"squawk box" begins right now. >> good morning. welcome to "squawk box" on cnbc. we are live from the marketsite on times square. you'll see some red arrows now we haven't seen the dow down a few days in a row. futures are down yesterday, the dow was unchanged. the s&p down by about 10.5 you take a look at treasury yields you'll see that right now, it looks like the 10-year is yielding 1.877%.

we'll hear from jay powell later today. >> day one of the disney plus era is now in the books. it didn't come without some headaches for customers. disney is blaming high demand for technical glitches some people say they got a message asking them to exit the app and try again. others with service in the apple app store. some say, the consumer demand has exceeded our highest expectations investors appear to well withcoe that this might surprise you. you would have thought disney, disney, disney what was the number one trending

one? >> the simpsons. the simpsons >> the same story if you hear from netflix friends is the biggest one they have >> you could see the list. at the top there they are not going to be able to program that to him just yet >> i wonder how much is what you'd be interested in >> rich was on and he had watched mandalorian. he watched and he was there and waiting. >> the last time on a sunday night, i'm always looking for things to watch. new episodes of the simpsons i don't watch them do i really need disney to watch

simpson reruns >> you know what rich told me? i'm old. >> there are entire generations rewatching friends and the simpsons and all of these shows. >> have you chosen to watch the simpsons at any point in the last five years? >> no, i have not. >> maybe my kids i don't know my kids have been watching the entire things to full house. >> do you want your kids to turn into bart? >> no. maybe that won't be on the list. >> i've already turned into homer. >> doughnuts mmm. purple when he sticks his thumb in the filled doughnut >> we know this gentleman, he's very tan

chief executive richard clep car in talks to sign a deal with the new apple tv plus. his new company would create original content for apple tv plus >> you got to make some calls. find out this stuff. call him right now >> i know you. >> i don't know if he wakes up this early >> tesla announcing the next giga factory will be built in berlin it has other facilities in nevada, buffalo, new york and shanghai >> stocks to talk about, smiledirect club with a loss

since going public in september. costs rose sees more losses and shares are down more than 50% since the ipo. >> white house economic announcer making comments on closing bell bringing up the prospect of further tax cuts again. >> the president has asked me to pursue something called tax cuts 2.0. my pleasure. i think our tax code could always use plenty of progrowth reforms. i don't want to be specific on anything it is way too soon i'm consulting with the leading tax people in the senate and the house. we are very preliminary stages right now. >> kudlow said the proposal wouldn't be completed for many months and would be released as a strategic document for the president's reelection campaign. >> the president brought this up

in front of the economic club in new york saying the proposal is out there. he was very vague about it i'm sure they are watching the campaigning taking place and trying to come up with their own ideas. >> also made the point if you are a business person, there is no other option. >> he said it more crudely than that he said they are all crazy so you have no choiz but to vote for me you have no other choice >> there are countries like that where literally. >> there is no choice. >> and they still do the vote. president xi president putin. >> got 97% or something. >> you didn't go to the shindig? >> did you go? >> she was on the desk >> i'm a board member. >> did you have a good seat? >> i did

i was three steps to the side. >> did he say hi, becky. yes. we talked. >> we did. about you. >> yeah? >> no. >> my ears were ringing. >> when we come back, a busy morning in washington, d.c we'll get to speed on the agenda there. the fed, vaping, tech under fire and the first public impeachment hearing. later, a cnbc exclusive interview with investor paul tud tudor jones. we'll rhtacbeig bk.

>> we have launched an economic boom the likes of which we have never seen before. i did this despite a number of rate increases and quantitative tightening eight increases in total in my opinion, far too fast an increase and far too slow a decrease we are competing with countries that have a negative interest

rate the federal reserve doesn't let us play at that game the s&p 500 is up over 45%, the dow jones is up over 50%, the nasdaq is up 60% if we had a federal reserve that worked with us, you could have added another 25% to each of those numbers. i guarantee that >> that was president trump speaking yesterday jay powell will get his chance to respond he'll testify before congress at 11:00 a.m. eastern time. the house subcommittee will hold a hearing on dominant tech platforms. the chairman of the federal trade commission the house begins its public impeachment hearings today investigating whether trump

jeopardized the 2016 election. talking about the impact on wall street joining us our guests ed keyon now we are not supposed to recognize. >> this is movember. >> do you think we don't know. >> you did that in 12 days w. >> we know you are the guy that doesn't like the stock market. we know it is you. you are not fooling anyone. >> what do you think about the president's renewe

sure he would want to. >> i'm not sure. i think basically the chairman is happy with the rates right now. they are right where we are. i think the policy now is about right. they are only going to make a move when the data gets better or deteriorates. >> which means what for the markets? >> if they do nothing the rest of the year, they would bake that in. at this point, that would be a positive surprise. you don't think that would be interpreted as a sign that the fed would weaken >> we've seen a turn especially

outside of the united states u.s. data continues to be strong fourth quarter estimates are all over the place it will probably be one and a half a lot of the data showing a little recovery. >> upward from stocks from here. ed is right if the bottom is in. i think the stocks have already done well. they are pretty fairly valued. if they rally into here end as often happens this time of year, it may be taking away from next year's returns you can call me an optimist as opposed to a mepessimist now. >> some of our names have done really well. at least neutral to slightly positive on stocks it is bond that are very

expensive but they are not going to change anytime soon >> you thinks it more likely the value stocks will perform now? >> a very widespread that spread is near record high and actually peeked in august. still, the value is where the opportunity set. >> where are you looking in particular in terms of value >> we look everywhere. we look within each sector we are not just looking for cheap stocks, period you can find that in every sector they are concentrating more on sectors like financials. >> are there names you can talk about? >> we can't for compliance reasons. i'm sorry. >> michael, what about you where would you be deploying

some of that cash? >> in contrast, i think some of that stuff that has worked will continue to work there is no reason they shouldn't. there are a few names here and there but we like a lot of individual names communication services a lot of good companies in there. we look at industrials and it looks like they've had a very good run health care is cheap frankly with the presidential election coming, i don't see that doing very well energy is stalled. we are sticking with what is doing well this year >> what about the spread that has really gotten exaggerated at this point. >> i don't really define groups of stocks as growth or value look back to 2016, companies

like facebook, amazon and alphabet were beaten up and cheap. i don't know that you callm value stocks today we are looking at individual companies that are priced attractively i don't get too caught up in those numbers. >> the major averages haven't seen two days, back to back declines in over a month does that make you think you don't want to fight or does that make you get a little nervous. >> stocks will continue to work their way higher until the next recessi recession. the united states has crushed other markets.

and that change we are pretty much stable i think there may be better opportunities to rotate outside of the united states >> thank you for being with us today. coming up, listen up college students or parents, we have new survey data on the most regretted college majors you got to hear this one that's next right after this break.

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♪ >> i'm ready the old music do you regret your college major. >> zip recruiter took a survey of more than 5,000 college graduates and created a list of the top five most regretted

college majors number one, english and foreign lang languages biological and physical sciences what biological. i'm a molecular scientists education, social sciences and law and communications the least regretted computer science and mathmatics >> i would think biological. >> i would think engineering but maybes that sort of the math >> i'm helping my nine-year-old

kids with their math and it is not the easiest. >> because it is the new image do you know how you divide now it is completely different >> i'm not going to extrapolate to a lot of people with your view point math is not the strong point free college, free tuition math is not a strong point >> what about those on the right. spending more than half. >> new math for everybody. we ran a big session in the "times." >> i never saw it. >> i thought you were back to reading in the new york times.

just a quick mention >> it was a column you did >> i did see this one. this was a collection of speakers >> i thought you were depressurizing >> by writing a column we had this piece together >> is that why you were out monday and tuesday >> i was out for many reasons. >> we have to talk off camera. >> secret, undisclosed locations as you would say in addition to all of those conversations which we aired last week, there were these task

forces about china and trade with steve bannon and eric >> you are trying to drag me in by mentioning bannon >> you see real people on all sides debating them. it is really interesting to get 12 people around the trouble and you get to see them talking about that that's my preview of the day that was almost a promo for that i'm sorry i missed it. >> i'll get you a copy >> can you get me a hard cover that you sign to my friend and

colleague. >>. >> your secret undisclosed locations are much cooler than mine i just say that because i'm embarrassed. >> coming up, the high-profile divorce between an apparel maker. we head to break, a look at yesterday's s&p 500 winners and losers

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>> dow futures down by over 100 points indicated by 11. both the nasdaq and s&p were up by yesterday dow was unchanged. the ceo of the real real is admitting that the company literally can't live up to its claim that its merchandize is real she went on mad money in the wake of an investigation that sent the stock tumbling. saying that staff copywriters were authenticating. >> do you make your life hard by giving statements when

everything is real when we all know no one is perfect do you set yourself up to some degree for a level of criticism that may be justified. it is impossible to be perfect >> i agree it is impossible but we strive to be perfect every day. the team's intentions and actions and our consumers tell us we are the safest place to shop on the internet thats what we do every day >> went on to say copyrighters are trained to look at lower risk products. about 400 out of 49,000 were not authent gated. >> nike is scrapping a deal with amazon to sell through the e

commerce giant this he will no longer offer sneakers and apparent but will use amazon services to power the website. it decided to focus on its direct business. people thought it might change how other brands come on to the platform >> nike shares were up when they did the whole move >> right, the first time interesting curious about the thought process. taking over the whole. he lived at ebay, he ran it. >> coming up, when you have ribs for thanksgiving >> no. >> i'd have ribs about any other

night. but not thanksgiving >> how about this morning? >> a fatal pig disease in china crushed their supplies rib giant joining us to talk about the rising cost for the industry straight ahead >> those are real ribs, not fake ribs >> and later, e g chthbite crack down you are watching "squawk box" on cnbc ♪ not much, how about you? >>are you answering my text in person? i am...yeah. >>lol. come on in. this is tech that helps you be there.

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>> the price of pork is moving higher prices are up 23% year to date as exporters struggle to meet chinese demand more than the markets. we should have bought hogs dom has more >> i wish i had some live hogs you mention china. that has to be one of the big keys behind the pork trade chinese demand is a big driver imbalances that have led to surges in prices but nothing like wheef seen before you mentioned that african swine

flu. supply has dwindled and prices have surged to making some chinese making questionable decisions as to whether or not they want to consume that. looking at pork in general, a massive amount of pork demanded by the world 6.9 billion pounds in terms of export that is 12% up jeer over year. exports to china almost doubling that demand also a huge amount of the story you look at one added piece to round things out it does kind of affect their profit margins and prices. some companies have been able to take advantage of the prices pilgrim'spride known for

chicken, doubling. tyson up 66% sanderson farms up 63% pork, a huge deal when it comes to rising prizes i have had a mcrib it is mcrib season now i remember doing a story about how they tie in prices >> you missed our conversation yesterday. >> swine slurry mostly crushed up snout poured into a mold that comes out looking like something that resembles >> people are eating breakfast >> fur going to eat pork, it

should be the good part. even considering eating it at all. >> have you ever had a mcrib before >> i actually enjoy them >> and mcnuggets which is from chicken flurry >> are you looking for the poppies spicy sandwich too >> i'm always looking for good fast food. >> are you fighting people is. >> no. i wouldn't be. >> you should come in here we have real ribs. >> i'm going to try to work my way down there i like cold mcribs >> okay. thanks, dom. joining us now, evan anders, vice president of the montgomery inn. claims to have the best ribs i remember that really cool

house in palm springs that bob hope you can see the house there. up on the hill >> the big party for the bob hope desert classic. >> that's your calling card? is. >> that's one of them. >> have you seen any effect? how does that affect what a processer charges you? not as much as we've seen the loins, the bellies and different pieces from the log. probably about 5 million there that you could sell. there is a little bit of a game

going on as well recently hog prices fell they are worried more hogs could die so they are rushing them now which causes prices to fall. >> something like that taking advantage of the shortage farmers with another 5 million head out there, you could be processing more keep the supply low there for prices go up >> can you point to anything specific in the trade talk that has affected your business >> no. nothing yet. we are hoping usmca is a big part of the trade talk to open mexico and canada. >> you cannot sell

>> i cannot sell cooked processed pork out of u.s. to mexico >> you can send the mix. >> we can send the barbecue sauce. >> ice cream >> has hard to get because customs will hold that up. they've already the dairy to go back across into canada. we are hoping they'll allow meets to tagalong as well. >> how is the traffic? >> pretty good >> we are positive our restaurant traffic, even though there are a number of restaurant seats unfold. our numbers are doing very well. we are happy things are moving along. >> people still come in and

watch what you refer to as a football team? >> i was checking the alendar, it is 94 days until pitchers and catchers report. can we move on to that squoo the ravens are good, the quarterback is good. i was told two things. don't talk politics or bangles >> who told you those things >> i got the elevator speech >> here? >> here. >> okay. i didn't know we have elevator speeches >> from my wife. >> i thought wax wmax was speakg >> enjoy >> we are pre-7:00

6:45 >> get on it go to cinci favorites.com. sky line >> greaters, montgomery. they are shipping cakes. >> you figure this would be the key to the city for me who gets one >> bill henna. >> his sister is known as the greatest bus girl. >> when we return, hong kong protests escalating. we'll talk to former prime minister talking about the implications for the trade war >> announcer: subscribe to our podcast. look for us on apple podcast or

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>> welcome back to "squawk box." an update to the chaos in hong kong the city closing key transportation hubs, schools and businesses eunice yoon joins us with more >> reporter: businesses in hong kong both foreign and local are in a tough spot. not only welcome back to "squawk box. chaos taking place on the ground in hong kong protesters ramp uchb nis yoon joins us they're in aon how friendly that business is to the demonstrators. they have been created by the protesters circulating around on social media, facebook and an

app called what's gap. color ratings, yellow is for protester friendly businesses. blue or black is pro policend this is supposed to be a way to guard against economic fallout some are being tainted as pro government one of them is mcdonald's. a store cooperated with police so they have a pro government rating a japanese noodle chain, protesters believe that the company ended up firing a pr agency that created an ad which appeared to poke fun at the police the company though says that it did not fire anyone. finally, there's starbucks starbucks does not have a rating but several of its stores have been vandalized.

they don't have a problem with starbucks itself but they have a major problem with one of the local suppliers. that supplier is owned by a family whose daughter has been very vocal with her criticism about the protesters guys >> eunice yoon in beijing, thank you very much. joining us to continue this conversation about hong kong and the u.s.-china trade war taking place, kevin rudd, former australian prime minister. good morning i want to get to the trade war itself, but i want to understand, do you think the united states has any role to play in what's happening in hong kong still >> absolutely not. >> absolutely not? >> no, no. this is spontaneous combustion in hong kong it comes out of, as we know, the attempt by the hong kong government to bring in a new extradition law. >> right. >> that just was the straw that broke the camel's back now it's a political management system it's not being politically managed very well. >> how long does this play out and to the extent it has an

impact, does it have any impact on sort of the larger geopolitical impact. >> the one impact i see in china, i was there two weeks ago, is there is beginning to be some bleed through into business confidence in china itself, that is, observing what's happening in hong kong just the beginnings of it. >> explain that. what do you mean >> when people are looking at, for example, the impact on the financial services industry, they can't operate effectively because of shutdown of large slabs of the city, it has a spillover in the large sector confidence in the country, the wider country's future let's not overstate it i also think there is still negligible prospect that china will send in troops or paramilitaries in order to control this. >> none of this gives the united states more leverage in the conversation i mean, to the degree you think the chinese economy is going to slow, you would think it would give the u.s. more leverage? >> to the extent china's economy

slows, which there are a whole bunch of other factors on that, yes. this is seen in an entirely different lens this is a local national security lens. over here you have the trade negotiations it's a wrong call from washington to think this actually strengthens the american negotiating bank. >> let's talk about the skinny bundle, the skinny deal that may or may not happen. >> yes. >> a, when do you think it happens? when it does happen, if it happens, i assume something will happen because it almost has to, there's still this larger overhang of a decoupling which you worry about in a much broader way, which is to say once the deal happens do you think the quote, unquote, decoupling happens unabated or things come back a little better >> two points. will there be a deal i still think on balance there will because the overwhelming economic benefits point in that direction. xi jinping is in brazil. he'll be there until friday.

we don't have any venue for the signing of an agreement and that's getting a little difficult. >> the venue seems like it's not the biggest problem. >> why is the venue a problem? because they don't have a substantive deal why don't they have a substantive deal the chinese think they have a stronger deal for what's about to unfold in washington. >> the chinese are going to wait -- >> do you know that or is that your opinion >> that's my opinion. >> okay. >> but i've got to say i'm now reading what's called an official commentary on mainland chinese newspapers one line is that china is now insisting that there be some reduction in tariffs associated with phase one deal, the skinny deal, and before that was not a pre-condition. so i just want to say, i still think on balance we're going to get there, but there are new degrees of difficulty. >> we'll get a deal of some sort but you don't think the second and third part of the deal that's supposed to come later

comes till after the election at best do they say, we did this, now we're going to wait? >> phase one of the deal, the skinny deal, has this effect, which is a stabilized financial markets, i think both sides will regard this as a reasonable win. >> deal getting skinnier though? >> yeah, the deal is getting skinnier. >> then the question is, who has leverage after it? >> good point. the hard bet was putting a trade negotiation. two, i've seen this happen before, you front load the, quote, easier stuff, you backload the harder stuff. guess what, the harder stuff is very hard when you get to it on your decoupling question, there is a big question mark over the extent to which either side wants a fundamental decoupling huawei, 5g, but on capital markets, this is a $5 trillion business between the two countries. you have to unravel that. >> we benefited from our relationships with china although it's been mixed lost a lot of factories, 70,000

factories, our workers, many people say have been hurt. australia, on the other hand, i think it's been -- china's a very important part of the australian economy what would -- would your country have been content to just leave the status quo exactly do they wish that the united states had never even embarked on this based on ip or some of the egregious things that china does in world trade? just let things go normally because it's so important with trade with australia do you think you would rather turn a blind eye to all of these things and let things go along as is? >> as i've said on your program before, i hope the president of the united states is right to have done this the australian view is both sides of politics, left and right, because we're free traders is that china needs to be brought to an end landing the deal is the hard part. when we come back, markets are watching two big events on capitol hill public impeachment hearings

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class cut. the president has asked me to pursue something called taxes 2.0. mark warner has a message for facebook and he'll share it with us as the second hour of "squawk box" begins right now. good morning welcome back to "squawk box" right here on cnbc i'm andrew ross sorkin along with joe kernen and becky quick. take a look at u.s. equity futures. they're under pressure amid trade jitters and jay powell today. you're looking at the dow off close to 100 points. s&p 500 off 10 points. the nasdaq looking to open down 30 points. the big question is will

chairman powell respond to the latest attack on the central bank here's what the president said yesterday. >> we are actively competing with nations who openly cut interest rates so that now many are actually getting paid when they pay off their loan known as negative interest. whoever heard of such a thing. give me some of that give me some of that money i want some of that money. our federal reserve doesn't let us do it i don't say -- thank you thank you. the smart people are clapping. >> steve liesman joins us right now. with a look at the markets can expect i don't know, steve, i would expect -- >> i'm just clapping i want to be one of the smart people, becky. >> okay. >> no, i would expect that jay powell is not going to take the bait. >> no. no you can expect him, becky, in his testimony today and he's appearing before the joint economic committee, he's going to stick to his practice of not responding to the president's

criticisms repeating the economy is, quote, in a good place. let's take a look at what a good place is or where it is. it's 2% trend growth that's out of near where we are. low unemployment record low unemployment. not much inflation going on. he's got those three rate cuts in place and other stimulus in train here powell won't say this but he likely thinks policy is in a good place because he's engineered positive rate cuts with a big market selloff. that's a big issue right now the most important issue for powell is whether lawmakers embrace the views of the president. so far they've not taken on his critical comments of the fed or the idea that monetary policy should be used as a weapon in the trade wars, but the democratic staff of the jec did issue a report ahead of the testimony that says in part, and i quote, the lack of recent signs of inflation suggests that there's room for monetary policy that continues to accommodate increased employment democrats are less explicit calling for further rate cuts

but the statement shows bipartisan support for rates to at least remain on hold and no change in monetary policy's almost certainly the impression powell's going to convey today and becky, and joe, it's interesting to me when i look at the outlook for fed rate cuts in the futures market, nothing at all in december by 3.9% chance of a cut you have to go until july before you get to the 50% probability of any future rate cut this idea of the pause is well built in for a big chunk of next year as well >> steve, we're back in the game with trying to figure out the ten year and we're thinking over 2, over 2 and then maybe -- >> oh, my god, over 2? >> don't you think that's in the cards eventually >> sure. >> you're almost there until yesterday. >> it would be good, wouldn't it where are we now, 187? >> yeah, 194. >> back to tariffs again today >> so that's down because of

that >> yeah. >> i mean, look, i don't think there's a lot of consequence here if you really want to know. i know we want to make a big deal of this, but if we were at 2 or 2 1/4, i wouldn't change my outlook on the economy very much. >> how about 3, how about 3 1/2. >> look, it depends on the reasons. >> yeah. >> if you have a nominal gdp running at 5 plus, a 10 year that runs at 3 is not unusual and would be expected and would be well handled by the economy the question is you get there because there is inflation concerns. >> yeah. >> and/or we can't finance the deficit. >> paulsen thinks a dollar gets weak for a lot of different reasons. inflation, all good though >> yeah, i mean, look, joe, the great thing about the american economy, it's dynamism you'll have some people do well with a weak dollar, some do well with a strong dollar i wouldn't be worried about that either >> all right worried about anything. >> no. we're in a good place, joe if you ever forget where you are, you're in a good place. >> we're in a good set

you have a new set. >> you personally? >> good place. >> good guests >> good show. >> vice chairman of investments at invesco and knudsen, you keep coming back because you've been bullish. >> i've been right. >> i know. you like to tell us that >> yes >> not everyone has been bullish or right >> so our outlook for the end of the year was 3100 and 2% we are as close to that as probably can be practical. the fact of the matter is, everything is falling in place when we talk about jay powell, one of the things he's going to repeat out of his press conference is the fact that while they may not cut rates, the likelihood that they raise rates any time soon, even with the reacceleration in the economy is very small. the statement that they made that we won't even consider raising rates until we see persistent inflation, which means never in real -- in real

terms, and i think that is probably far more significant for the stock market than anything else. and i think that means 2020, at least the first half of 2020 is being set up as a persuasion for equity markets we have a reacceleration in the economy. fed on pause and a trade deal that gets consummated before year end >> okay. no impeachment and no elizabeth warren i mean, i -- either one of those things make me think that you might lighten up a little if either one of those things look likely. >> impeachment for a second. from a market's perspective as opposed to from a political perspective, impeachment is not that relevant an issue because the likelihood of it getting through the senate is pretty small. we as market participants, despite the theater, will probably ignore all the things that are going on. elizabeth warren -- so second half of the year of next year is

probably going to get interesting because that's when we get into the real issue with respect to how things are going to shape up for the next four years. and -- but at least we have first half to go through without -- there's not going to be a whole lot happening in the first half of next year and people should sit back and enjoy that. >> right if you wait long enough we're all dead anyway. in the meantime we might as well stay long? >> oh, absolutely. my year end. >> cheri -- >> is this a melt up story is this a multiple story i want to understand how you're getting to the higher numbers. >> because of the reacceleration it's not a multiple story because rates are probably going somewhat higher. modestly higher because i think the up side is truncated because the fed is not tightening. modestly higher. the expansion that we are seeing unfolding on a global basis, i think that will get us to a higher level of earnings.

>> are you reorienting >> i think there's a good chance to be made and i think the acceleration is going to be more pronounced over seas in relative terms. >> you've been on the overseas story and that part of your story hasn't always been right. >> indeed. the reason it hasn't worked out is because of the strength of the dollar that has been one thing that hasn't worked according to plan. going forward with the fed on pause and relative growth or increase in relative growth being better overseas, i think that bodes well for international. >> did you need to say anything? >> chris is doing a good job. >> do you agree with a lot of that >> no, i agree with the fed is less likely to raise i'll agree with that agree with the dollar is key aside from that, we are not that bullish at the market level at the beta level that's got to do with valuations and what's going to drive earnings growth. earnings growth is expected to be 2% this year and 7 to 10%

next year and we're not clear on what drives that appreciation. we're not looking for additional multiple expansion s&p 500, forward earnings multiples just under 18 times. we don't think it's prudent to assume you get multiple expansion. there's more down side risk than up side risk we would say that the election pricing may begin to hit markets, say, march 4th, the morning after super tuesday. so there's some tails that haven't been priced there. that said we see opportunities kind of beneath the surface. smaller company stocks, more cyclical stocks. more opportunities to benefit from the overall story without taking market beta bets where we think there is a lot more bets if the dollar weakens, we start seeing opportunities over seas we've been u.s. centric for the last few months and we would -- largely because of the dollar. if the dollar starts softening, we could see that given what the fed is doing with their balance sheet, kind of a reflation

naryury story, then we would start looking for opportunities over seas. >> all right that sums up your views well erik, krishna, thank you. we'll have more on this morning's top stories and stocks to watch as well later, don't miss paul tudor jones. he will join us at 8 eastern time he'll talk about the markets and the newest investment project. stay tuned, you're watching "squawk box" on cnbc each day our planet awakens with signs of opportunity. but with opportunity comes risk. and to manage this risk, the world turns to cme group. we help farmers lock in future prices, banks manage interest rate changes and airlines hedge fuel costs. all so they can manage their risks and move forward.

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welcome back, everybody. mortgage applications jumped last month by 9.6. it was driven by a surge in refinancing activity that's despite the average of the 30 rate to 4.30% tech data is involved in a takeover deal this morning it's agreed to be bought by affiliates of apollo global management for $130 a share or about $5.4 billion it had been reported in mid october that apollo had approached tech data about a buyout you can see this this morning.

tech data up by 4.4%. google is planning to offer checking accounts. the effort is expected to launch sometime next year with accounts run by citi bank and a credit located at stanford university unlike efforts like the apple card, google does not plan to put its own brand front and center instead, it will be letting the financial institutions in the spotlight. we'll talk with senator mark warner in the next hour. the ceo of convoy. a company many call the uber for trucking we're going to talk about that industry right after the break today's big number 7.4 million. that's how many people were employed by the trucking industry in the u.s. last year that's 5.8% of all-american full-time workers according to the bureau of labor statistics for today's aflac trivia question, the vietnam veterans

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♪ eastbound and down, load it u and truck it ♪ ♪ are we going to do what they say can't be done ♪ ♪ we've got a long way to go an a short time to get there ♪ now the answer to today's aflactrivia question the vietnam veterans war memorial was dedicated in washington, d.c., on this day in what year? the answer, 1982 the $800 billion trucking industry is ripe for disruption. frank holland joins us with more on the companies that are leading the charge hey, frank. >> good morning, everybody the race is on to be the next uber of freight according to digital marketplace that brokers free for hire where customers and truckers can bid for jobs. companies like convoy and uber see opportunities to disrupt the $800 billion u.s. trucking market because it is so fragmented what they currently offer only addresses a fraction of the industry the for hire brokerage market is

62 billion convoy which started in 2015 does not disclose revenue. we know how key competitors performed. uber freight, in operation since last year, reported 218 million in revenue xpo, logistics company which has offered digital for hire since 2011 reported 633 million in revenue saying a large percentage is done digitally landstar, a trucking company reported 466 million in for hire revenues they've offered digital for hire since 2014 and say that's now the majority of their brokerage business the exact numbers are hard to pin point because there are 900,000 for hire truckers in the u.s. and they often use a combination of digital and traditional for hire platforms, whichever is more profitable for them at the time relationships are very important. the top five players only control 1/3 of the market so many legacy brokers that have not gone digital are still key players in the space >> frank, thank you for that

stick around, i want you to be part of this conversation because joining us to talk more about the future of trucking and the company's latest funding news, dan lewis is joining us. convoy ceo is joining us good to see you. >> good to see you. >> congratulations on this new funding announcement i want to get to that in a second to the point, i don't know if you could hear what frank was talking about in terms of how fractured this marketplace really is right now. sort of how do you see this playing out? we talk about your company often as the uber of trucking. uber is now in the uber of trucking, too, and so how do you feel about that? what's about to happen here? >> yeah, i think the key to higher earnings for all of the truck drivers we were talking about is more productivity as you guys mentioned, it's extremely fragmented there are hundreds of thousands of small trucking companies across the country moving millions of truckloads for the day. they drive a lot of empty miles,

they sit at different warehouses waiting for their appointment and when it's thatfragmented it's hard to make that work more efficiently. what convoy does is we take all of those jobs, put them into our platform and we can consider tens of thousands of trucks and we find the ideal matches significantly reducing empty miles and waste to the system. that's where we think the future of trucking is going. >> dan, how many of these platforms like your own can exist? because there's a network effect to this, i imagine, in terms of how this, would. right now there's in the car business, obviously there's uber and there's lyft and then there's lots of little guys, but not really and so the question in the trucking business is how many of these platforms can ultimately exist? and does that mean some are going to be buying each other? how does this all play out >> yeah, there are 15,000 truck brokerages today and hundreds o can exist but i think that we're going to see consolidation and

there is an effect as we get more and more jobs on to our platform, more and more trucks, it gets significantly more efficient. i think there's an opportunity for consolidation in the market through gains in efficiency and several players to be successful over time. >> this is -- your platform and so many others are what people might discuss are asset light. you aren't owning the trucks, employing the drivers, but at some point when you get into driverless vehicles and you get to a point where these vehicles are being run by robots or computers, does the whole model have to change >> that's a very, very long ways off. what's going to happen in trucking is hopefully with semi-autonomous vehicles that are coming will make the industry safer they'll be able to run more hours per day. the biggest challenge today is that a truck driver is limited to 11 hours per day with government regulations ideally if trucks can drive

themselves maybe certain highways, certain times of night the hours of service for truck drivers will be able to increase and be more productive truck drivers do so many more things than just drive the truck and there are so many situations where they need to drive the truck in complicated scenarios i don't think they'll be out of trucks for a very, very long time. >> this is frank holland speaking of truck drivers driving trucks in the country, 99% have 6 trucks or fewer it's very small and relationships are very important. how do you convince this fragmented group of truckers and fragmented group of brokers to decouple and go over to convoy >> yeah, you know, i think as i mentioned, higher productivity is the key to higher earnings for truckers one thing we did is introduced a program called automated reloads. when they use this, instead of getting one job at a time, which is the traditional method for getting work, convoy offers them two, three jobs at a time. we optimize the pickup and dropoff locations, the

appointment times to make it as minimal as possible and minimize dead heads when they use that we find they're running 45% fewer miles on convoy than when they're going one job at a time. when we do things like that, it's a no brainer to use convoy and use our platform more and more you make more money and have less hassle and less waiting time. >> congratula grat tgratulation funding round. >> nice speaking to you guys. still to come on "squawk box," this morning's stocks to watch plus a top white house economic advisor, larry kudlow, teasing a middle class tax cut we'll debate the idea. then going after big tech. senator mark warner will join us live with his message for facebook and others. stay tuned, you're watching "squawk box" on cnbc. don't forget to subscribe to our podcast. you'll get interviews, original content and behind the scenes access look for us on apple podcasts or

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welcome back to "squawk box. we are live. this morning's stocks to watch dom chu is going to bring us the big names to know right now. mr. chu, dom, how are you? >> reporter: mr. sorkin, i'm doing great. thank you. let's start our morning movers off by apple which are just half a percent, roughly 75,000 shares of pre-market volume down with the rest of the market, but despite analysts at rbc initiating coverage of the iphone maker with an outperform, they put a $295 price target they like apple being a path towards being more relevant and a balance sheet to return significant cash to shareholders getting an upgrade or coverage initiation. next up are shares of j.m. smuckers up by 1.5%. the packaged food with jams, folgers coffee and kibbles and

bits dog food. they say the market is already making an out of favor stock but there could be even more down side due to structural challenges at the company. those shares lower then there are shares of take-2 interactive moving between gains and losses just about flat in pre-market trading. the video game production gets initiated as a buy rating. they like a good management team at the company and a robust portfolio of gains and those shares also ones to watch, becky. i'll send things back to you. when we come back, as the 2020 presidential race heats up, the white house is considering a middle class tax cut we will debate that idea next. plus, don't forget to subscribe to our podcast you're going to get interviews and behind the scenes access you can look for us on apple podcast or on your favorite asapp. subscribe to squawk pod today.

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the prosal election is now than less than a year away the economy is already front and center on the campaign trail yesterday white house economic advisor. the tax cut could be coming. they are exploring the scales. on my campaign trail >> the tax cut 2.30 do potentially bring the middle class tax rate they have asked me to pursue 2.0. i don't want to be specific on anything, court. it's way too soon for that i'm consulting with the leading

tax people in the senate and the house. we're very preliminary stages. s the official rate is only 14%. they have been discussing tax cuts they're extending individual tax cuts beyond 2025 if you got rid of deductions, it's a reduction >> yeah. we add in all of the stuff that they put in and their effective rate is already below that i just don't know it would be the windfall that many forgot it

would cost the government as many would fear. >> well, i don't feel like we're in a real tax cutting environment right now. >> not on one side >> no. i mean, i just know what i read in the paper which is always true thanks, robert let's bring in our guest, neil abernathy. and arthur laffer. advisor to presidents ragan and trump. >> nice to see you. >> good to see you >> i love it it's amazing. >> welcome thank you. >> thank you >> this is becky >> nice writeoff probably. >> no, it's not. >> not deductible? >> not anymore.

>> a lot of people >> for that right now, at least for a large part of the political dialogue >> this time she's the personal one.

the taxes. >> it's complicated. cuts are easier and simpler. right across the board is good >> this is not obviously what we're hearing. >> they have more tax cuts they have taxes and they're trying to get at some of these gains that are never taxed, right? >> absolutely. i think what we're trying to get at is the idea that raising taxes on the rich is in any way going to hurt investment or innovation we've been hearing for 30 years we need to cut taxes on the

rich that's going to spur this trickle down economy i really disagree. the empirics backs me up here that has trickled down or investment. >> this is the argument i always make when you don't treat capital well in the private sector, when you don't help companies hire more people, you don't get growth and during the obama years i didn't see a lot of growth initiatives for the overall economy. as a result, we're stuck at zero for eight years with the fed and anybody who owns assets ends up becoming richer and the income gap actually got worse because of the bad policies that didn't spur any growth. now i think you're starting to see the beginning, the seeds of the flip side of that where you are seeing wages grow for middle income

and the pro growth policy actually does help when you don't do pro growth, you're splitting up essentially for lack of a better term, you're dividing a smaller pie more equally. >> i absolutely believe that we need pro growth policies we need investors and we need businesses to do the things that actually grow the economy and help average americans you know, invest in science and research create new consumer goods thatse i'm just saying that's not the way the investor class is currently operating and that's not the way. >> that sounds very reasonable

>> there's some way. is there some way you can get at some of the money that hasn't been taxed, isn't taxed. if you had good things to do with it where you could count on -- that's where you don't think the government -- >> there are two ways of getting the money from the rich. one is to send the police in there, irs agents. >> elizabeth warren. >> yeah, or the other way is jerry brown. low tax rates. make it be a voluntary society effectively. obviously you have to have all of the rules low rate, broad based tax. get rid you will all of the deductions, you can fund static revenue. fund it with a 12% tax, all federal taxes on personal unadjusted gross income. >> static revenue. >> just interesting because that's actually not the evidence that we've seen over the last 30 or 40 years where we've tried again and again. the data is in on this

experiment and the exerr p iment has failed when we cut taxes on the rich it does not leave us revenue neutral. >> can i respond >> it does not lead to more investment we have the data. >> let me just say that harding coolidge cut the highest tax rate from 77% to 24% revenues from the top 1% went from 15, 20% of all tax revenues to 68% we cut taxes dramatically on the rich under jack kennedy. tax revenues from the top 1% went way, way up we did itwith ronald regan and the revenues on the rich went up. >> explain what do you think has happened over the last 30 years. >> over the last 30 years we've had fairly bad policies. i mean, from 1990 on i mean, i thought clinton was great. he was a big tax cutter. he cut government spending. >> but to the extent there has been a remarkable increase in inequality in this country and a remarkable lessening of the revenue coming in from the 1% over the last 30 years what do

you attribute that to? >> i don't see the huge increase in inequality. i think the people who have jobs are not included in the inequality numbers those are only tax return numbers. what you're seeing is a lot of new people coming in. >> i'm worried that some of the audience is frowning and making faces when you say you don't believe there's been inequality. >> in the last 30 years. >> you say you don't see it. what you've seen in the last year or two is a huge increase in employment. >> i'm not talking about the last year, i'm talking about 30 years. >> i've done this. wages stagnating in 1980 and you can look from '80 on, what's happening? >> if you look at wages recently, they're skyrocketing right now. i'm kidding. just obama -- >> i would not say they're skyrocketing you know, we had a brief blip after the immediate tax cut, you know, where there was this consumer spending, not supply side blip in increased wages and that's really flattened out now

at this point. and i want to be clear, not only have we seen inequality increase but we have seen a decline in the kinds of productive investments that we need to grow our economy. startup rates are at an all time low and that's an important thing to remember when we talk about, you know, any kind of tax increase people say is going to hurt innovation or hurt investment we are not in a pro innovation, pro investment economy bill gates we've talked all about, poor bill gates is only going to have $100 billion instead of $150 billion, he started microsoft in 1975 when the top tax rates were much higher, the top income tax rate was 70%. so i don't think that taxes are what is going to stifle innovation or investment. >> just because i've seen so much misinformation and mis sort of classification of what bill

gates actually thinks about taxes. i was the one who interviewed him last week. it upsets me frankly to see what everybody has said he actually wants a super, and i'll quote him, a super progressive tax system i think he's okay frankly with a 2%. >> he's trying to put it on. >> it gets complicated for him not because it becomes complicated for him but because of what he thinks it will ultimately do to the economy and what it will do to innovation and capital formation and all of those things all of these people who are saying boohoo bill gates and he's trying to save his own money, i just want to say straight up that i think is a fallacy and a myth that's being perpetrated by people who are on the other end of this. >> bill gates sponsored an income taxi fishtive in washington state. >> right tried to get it on the ballot. >> his views were that his father's views want to go back up above 90% tax rates on people what we're missing is up until

the third quarter of 2017 the u.s. growth rates were right in line with the eurozone since that time our growth rates are way above the eurozone and have been and still are. i mean, the 1.8 we got -- 1.9 was a whole full percentage point above the eurozone's 0 point be point 8% and it's continuing that growth and that's a lot of money. a lot of -- >> we're judging the trump economy. we have to wait until it's been eight years before we really judge how it is compared to obama's. we'll just have to see i'm saying that for you, andrew. >> so far it's a good start. >> when we're done with all eight. >> yes, i've got >> so we've got fell in talking pro growth and art talking jerry brown. >> decent chance he gets impeached and re-elected. >> that would -- successfully be impeached? >> convicted is different. >> no. >> that's what people are saying he could be removed and then run

and then win some people. >> that -- i'm not sure i'd bet on that one. >> you know, why, to get the senate -- to get the senate on board there has to be something that comes out that was a bombshell that would probably change public opinion. >> public opinion will be withdrawn. >> all right, fell in, thanks. >> thank you appreciate it. coming up when we return, senator mark warner has many questions for some of the nation's biggest tech companies. he's going to ins veig ter the break. what are you doing back there, junior?

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welcome back, everybody. social media giant facebook remains in the spotlight for better or worse. we're joined by senator mark warner he's been advocating for this and pushing back on mark zuckerberg senator warren joins us. thanks for being here today. >> thanks for having me. >> so your big problem in terms of privacy is what explain from the social media perspective and then explain from the broader perspective of what's happening in technology and privacy right now. >> well, i'd step back i think that for a decade plus we had this almost over the top optimism it was reflected in both political parties. we saw these companies do great innovative things. and we kind of refused to acknowledge with all of the communities that they were building there wasunder

b underbelly that allowed a country like russia to catch 9 companies and our government off guard and interfere in our elections using social media control oigs, bott trolls and botts and fake accounts and we're 3 1/2 years later and congress is still not acting from the most basic things like having the same political disclosure for political ads on social media that would take place on cnbc or some basic rules of the road around privacy or other pro competitive aspects in this industry and america's failure to act has meant that we've ceded that leadership in many cases to europe, to the brits and individual states like california and i don't think that that is a good scenario for our country

and i kachb dead candidly thinke social media companies realize that they are kind of playing rope-a-dope with congress and in the end it will come blaack and bite them. >> maybe playing on congress' in-and ability to act, but alsoe idea that the right and left can't agree on just about anything >> but i have a series of bipartisan bills i laid out over a year ago, a white paper with 20 plus ideas. every piece of legislation i've introduced has been bipartisan i think this may be the sweet spot where there may be that ability to 234089 make this a democrat, republican or left/right, but a future pass kinkd kind of issue. a couple of the bill, let's have disclosure of the political ads. >> that seems like common sense.

>> i think that it would get 80 votes. another bill i've got a because i think we need more. >> interpreter: - transparency says we should know what data is being collected about us and what it is worth. so couplers start to understand facebook and google are not free they are giant sucking sounds of data from us that they then monetize nothing wrong with that, but consumers should know what the value of what they are giving up >> i agree 100%. and google and its deal partnering up with a hospital chain. it has i think 150 google emp y employees who have seen information on patients who have come through those doors it is not a violation of hipaa because they are working on tools to try to make it more accessible for doctors however no patients knew about it until the "wall street journal" reported about it and

none of the doctors knew about this so how quickly can you enact if you have bipartisan support? >> logical things -- news flash, but logical things that are common sense don't always happen in washington. but the google case was a perfect example. we all know the power of data to bring about health care reform and it is really important the whole basis of electronic medical records. >> does it have to be done without anybody's consent? >> that 1 tis the point should it be done without consent and where we're frankly empowering one of the already dominant platforms and that brings me to another piece of legislation i've got that says shouldn't we be -- if we're tired of how we're treated on google or facebook, should we be able to move our data, make it portable to a new site so you can move all your data plus your cat videos if you are tired of

how you are being treated. if you have data port ability, you need interoperability so you can still talk to the folks who remain on facebook, think about the different email systems how they talk to each other. and we've introduced another concept that says because chances are these forms of what you are giving away are never going to be understandable in english, let's introduce a concept where if you want to delegate in a sense to a third party the ability to be guardians of your data, you should be annual nuae able to d. and shouldn't we have a right to know when we're being communicated with. are we talking to a human being or a bot that is easy to say, a little harder technically to do and nothing per se wrong with a bot. but if we want to make consumers informed, they should have that tool as well >> do you have any issues with this separate report that google

is offering checking, getting into the banking business as part of a project with citigr p citigroup? i ask because when libra awas announced, washington went wild. >> i think again that we'll see greater use of data in all sectors including finance. i'm concerned when we've got whether it is libra or whether it is the google proposal around banking, where we have these giant tech platforms entering in to new fields before there is some regulatory rules of the road because once they get in, the ability to extract them out will be virtually impossible. and i'm a tech guy i'm all for innovation i would rather see new -- >> i guess do you want a facebook or going him in these businesses there this is either a larger anti-trust question or size

questions. >> i think if we could have rolled back some of the facebook acquisitions on insta grangrast whatsapp, i think that we will be -- i think there should o ule strict scrutiny. i'm not saying they should be broken up, but -- >> you would block the fit bit deal >> i think it needs high level of scrutiny if we are going to have them take on all this personal data. when they don't have a very good record of protecting the data or being trarnsparent >> senator warner, thank you hope you come back soon. coming up, a legendary investor teaming up on a new

project, and ty lloin hewi jus to talk about it when "squawk box" comes right back. robinhood believes now is the time to do money.

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the markets and judging companies on smomething other than the bottom line final hour of "squawk box" begins right now. good morning and welcome back to "squawk box. live from the nasdaq market site in times square. i'm joe kernen along with becky quick and andrew ross sorkin treasuries, the yields dropped a little today after what so many people thought could happen any day and that is the give and take that we see on the trade front, whether it is three steps forward, two steps back.

we heard about maybe more tariffs being put on,yields dropped a little 188 today. and futures dropped. and then there is a lot of other things going on including this >> that's right, the house is set to hold its first open hearing as part of the impeachment inquiry into president trump. the market's reaction or lack there of will be of high interest on wall street. ylan has more. >> reporter: this is the next phase, one in which democrats have a chance to make their case directly to the public the first witness is bill taylor, and he says that trump employed irregular channels to communicate with the president of ukraine also george kent, a top state department official, will be testifying he repeatedly raised red flags over with what he saw as preliminarily motivated prosecutions in a statemented adam schiff sa

we want the american people to hear the evidence for themselves and our goal is to present the facts in a serious and sober manner but republicans are ready to rumble here. they added jim jordan to the committee and he is one of the president's staunchest allies. >> the truth is on his side. the facts will never change. that will be something that we talk about tomorrow. >> the tensions are running high here in washington and there is more to come. on friday another hearing is scheduled and there are eight more witnesses who are slated to testify next week. so, guys, democrats are trying to pack this all in ahead of the thanksgiving break so that they can go home over recess and see how all of it is playing out in their districts. >> thank you for that. we'll continue this conversation because so much is happening this week. the third annual list of the just 100 companies and how they perform on issues like worker

pay. and this morning just capital and pay pal is hosting their first ever quarterly just conference call, it allows investors and the public to ask ceos about important nonfinancial metrics joining us know, paul tudor jones from just capital. also chief investment officer of tudor investment corporation and dan schulman is here, ceo of pay frts pal i want to get everybody's sense of where the are markets are going given the potentiaof impe jay powe think jay powell will be saying or not saying. so where are we in terms of what you think jay powell may or may not do and how does the impeachment factor into this for you? >> i think there are three things broadly driving the

markets. first is -- and i think more is a secular deem we got a 5% budget deficit coupled with the lowest real rates that you can imagine with the economy at full employment so that is the most unorthodox is and potentially explosive combination that you can imagine. it is like the photo negative of 1930 when we had the last trade war but you had tight fiscal and tight monetary policy. now we've got the exact opposite so that is one the second thing that you have going on is suv the you hayou he presidential race where the outcomes give you such dramatically economic policy so that is huge because if you have -- you have to have a view on who the next president is going to be to have a view on where the economy is going to go and where rates in particular are going to go.

as well as the stock market also and then i think if you take the final thing is we've got this trade war. we have the deconstruction of 50 years of interconnein-connectiv globally so when you start to dismember that, it was offset by 150 basis point drop in two year notes and the markets have voted and the ease that we got in interest rates has obviously outweighed is the fiscal contraction that came from the 60 to $100 billion of tariffs that had been imposed. so those three things at any one time are what are driving the market narrative every day but i think the most important thing to understand, we've got an explosive combination of monetary policy and fiscal policy right now

>> explosive on the up side. >> on the up side. >> can we unpack the other two issues real quick? your bet for who will be then in office in november, because that sounds like a huge component of how you think the market may move one way or the other. >> completely mystified as to who the next president is going to be. >> therefore you do what as a trader >> it is really hard this reminds me a lot of brexit, trading brexit there was so much uncertainty. and i've never seen so much intellectual capital devoted to one thing in my life as brexit and when you think about it, the markets did relatively little in the uk during that whole time. we talked about it every day and the markets did is very little i can see that kind of standoff handing in the markets going forward until we get some kind of resolution on who the next president is going to be >> does the impeachment piece

matter >> i think it does because the impeachment is going to directly weigh on the probability of the president being reelected or not. so to the extent that it either helps or hurts him, yeah >> do you think that democrat winning though just so we're 100% clear is damaging to the market >> i think the stock market will definitely decline is because that will assume that it is going to be accompanied by a raise in taxes so, yes, it will decline somewhat i don't know necessarily where the economy is going to contract we'll have to see what happens >> that is on the democrat too. >> no question >> final unpacking of this piece, you are talking about the trade war, how do you think it plays itself out and how do you trade that >> i think you end up with 25% on $250 billion. i think that that is what ambassador lighthizer wants, i

think that is what the president wants. it gives them the lever going forward is to continue to make china accountable on a variety of issues that are so important to them. and i think what does that work out to, $62 billion in tariffs is s. i think particularly given where honester takermonetary pt now, that is basically nothing >> so status quo >> probably. >> if you had to reevaluate the way you think about it globally, where rates are still this low, i mean, it is different ten years ago would you have believed it if someone described the current -- >> i think, you know, the only thing that really bothers me is when is we don't talk about this 5% budget deficit, for instance

the last fed meeting, the media gives the chairman a pass when he says there are no bubbles out there. and if you look on a variety of metrics, you can argue that we have an degree nenormous budget. that is the bubble >> so why don't pi't people put money where their mouth is when it comes to that bundget >> i think the president has done a brilliant job telling it. it is not the party of fiscal conservatism anymore do i think that is the right pre-skri prescriptive policy? well, let's see. in 30 years at the current rate would have a national debt of 220% --

>> you are not even talking about unfunded things like medicaid but the rest of the world is 00board with these rates it is not just trump why? >> and one of the reasons why is because our federal reserve for whatever reason, which you would think would be the entity that should be talking -- i mean, if we're going to think about the fed as the kind of yoda of the financial world -- >> i like this >> -- where is the discussion about fiscal policy when we have 50 year lows a s in unemploymen? where is that discussion why do you give them a pass at every single fed meeting >> all i can hear now is yoda's voice, might ne, mine, mine >> so you don't think that you've missed anything that explains all this, whether it is productivity or technology or

innovation or globalism? because you would not have stayed long bond and why did gold hit 2,000 years ago and hasn't even seen those levels since with all this cheap money? that would not have been something you'd think either we should be at $5,000 an ounce. >> if and when we bring the fell budget back to something that is sustainable, my guess it will be accompanied by a dramatic drop in interest rates and gold will absolutely rocket. >> i want to bring dan into the conversation and then i want to talk about just capital because that is the reason you guys are here but to the extent that the trade war, the election and interest rates matter to your business, to the consumer and how people are buying or not using pay pal and -- you sort of have your pulse on a lot of things that are going on what is your take on all of this >> i've never been particularly great at predicting the ups and

downs of the stock market. they're cyclical and trying to predict when it will go or down is a fool's air rach -- errand >> are you seeing any of this this your business >> i think in general in the u.s. consumer spend is still strong people have been predicting a recession for some time but we're not seeing it. there are some of these macro events that paul mentioned whether it be brexit, u.s./china trade tensions, the impeachment process, the election going on but those can break any one of a number of different ways so from our perspective, you know, we see some pretty strong secular growth everything is digitizing so for us, we're relatively bullish over the short term. >> and you are in such a fast growing arena. you will see growth no matter what do you have anyway of

extrapolating what that means for the american consumer or is it too hard to do? >> we have almost 300 million people on our platform right now. as to it so it is a pretty extensive view of what the average -- >> more and more of my purchases are online >> more and more of commerce is moving online. more and are more of our monetary system is digitizing. so those are strong secular tail winds for companies like pay pal. so we would see more growth, but we would look at spend relative to other periods at least right now over the next year or so, we're pretty bullish about in general the economy >> i want to pivot the conversation to just capital because you just announced the new top 100 companies using the metrics which i want to talk about. as we say dan's company is number eight on the list but there is a new list out.

microwak microsoft is at the top of the list you do a poll which is how you measure and judge these companies. so what changed? >> every year we poll the american public and we ask them what are the metrics that are most important to them to determine a company's justness and they have been i think fairly static. we've been doing this for five years. we poll close to 100,000 americans. and the number one single most important component or area is around workers that is 34% of our rankings are around workers >> and workers has been the top -- >> always. so fair pay, living wage, those are the top two. interestingly the great story about what the american public believes in justness is that if you look at the top 100 companies of which dan's company

is number seven, if you just listen to what the american public says, the roe of the top 100 on average is 6.5% higher than the rest of the 1,000 that we rank. so focusing on workers, focusing on paying a living wage, paying a fair wage, benefits, making a socially beneficial product at a reasonable quality, reasonable price, treating your customers like kings and queens, that is actually 60% of the whole equation so it is really a good formula for business and those companies that do that, that follow the will of the american public -- >> they outperform >> they absolutely smoke them on roe, the rest of the companies and then stock price, our top 500 out of the 1,000 companies

we rank, i think in the last 2 1/2 years outperform in stock price by about 5%, 6%. so there is a great story that the pie gets bigger by focusing on the metrics >> and he upgraded you from number eight to number seven >> excuse me, my mistake >> you get asked lots of questions about analysts about your earnings, what will happen next how often do people say how much are you paying your workers? >> how often do analysts ask that >> how often does the investor class ask you any questions about the things that he is just talking about here >> i think esg is starting to rise in importance in general. but do i ever get a question on how much do we pay our workers i would say pretty much never. but i will say this. this shouldn't come as a

surprise what paul is saying if you ever aspire to be a great company, the number one asset that he have company has is its employees. and if they are inspired and pag passionate, they will serve customers better and then the customers will be happy. >> and how much of this is already being done we didn't just start having just companies in 2019. we had some good companies before the turn of the century as far as i can remember they weren't all unjust prior to that so you talk about 1,000 companies. are there quihere quintiles what is the bottom 20% are there really unjust companies? complaint this be the more just instead of the just versus unjust are there bad actors in the bottom 20% >> i've always thought of our rankings as a competition for

goodness >> did it really need to be done that there are bad actors that are unjust companies that are still succeeding >> if all our goal is to do is to put the rankings out there in accordance with what the american public says so we don't editorialize at just capital, we're nothing more than journalists just like you are. what we do is highlight where the things that the american public think are important can be added into society. so is dan while we were in the greenroom went through with me what they did two weeks ago, oh, my lord, if every ceo did what pay pal did two weeks ago is i can promise you that so many of the social issues that we're dealing with today would be solved if we could get companies to refocus the way that dan has. just one metaphor.

ever since i was a kid, i used to always shoot my shotgun with one eye closed like this and then when i was 50, the shooting instruct tore said you will shoot a lot better if you open both eyes thought i couldn't change. took me a week, but as soon as i started -- after shooting with both eyes open is my trap and skeet scores went up by about 20% by opening both eyes that is where we're going in the new wave of -- >> did he just lose you bleetly with t completely with the shooting stuff? i think you just lost andrew talking about guns -- >> both eyes open. that is how we -- >> you're in the bottom 20% now. >> we have companies 16 frill i don't know trillion in the private sector the government is will trillion. if we don't tap into the big

gorilla which is businesses to help us address our social issues, we'll never solve it >> we'll continue this conversation in just a is moment we'll find out what you told him in the green room right after the break. ♪ ♪ ♪ ♪ ♪

we have two big ghuests with us this morning. paul tudor jones is chairman of just capital and dan schulman of pay pal. when we went to commercial, we were talking about what you've done with your employees what did you go back and do? >> our mission at pay pal is to democratize access too financ fl services which is way of saying managing and moving monday should be a right, not a privilege and so we asked are we really practicing that inside our company. and it is something like two-thirds of all americans struggle to make ends meet >> living paycheck to paycheck >> a lot of financial anxiety.

it impacts productivity at work. so we did a study of all of our workers. and what we found is our sbr level positions, hour hourly workers, even though we pay at or above market in every single market, about 60% were struggling to make ends meet so we thought to ourselves in some way then, there is something wrong with the market. because we're paying at or above but still a lot of our work hes are struggling to make ends meet and so we thought to ours if the most upon the asset is our employees, then we need to do something about that so we good a very comprehensive program to look at what their net disposable income is and what we could do about that. >> what did you do >> first thing we did, we had to measure why was it people were struggling and what we found is if you look location by location, and you have to do

this by geography, the net disposable income, how much people have after they do their basic is essentials like is transportation, rent, medical expenses, child care, that kind of thing for us call it 5% to 6%. so people are living at the edge and what we said is we need to do four things and i'll talk about it very quickly. one was we needed to raise basic wages. second thing is we wanted to look at benefit costs. because that is a huge -- almost like a regressive tax. you pay the same for that as somebody who is an hourly worker, it costs them obviously as a percentage of their income a lot more so we cut the cost of benefits for those folks by an average of 58% for that portion of the population the other thing we did is we made every single employee is inside pay pal a shareholder of the company.

so we gave them all a one time equity grant and we made all of them eligible for equity going forward. >> if the shares do well, you'll do well and then you're back to shareholder value. >> i'll talk about that. >> but it would be nice if they own and then they -- >> our success as a company should be shared and that means that every employee tries to do the right thing on every interaction with customers. and i really believe that. one other thing that we did, we surrounded all this with an educational program around financial health and financial wellness because people are getting more money, they need to know how to manage it, how to save it, that kind of thing. is. >> someone wrote 1920s and 30s, dan gerber said take care of employee, treat them like family, they will work hard and make themselves happy, happy customers. so not a new idea, but a great idea and i even wonder whether the brand name companies that are in

our -- that we always talk about by definition, weren't they just all along and that is why we know who they are and why they have been are leaders in the wod >> i won't comment on whether companies are just or not. but let me point out this, this is really important. two-thirds of americans struggle to make ends meet is at the end of the month two-thirds so who employs all of those is american workers all of us who run big businesses and i think it is incumbent upon us to look at do they have enough net disposable income, a living wage as other people talk about to make ends meet. because i think that if you want to have passionate employees, they need to be financially sound. >> we have the highest standard living in the world and we want

to keep it >> business round table comes out with their statement which is very much in line with just however the treasury secretary of the united states said if he was part of the business round table, he would not have signed it >> and others. >> and others. steve schwartzman didn't sign it what did you make of that? >> i think we're in the three stages of ruth a truth. right now we're probably in that second phase where a lot of times it is rejected or opposed. but we'll end up going back to what i think are old school values up until 1970 when hmilton friedman says purpose of a corporation is to maximize profits. and then in 1997 canonized by the business round table who also says that the primary purpose is to share shouldshares

that changed in august when they had don'ted stakeholder capitalism and said no, we need to treat each stakeholder equally. and that is so important i'm optimistic about the future of this country because we'll go back to old school values and that man is the living embodiment of it >> hate to cut this off, but we have data that is hitting. rick >> yes, october read on coupler price index up stronger than expected headline up 0.4% if but look at food and energy, up 0.2% as expected. and year over year numbers, headline is up 1.8 remember, the highest that we've had this year is 2%. last several readings have been 1.7. and if you look at year over year core, up 2.3. consider this, in the rearview mirror is 2.4, that is the highest level for over a decade. so it is still up at lofty

levels and if we look at earnings which are always important, real average weekly earnings for october were up 0.9% sequentially following the upwardly revised 1%. now let's look at hourly earnings, up 1.2 and the same srkts revision up is 0.1 so both a bit lower, but definitely on the fill side is becky, yields have dropped a bit, we went from risk on to risk off in the blink of an eye last night with all the obvious headlines not the least of which will be of course chairman powell's testifying in front of both houses over the next couple of days. and of course is that speech by is donald trump the president regarding trade. all these have hit the market rather hard. and several basis points might not seem like a lot, but we've now is slipped under very decent high technicals in the long end.

we're under 190 in tens and under 238 in 30 year bonds >> that is a big move overnight. rick, thank you very much. we'll get to steve in a moment, but before we do, i want to give a moment to dan to respond just on that last question that we talked about >> i think that it is really important to understand that these are not two in-congruent statements that by doing right for more constituencies including your employees is and doing right by shareholders are two opposite thoughts. i actually think they go hand in hand if you do right with multiple constituencies, you will deliver more value for shareholders. >> all karma >> are we have to get back to steve liesman, but i did want to say that you have a phone call where actually anybody who is watching our show can actually ask you questions directly on a conference call and you can go to just capital.com i think

and -- >> and that call starts at 8:45. so you guys have to run is for that call. but thank you both >> thank you for having us it's been wonderful. >> can i ask you about live hogs on the call? >> not trading those >> all right let's get down to steve liesman. eat been looking through this data too what can you add to what rick had to say >> the headline was pushed up by gasoline prices. this was expected. they fell 2.4 in the prior month. looking through is the data, you had a reversal in new and used vehicle prices they were down 0.6 prior month, up 0.5 this month. you have a 1.8 year over year on the headline and you have 2.3 on food and energy, down a tick. the fed follows another inflation gauge this using some of this data and it usually runs

about half a point below this one here so we're still right in line on the fed's preferred gauge. the debate here at the fed is, hey, 1 pnt.7, 1 pm1.7, 1.8, clo 2. and we come coming in believe 2, we need to do something to get it back to show our credibility that 2% really means something i think this will be part of that debate and ultimately you have steady inflation around the 2% target. >> how does this play in at all to what powell may be talking about today? >> well, i go back for what i talked about in the 7:00 hour when i talked about the democratic response here which is not all that different from the republican response the democratic staff on the joint economic committee came out with this paper, this report, and they said you know what, inflation is low, there may be room to deep goping, to keepyour foot on the gas pedal

when it comes to bringing people into the jobs market i think that is the feeling by both political parties here, that we did not know what the bottom is here for the unemployment rate. what unemployment rate, how low it can go before sparking inflation. and there is no sign given how low the unemployment rate is it, 3.6%, that any of this is creating any kind of sustained in-flagts across board when i talked about what is up, what is down, there is a lot of stuff up apparel prices are down pretty sharply. you have this rebound in new vehicle prices gasoline prices up no real trend that shows that you have incipient inflation across the board so i think what this does, this allows the fed to remain on hold and, you know, take that criticism from both political parties that maybe they shouldn't tilten at all and maybe even be easier >> steve, thank you. we'll watch you later today too

flp with t >> with the powell testimony >> when we come back, we'll talk markets. right now w wnbododo aut 80 points is the monolithic view of emerging markets obsolete? at pgim, we see alpha in the trends driving specific sectors of outperformance. where a rising middle class powers a booming auto industry... a leap into the digital era draws youthful populations to mobile banking and e-commerce... trade and travel surge between emerging markets. every day, our 1,100 investment professionals around the world search out opportunities for alpha. partner with pgim, the global investment management businesses of prudential.

apple launching a 16 inch mac book pro and it addresses one of the most common

complaints and it is the keyboard cnbc digitals -- that's what we're calling it? todd hazelton is here and he has the actual laptop. >> it was just announced at 8:30 this morning and it does like you were saying fix one of the major problems everybody was having since 2015 on mac books and that is the keyboard apple tried since about 2016 to create a thinner keyboard, but the problem was there wasn't enough click to the keys, they would get stuck. and often when i reviewed the last mac book, it work 230d a couple months but then would get jammed and i was hitting a delete a lot so any created this keyboard there is more travel to it and basically what apple did, they base it off of the magic keyboard from thei computers, they know people lov

that and they say this is the best keyboard in a mac and that this is the best mac book ever made >> joanna stern by the way should get a lot of credit because sheets been very aggressive about writing nasty critiques. >> she wrote an awesome editorial all typos. >> and i think that may have pushed some of this. but my question to you, do you think that they can put it in the smaller devices? >> i hope so >> the mac back air. one of the reasons that they changed it was they wanted to get even thinner >> right but i think as chip designs and other things become thinner too, they should be able to put it in other key 3w0rds i 3w0rds. yeah, this is a really good

keyboard so far. things might break in a couple months i don't know that happened to me with the mac book air but it is easier to type on. but it starts at $2399, goes up to $2799 this is for professionals. >> that's what i don't get if you are stuck in a middle seat in coach, this is not for you. >> no. it is for people behind the cameras here doing video editing, they can edit multiple streams at once. it is really powerful. 2000 people like you and i, we're waiting for the keyboard to come in the mac book air and other products like that while we're here, apple just announced this morning also that in december, the mac pro, computer that starts at $5999, will go on sale finally. that was first -- >> how much? >> $5999 and if you want to add a fancy display, it is about another $5,000 >> and what does it do for you >> this is for like the people

in hollywood -- so you can edit six 8 k streams at the same time which to us means nothing, but for people editing real video and shooting doumgt taker docud tv shows, it is for them >> todd, thank you you've got your own now. >> yeah, i bought my own >> how many sweaters you got >> i think i'm up to like four >> only four >> just kidding. >> hundreds of sorkin of the month -- that is why it is the gift that keeps on giving. >> it is getting cold out. i'm going to start wearing swer sweaters i want to create a monthly -- >> we've had that video for

years. >> how do we work the deal >> whatever you think is fair. whatever you think -- just make us employee stakeholders in it that's all i ask >> like pay pal. coming up, market strategy and where to put your money as indexes hover near all time highs. futures are under pressure morning. stay tuned

the president has asked me to pursue something called tax cuts 2.0 my pleasure. i think our tax code could always use plenty of blow groof reforms. i don't want to be specific on anything, it is way too soon for

that i'm consulting with the leading tax people in the senate and the house. we're very preliminary stages right now. >> that was larry kudlow making headlines yesterday bringing up the prospect of further tax cuts kudlow said the proposal wouldn't be completed for many months and would be released as a strategic pro-growth document for the president's re-election campaign we're less than 45 minutes away from the opening bell on wall street. mike santoli is joining us he has a key question about where they go from here. >> this two year chart really tells the whole story. it is a clear but maybe tentative breakout we got a little overbought it is about 2.5% above the july high we have not had one of these new highs get at least 3% above a prior high since january of 2018 so that is about 3115 on the s&p. take a look at the russell 2000,

this shows more back to the upper end of a long term range that has been stuffed. the good news is it doesn't have any magical predictive powers for the overall economy, but it does show you that it is struggling to break out of this range. we've been well blelow the 2018 highs. and the treasury yield, not too far from expectations. this shows you that it is still trapped in the lower zone. so maybe that shows you we need to settle out here for a little while. obviously still well off the low, but not yet back to that pre-july high above 2% on the yield. >> mike will stay with us. our next guest says equities are still in the early catchup phase. joining us now, chris heizy at merrill. bull market power is on, that's the bottom line? >> it is there are so many things going right for it

doesn't look that way in the fourth quarter of last year and a lot of people were throwing in the towel. but is if you have a lot of uncertainty that was basically all baked in, does not come through, you climb the wall of worry and a little bit of cash that comes out of large money manager cash piles comes into the market, you go back to the new highs. and that's what we're seeing and the main reason, trade war dehe is are a lags, that is stilld deescalati deescalation, that is a tail risk and monetary policy is number two. we get a lot of emails from clients about it is not monetary policy, it is all about profits. that we know but it is monetary policy. it is a lot about the balancey f

liquidity. and housing is another one in a very sneaky way, housing is powering the u.s. economy along with regular consumer spending lower income, middle income, higher income increasing their spending habits. we see it in credit card transactions and then you start to look at the dollar the dollar has weakened a little bit recently and that has created a saucer-like approach they haven't bottomed yesterday action but the second derivative has slowed down. not an excuse, but first derivative is coming next year >> is that four or five? >> that was five >> when you said looking back at the charts maybe tells us where we've come, i can't help but look back to december of last year do we need to worry about that what would tell us that that would repeat in. >> i don't think that we need to worry about something like that. for one, it was pretty extraordinary to have that kind of performance in a fourth quarter. and before that when the market

topped out in september, you had a lot of kind of things below the surface that weren't going well very few stocks performing at highs. and you did have a market that was begging for a different monetary policy than they were getting. and right now it seems like the market is relatively in tune with where the fed has come after three rate cuts. sideways move, slight upward tilt, very similar to what we emerged from in late 2016 and also late 2012 you had other two periods during this bull market, flat for a long time, then broke out higher now, not to say we're going to get 25% on top of where we are, what the other moves got you, but it shows you that the market because of cyclical sectors starting to lead, the market is trying to sniff out a global point. >> continues in the first quarter of next year >> yes >> upward momentum to where? >> we could get above 3300 and

we could have another blowout from there if a lot of the big worries don't come through the two biggest worries out there that have faded as a recession risk is basically decline to a very low probability. but the other one that is out there, that is still the election risk and that creates a lot of uncertainty around the middle of the year ahead of that, you can fast track a full year's worth of gains up ahead of june, over 3300 the more important story, joe, you like to talk about this a lot, is the long-term. it is easier to say long-term because it is long-term. but in equity culture is being built right now in front of us another massive equity culture the millennials, the gen zs, far outweighs the gen xors if you think of the equity culture with us now that should create this rising equity culture where yields stay low and to create any kind of return in your portfolio, you need a

higher combination of equities relative to fix. the big story is the next year is interesting, but really over the next 20 years. >> tech, financials, across the board, emerging markets are set up. >> certainly set up better right now. they're on the watch list, watch list is many people are still underweight, we're still underweight, non-u.s. equities in general including emerging markets on the watch list for upgrade. that's a sign that emerging markets can contain their recent outperformance those windows close pretty quickly. >> do you follow the 19 people, 19 analysts that we had, 17 of them were below -- are any of them raising >> not too actively just yet seems like everyone is probably right now in the process >> how do they do it good idea to do it late on a friday >> possibly. i try in the to -- i try not to do the -- >> three day weekend. >> to me, the shaming of the bears is something that happens near -- >> that's like -- >> mike wilson, we should

never -- don't bring it up 1600 on the s&p -- no. 2750 bears case was 2400. >> sure, yeah. >> again, we were there a year ago. >> i would -- they should throw in the towel don't stay there foreever. >> just incrementally roll up the range. >> so no one notices you could be a self-side strategist you have all the tricks. >> i take that as the insult it was intended. >> he's saying you shouldn't spike and shouldn't be celebrating, just like when the jumble -- >> you always -- i know. so i celebrate four days and then you do one -- >> you have to sit on it for three days >> let's get down -- >> you said that to me >> let's get down to jim cramer at the new york stock exchange earlier, we talked to jones about the stock market and the political risks and want to show you what he had to say before we get to jim

>> we got an explosive combination of monetary policy and fiscal policy right now. >> do you think a democrat winning, so we're 100% clear, is damaging to the market >> do i think it is -- i think the stock market will definitely decline because that will assume that it is going to be accompanied by a raise in taxes. so yes, it will decline somewhat >> down to jim cramer. are we in a -- is this an explosive combination about which way the market is headed >> look, i'm not going to disagree with him, he's too smart. i'll give you an added twist, maybe make you some money. if you feel elizabeth warren or democrats going to win and they have no fracking, oil is going to go up in value. and you would buy the oil stocks if you continue at this pace, a lot of the oil stocks will not be able to survive but, you know what, i would buy -- if you think democrats are coming on and shut down

fracking, we're finally going to have the shortage we need to be able to buy something like a levered occidental that is the only way i know of there are a lot of stocks that go down. multiples would shrink i'm looking for something to buy and i realized that shutting down fracking is fantastic it would mean that whoever is the incumbent is going to make a lot of money. >> sure. but isn't this too early to really make a bet. >> i agree my colleague, david faber, it says anytime i mention the election, he goes, jim, do you know how far away it is? i have to agree with -- it is a parlor game now. there will come a time it is all going to be talking about every day. >> i got two others for you. no nike announcing they no longer will directly sell on amazon they were going to sell on amazon, it pumped both stocks and you have the opposite taking place right now. >> nike does have an unbelievable direct to consumer plan so maybe the best -- maybe the

most sophisticated of any appar apparel, any supplier, so i don't blame them one bit this is a good idea. you can personalize on that nikk site the stock will be stuck here >> the other big news to me was this idea in the journal that google plans to get into the checking business. part of a partnership with citigroup. apple is trying to get into the financing business through their arrangement with goldman sachs and the credit card. having said that, we saw what happened when facebook announced its libra project. maybe this will be different are they just asking for it? is washington just taking a whole second look at google all over again >> you were with the foremost person at fin tech of our time, dan shulman. and dan would tell you there is credibility and no credibility there is truth and no truth. and a lot of these companies -- hate it or like it, people think that google is on the no truth side and pay pal is on the truth side of the ledger

there is nothing you can do. that's the way it is perceived doesn't matter whether google is good or bad. i think operation cash, project nightingale, operation grand slam, doctor no. what are these guys doing? don't they know what this looks like i think they have to be a little bit more circumspect and less -- >> jim cramer, we'll see you in a couple of minutes. ay tuned you're whoppi you're watching "squawk box" on cnbc back in a minute does your broker offer more than just free trades? fidelity has zero commissions for online u.s. equity trades and etfs, plus zero minimums to open a brokerage account. with value like this, there are zero reasons to invest anywhere else.

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final check of the markets before we hand things off to "squawk on the street. that does it for us today. join us tomorrow right now it is time for "squawk on the street. ♪ good wednesday morning welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. futures soft after the first unchanged day for the dow in over five years. little more trade skepticism after the president's speech and now public impeachment hearings and fed chair powell on the hill today watch europe yields, october cpi runs warm, year on year change 2.3, just short of the decade high of 2.4. road map begins with powell, trade, and