable >> the hiring pace is enormous, which is why of course it costs so much. >> but there's just a lot of good news. >> we're going to see. amazon's a huge piece of triple

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sneb ♪ always a nice moment in the week when we get to the final mad dash an it has been quite a week. so much so that we didn't get to nokia yesterday, which was down sharply after cutting its dividend >> jpmorgan -- david, be careful. they paused the dividend >> thank you for correcting me >> what this really does is something you've said many times. to go up against huawei is almost an impossibility. they've not had free cash flow in three years >> but they're trying to supply the world equipment for 5g they are number two, up against huawei it's not in the u.s., where we don't accept huawei. >> barclays downgrades it to equal weight they say the delivery is

delayed, cut to 2020 guidance. the margins are being crushed here they're basically saying, listen, we're going to get our house in order we're going after huawei and david, i know nokia is named after a river in finland >> do we have a 20-year on nokia, just out of curiosity back to the hand set dominance days >> oh, my. >> yes, there it is. >> there we are. so far that's not -- you know, this is base camp one, base camp four this is where we lost mallory. >> that's not long-term value. >> no, no. this is value destruction. but they have decided, listen, we're going to compete with huawei if you compete with huawei, we have to be able to compete with the chinese government, which by the way there's a lot of nice spats back and forth between the chinese government and pence >> huawei says it's a private company, nothing to do with the chinese government >> i don't know. i think to go against huawei is to do that to your shareholders. >> sales in the u.s. still up.

>> david, one of the great things about stocks, they stop at zero. >> they do only another 15.5% to go >> you can't go here, david. it doesn't even work look at that very positive. >> oh, there it is i made it. i got it >> well, 84%, david. >> i'll cover it up. >> it feels very dolphin like. >> don't go anywhere as a principal i can tell you this. when one student gets left behind, we all get left behind. this is a problem that affects each and every one of us. together with ibm, we created a whole new kind of school called p-tech. within six years,

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as we wrap up this first big week of non-bank earnings, s&p half a point from its record close, shooting for a third week up fighting the amazon tide today, though nus.ousen ll in abt ve mite

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we got to go. ♪ vacuum in the back, hallelujah! ♪ you're watching cnbc "squawk on the street" live from the financial capital of the world the opening bell in four minutes. happy friday, everybody. it's been a busy morning so far already. billionaire investor ron baron says he expects the dow to hit 6 650k in 50 years listen to what he told becky quick this morning >> if we invested in this turmoil in 1969, you would have made 25 times your money i think the 6.5% annual growth is going to continue on average for the next 50 years, at least. then what that means is that dow jones, which is now 26,000 or 27,000, up 25 times, that's 650,000 on the dow >> all right he loves big numbers with long

time horizons. talked about test will bag talked about tesla being 20 times your money >> yeah, look, i like a lot of things in the stock market, but if you told me the 30-year treasury would have been the best investment and risk free, it tells me while ron is internationally positive, there's a lot of ways to make money. i don't want people to feel too complacent here. there's a lot of good stocks, a lot of bad stocks. if you want to do the s&p, you really haven't done anything of late, it's fine. but don't expect that. i think that's a way too great of a return. way too great. it would make you very complacent there's things that happen we have a critical election coming up, all right i think that everybody, including a punitive president warren, would agree don't look for the stock market to do great if she wins. it's not the point of her election so i mean, let's just be a little -- maybe you should be a little more circumfective when

you want to be in ron's camp we have a fifth circuit court of appeals decision coming up on affordable care. if it goes against affordable care, maybe senator warren comes in with her plan, the president comes in with his. senator warren, the plan she has for health care is equal to the entire budget of the u.s. government >> here's a 50-year chart of the dow. critics still it lately has been fueled by debt, you know, in the form of corporate debt issuance, buying back shares >> there's nothing wrong with putting excess capital to work if you want companies that don't do that, go buy the cloud stocks, go buy biotech stocks. i just think what's important is to recognize that there are times it's like to everything turn, turn, ton. there's a season i think ron baron is saying,

listen, just go on auto. look, we also know that that's been warren buffett's method i just don't want people to get hurt >> 50 years, robot armies are going to roam the streets. >> sky net you coming with the sky net thing again? >> elon musk will be in everybody's brain. i mean, come on. >> that's a doomsday scenario. >> i guess companies will still need to raise capital for their robot masters. >> although, brexit might still be uncertain at that point we might not know. >> that will be forever. >> i'll give you a positive. >> some things are not -- brexit is forever >> look, ceo of american electric power, the nation's largest power distributor, 40% of our power is going to come from renewables in a couple years. there you go how about that >> let's get the opening bell here on the s&p 500 at the cnbc realtime exchange, celebrating an ipo down here today, it is a

china based education technology company. at the nasdaq, it's proginy. we'll talk to them on "squawk alley." >> he's in the crosshairs of washington >> if you had your way, you'd prevent all these people from having such a great day here at the new york stock exchange, going and seeing their company going public if you had your way, there'd be no capital raising by chinese companies. >> absolutely. what's wrong with that >> i think it's wrong headed >> you do? you think it's ill advised >> i do. >> these are all nice people >> a two-economy system. >> i don't think -- look, we're in a trade war with these people, and they're raising money here to defeat us.

i think that's kind of silly what's the point of that let's have some rules. let them abide by the seven sins that peter navarro is talking about. he's one of the more important trade negotiators. what's been the process? mnuchin comes in, gets some deal the chinese can't fulfill. there's been no giant buy. then navarro goes to the president and says, listen, we've been had again that's my biggest worry. i've been checking the twitter file the whole show because i'm wondering whether this isn't the day trump loses his temper >> the chinese not only dissed pence's speech, called it lies and arrogance, but reuters today says they're going to talk by phone, officials on both sides today, and that china's going to want cancellations of tariffs to boost the ad buy >> that's not going to happen. geez >> so are you going to count on it being significant or not next month? >> look, i think the president is going to move these tariffs up if the chinese don't do

something. >> so no signature, no phase one signature. >> no. and look at this crowd these are just incredibly nice people, but this is the exact opposite of what navarro wants i have to tell you, i think navarro is in charge i've said that from day one. navarro does not go down the elevator mnuchin goes down the elevator navarro lives to play again. >> he does he lives in his dark little tunnel >> no, "the apprentice," david how about the nba? you think it's great they black out the nba there? >> i think these are important issues that we're dealing with here in terms of free speech >> what a statement by you what is adam silver? >> adam silver stood up and said -- >> i'm pro adam silver i'm also pro the sixers. they look great.

but i think we're in a bad moment we sit here and say, hey, the chinese, it was good they came what was good? what did they do what have they delivered aren't they just once again making the president look bad? and remember, the president around 4:00 he freaks out and starts saying nasty things can you believe that twitter can capitalize off the president >> goldman took them to hold yesterday. lack of visibility regarding the ad platform. jpm and rbc go to 40, cut the target to 40 today >> i know. there was a shocker. a lot of people felt that maybe they were capitalizing off things that they don't want to -- i mean, did they have a facebook problem by the way, people still talking about how poorly zuckerberg did in front of washington i think that's wrong i think you're going to be wrong no matter what you think they're going to say, hey, man, that's a great looking sweater? i mean, come on, it's a grand

stand. >> others have said, you know what, a great move by twitter would be to come forward and say, we're not going to do political ads. we're not going to be in the business of letting misinformation flow. >> come out and say, listen, we're going to miss the quarter. >> the question is would the stock trade up or down that day? interesting question >> that is a really interesting question after what's happened i keep coming back to saying it's one of the must buys. snap is a must buy we don't talk enough about how instagram is continuing to gain, to gain, to gain how about all the businesses that have been started by instagram. my wife's general manager, good restaurant, it was 30 bucks. you might not want to spend that money. we had the steak guys in the other day. the steak guys, that's a company. they're on instagram there are people who have

hundreds of thousands of followers on instagram, and all they do is tell you they like a certain product. >> they are influencers, yes >> and that's a great business that's the one if i were uckerberg, i would b talking about empowering those businesses by the way, have you been looking at what square is doing? a lot of things about empowerment. they also started doing that fractional share thing, which i like none of these guys split their stocks anymore >> speaking of things financial, kbw this week, the bank index, 52-week high today, deutsch names goldman a catalyst call, says they're going to name some r.o.e.

targets in january >> i don't think apple is going to speak enough about the credit card next week i think the credit card is a very controversial thing why? you don't know whether you're going to pull it out of your wallet or not. i understand the chainsmokers are going to be involved >> the band? >> the band. they're targeting younger people they're targeting the people who are pre-millennial apple is not going to talk about it by the way, goldman was not at all upset by the fact that the commercials say it's -- i think it's going to do well. i'm the only one who thinks that >> i don't think that's true >> name me another person.

>> i don't know. >> yeah, you don't i think the apple call is going to be -- they've really raised the bar. >> goldman had a lot of positive things to say about the launch of the card around their earnings >> they have some very smart people who are saying -- >> the cfo sounded pretty positive about it. >> really? glad you pointed that out. >> not out there completely alone. >> will you take it from your -- it's a little heavy. >> is it >> yeah, you can get a hernia from carrying that thing >> guys worth mentioning, our parent company yesterday reported earnings. >> yeah, what the hell was that? >> didn't really go up it is up today >> no, it went down, david >> negative yardage. >> it went un-up >> exactly

charter this morning reports earnings being well received the stock is up over 5%, of course one of the larger distributors of broadband and video services. a wireless business, same way comcast does perhaps the number that struck investors most positively, although there are a number of them, they only lost 77,000 video subs people still keeping an eye on that remember, yesterday comcast lost 238,000. although, adding all-time highs in terms of broadband and customer relationships, same with charter strong additions internet, 351,000 additions. that was up 85,000 from the third quarter number of additions. so a positive response there >> there's a lot of companies that are positive even though the numbers don't look that good itw, they miss on the revenue line and here we are, all-time high people want to own cyclicals again because a lot of people are thinking, you know what, we're not going to have a recession. itw is a great cyclical. they even have auto.

ppg had auto they managed to slim down their auto business. itw is a classic case of a stock that was down in the 120s. they're not worried about a recession anymore. they're overlooking all the negatives in buying the stock. >> honeywell, utx, even this growing theory that the ism sentiment is overstretched when it comes to actual ip in this country. industrial production. >> september was a good month in the country. people seem to be thinking that germany is making a resurgence but the month of september is a month that people are saying, you know what, we got an inflection american electric power. september a good month caterpillar, september a good month. >> how about pg&e, back to levels we saw when the fire was once again a story >> i keep hearing from the utility guys i deal with that it

really is the trees. when you look at your trees -- you know what happens, david when the guys come and take your trees apart. >> there's concern there's some talk about -- it's not nationalized i don't know what you call it when you make it -- but you've got the competing plans, remember that was the last leg down before the latest with the concern of any liability from the current fires. last leg down was when the judge did not consider exclusively the plan that had been proposed by the board of management. >> but you're talking about seizure. >> for equity holders in terms of what would be remaining then there's this idea -- i'm not sure, why can't we just take it over. >> david, i got to stop you right now. >> why >> david, the stock of cbs is

up >> put out a news alert. >> i'm not kidding it's actually up >> it's not un-up? it's really up >> it's up a couple pennies. maybe it's because "jack ryan" comes out. >> maybe it got to a level that some people feel it's cheap. it's been suffering ever since we highlighted those particularly low free cash flow numbers, which kind of had to do with the spend that may be anticipated. it's been almost nothing but down >> remember when les moonves would come on and tell you, look, the most watched network and we've got this program, ratings are up >> that's all still true >> but they don't have that les moonves, look, i'm the greatest, it's the greatest thing going on anymore. they don't

so look what happens when you lose -- les is less. >> yes >> i used his name many times. >> you do. >> i violated the rules. i said his name. >> no problem with saying his name >> it's one of the 137 names carl says you can't talk about >> wonder what he's doing these days speaking of companies and successors -- >> what do you got >> you're sort of getting some attention paid >> new president of sony >> he's only 59 years old. >> he looks 40 yeah, that's okay. why not? >> but he takes over as president. >> he said he's going to run that bank to 62. if she does a great job, obviously she's going to be the heir fantastic in front of congress they were asked, is there ever going to be a major -- >> will there ever be a woman who takes over >> looks like it could be. >> could be the case

>> why not this is national women's business week, and no one even talked about it. what's that about? >> nobody talked about it being national -- >> yeah. yesterday was like national dr. pepper day >> there's a lot of national days >> national david faber day. just sit around and look grumpy. >> how did you know? >> that's some day that's every day it's the opposite of singles day. >> one more touch on amazon, which was down six-plus in the premarket. now down less than four, jim off the early morning lows >> the sellers will come back. they're not going to stop. they want to finish their selling today. go ahead, make my day. it's just not that bad it has to do with gloom factor versus not gloom factor. i think the sellers do have to come back because the brokers want to mark the stock down. probably the low of the day will be when they jam it. i like the stock

you get these opportunities, as you mentioned, six times that's it. it just keeps happening because people misinterpret everything that is said on that call, which is we're happy because business is really good what's the matter with that? nothing. >> really quick, beyond meat is back below 100 not only the lockup next week, but earnings as well we'll get a look at their numbers. >> 6 billion company very nice report out of merrill today. you got tyson, nestles they're both making a move i've had the pea-based chicken tenders. they're killing it >> really? >> they're absolutely killing it >> what did you have on them >> no, just straight up. i dipped in barbecue sauce those are fantastic. the impossible burger, it's just on fire. and hormel, which by the way, gets started with a cell this booster shot, you need to

fight this fever they make it sound like, here, have some influenza. gee, i think it's a better story than that, but it's rising pork input. >> you ate spam on live tv we know where you're coming from >> nothing like drinking spam juice in the early morning >> it was pumpkin spice. >> we got to move on, david. >> intel doing work here dow is up almost 60. let's get to bob >> happy friday, everybody intel and amazon moving the indexes around some of the etfs can do that let's look at the sectors moving here there's the semis on the upside. intel is 8% of the semiconductor's index. free cash flow guidance was strong for the rest of the year. that's a good sign for the overall space. semiconductors a little bit of a bellwether for tech demand regional banks have been doing

well since the earnings season started. amazon, as carl mentioned, is the big mover. was down 6% in the preopen now down a little bit less than that just about 4%. but we're 15% off of the old highs for amazon, which we hit back here, as you can see. and it does move the indexes when you have these big, big market cap companies let me just show you here. amazon's 3% of the weighting in the s&p 500. but look, it's almost 23% of the consumer discretionary weighting. in the nasdaq 100, triple qs, it's almost 10% of the nasdaq 100. you can see when these things start moving a little bit that they tend to affect the overall indices. just put up here how the s&p 5 00 is against the consumer discretionary. you see just flat here consumer discretionary much weaker that's because of amazon you see the difference there between the two. also, the triple qs, weaker than the s&p 500. that's also because of the influence of amazon. you see how these big market cap stocks move these etfs around that you own and we all know and love right now

let's move on here the consumer -- oh, look how it's moving these. this is a market cap weighted semiconductor etf. because it's so heavy in this group here, you see how amazon is moving that down. and this is an equal weight etf, and it almost has no effect. so market cap versus equal weight really changes it depends on what you own here got to know these etfs and what you're owning. let me move on to visa the consumer is healthy. b bottom line, visa had really good numbers initial 2020 revenue guidance that was very strong this is an indication visa at least believes the u.s. consumer is going to be strong. that stock has been a monster this year, trading to the upside that's good news u.s. consumer is the global growth engine right now. finally, maybe a little bit of excitement down here on monday we're finally going to get virgin galactic down here. this is not an ipo they're not floating any new shares richard branson is going to own

51% of the company social capital is going to own 49%. recall that it was floated down a while ago. the symbol is ipoa that's still trading as of today. what's going to happen is here was the announcement they were buying into it right there now, ipoa we want to put up there. the important thing is that company is going to go away. richard branson's capital is going to go into it here on monday, you'll see a new company, spce. should be exciting they're going to have spacemen down here. they'll have a spaceship they know how to do things right. we'll be here covering all of that back to you. >> bob, thanks meantime, former goldman ceo lloyd blankfein speaking at cnn's conference in new york made some comments on elizabeth warren, capitalism, and what he would pay in higher taxes. >> i sure as heck would be willing to pay more taxes if i could buy a happier and less polarized society, for sure. >> would that help

>> it would help, yeah i think it would help the mood of the country i think it would get some focus on real initiatives that we should be doing and grappling with real problems and real opportunities instead of everybody hacking at each other all the time >> comes on the heels of ron baron addressing it today. obviously lee cooperman this week with comments about warren that we can't even say on tv >> look, i think that people are waiting for her to move a little to the center. it hasn't happened yet i happen to think she's a person of far more reason than other people think, but it has not -- she's not produced that yet. i think that when i was speaking last night to the ceo of the largest managed care company for medicaid he said, listen, there's really no consensus in washington for what she wants to do in the house or senate. >> why is she blowing away biden in these new polls >> well, i just know that nancy pelosi does not support her

view speaker pelosi is still very powerful >> yeah, it continues to be an area of great consternation for many on wall street, as you might expect but you do need to remember, iowa is still a long way away, and even if she were to ascend to the presidency, we still do have these other chambers that actually are supposed to be equal partners >> you have to have every senator, every senate race go democratic you have to look at me and then you have to say something. >> i was explaining to people what you were talking about.

>> i like you then >> when we come back, we'll talk to snap's ceo. dow is up 72 it's either the assurance of a 165-point

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good friday morning. welcome back to squawk on the street morgan is in for sara eisen. interesting day for the markets. intel, caterpillar, goldman sach helping the dow up some 45 points

we are getting the latest consumer sentiment number. 95.5 is the final october read compared to the estimate of 96 the most recent read midmonth also had been 96 >> that is a key stat one that everyone is watching closely our road map will begin with amazon jeff bezos losing his title as the world's richest man. >> and facebook's newest feature, we'll fill you in >> starting with amazon. shares are down after the retailer awarded its first year on year profit decline shipping costs up 46 on the quarter weighing on the company's margins. for more than the earnings, we are joined by our two guests this morning

good to see you guys how much should we worry about this >> i don't think we should worry about this the four qes is why you want to earn the stock retail business growing. two consecutive quarters of revenue growth it is helped by one-day shipping that's a game changer. yes, it is costly. they have to be better at utilizing. you have their advertising business growing in excess of 45%. so that's $10 billion. aws concerned about deceleration of a business that has a tam that is still growing. i don't think investors should worry too much

lasty, amazon has clearly become a logistics company now. >> anthony, of the things victor just mentioned, the aws deceleration, is that the biggest worry? >> i think it is the biggest worry. part of that is that growth is slowing, at the same time margins are declining. you do have google and microsoft pounding their chest i agree with victor that the tam is so big here you do have this company at a $36 billion run away at some point, you can't continue to grow like that >> becoming a logistics company, are you factoring that

what do you envision do you expect that to be its own revenue? >> i have not factored that into my estimates that's pure upside but i think it could become a multibillion dollar business looking at probably 10 years, 15 years as they slowly build up that capsty around the globe >> in terms of aws there, it is still growing strongly it seems like the question now is, were expectations too high >> do they need to look at that growth rate at something like 40%? >> i think they do you speak to an important point. we have these level quarters earnings growth was well above these expectations

that kind of became the new normal that was kind of the exception, not the rule you see them going back into investment mode in aws, in free shipping that's kind of the amazon playbook >> i was making the pointerlier, five years ago, we weren't really talking about aws you think five years from now, we'll be talking about logistics in the same way as those two and other business contributing significant profitability. >> i think everyone nose it is logistics. that evidence is not really there. you are seeing trucks delivering in vehicles on neighborhoods in highways yes, he's building out the

delivery structure i think there were areas already on the call. the uk have a big advantage in the uk right now >> why >> i think the delivery systems there are a little more inefficient than here in the u.s. they are able to plug in to the pockets of inefficiency in the uk >> do you see this the same way as amazon? this is the conversation i've been having with delivery carries and industry, who is actually going to sign on to that business? so many retailers see amazon as a frienemy or outright enemy >> building the infrastructure to do their own final delivery they will access some is of that we think the next white whale

for amazon is in health care we think that is a very large market opportunity incredibly inefficient several opportunities, most obviously in pharmacy and lifestyle management side as well >> that's funny. it seems like a while we've talked about the next thing they could get into where are we on regulatory risk? >> as we get further into the election cycle, i think we'll get more calls for signs and breakups i think that will ease post election i do not foresee any sort of break ups of these faang names like netflix i do think there will be regulation if you see what google is doing and companies like yelp an

angie's list that is happening real time right now. some regulation is needed in the space for google and facebook and social media amazon, you can make the case that amazon is a different growth business. you could argue that it could potentially be spun off. i don't foresee that anytime soon. >> why use some parts at all then >> some of the parts in a breakup, these are the potential businesses >> you know what we are not talking about right now. the brick and mortar the whole foods and other things that seems like an area that has been dragging and softening. fair to say maybe the whole foods acquisition wasn't the best or maybe a mistake.

>> i don't know if i would say that the reason they bought whole foods is because amazon fresh just went getting it done. the one thing that is tricky is that only counts sales in stores that originate in stores if i buy something on line and pick it up in the stores, that's not counted. i don't know that i would necessarily agree with that. at some point, they'll figure out how to leverage that brick and mortar presence. one idea would be to put health care clinics in all whole food stores they are coming out with this new mainstream grocery chain next year that will be a big dill for them in the long run. >> you've got prime video.

are people tapping bezos on the shoulder going why bother? >> that is really to drive prime minister adoption. this is really an issue for netflix. this will pressure netflix's subscriber growth. that is the result of all these different services coming on the prime video is also for retention. >> do they need to >> they are going to one day isn't that enough? >> you'd be surprised. people have an attraction to prime video. you take that away, that puts pressure on the prime membership >> you agree >> i do agree on this. i do think it is a retention

vehicle. you are siege the quality of prime get better you saw them get eight emmy awards >> bezos doesn't miss an award show >> thank you, guys >> when we come back, capitalism in the crosshairs. our next guest says the attacks are just a smoke screen. and facebook is out with a new feature. we'll fill you in. movies? i'll get snacks! no, i can't believe how easy it was to save hundreds of dollars on our car insurance with geico. i got snacks! ohhh, i got popcorn, i got caramel corn, i got kettle corn.

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>> welcome back to squawk on the street last week, telling us he believes cap caitalism is dead. he's not alone taking his swipes at corporate america. the business round table made the case that companies need to value share holders and stake holders and the so-called woke capitalism is a smoke screen joining us now, author of "winners take ll."

apparently jamie diamond reached out to you what came of that and why did he choose to do that? i remember you you sat next to me at dinner >> i know. i wish we had some food right now. the business round table which is an umbrella group the voice of big corporate america put out this statement that was immediately billed as historic on page 1 of the "new york times" that said companies shouldn't just be focused on share holders but focus on stake holders. that means human beings. he was very skeptical. in many ways, this is a pledge of voluntary vir tut it does not include any commitment to top using tax

dodges and business that is good and bad for people, actually involve a pledge to pay people more sort of like my annual pledges to never eat french fries and i've never succeeded so i was quoted as being skeptical. so jamie called me we had a half an hour back and forth. he never once asked to go off the record it got to the heart of why this woke capitalism you think these companies should be

better we have an excellent mechanism my four-year-old pledges to clean up after himself and almost never does. as i pushed jamie on it, it became clean that that's the red line voluntary virtue is fine, actually thinking of substances and changes that would force companies to take changes into account is not acceptable. >> certainly, we've been taking note hear the increasing notes of capital that are behind and think about the total share holderreturn looking at that announcement as significant one. i wonder why now

if in fact it was an empty promise and what you make of the money that is truly moving in to strategies that say, hey, we want you to consider all of the implications as opposed to the one just about making money. >> i spend a few years precisely about the question asked all of these questions about rich and powerful people it is real all of the philanthropy from bill gates on down is real all of those where they are saying something is broken it is real the question i took on, is why is it in an era where rich people are doing all of this to make the world better. why is it that the fundamental

still follows. the top 1% still continues the 400 richest families in america pay a lower effective tax rate than the rest of america. you've seen the top 1% gain $21 trillion in wealth all that stuff is nice activity. in my view, it is lube can't in an engine of exploitation. the hyper capitalism is grinding people down. you ask why is democratic capitalism running and anti-free trade ideas still running.

those of us who cover business in particular, why america capital was starting to fail larger amounts of people, we kept telling old stories about those responsible that could be the cops on the beat to fix it arsonists cannot be firefighters the only answer is where winners take less. they are not going to take less vol tarly. they'll have to be made to take less through policy and law. >> i think that is right that gets lost in the idea it is not just businesses and corporate america and so-called free market, it is the intersection of all of those things with government the biggest disfiction are where the two have intersected heavily. it gets to the key point, why is it up to something like, say,

the business round table to implement these changes when it should be the job of congress and lawmakers? >> that's exactly right. there's an answer to that. the business round table, does not want this to be done and prosecuted by congress and lawmakers. they may say they are open to that they get in front of it. they get in front of this capitalist reform agenda bubbling up. they are saying, no, no. don't tax us we got this y' all we got this. like mitt romney's self-deportation my dms are open. message me

if there is a single tax loophole you used in 2018 that you plan not to use in 2019 because of this round table. message me if there is a single thing you've lobbied for that is good for america, bad for your company that you plan to not lobby for. if there's a single environmental practice you were not proud of before. the burden is on business to get out of the way of a democracy where large majorities of people want to do a bunch of things and keep being blocked >> we have to leave it there it will be a topic we visit often. given the political season as well appreciate your time >> thank you for infuriating

your viewership. >> no. not at all they want to be enlightened. >> author of "winners take all." which is now in paper back >> looking at the winners and gainers. we have more squawk on the street when we return. virtualize their operations. (woman) and build ai customer experiences. we also keep them ready for the next big opportunity. like 5g. almost all the fortune 500 partner with us. (woman) when it comes to digital transformation... verizon keeps business ready. ♪ pacifica: ted! goin' oneighbor: yes. takin' it off road station wagon? you know it's an suv! i know for fact your suv does not suck. why is that? it ain't got that vacuum in the back!

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. >> welcome back to "sqwawk on the street." when china celebrated its anniversary, it showed off some new weapons. the df 17 hypersonic missile represents a new threat all together both for midable but strike at the heart of military. the u.s. will need as a new arms race what america has the nuclear triad. the missiles made bibeauing.

lockheeds missiles launched from submarines and the u.s. has anti-missile systems and defense experts warn that those current systems will not stop china's new hypersonic missile. they move faster than the speed of sound they fly at lower and changing altitudes are hard to see. making them near impossible to detect largely still in the development stage. so far, it is lockheed martin,

rocketdine, north rup drummond and raytheon working on these. all of these next gen missiles are sparking a key arms race all why the u.s. is been waging a cold war with china and russia i'm bringing all of this up because we have defense prime earnings all of these topics were discussed. things like hypersonics getting attention. representing future revenue screams all in whether talking about modernization of the nuclear try add. hypersonic defense systems we are talking future revenue. >> the russians are also into the hypersonic thing too >> right not just the chinese russia and china have been developing these weapons, these

systems. >> but we don't know how far along they are really? >> these missiles they unveiled in china were developed. there on the street and raised some eyebrows. they are very much in development. the bottom line here is, we are developing our own systems but arguably still a bit behind. >> will be interesting the president talking about stopping endless wars, so there is that too. >> with all of these different systems, you never have to use them deterrents >> that's the hope anyway. getting to frank holland >> shares of inbev fallen

sharply. key markities like brazil. and key commands are a key factor the other side, the company plans to offer hard seltzer and considering brewing corona outside of mexico. down nearly 10% after weak guidance >> thank you time for our etf spotlight racing losses. shrugging off the disclosure on pace for the third positive take for four. dow components up 7% looking at the major holdings. nvidia and more.

you do want to miss bob swan from intel when we come back, mark zuckerberg taking the stage with the news corp ceo. talkinabg out their new partnership when squawk comes right back ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪

♪ ♪ ♪

>> here is your cnbc news update a new criminal investigation is under way in washington. the justice department probe into the russian inquiry is shifting durham is handling his own

investigation. eu ambassadors have agreed in principal to the questirequeo extend the deadline but have yet to agree on the length of the delay. >> we have agreed to the principal of the extension that work will continue, the intention is to take this decision by written procedure. for any further questions, i would refer to you the council crews are fighting another wild fire in california. flames from the tick fire are engolfing santa clarita. it is just 5% contained. 40,000 people were forced to evacuate their homes back to you, carl. thank you so much. amazon shares have fallen.

ads are their bright spot. our guest, the author of the book "deep state." people look at this other category up 45 we've heard people building bull cases on the advertising alone >> there was a lot positive on those numbers. when you look at the overallgrowth rate of a company that big, it is impressive i think the scare of the spending on building out the rapid delivery, you've really got to drill down and see how much of this is infrastructure and how much is the one-time fixed cost that will pay back big diffidents and how much is the ongoing cost i was a little nervous when i saw the personnel cost going up. does this delivery take a lot more people to get it in there if it does, that's an ongoing

expense that is worry some to extent they can automate. that's all ongoing expense for them that is a competitive edge they've got all this nice advertising. the cloud is still doing very well it is a nice looking picture, i think. >> you usually have a critical eye when it comes to gia giant company. >> i don't tell me what market they have the market share in. there is vigorous competition in the cloud share. retail is still competitive. walmart is still taking them on. they can't just sit behind their

moat and cut costs and margins they aren't there yet. they are a long way from that. >> the delivery piece of this is fascinating. it seems like we've shifted now to pull things up to one-day delivery you've seen competitors like walmart making a similar move. it is like a race to the bottom. how much of this is fixed and how much will continue to stay the margins don't tend to be very good. we are almost looking at with amazon and retailers in general, we are getting boxes into the corner here. >> when you say a race to the bottom, it might be for the bottom perspective it does raise an interesting perspective. we have a generation of

companies that have been promising this amazing door-to-door service a lot are now wreckage on the path amazon is the first one with the kind of scale and possibly the technology where are the drones i'm still waiting for a drone to come plyiflying up to my front r >> they are coming >> they wouldn't rule it out they can do it, drive everyone else out and maybe they pull back a little bit. we'll see. they have some flexibility there. >> jim, don't go away. we'll be talking about facebook and launching this new feature big story. >> big story after years of attacking facebook for devaluing

professional journalism. he seems to be getting what he wants. cash for his content and other news on facebook perhaps directing people from facebook into paying subscribers. the new tab they'll be touting will include daily stories created by the team of professional journalists and linking users in this tab. facebook is not providing financial details but is launching with about 200 publishing partners including the washington journal, new york post and nbc which is cnbc's parent company some publishers won't be paid because the real value is the traffic to the websites. now facebook's payments are a

small financial commitment relative to the $16.6 billion in revenue. it is a dramatic case. news corps public embrace is a reversal robert thompson said if journalism is a film, the last decade is like a slasher movie we'll have to see if the news tab ends up being beneficial for publishers or just for facebook. >> your thoughts on this >> i'm kind of a disinterested observer here. >> nor are we. >> i'm happy to see any revenue stream in the way of supporting real journalism. it is really expensive i don't think people know how

much work goes into getting real news to make sure it is fair and accurate the other thing i have noticed is digital is so up end of the model. it varies. i have a new york times story. a lot depends on who else links to it. if matt grudge links, the numbers go through the roof and they are not linked to the new york times article >> it's really amazing he was saying in 2018, people don't come to facebook for their news

there has been a turnaround from him trying to distance himself to saying, we are going to work with you guys. if they click to link an article, they are moving over to new york times that is the question do people want to read professional news on facebook. >> it is the platform. certainly, they don't want it in a news thing that lands on their doorstep i don't think they draw that distinction. i remember years ago, they said, we are not touching news too hard to believe. now, i think they recognize. they can't help it whether they put the news on there. people go to facebook as their portal to the world.

>> when people go to facebook, they want to click on the second tab. >> are they going to click there to say this is my new source of news >> we'll have to wait and see. >> it is been a long time coming >> when we return, wall street's report card. we'll speak to new york state come troller and what an elizabeth warren presidency might mean for wall street and don't miss evan spiegel.

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johnsons baby powder from their shelves. >> recalling one line of the baby powder. the company said it was doing so out of an abundance of caution after they tested positive for asbestos retailers are pulling bottles from their shelves walmart and rite-aide are following. they say after rigorous testifying including their own testing found no asbestos. stock is taking a major hit on the headlines wiping a billion dollars. according to bernstein which asks, quote, $2 billion for one bottle of tarch talc they say jarchd j should pull

baby powder completely >> that brings the parallels when the early '80s when they pulled tylenol from the shelf. this is a different situation, not least because j&j is facing thousands of lawsuits claiming it caused users cancer they say why keep it on the shelves. they say customers like it their testing shows the product is safe. sending it over to john to get a look at what's coming up >> big beat and a raise from intel. intel ceo bob answ has some detail that is coming up on squawk alley. ah, you could say that. so how are things with you guys? great. thank you. thank you, sir.

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welcome back to ""squawk on the street". wall street is booming here to discuss is thomas denapoli you put out this wall street report card. is it booming? >> a good first half of the year we look at what's happening to wall street. big contributor to the tax revenue that comes to new york

city and new york state. for the first half of the year compared to the first half of the 2018, up 11% pre-tax profits for the securities industry of new york city, $15 billion that's the best in ten years for first half year performance. that's only half the year. we still have a ways to go we don't have third quarter numbers in yet a lot of indications that we need to be cautious as we head towards the end of the year. >> are you cautious? are early signs showing it >> yes there's a lot happening with the global economy as you always report there's a general view that we're headed into a lower return environment, certainly our perspective as a pension fund investor, we lowered our long-term rate of return because of that issue. we will see where the bonus pool is headed. in terms of employment, beginning of the year it looked like they were continuing to add jobs now it looks like they are shedding jobs. we have to remind everyone, wall street is smaller today than it was before the global financial

crisis in terms of head count, but still an outsized contributor to the city of new york city and the state. i think discipline has improved. i think there's less risk taking than there used to be. i think tieing compensation and bonuses to long-term results makes more sense, having more deferred compensation. all of that makes sense. we will see what the outcome will be for this year. we saw the bonus pool was down last year. we also are seeing the set aside for compensation first half of the year down 1% part of how -- net revenue is slowing. that's one of the other issues it's growing but slower. how will they continue to be profitable, keeping down expenses that will have an impact on compensation, head count we will keep a close eye. >> i wonder about what we might not lump in here, private equity, hedge funds, biggest paychecks in new york city that are getting taxed. salt going away.

just in general, anecdotally, i know guys who leave. they are going to florida or other places is that an issue when you look at overall revenue >> i think it has to be. i think some of the information we have is still more anecdotal than hard data at this point >> there's a budget shortfall this year. >> we typically have a budget gap. the numbers are somewhat holder better than at the beginning of the year, at least for now it's heading into next year when we start the budget to saprocest will kick off in january it's been reported in the press of late, our medicaid costs are going up higher than anticipated. there's a lot in the mix that we have to look at. >> how much is salt hurt and will continue? >> it's hard to quantify there's no doubt that some of the higher earners, that was the last draw for some of them i am concerned about the middle class folks. a cap of 10,000 on state and

local -- i live on long island 10,000 is not much of a property tax bill what happens if we start to lose the middle class that's the backbone of our community. hopefully, those efforts in washington to change some of that -- >> it's not going to happen. >> not going to happen soon. things change in this country. we learned that dramatically in recent years we will see. >> what about banks' efforts to move their back offices, has that been done is that still -- >> i think new york is holding pretty steady at this point. we may benefit from what's happening with brexit, perhaps at london's expense, hong kong's expense. there might be opportunities for new york to grow. >> what's the -- financial services has been such an important component of the new york economy you point out in terms of overall percentage of employment, it's not that large. is google picking up the slack amazon would have. do the likes of facebook, amazon, even though they didn't open the headquarters, is that where the new jobs are coming

from >> the tech sector is growing in new york those are good jobs, high-paying jobs keep in mind as we look at it, although in terms of head count of employment, you are only talking about 5% of the work force in new york city related to wall street, it accounts for 20% of the wage and salary it has an outsized impact on our city and state economy it's why we need new york to continue to be the capital for finance here for the united states and for the world. >> thomas, new york state comptroller, thanks for joining us >> hamilton is buried nearby you can thank him. >> i go by >> it's a great place to stop and visit. the ceo of intel, bob swan, on his company's results, the road ahead the dow is up 137. ♪

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it's 8:00 a.m. in seattle. "squawk alley" is live ♪ >> good friday morning welcome to "squawk alley." what a morning it has been for the markets and for tech despite amazon, shares sliding as earnings fall for first time in two years got that miss on the bottom line soft guidance sent the stock down as much as 9% after