a quick 13-second look at the stockmarket for those irregular people we got out there. we are up 128 points on the dow. we open new highs across the board. make sure you join us tomorrow, regular people, "squawk on the street" is next. ♪ it's a beautiful day >> good thursday morning, welcome to "squawkon the street," i'm carl cantonea, david cramer at the risk exchange it is on, the u.s. and coin have agreed to remove tariffs if phases we waive the results from qualcomm, square, roku, exped why and more the bank of england

holds, ten year yield, getting in the area of 9 the road map begins with the trade rally. future points to new record, china says it has agreed to hold back tariffs plus, takeover offer, getting my latest reporting on xerox's bear hug of hp. warren proposes a sitdown with the microsoft founder we will begin with futures fresh hopes of a trade agreement, giving stocks a boost. china's commerce says the u.s. have agree ed to phase out the tariffs imposed during the trade war. they don't actually say a deal has been reached multiple reports from this one on qualcomm. >> yeah, i don't trust them. yesterday, they said the talks were elayed. honestly, these people were members of the people's republic it might as well be run by the 8th army can i tell you what might

matter they signed a death warrant for someone who pushed fentanyl to us and two life sentences for their colleagues they did a two-year stay of execution on the leader of this. but this is what president trump is waiting for far more important than any nonsense about tariffs this is what they want they want a signal that someone will be executed for fentanyl. they got it. >> that is be ig. >> why is that that is clearly not focus of the reporting this morning >> no, because everybody is wrong, except for me carl did i really say that? i actually said that >> you didn't just think it, jim. >> let's understand each other >> that the only thing at the con-- they immediately came out. i absolutely love it they said it has nothing to do with trade talks they have not been tolerant on drug dealers this the a guy hugh high bing and the united states limited itself the united nations has done everything it can to try to find these guys it is completely involved with the trade talks. the chinese government has had

total tolerance for selling fentanyl when i deal with my sources in the white house, they have been waiting for this not roll back tax. >> it's an epidemic. >> right >> this is what president trump cares about. >> obviously not just fentanyl but it's making its way into all sorts of things. >> this was the pre condition to talks. that's what matters. >> and for the other things, when everything actually happens. >> i meant took as air gone as i was. i didn't mean to be ar gant in that no my contacts at the white house say, at last because president trump cares passionately about overdose and passionately about drug use. and he didn't want to sit down until this of the seven deadly since was agreed to. he wanted to see these kind of prosecutions now we can go forward and the president will play ball he was not going to play ball. >> by play ball o, you mean. >> willing to talk about, not rolling off, staying not rolling off.

>> so december 15th doesn't come off but we don't add anymore >> new york the president does not want to have the chinese control the narrative because it will break down, but he was, i understand, very happy about the national archives control commission not just being involved with sending us bad fentanyl, which is causing, as david said, a huge number of deaths in this country it was a very good pre condition an this was important. so now there can be a real discussion it's interesting it came after yesterday's leak that there may not be or there will be a delay. you know, this has been something that the president has been saying over and over and over again and pe tore navarro said over and over and over again. when are they going to crack down on fentanyl when they do, we'll cooperate. >> you think we will get a signing in december, whether in sweden or -- >> yes, it can now go forward, because this was what the white house was really waiting for i know it's under played in this country. when you seek with them, this

fentanyl epidemic is something that both parties share. and a hospital of people know where that fentanyl comes from, which is china, the military knows. everybody knows, so this is very positive. >> we'll see if this warning's run a new record it's justified, david. >> yeah, i want to follow up on our stories from yesterday, followed by xerox. actually we can now give you terms involved of what the letter contained with the offer that was sent to hp on tuesday we did get a statement from hp yesterday, which i'll share in a minute but let's get to the offer, itself because people posted the situation indicate it was for $22 for each hpq share $17 of which would be in cash. and .1 learn the xerox shares for the remaining. so you are talking roughly a 77%

of cash, the remainder in examinxerox stock, contrasted with hpq which was lows billion in this potential bid made its way into the marketplace. they are expecting cost synergies, by the way, given the cash and stock component, what you would end up with at the end is a new company that would be 48% owned by current hewlett packard shareholders, 52% by examin xerox. they will play up the fact they are the right ones to deliver in expected cost synergies and would have the effect. by the way, their management team is comprised by a lot exhp erz, including ceo johnballan teen that i -- john ballentine

they believed it would be investment grade it would be five times leverage given, of course, the death they would be adding to buy what would be roughly 23 billion or so in stock. these 77% component that is cash, perhaps a bit more than that the price, itself, 22, although, interesting, these examinxerox by all shareholder bases by the way, there is a decent overlap in the shareholder bases of both companies. not to be overlooked or is it in part some people find xerox can find itself on the takeover bid from hp despite the huge relative size unclear, they were both up >> that obviously, does have the impact of rising the actual price being offered given .137

xerox shares with the exchange of 23% of hp they do expect to delever very quickly. talking about the cash flow, generating characteristics of this combined company, being able to take leverage down from what would be five times at close to as little as three times within 24 months so we can tell you at this point that is according to my sources the offer delivered i'd to hp. what did hp say about it they put out a weird statement. >> it wasn't weird i worked on this. >> it was weird? >> yes, i worked on it it was a heisman >> what i will say, it was out of character in a typical takeover situation >> it was not. there was no animosity >> being written by a philosopher major rather than somebody focused on business >> i never took philosophy. >> that said, they said most recently they received a proposal transmitted from the company. they went on to say they have a record of taking action. if there is a better path forward, they will continue with

discipline and an eye toward what is in the interest of all their shareholders >> january 28 they made a bid, it look liked like a -- it looked like a fung ible bid. >> my sources indicate while they are certainly opened to anything share holder, they put together a plan, i don't know if you got a chance at the big analyst meeting. he wants a chance to be able to put the plan through i don't blame him one bit. the plan, by the way, is much more getting away from printers than it is to go deeper into printers much more digitization play. hardware digitization. >> that is not what you get if you merge with xerox they are kind of don't want to do in terms of strategy. yoeb nobody denies there wouldn't be substantial synergies. >> no, there would be

substantial certainly ifs, this is a company that most recently at its lows. they are talking about that price at 22 rowley at 29% premium for the shares over you know repeat fairly recent periods. so not an insignificant premium was was indicated to me yesterday, real significant. we can debate whether it's enough certainly to move the ball here. what i will tell you is i do sense, jim, that there is great fervor on the xerox side to try to make this happen. january t january 24th is the close for the directors. all of them are up will they move to a proxy fight? i can't dismiss it as a possibility. though there are shareholders and deep forget there is overlap. >> that does prove to be an important part of the strategic merits of these kind of deals and how they will be considered. whether or not the shareholders would agree at 22. very much unclear. >> the statement and things i've learned indicate to me there is zero animosity, therefore would

surprise me for a proxy fight. i think they want to have a shot here. >> you think hewlett pack orlando would say, just let us buy you? >> yes i think at a certain point its not in the plan, though. we ought to give mr. lawyuris he took over because of a family health issue i think if they had not weighed out the plan -- david, if they had done this right wendy on said he's done or is going to leave. but will lauris has a fine plan. >> they do have a highly confident letter from citi to finance the deal it wouldn't be a lot of debt as we said. although the cash flow combination. >> they're not an elliot kind of nielsen thing. >> i still say that was a weird statement. >> it was weird. >> you agree now it was weird? >> no, it's not weird in the context. i've covered about a million mna

situations >> i've covered when we return, this one, temperatures not as weird once you start realizing they were trying not to be angry. >> oh, that's a good point. >> we should take a break and make some money. we have a podcast, too >> when we come back, cramer's mad dash and the opening bell. plus, we'll get the big movers of the morning there is a lot as we said earlier, qualcomm, roku, look for record highs as the s&p industrials have posted their first record high in more than a year dow futures up 141 when you look at the world,

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all right. 15 minutes before we get started with trading at the stock exchange time to fit in a mad dash. we will have a lot of earnings to cover in terms of at least the way stocks perform let's get to qualcomm early here it is going to be a stellar performance. >> the analysts are not ready for the quarter we expected three or four quarters from now. you got 230 5g of devices. remember our friend christiano among the scientists engineer at qualcomm, he's talking about the idea that this is, please don't

think of this as a cell phone, think about this as everything qualcomm owns this, david they violated the first rule of fight club they talked about apple. >> they did? >> they talked about apple >> i did sit down a couple months ago with hans vesberg from verizon and we spoke as you know, jim, about the idea of 5g in the enterprise, even though that's not necessarily a 2020 event. >> right. >> it's coming it's programs much more substantial than everybody's cell phone to be able to get video downloads real quick. >> i worry about a cable company. >> the internet is already talking about this we're seeing it. >> this is something so amazing. they brought back 22% of the company, the basis 65. 65 now, that's how you do a buy back right when everyone was giving up, they were in there buying because they had conviction, like john fort has an interview

with steve mullencaugh hauwei is not included in the numbers. wouldn't you see if they were allowed? that would be amaze zplg we do have important business in china. >> they made good deals with the chinese. >> china is moving quickly >> very fast faster than us >> yes, they are >> we are way behind. >> we're not way behind. >> career leapfrogging quick. >> they can say we're putting this here. >> oh, ototalitarian dictatorship that executes people because they push fentanyl here. >> no rule of law there. >> there is a rule of law. just like there was when stalin ran the soviet union >> let's see what they say all right. we got a lot more on "squawk on the street" as we get down to the opening bell

whether it's dish, fox, discovery. >> those are all ours. >> i know. what do you got? >> ralph lauren. >> there you go, ralph lauren, too. >> roku. i got roku roku >> we are back after there new york state is building for the future of your business. this /* -- we are back after this to infrastructure, we're creating state of the art, 21st century transportation hubs, constructing new bridges, bringing high-speed internet to every corner of the state, and committing to low-cost clean energy. with infrastructure built for the future, the companies of tomorrow can thrive here today. see your future at esd.ny.gov.

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futures suggest record highs across the board as the s&p is on track for a fifth weekly gain on these headlines that the chinese, at least, say the u.s. and china have agreed to remove tariffs in phases. the opening bell less than ten minutes away ♪

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everyone's attention when he talked about senator elizabeth warren's wealth tax. >> i've paid over 10 billion in taxes. i've paid more than anyone in taxes. but i, you know, i'm glad to have -- if i had to pay 20 billion, it's fine but, you know when you say i should pa i 100 billion, then i'm starting to do a little math about what i have left over. sorry. i'm just kidding so you really want the incentive system to be there you can go a long ways without threatening that >> have you ever ever talked to elizabeth warren about this before >> i have not. >> would you would you want to? >> i'm not sure how open minded she is or that she'd even be willing to sit down with somebody you know who has large amounts of money >> senator warren then offered to sit down with gates tweeting quote, i'm always happy to meet

with people. even if we have different views. bill gate, if we get the chance, i'd thereof to explain exactly how much you'd pay under my wealth tax i promise it's not $100 million. didn't commit to supporting her or the president interesting conversation he was trending open twitter last night. >> you know what this kind of reminds me of a johnny cashson debate johnny carson was the highest paid person in america 70% bracket. often questioned what the -- he was working so hard for he was in a 70% bracket obvious, that's income tax we'll would say this is wealth tax. there is a level people get to where they debate what they are doing. elizabeth warren yesterday one time only maybe. look, i think it's worth discussing now, there has been tremendous research about whether it really works and i'm going to go back to lee cooperman who has done in a very rigorous fashion whether

it really produces more for the government than traditional taxes. >> yeah. >> i just think that there's got to be a level of where it's not. i always feel senator warren is a little too much antipathy. >> she is. >> there is nothing wrong with being more gentle. >> what would the tax be oempb other than assessing people's wealth, you are talking things far beyond their income or their savings. >> right >> you are talking about their planes, their wine, their boats, houses and paintings, their art. it seems virtually impossible to sort of figure out without getting into every sing him the irs would become your best friend, they would be living in your house >> you can go back to capital gains and dividend tax. >> larry kudlow, capital adviser, you want a low hanging fruit, you double both

meanwhile. >> rich people has been the single most charitable organization the world has ever seen period. >> look, these billionaires, bloomberg. she should be going over the billionaires who haven't given a sometime >> shaming bezos for spending money on space, where gates said he can have it, malnutrition is more important >> heels got his priorities. i don't know, it's about time, it can be the best for the human race for all i know. >> climate is really, really important. really important. >> mark benoff has been talking about the tree, if we planted a trillion trees, we would be able to reverse global warming. >> that's true how many a trillion? >> just a trillion to do it. >> don't laugh 30 cents per tree. >> 300 million trees in nigeria in a very short amount of time. >> i'm giving a lot of mo into plant trees. >> the numbers sound daunting. you can do it.

the priorities >> let's move on here. >> is someone? your ear saying move on? >> they are. >> we will have plenty of time after dimon cooperman lazry this week on our air. "washington post" reports that a sources close to her campaign love it. love that people are coming on our cnbc and weeping over her -- >> she has a soft spot for dimon, who by the way hired more veterans than anyone in our country other than starbucks and elizabeth warren has never been that interested in the technical breakout of 130, but i am. >> it's always worth pointing out that at this point in 2004 or '3, iowa, this number -- >> oh god, you are doing that again. >> it was polling at 4% and howard dean. >> david, it's called a horse race. >> four years ago it was kristi's tee, john kasich, ben carson, carley fiorina >> i used to love tponies, it's

the first term. >> how you will address income and equality in this country, it's an enormous issue whether or not elizabeth warren will be the nominee, it's -- >> i may have to have senator warren debate jamie dimon in my conference. >> that would be good. >> at my conference, a mythical conference >> at my alma mater, i'd like to have a whole day on capitalism jamie dimon went there okay done >> he's a proud jumbo. >> done. >> let's do roku here. shires getting hammered. the beat on the top and bottom lime losses nearly tripled that of a year ago sending more efforts to get more subs we will talk to anthony wood on "squawk alley" later on this morning. this got hit pretty hard. >> he said look, point blank, he used, this was all in the square by the way he said look, 2020 growth rates are liable to be lower than 2019 you can't have a stock that has that, expected to go up. he, by the way, is so under

stated that he will not reverse the direction of roku stock. i am promising you that. >> that same thing has been said of silverman interest, understated in an environment. let's talk >> noah bratski dynamic talking about pinterest. i have gone over that pinterest with a fine tooth comb the problem with pinterest it does not under promise and over deliver. i urged them to do so i said, play the game ask him. >> not everybody listens to you, jim, at their peril. >> not everybody listens to me my dog doesn't listen to me. >> no, he doesn't. >> let's get the opening bell. the real time exchange, the big board celebrating an ipo, silver gate capital, a california commercial bank where they focus on digital currency. it's a network of non-profits supporting young people in new york city. jim mentioned ralph lauren earlier. >> that mpph are going to lead the way here, jim. >> well, i have to tell you.

i am so impressed with what's going on with ralph lauren what ralph lauren is doing is they're just embracing the social media that nobody else is they understand that closed for instagram. they understand the concept of heat they also are getting out of the malls. there is a lot of discussion among suppliers. who is going, you say, you know what, those are empty calories i don't want to be there ramp lauren is closing the bad ones that's what we want. they're closing the bad ones that's a gutsy move. because it's very hard for some companies to admit maybe they have too many stores in too many doors. >> u.s. comps up 2 wholesale down 6 reaction >> i think some of that is they want to be out the comps obviously -- it's still better than what i was looking for. patrice levay is a different kind of ceo. he says i know that by the way cap wants to do there too, not as effective what he's saying is we have got

to change our mindset and recognize that there are, you can have classic clothes but you can also have clothes right now that you must wear that's why they're instagram they use instagram i don't know why people -- i know there are issues, roku has these fabulous lines, there is a lot of advertisement on tv it's got to move to personalized tv they still have to move to personalize instagram. i urged mark zuckerberg. i challenged him to start helping the people who are building their brands on instagram who aren't as big as ralph lauren, that's what he should be focused on he has to talk about free speech how about money for companies, mom and pop, that are using instagram. that's what he should play >> what? >> sorry i got a lot of stuff to get to i don't mean to stop you i was commenting on my own as i've gotten older, i talk out loud all the time. >> i think mark zuckerberg had a focusing run >> i put myself on the street

now. >> it just happens >> the old ed mcmann, yeah, are you correct, sir. >> johnny, this is a throwback, throwback thursday i love johnny. frontier brisk >> is he really the highest paid person in america? >> 25 million. on television. >> not in america? >> no, no, he was. you got to read on bush, his book, the guy, the lawyer. >> oh, yes, his lawyer >> a great chapter he is the highest paid man in america. >> he deserved to be. >> i am saying he was also the hardest working man. >> he took three days a week. >> he hated joan rivers by the end, she betrayed him. >> bushkin >> jim you mentioned instagram let's quickly do twitter it's in the same neighborhood. downgraded they call it, the title, the report is tailspin and their argument is that they've benefitted from under investment that's what led to the ad bug in

the quarter. >> we got to talk about squared and twitter. they're now in the under current when you speak to people about this, jack, pick one the two thing ain't working anymore. ceo of both. it's not working. >> what about those saudis that was two former employees. correct. >> were they spice >> you have as to spy on potential dissidence on behalf of the saudi government. those are a little frightening. >> zuckerberg. if that was zuckerberg, they'd hang him in effigy no, it's dorsey and he's loved dorsey fought, he did, the homeless guy >> all right guys, let me start off with a couple names we are watching, dish reported earnings, the big news there for the satellite broadcast company that also has ambitions to become a nationwide provider of 5g wireless services is they didn't lose any subscribers. they actually increased. 148,000. that's obviously with their ott offering, but also their direct broad cast

yeah, that was compared no a decline in the third quarter of last year. that was a surprise. stocks up. they also hire a couple people in the wireless industry to join their executive team to help start to build this possible wireless network they're talking about. right with the divestitures they're getting. if sprint and t-mobile goes forward. by the way, charlie ergen will be a key witness in the states that are opposing the deal they have to bring him in to put him on the stand potentially or at least question their business model and whether or not that company, dish, is going to really be a competitor in a real way and be able to raise the billions upon billions that it into evidence to actually build out a wireless -- >> what did you get about the money? it's very unusual to see a stock go up. >> they raised the money they have a billion dollar rights offering. the right to participate and

subscribe for shares on a pro rata basis jim says subscription will be 32.52. there you are, bow low where we are. it's not often you see a billion dollar rights move up in stock we got disney reporting after the close today. and that's going to be interesting, because there is an expectation on the part of some investors that you may get i don't know if this is the calls. some sort of eps range that incorporates their expectations and/or the losses that they will be dealing with as they launch disney plus. also some question about the parks. remember, attendance was down last quarter even though revenue was up because they raised price so there will be a focus on attendance at the parks as well, also, china, hk, what's been going on at hong kong. >> the stocks are going to hang here as they disappoint. >> it's a question i have been getting from some investors. >> i think that you own this,

don't trade it but i just think that there was one thing that was certain, bob i caner said, it's not a 2020. a lot of companies right now are looking at 2020 numbers. i don't think he's in a position to talk about 2020. >> eiger is on the cover of business week. it's just his face it says, don't mess with bob i believe is the title and then, of course, hastings, a deal book yesterday saying that of the rivals from which they have the most to learn, it's disney >> look, i think there is an element of everybody, people have been getting very bullish about disney plus. you know, i know some people get bullish about apple tv yeah, i'm not kidding. >> say it again. >> apple tv. >> what about it >> if they have the ability, people are loving all those over the tops, you were the first to talk about >> yeah. >> you were the first to talk about it starting to get some traction >> they are in full bloom, media

wars speaking of that company like discovery oftentimes is lumped in with those, who, well, what's going to be the strategy do you have the networks that actually could xiao compete? you can't go direct to consumer. the current model, stocks up, though, why? they beat on the bell line they do -- fet score i think do i do lap the affiliate fee growth that they so. by the way, the leverage came down as they said it would, brooks steel i think they're down to three times lever. so they did de-lever rapidly, strong cash flow there >> that stock having a good morning. as is fox, which also had better than expected numbers. although, some loss is still overall in the universe. people are core cutting. so you can get your affiliate fee growth you can get you know more money, but there's fewer people in your universe plain and simple not all of them are going to the ott platforms, whether it's the

you know the youtube channels or any of them. not all of them are going. you lose them. and we suffer from that, too everybody does in the cable universe as it continues to contract good news today from dish. they didn't lose any subscribers. >> what is the lowest price multiples? lowest >> yeah. >> cvs i got it right >> via com cv vcvs. this one can rally >> the deal closed about a month from now >> yes, it's amazing how there are so few people who actually agree with what i just said. they just feel that this is, when you talk about cord cut, everyone always thinks, like via com cord cut i don't think that's right it's cvs by the way they locked up a lot of sports. it's not like alphabet, which there is a negative script

but alphabet and amazon come in to take all those contracts away would be easier to buy cvs than to get the contracts >> remember nielsen was for sale for quite some time? they announce this strategic review process has ended they will spin off their mobile connect business it's not doing anything positive for the stock price, which falls below 20 bucks a share >> we had ed norson on yesterday talking about the failure of nielsen. he was really good guest eto. >> she's a mart guy. >> his efforts to sort of change the way things are measured and actual the actual buying that occurs as a result of some of these. but there's nielsen. look at that, jim. >> you just moved discovery 1.70. >> i did >> you did could you move it up like my travel trust owns it please >> no. >> it's the worst performing stock i have had since the initial original charter and

also apache. >> are you hanging in there on viacom, though you have to wait. >> at this point you have to make it's an oil stock maybe chesapeake owes it moinlt by the way, y -- i don'ts it money. by the way, chesapeake owes everybody money. >> given the tone of discovery and fox and cvs and via koym are -- viacom are up >> from cbs to cvs >> i say that i bought 50,000 suits by mistake yes, exactly a also the 1.49 french's mustard when i was in louisiana, my teammates made fun of that >> here's what he told jim last night on "mad money. >> where were you surprised to hear some chatter of walgreens going private given the fact all they reason doing is doubling down on your store that i know you are always worried about >> you know, jim, certainly you

can't comment on rumors we see in the marketplace but we are very excited about our strategy as you said, we talked earlier this year. you know, it was on a piece of paper, but you know that vision that strategy is coming to life in a meaningful way and what we're hearing, what we're seeing from our consumers, our clients, the payers is validating you know that that strategy is, in fact, the right one. >> well, look, i think that he's kind of candidly saying, i don't know, that's their strategy is one that basically double -- they're doubling down when the worst part, the front of the store. cvs is, indeed a health store company. you walk, if it looks like you are into a ready clinic. when you go into walgreens it looks like you are headed into a candy store. the house of tobacco, remember merlot had that 2% on tobacco. she out of it, talking about

juul by the way, the chinese are anti-juul. no more vaping if you ask them what the cause is, it's juul. >> you can only have 90 minutes of video time if are you a kid and not after 10:00. >> that true >> yes >> i likeed that group >> it hurts that group i haven't looked at the implications for names like that >> this conversation we are having right now is likely been blacked out. if you were watching in this beijing. >> no. >> it happens all the time >> they tell us all the time >> they were watching, she lost us >> people sit there two a button. >> i say late thousand flowers bloom. i say the culture revolution was about culture not executions i praise the 8th army for all the bridges they built s. that blacked out, too >> we might be back. we're back >> have you ever ready the stories shin did dynamite. >> xerox and hp up again after

the deal terms and the sources, $22 a share is what was offered. the rest xeros stocks they're higher >> because of the cryptic nature they are released. which is basically, we don't hate you remember ten bears in outlook and josie wales >> knowledge is good don't forget, jim, drunk, fat and stupid is nowhere to go through life >> he's a sage, he reminds me of confucius meets ghandi >> let's see, dow is up almost 200. we are 5 points from 3100. let's get to bob pisani. bob. >> reporter: good morning, everybody. new highs here the important thing is we don't know much about when these tariffs will be rolled back. but that's moving the markets. what's really important is the yields we see bond yields move up we are at the highest levels since july that's moving all these bank stocks in europe are up.

this is all trade talk related it's the same thing here we are seeing our bank stocks move up. they're in the new high list they have been getting frothy. bank stocks are up we are seeing semi conductors up this is that whole energy play china stocks consumer staples, of course, are lagging. that usually happens when we see this play going on let's take a look at the new high on the transports this is very important they're dow theorists out there who like it. we have a high on the tran ports finally confirming the new high on the dow average where are we here? a lot of people trying to argue we should be from a new trading range. this is a little iffy. this range, the last two years, we have been here. now we have been here. we are trading up here, some are saying here's you new trading range. it's north of 2,000. it's early bulls are out they're saying that we've got a new trading range that will be in, what will determine that we know the marginal movers of

the market the federal reserve, china trade and global growth. there is a neutral there is a neutral to positive here is some hoping as well here, made maybe the global rule isn't as bad neutral, neutral to hope and neutral to hope here that's why the market is moving up let's take a look at a couple other things we are getting a little frothy, though have you seen investor sentiment surveys? these aren't useful. some are up there. bulls and bears are rather high. bulls up 40% this is what i talk about. china waiting and the global indexes are going up the important thing here is that the msci is announcing they are increasing the china wadings china was about, oh, 3%, mainland china and the wadings that's going to go up to 4% on november 26th. they're announcing these new wadings hong kong is at 21 china or u.s. is listed at 8 ride now

this weightings will go up south korea will basically stay the same why is this happening? china is under representative in the global indexes and these global index providers, which is what the basis of these etfs are is we want to more accurately reflect the global situation there you see south korea. the problem, of course, some people are objecting to this senator marco rubio in particular has been very vocal arguing u.s. government employees should not have these stocks in their pensions he will be on at 10. from -- 10:45 eastern time we will here what senator rubio has to say about that back to you. >> thank you, bob pisani the curve continues. let's go the rick santelli in chicago. rick s.. >> carl, not only does the curve continue to steepen, global interest rates are heating up. i have been on the this tune for a while. it gets in fits.

today fit fits exactly what's going on many aren't really super optimistic about europe. but maybe there are certain signs things aren't as bad as they seem. but no matter how you slice it, many corporations in europe are really tapping the credit markets. countries are tapping the credit markets and big supply, just think about it this way, if europe's numbers start to get better, we could really have a bit of a tantrum on our hand globally look at a interday of 10s, zooming zoom, zoom let's zoom to the middle of july you can see the only thing between us now and more follow through to the upside is that september 13th high closed 190, we're one basis point away here's the 10s my in us 2s carl is talking about it's hovering below 24 basis points it continues to steep. it's gaining a couple basis points today we're up 6s and 10es, up 4s and 2s ten year boones. look at this one-week chart.

it's a stairway to heaven with respect to higher yields when the 10 billion euros of oats long dated friend securities started to be talked about, we see selling of other securities, maybe to make room, but supply in and of itself is bearish. look at the may 1st the bunds highest year since mid-july. trade talks continue to progress compromise isn't a bad word. look at how the dollar continues to deteriorate against the chinese currency carl, jim, david, back to you. >> rick, thank you very much coming up this morning, two exclusive interviews you do not want to miss the ceo-of-qualcomm will join us and ceo anthony wood, stocks going in different directions. that's coming up on "squawk alley. record highs across the board. we're close to 3100. we are back after this (vo) the moth without hope, struggles in the spider's web.

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let's get to jim

>> when you usually see a stock up 25%, you think it may be a takeover, but this does glucose monitoring and kevin sayer is on fire they have the tools to make it so you can live in a normal fashion as best as you can my hat's off to them for betterp tonight we have cyrus one. and this is data center. people think that it is slowing and some think that it is accelerating gary knows more than anyone, so we'll solve the problem of knowing today. >> a broad impact. >> biggest source of hardware and software in this country is the data center. >> all right, jim, we'll see you at 6:00. as you said at the top, we'll watch that when we come back, marco rubio speaking of china and the trade war, we'll speak with him in the next hour.

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good thursday morning. welcome back to "squawk on the street". record highs, dow is up 200 plus s&p within ten points of 3100 as we watch trade and a bunch of earnings today >> roadmap today starts with a record rally, stocks getting a boost from positive trade headlines. we'll hear from senatormarco rubio on the trade are war and coca-cola joining the seltzer wars launching its first new brand in more than a decade. and elizabeth warren proposing to meet with bill gates as the debate over her wealth tax proposal continues. >> let's get to d.c. and check in with kayla tausche who has the latest read on some of the trade headlines. >> china's commerce ministry announced that the u.s. and china has reached an agreement

the ministry spokesperson in a regularly scheduled briefing said the trade war started with tariffs and should end with the can't la cancellation of tariffs but did not elaborate. according to three people close to talks, u.s. officials have been open to rolling back the tariffs put in place this september and canceling upcoming tariffs in december. but leaving tariffs on $200 billion in goods until a phase two on dedeal is reached but chs seeking a roll back on all of those two on as they get closer to an agreement, where and when the first deal gets signed is still an open question the white house is still targeting next weekend when the apec summit would have happened. but an official acknowledges that that time line may be in-feasible. the focus is on europe as a possible location for that summit possibly when president trump is in london for the nato summit in early december

reuters has reported that sweden and switzerland are under consideration but two officials tell me those locations are highly unlikely. guys >> kayla, we get these updates, the market tries to understand what actually has advanced in terms of the likelihood. you know, what is your sense at this point and is phase one going to be it >> i think both sides are still negotiating in good faith. i think the reason why the administration is so intent on leaving those $250 billion in goods with tariffs on them is because they know that phase two is going to be incredibly difficult to get china can to commit to. not only because it includes things that are crucial and really like the center points of china's economy going forward, but also because they know that president trump is in a delicate position next year with the

election so phase two might not be impossible, but it would be incredibly difficult so that is why you could see the tariffs stay in place on those $250 billion in goods. although it seems like both sides are really gunning forward on phase one and so we'll see what that means for an announcement in the coming days on where this actually gets signed >> so less than a month away as you indicated. kayla, thank you joining us with more, mike santoli and also scott ren how much is left in terms of up side with the expectation that we get a deal? >> i think the premises of the rally for weeks has been progress on trade. i think any message of deescalation is what the market feeds off of it is not about the details or even about when, but it is about make sure tariffs are on a track

to come down and just releasing the pressure valve on the global economy. i don't think it is the market saying this means great things for u.s. companies it is a way to release global growth a little bit. and you are seeing yields a little bit lift, you see the ten year treasury yield getting back to september highs and so it is a big relaxation trade. because we were afraid of things that had not come to pass. >> what is the extent of the risk to disappointment how much of this is priced in? >> it is getting to a point where the markets are stretching and testing how much good news it will take to keep going high higher 3115 in the zch s&s&p, just a ha percent or something like that, is a 3% advance off the prior record high. none of the record highs since january '18 went past that so this is telling you that the market is wanting to test to see how positive it can take these things same thing for the bond market so i do think if you have any

back sliding, sure, that will be the excuse for this rally which is getting amoun little stretch anyway to back off a bit >> fed looking pretty smart saying that the trade wouldn't go off the rails what does it say that the fed has done better under the hiking phase than it has done under the cutting phase? >> or the a least the stopping of the cutting i think the market said the best case scenario, the three cycle -- >> because a lot of analogs on the three. >> two important ones which were both in the 90s. not a good sample size, but what people will run with for now >> scott, as we approach 3100 on the s&p, give me your overall take on your expectations. >> really we're just above 3030 is the mid point, year end mid point for us, for the s&p 500 of

our target range so we're just above the top end of that. i think stocks are pretty close to fair value. and really for us, i think what is going to -- clearly the market has anticipated some trade positives coming in. i'm not sure the market anticipated let's say a rollback of the september tariffs certainly has anticipated the defender ones not coming on line i think that is probably a good way to think about it. and between now and year end or beginning of thor year, while we may be at fair value now, you have to remember there is a lot of investors, whether pros or retail investor, they are und underinvested here and for us the question is if we get some kind of a reasonable trade dealle, doesn deal, does chasers in who are underinvested. because if you are a professional, you cannot sit here on your hands and watch the market run higher.

now, of course if these trade talks fall apart and even walks away, are year end targets going to be too high but certainly i think that it is proper to lean toward some type of minor trade deal coming through. and in-as i said the magnitude here going into year end is probably going to come down to how much chasing will we see from people who are und underinvested. >> scott, you say hit is hard t bet against the american consumer what are some of the risks >> one of the leading indicators we like to watch is the initial jobless claims 211,000, that is a great number. you've been around long enough to remember that even in the best of times historically, you'd see a 300,000 or 320,000 number these numbers here are really, really low and so i think really for us, the consumer is pulling the wagon forward. the baton hasn't been handed off

to corporations doing a bunch of capex spending so what we're trying to pay attention to is what is going to happen with the consumer we know that the job market is pretty darn good out there, we know we're seeing some wage increases that are modest to good and so as long as we see things as we look ahead to tell us that will continue to happen, you know, we want to stick with this consumer discretionary sector. we've been in it for a long time and it has been the right way to be so we feel pretty good about that but certainly we'd love to see some business capex spending come in here and i think that that would help extend this expansion. >> deutsche has a nice chart out looking at the discrepancy between corporate ceo confidence and consumer confidence. the split is at a record high. so what do we trust, the ceos or the consumers? >> i think you trust the ceos in the sense that it really does

man fest a lot more in terms of business spending as opposed to consumer mood. and there is another chart which is the spread between consume are confidence and consumer sentiment. so these are all saying, yeah, still probably late cycle, but jobless claims are saying we're not seeing the turn upward in the insurance claims so that doesn't say that you are at the end of a cycle. so i think this tension that could be here a long time. so the ceo thing, i think trad is so front and center and politics will be front and center for ceos for a while, i think through the election so they are human as well. they are just picking up what the mood is. it is not just about pure economic fundamentals. >> the theory is still running that companies are trying not to lay off because it is expensive and rehiring is expensive, but in the meantime, they are cutting hours, unit labor costs aside, getting a little more

passive on wage growth i just wonder whether you think they are trying to just hold their cards close to the vest? >> i think they are. they want to hold them close to the vest look at earnings season here nobody expected anything really good to come out of earnings season overall and the numbers, you know, haven't been good. but what you really can't count on, and this has been the case for at least a few quarters if not longer, you can't really count on the forward guidance because there is no ceo that is going to go out on a limb even if they think times will be pretty good and say, you know, we're going to knock the cover off the ball because they want to be conservative 77% or so of the companies that have reported have beat guidance and in this kind of environment with all this uncertainty, you know, there is no ceo that will go out there and try to make a lot of promises without knowing -- or having a better feel about what will go on down the road >> scott, mike, thanks to you

both when we can back, bill gates now responding to elizabeth warren's proposal to meet over the wealth tax we'll get you details on that. later on, marco rubio's thoughts on china and t tdearhera w robinhood believes now is the time to do money. without the commission fees and account minimums. so, you can start investing wherever you are - even on the bus. download now and get your first stock on us. robinhood.

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jon fortt spoke down with their ceo last night and is joining us with more on the quarter and that conversation. >> $92 a share last time we saw $92 a share has been a really long time. and after the last quarter, there were some concerns particularly about the way that some of qualcomm's customers had slowed down the current generation and their purchases and plans ahead of 5g. here is what steve said about that >> what you are seeing in the handset market, you are he seeing china handset oems taking a pause before 5g and they have a tremendous amount of activity in designing 5g devices. and we talked about this in our last earnings call you still see it in this call. of course we said we expect to see it through the entsd of tene calendar year and then an inflection point in the first

quarter of 2020. >> the licensing business for qualcomm particularly strong it helps to have apple paying again given the quarter that apple had as well. south korea as we're looking forward to 5g, a lot of people are seeing that as a bellwether because they have a very strong wireless market. it looks like they are ramping 5g faster than they did 4 g. qualcomm is also leaning into this trend in china toward really advancing not just 5g at the high end of phones, but pushing for 5g to be in phones in 2020 as cheap as the equivalent of 300 bucks. so they are pushing for a lot of 5g phones. the question outstanding, will people really buy those phones, will they demand them. we don't know yet. >> and will they demand them in 2020, how soon will that incentivize people to buy more phones >> what we don't see yet is the

software applications that might drive demand we might start to see that -- i mean, they won't come out and say what sorts of features will be in the next iphone, but everybody sort of expects that it will be 5g. will they have gaming type features that would take advantage of that faster kind of connection to entice consumers to upgrade to a phone with that kind of technology i think it is one thing if handset marks are makers are mag phones, that is great, but is there incentive to upgrade at a rate that will translate into revenue. >> and we've talked to analysts who think that the latency improvements are not consumer centric. >> some people have said that. and granted, i don't -- i try not to believe too much in technology, right? because there are marketers out there selling the stuff. i've seen it at mobile world congress

there are some compelling advantages in speed that 5g does offer. yet maybe compared to what you've got today, if you think your phone is fast enough, great. but good y if you want to download a movie and you don't want to have to do it on your home network -- those of us with kids, we know the problems >> and the long term opportunity here being more about the enterprise and connected devices on a factory floor or connecting a surgeon in one place with a device in another that is doing the surgery robotically. between he talk at all about that >> yeah, absolutely. those are phases of 5g we're talking 2021, 2022 before you start to see the kinds of factory floor customization possibilities out of 5g. because not only do you have to

have certain standards still put into place, but then the design process for that factory equipment is a bit longer lead time the nearer term opportunity is really about phones. that is where a lot of the volume might be. and you know, i think we could be underestimating or at least rod hall might be underestimating what 5g could do but i'm not sure yet what the applications might be to drive na consu that consumer interest i remember people saying who needs faster than pentium or dsl. people really like speed and if you give them a compelling reasoning to have i, you could really -- so first phones, fixed wireless broadband, longer term the enterprise it is potentially a lot of different layers the question for me, is qualcomm

really going to get a big boost out of that. we'll see. >> fomo factor >> thanks, jon.come back, coca-s launching into the seltzer wars. we'll have details

we had record highs at the moment and we've added a couple more. qqq and three major indices at records. and coca-cola announcing a calorie-free caffeinated seltzer water that will launch in early 2020, it is their latest investment in the fast growing water category which did see sales surpass all other beverages last year. joining us is their north

american president, shane grant. this is a big deal >> it is a big deal for us as you say, biggest launch of a new brand for us in over a decade it is simply put a flavored sparkling water. it will be a vibrant brand, a brand that is really unique combination of accessible flavors and we'll launch it with real scale for us, really part of this total beverage strategy mission that we're on to expand the company beyond our core sparkling business which we see real growth in and continue to see growth in. we see really enormous potential. and water really is the core of that if you look at what is happening in water today, it is generating almost as much retail dollar growth as all other segments combined so we see enormous potential we pushed on it with real speed

and we're ready to launch it >> how long ago did this get started? >> start to finish in seven months we're not new to this category we know water intimately but we saw an opportunity here and we wanted to move on it with a very differentiated proposition. >> does it feel like a crowded space at this point? obviously fast growing, but there are a lot of brands in this category. how do you stand out >> it is one of the most dynamic segments fast growth, it has been growing consistently so it is a dynamic space which is part of attraction to it. for us, we are not new to it, we've been looking for a differentiated space and ament menhha with the flavo combination and expanded into moreoff indications to line up the different options for maybe

among the renewal, a moment of up lift, a moment of energizing. included in that is two of the products will have caffeine. we saw that as a natural inclusion with flavors like black cherry coffee, citrus green tea. and consumers were excited about the brand. >> pepsi acquired soda stream last year. and this is the route you chose to take as opposed to more of a home machine that would make sparkling water at home? >> we see the sparkling water category in all its forms as very dynamic and exciting. we're very disciplined at looking where the segment opportunities are, we are pressing aggressively with premium water, smart water, source water and so this is the next iteration of it. and for us, it was how do we create something different, something special, something that consumers were really excited about. >> and this is a north america launch only?

what is the international potential. >> it will start in north ameri america. we will launch march 2 with real scale. and we'll lift and shift successful propositions with much more speed and agility. so we'll start in the u.s., but we truly think this is a proposition with global potential. >> you have to know a cannabis question is coming seems like we can't have a cbg discussion without asking. feels like this could fit, am i crazy? >> we're not going into the segment, we're not going into cbd. that remains the position. >> given how quickly you were annu able to launch this, can we expect that it won't be another decade before we see a similar launch >> last major launch was gold peak and that is a billion dollar brand today we're doing a lot more innovation in the company. you see that with the coke energy and the flavors so the energy cycle time at the

company has sped up dramatically >> how and why has that happened >> i think it is part of the culture transformation of the company. we want to be more consumer centric and so we gear in the culture do that. everyone from our brand teams to our research and development teams to the way we enter aintet with our customers and this was built in partnership with our major customers and they have been on the journey with us to help shape it >> what do you think it says about the traditional carbonated soda business and what further innovation can there be sides packaging changes that allow you to get some price? >> there is obviously growth in our sparkling soft drink business you saw that in the most recent quarter. we will continue to innovate with packaging, with flavors, with more extensions on that i think that you have seen that with coke energy so we believe strongly in the

future growth potential of our core soft drink business but what we're also doing is seeing massive growth potential in categorieslike he water, hard water, sports, tea, coffee and so we'll be much more assertive in that space. >> so given the sped up cycle that you have been able to create, do you think we will he see more innovation as opposed to acquisitions in the future? >> i think we're bringing a culture of consumer centricity and innovation into the company like never before. and so you should sxwenkt uld e further ramped up innovation both in theist a u.s. and globay >> and fewer acquisitions? >> we've announced a few acquisitions we have a history of big acquisitio acquisitions so we never rule that out, but we are focused on extending a new brand, creating a new brand and extending in other categories of our core equities.

>> we'll look for it in march. really appreciate you coming in. >> thank you let's send it over to sue herera with a news update. >> good morning. here is with what is happening secretary of state mike pompeo is in germany for a two day visit to participate in events commemorating the 30th anniversary of the fall of the berlin wall. he visited with military personnel. he is also scheduled to visit a u.s. army base where he served as a tank commander in the 1980s. lufthansa is canceling about 13 flig 1300 flights today and tomorrow because of a planned strike. it is about pay and the union's legal status some 180,000 passengers will be affected iraqi security forces attacked as glon straight tors attempted to remove barriers near bridges that lead to the west bank of the tigris river

no word on casualties. and here at home, the capital christmas tree is on its way to washington, d.c. this morning. the crews cut down the 60-foot blue spruce on wednesday it will take two weeks to reach washington, d.c. so we'll keep you posted on that one. that is the news update this hour leslie, back to you. >> that is a long time for a delivery of a tree >> i know, people line up on the hifrp as highway as it goes by. it is really cool. >> thank you so much when we come back, shares of apple hitting a new record high today, but our next guest says there is more room to run. and later, marco rubio will weigh in on china and making more investments sometimes, the pressures of today's world can make it tough

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tech continuing to lead the

s&p this year. looking at the tech spdr, up nearly 40% year to date, climbing even higher today as the broader market rallies apple the driver there getting a boost after qualcomm's quarterly results which cited strong licensing operations most notably its deal with apple. so joining us now to discuss why he thinks apple still has room to run, our senior analyst and you are focused on the cycles between iphone launches and what that means in terms of apple's future potential performance. so why k. where are we within the signing kell acycle and whys that give apple room to run? >> i think the interesting thing is that most people look performance year to date and say that the stock has run so much, there is material outperformance behind it. so really not much room to run we think the discussion should

be focused on how did apple perform since the last iphone launch investors are focused on the iphone cycles. so we looked historically how has apple performed relative to the s&p and in absolute terms from one cycle to the next and what we see is that this last cycle was actually a very poor cycle heading into the ichl iphone 11 launch, you got an 8% relative decline to the s&p since the launch of the last iphone so in past cycles where that underperformance, you actually followed by material outperformance which is what we think is the case heading into the 5g launch. >> of course past performance is not always indicative of future performance. what makes you think especially given some of the contours of the upgrade cycles being longer with regard to the iphones that this time will be similar to what we've seen historically and are you concerned that there

are certain changes within the iphone environment that could make things a little different this time? >> that is a good question i think when you look at past cycles, the real outperformance that you have actually gotten was when the iphone 5 was launched which was the change in the carriers lteadoption it was not really in the form factor change. you got some really nice incremental performance both with the iphone 6 launch and the iphone x launch but you really got the best outperformance for lte. we think a use case like 5g which can significantly improve what you can do with the phone will be much more critical so we actually think that heading -- looking forward into 5g or a multiyear cycle, apple has the opportunity to start to dominate the discussion which it has not really for the last few cycles which have all been sort of boring cycles

when you think about the replacement cycle, we actually think that apple's replacement cycle has become somewhat stable at the moment partly because they have introduced the trade-in program which has been very effective you heard tim cook talk about how trade-ins have up and that is shrinking the replacement cycle marginally so you are actually at a point where you are starting to see the cycle stabilize. and when you go into the launch of a materially new technology, that drives tail quind fwind foe stock. >> qualcomm expects 200 million 5g smartphones to be sold next year how much do you think apple will be a participant in that >> apple does have a 5g iphone yet, so when they launch it in september of 2020, they have

some almost of benefit starting then fiscal '21 will be a material year and so will fiscal '22. 5g will not all be launched assign simultaneously simultaneously there is a skew of china first and u.s. later so as this rolls out, what we see is that apple will launch a higher asp, a premium product that will launch in certain regions at certain times it will be a staggered launch because not even will want to pay up when the network is not ready. so we see this as a prolonged cycle, but we think that apple in next year's 200 million is going to be maybe 5% of that number it won't be a very huge number to start off, but we think thatoff time as different geographies roll out and they will have a wider could you i go on, that is where we see the up side potential come into play.

>> all right thank you for joining us bill gates is responding to elizabeth warren's proposal to talk about the wealth tax. robert frank is joining us with the latest >> good morning. and the tax guy now these days bill gates saying he supports higher taxes for the wealthy, but not through a wealth tax >> i've paid over$10 billion i taxes. i've paid more than anyone in taxes. but i -- you know, i'm glad to have -- if i had to pay $20 billion, it is fine. but you know, when you say i should pay $100 billion, then i'm starting todo a little mat about what i have liftoff. sorry. just kidding >> he also offered to meet with warren warren tweeting back, i'm always happen to meet with people even if we have different views bill, if we get the chance, i'd love to explain exactly how much you'd pay under my wealth tax, i

promise it is not $100 billion so how much would bill gates pay? the wealth tax for elizabeth warren right now is 6% is the top rate on information chunl f1 billion. so gates would pay $6.5 billion this year. but warren is also planning a tax on unrealized capital gains as part of her health care plan and gates' wealth up this year to $19 billion on microsoft stock gains, so he would pay an additional $7 billion on top of the wealth tax so bill gates' total tax bill under warren would be $13 billion. gates just a moment ago tweeting back it warren, you and other candidates are having a really interesting conversation on how to solve some of the world's toughest problems. i greatly respect your vision. while we may disagree about some of the ways to get there, we agree we need a lot of smart

people committed to finding path forward. so the latest back and forth on what will continue to be a lot of back and forth between warren and the wealthy. >> yeah, and very interesting. would love to be a part of that conversation were it ever to take place so he is $109 billion outside the gates foundation >> correct >> doesn't she also have proposals that would in some way tax foundations as well? >> yeah. so as part of the wealth tax, there are some elements that would include foundational wealth so that is a good point. i didn't include that in my calculation. that would probably add another $2 billion to $3 billion bringing him up to $15 billion for this year. so that is a good point. i should have added that in there as well. >> i'm here for you, robert. >> thank you >> the wealth by, tguy, tax guy is there political appetite to

even change the tax bill i know this has been a big part of her campaign so far we just had tax reform a few years ago. is this even a real selling point in terms of the election >> there is another proposal out today which we'll hear more from el elon and the issue with elizabeth warren is what many say, well, this is the one part of her agenda, taxes, that congress has to approve so more rational minds will step this back and she will never be able to get this through congress because people in the house and certainly in the senate wouldn't allow it but you are seeing among democrats now a clear race to somehow, even joe biden entering this race, to tax the wealthy more and increase revenue from that group so they are all doing it but in different ways and clearly on a different scale. >> all right robert, we'll talk more and more about it in the year ahead

when we come back, senator marco rubio's thoughts on the china trade war and as we go to break, we'll watch roku shares, don't miss an exclusive with the ceo in the next hour ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪

stocks holding at all time highs, but could investors be too positive is this one top stragitest makes the case. more squawk on the street coming up it was sophie's big day.

by the way, she's the next mozart. as usual we were behind schedule. but sophie's enthusiasm cannot be dampened. not even by a run-away donut. we powered through it in our toyota prius. because a star's got to shine, no matter what. it's unbelievable what you can do in the prius. toyota let's go places. wanted to take a look at a name that we have not yet mentioned this morning until now. 25%, a quarter of its market value being lost at expedia after disappointing third quarter results. it had a 5% miss on its ebitda and beyond that management

taking a cautious approach of the year so it has lowered ebitda fiscal growth guidance, cut it in half. what is going on well, it is google google changes the way the algorithm works, really some are saying on twitter that organic search is dead just not going to it on your mobile phone and typing something in and getting a result and for that reason, expedia has had to rely a lot more on paid advertising to reach consumers. the search algorithms and getting there, the ceo said that challenges can be felt across multiple product categories and moving to paid links presents a sizable hid wieadwind for the company. again, search optimization just not being enough there it goes back to the power google

has on that platform changes the way people go about searching or finding things. forced dramatic changes in companies. >> and there is an automatic yoit co outcome, down 25%. and meantime stocks are hitting all-time highs as china says it has agreed with the u.s. to roll back tariffs but our next guest sounds the china alarm. joining us, senator marco rubio who is leading a buy effort to ban federal pension funds from investing in china senator, welcome back. >> thank you >> first on the headlines, they say we have agreed to removal of tariffs in phases. do we believe them >> always with china it is a question of compliance we've seen them come to the edge of an agreement and then try to redefine it. so obviously they don't have the most transparent process.

but i think china will continue to be an important powerful country. but we have to be balanced that is my concern if there is not geopolitical economic symmetry and balance between two great powers, it leads to great conflict. we've seen that on the economic front and we'll see it on the military front one day so my goal is to get towards more balance right now we're heading to more out of balance and part of that is the investment decisions with the federal retirement funds >> you call this common good capitalizati capitalization where do the funds fit into that >> i think that they are interrelated because i believe in free enterprise and the free market i think socialism is a disaster. it hasn't worked anywhere that it has been tried. and many ideas by senator warren and others like well wealth

taxes have been abandoned. but my argument is that to the extent that we place conditions on the market, they should be conditions that serve the common good for example protect our national interests. there might be interests where a pure market return may not justify it, but the u.s. needs to retain that capability. or decisions about where to invest in the case of federal employee, imagine the leverage the chinese have if a significant amountof the retirement of service men and women in uniform and federal employees is invested in companies listed on chinese exchanges that are not transparent, that do not undergo the same accounting scrutiny that others do and many of these companies are active agents of the chinese government all sorts of activities including stealing intellectual property and the like. >> senator rubio, with that logic, we have aramco's ipo

coming down the pike next month. would you extend that same kind of concern to investing in saudi arabia and companies in the future >> potentially if it would harm u.s. interests. but i think that it is difficult to compare china to anyone not because human rights violations aren't great no matter what, but saudi arabia does not seek to second world war, replaced it with their own values at the expense of ones that others led. saudi arabia is not seeking to dominate all key industries. what we face in china, first near peer competitor since end of the cold war, saudi arabia is a country we have an alliance with militarily, geo politically that i have great concerns about human rights, freedoms and other activities but is not at the same level from a geopolitical and pragmatic perspective. >> senator, when i hear your

proposals and many others and many that believe china has been unfair in so many trade practices, are we headed to a world in which there will be two significant economic powers with their own orbits, and all of the inefficient sees has come as a result of that, the added costs as a result of that as well. potentially be borne by americans and others around the world? >> yeah. ultimately you prefer a world that's headed in the direction everybody thought it would head for a long time, once china became rich and prosperous but that isn't really the choice before us. the choice is whether we want a world in which there are two different orders and orbits, one that reflects the values of freedom, the values of free trade and fair trade, or one that's dominated by china. what they want is only one global order, one global orbit and all to their benefit and looks like them. and that is not an appropriate outcome and certainly isn't good

for this country or the world in my view. >> it does seem, though, every time we have with you, farm subsidies come up, now it is flow of funds. people argue their own standing as champions of free markets gets eroded with each move what do you think of that? >> you can make that with regard to other countries up to me, we wouldn't be involved in multiple trade conflicts at the same time for example, i have complaints about practices in europe and other countries. like i said about saudi arabia, these are not countries that are seeking to displace us, and are allies in other matters. when it comes to china, we don't have fair trade or free trade with china their companies are protected in their domestic market. their companies are allowed to dowhatever they want here. so they benefit from free trade in one direction but don't allow it in the other. how can that continue at a basic level, we should reach a point

to say china is now a rich and powerful country, soon to be largest economy in the world why are they able to do things here that our companies, our firms are not able to do there >> senator, i am curious how your thinking has evolved on this we had any number of people from the right and left saying tpp would have been an effective way to marginalize the chinese, make the playing field more fair. at one point you seemed to support tpp. curious where you stand now on the lines of that proposed partnership which is no longer going to happen. >> yeah. look, i thought it would have been a great counter to what china is trying to do in the asia pacific region and world at large. in 2016, both candidates, democratic candidate and republican candidate were against it tpp was dead either way, since both people nominated were against it, and that's who the people voted for do i believe at some point it is

something we should revisit? frankly, the administration is in my view open to it, rather than one big deal, trying to do bilateral deals with countries individually i think it is harder to do it that way, but ultimately offering an alternative to what china is doing is certainly better but right now that's not in the cards given the trump view toward it and secretary clinton's view when she was the candidate as well. >> senator, we appreciate you spending time with viewers appreciate it very much. talk to you soon >> thank you as we go to break, a quick check of the markets session highs are close. dow up 250 ♪

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