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 impeachment

wall street watching washington today. stocks set for a lower open. >> google, the banker. the search giant reportedly planning to offer checking accounts next year >> and nike's amazon challenge, the sports wear retailer set to stop selling its clothes and shoes directly to the e-commerce giant. wall street's going to pay close attention to events on capitol hilld chair powell will testify before the joint economic committee of congress and the nation will hear public testimony from house impeachment witnesses for the first time the inquiry surrounding the president's actions toward ukraine, for our purposes, jim, we'll see what powell says first as we expect him to say the economy is in a good place. >> yesterday was a punitive moment with president trump calling for negative rates and i think that a lot of what -- let's just call all of our watchers who are in the professional side of things, i think we're unanimous in what was that about, that's off the

reservation. i think jay powell is immune to it i think it is interesting. the attacks happened so much, that it is, like, okay, let me move on and i think that jay powell is no longer in the fix because the president is the negative rate thing i think just doesn't resonate our economy is too strong. >> we don't want negative rates. >> no, our economy is strong right, right look, you may want lower rates and i understand that maybe you want five cuts but it is a sign of weakness i wanted to hear from larry on that, because larry would tell you i think it is a sign of weakness i thought the interchange between larry and the president was interesting. every few minutes larry -- there is a larry -- he said, larry and larry is actually very -- the view of larry wouldn't want negative rates means the economy is weak. >> so you would know that better than just about anybody. >> larry is kind of, you know,

he's an economist, he's not -- he knows what he's doing. >> this is what the president said at the economic club of new york >> it is my election the s&p 500 is up over 45%, the dow jones is up over 50% and the nasdaq is up 60% slightly more. and if we had had a federal reserve that worked with us, you could have added another 25% to each one of those numbers, i guarantee you that that doesn't happen. but we all make mistakes, don't we >> of course, emphasis once again on stock prices as opposed to corporate earnings or gdp >> i think david has to be cheering he felt the president was stuck on the dow jones average he added all the averages now. he must be happy with his work.

>> i am pleased to see he's including everything >> including the nasdaq. >> we were having a conversation last night over dinner last night about the s&p 500, explaining everything to the kids >> how many are in the s&p 500 >> i asked that question, i got a good answer. >> who is buried in grant's tomb. >> they were right on the market cap company. >> the president, i never heard of -- >> the president -- when was the last president who talked about the nasdaq remember when janet yellen thought biotechs were too high >> nobody. no president. >> no president. >> biotech >> i thought it was -- the president, i thought that was a fabulous moment. it validates my complete view of life i represent the dollar sign, i'm a dollar sign represented by a man. i thought it was brilliant he

included the nasdaq. i'll tell you why. stay with me here. it is an appropriate barometer and we have a lot of people come on and say, earnings down, earnings down. but the fact is that the average american does own some way or another a pension plan, a 401(k), an i.r.a not -- this is from larry. >> bottom 50% of americans by wealth own no stocks or mutual funds at all. >> larry is the only 90 million household -- you may not be as -- okay well, there is -- okay larry gave me that number, but all right now where do i go? what do i say now? >> well, for our purposes, stocks, maybe most important line was about i'll raise tariffs if we don't get a deal now this journal piece that says tariffs are emerging as the main stumbling block. >> look, there is -- there is a view, larry's view, and, you know, secretary mnuchin's view,

that we should have trade and particularly if -- remember larry immediately said financial institutions need to go in we had dan shulman on. pay pal is in there, they have a license. it sounded like if the chinese were willing to show some goodwill, this could change. i know that there is other people in the white house who say are you kidding me unless we get the seven deadly sins rolled back, including fentanyl, intellectual property, there will be no deals i think the president is saying, if you don't give us something soon, china, we're going full bore in december we're going to take up every -- >> that's -- that does not appear to me to be something the market is expecting. >> no. >> or reflecting. >> no. >> we had a bit of a rally on the hopes that a trade deal was near there was the hope that they would sign it in chile before it was canceled looking for a new place. what i'm hearing from you, what i read today in the wall street journal and on this stuff, i have no -- of my own reporting,

i rely on what you're hearing from your white house contacts, and what the journal is -- doesn't seem as positive as it did a week ago >> well, see, i would contest that it has been the same the whole time >> okay. >> but the president sides with the people who think that the chinese aren't playing fair. and that the wishful thinking side is the kudlow mnuchin side. >> back to that power struggle between knnavarro, lighthizer on one side, and then mnuchin and larry. >> the navarro camp wants to be i identified with lighthizer i think the president agrees with that. >> it does -- the journal makes it sound like lighthizer has come around to the view that tariffs are leverage >> absolutely. absolutely. >> didn't want to raise them in the first place, but now they're that here, keep them until --

>> raise them. >> this is the journal's report. >> remember that the president's using that view of the households that do own a lot of stocks and saying if you look at that, it is interesting, i look at the -- i look at the -- to clarify, i don't mean to be facetious about it, i look at stocks, i lamented every day there aren't more people but larry has always said that it is far bigger and i know that this is actually empirical it is not as big i think the president listens to larry on this and knows that the nasdaq and the s&p do affect people's lives affects the wealth -- >> that's where the spending, lion's share of spending is from the wealthy. >> when i see -- sit down with the ceo of the norwegian cruise line, who are these people that are spending a fortune sp people who feel great. it is a jobs led economy it is.

it is that it is that. >> i don't dispute that. >> thank you. >> they really want -- the hard-liners are not -- let's dive a little bit deeper >> are people who feel there is a captive group of rich people who want very much -- some of whom are affiliated with goldman sachs, very much to be able to have much more trade and this wing wants ideologically not to have trade it is kind of like it is a little bit like can i just delve into the way google thinks of things operation grand slam, it is that moment where a bond, let's refer to it, says do you want me to talk mr. gold finger says i want you to die the people who in the hard-line want the talks to end. they don't want talks. they don't. >> no, it all comes back to trump and what he's going to milwaukee a decision make a decision in terms of doing. i think if you ask me right now,

mnuchin and kudlow go down the elevator go down the elevator. >> as in bye-bye, you're fired. >> yeah. you never judge? >> no. >> i sent melissa rivers down the elevator i sent joan rivers' daughter down the elevator. >> got it. i remember that. >> you do? >> yeah. watching the clips on our air. >> i thought she was good, actually not allowed to talk about -- >> the fix was in. >> no. you can't talk about the nitty-gritty the fix was not in it was project oriented. >> we'll keep our eye on the hill today google is the other big story. they plan now to offer checking accounts according to the journal. the effort is expected to launch sometime next year with the accounts run by citi and credit union at stanford. unlike ev ft. efforts like the card they don't plan to put

their own brand front and center between that, i think it is called project cash, is that right? >> not cache >> how funny are the people in silicon valley, cache. they're a laugh riot like nightingale how about nightingale. how about project falcon this is another thing we don't need checking account there is still a lot of people that use checks. how about cash >> that comes on the heels of facebook pay yesterday. >> people -- the stock went up four points, facebook pay. they had a currency this nobody liked, new currency that rivals pay pal. i had the cfo on yesterday, it doesn't bother me the top guy went on that show and the number two went on -- i'm not hurt by that they claim they're friends, they always worked together pay pal is the new way people move things. and i think that opening up

checking business once again i look at google and say, would you guys monetize something? i don't think this is the way of the future >> i don't know. i look at china, just not to bring up a sore subject, but think about the power that ali pay has there as part of their financial, it came out of the balances people had and alibaba accounts that went to mutual funds, allows them to pay. payment is a huge part of the mobile experience over there >> that's why pay pal is there already. >> right i can imagine easily it could be part of the android experience around the world why wouldn't it? >> did you look at the facebook app. >> google wallet >> see the facebook app? it is better than venmo in some ways >> i remember kayla tausche asked me to venmo money for the christmas thing. look a venmo trade. >> it is part of -- they're going now, venmo, pay pal says we have emojis, cultural zeitgeist pro venmo. i think a checking account, i

mean, checking, checking -- why not? why not? not us our kids, maybe your grandkids. >> i don't want a piece of plastic anymore. it has to be pay pal pay pal is what people like. pay pal. >> i understand. >> pay pal they should buy pay pal. >> dan shulman on this morning. >> always wears that cool sweater. me, i'm still in the suit. is that cashmere >> i have no idea. >> i think they should buy pay pal. why don't they ever buy -- >> you seem happy about tech data. >> i think tech data is the -- >> you said today, decent reason for ka-ching ka-ching. >> i love -- i've always loved -- tech data is the supermarket of tech. what was i saying yesterday about tech data? 100,000 shopping units remember i said that to you? >> mm-hmm. >> it is a podcast you have to say, yes, jim.

>> we'll hit it around the bell. $130 a share. >> it is too cheap. >> $5.4 billion enterprise out for a while. you won't see a pop. >> i have to tell you, their business is so good, so much better than ab net they have a better call. by the way, they're the best call on tech they would tell you tech is booming. just booming unlike the naysayers >> we're going to -- >> kudlow says that almost everybody's stocks -- >> says what >> between people. >> yes for sentiment, yeah. sorry, larry didn't mean to -- >> you said kudlow and cramer, that was the number. >> great show. >> thank you my father said i like that kudlow, he's very smart. >> really? >> would you bring it back, if he was done? >> yeah, i would i always hated the fact my father said he's a little smarter than you, but if you

worked -- everybody was smarter than me. >> that's ridiculous. >> if you worked harder -- >> wow there you go. >> this is getting deep. mad dash coming up with the opening bell big day of coverage in washington look at futures here, more "squawk on the street" from the nyse is straight ahead as a principal i can tell you this. when one student gets left behind, we all get left behind. this is a problem that affects each and every one of us. together with ibm, we created a whole new kind of school called p-tech. within six years, students can graduate with a high school diploma, a college degree, and a pathway to a competitive job. you know what's going up today? my poster. today, there are more than a hundred thousand p-tech students around the world. it's a game changer.

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♪ 13 minutes before we get started with trading here at the new york stock exchange. let's get a mad dash in now. >> hump day, isn't it? it is wednesday. like, tuesday, wednesday >> david, david -- >> what do you got >> i often use the term suboptimal to describe situations that are suboptimal smile direct reported last night. the numbers look good on the surface. they talked about rising expenses, a technology glitch, how they spent a fortune, a lot of money on a social media campaign that didn't work. they got many questions about whether california's got a bill that will make it so you have to get new x-rays which would make it so you go to an orthodontist. it was a suboptimal conference. >> the first quarter since the company went public. >> right it has not been a good

investment. >> it hasn't no >> it is -- >> no. >> this is a key number, david that's a number that implies you lost a lot of money if you bottom smile direct. this one is the biggest of the majors, some people think the biggest disaster you got very little comfort if you listen to the comps call they have fantastic growth and a lot of members, i never thought of -- i had braces, david. >> i was not a member. >> not a blue apron. went straight down and was -- >> blue apron, interesting to be mensed in the same -- >> i remember it went public we had a lot of questions for the ceo at the time. a lot of -- about the business model. >> we should have smile direct come on. because i think that what we would say is there is two sides to every story, david. i think -- i had braces. >> yes >> and i had -- i spent a lot of my parents spent a lot of money on braces. this is a much less expensive brace. you have to put down some money and you can use the credit card of theirs, basically, credit card, i'm not saying this is a bad service. i'm saying they're spending a lot of money to promote the

service. that's what i think we're really upset about and whether the orthodontist around the country will try to pass bills so they make it so you can't do your thing. i present the story, which says, the selfie generation wants their teeth straight. >> got it. >> two sides to every story. right now it looks like the bears are more in control than -- >> long line of underperforming ipos. >> i think about it a lot when i look at my wife's peloton. >> another name. >> this time it is using towels. >> towels? >> towels. >> towels. i'm saying exactly what you're saying towels, rhymes with powell and owl. towel. it is great to -- david, it can dry a towel better than a rack >> i'm sure it can. >> while you dry the towels, music playing and someone telling you to go like this. the towels aren't listening. >> we got an opening bell coming up only one thing's

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you watching cnbc's "squawk on the street" live from the financial capital of the world the opening bell in just under four minutes on a busy wednesday morning. >> yeah, look, this is one of those days where yesterday it was so flat that it looked like nothing was happening and yet underneath there was tremendous activity a lot of what i -- i think there may be a move to sell a lot of the soft good stories, they're not moving anymore they're not going up the procters and the coke, they

stayed like this i think the next move for them will be -- actually will be down because somehow they relate, every time you think there is no -- there is -- that tariffs could come back, those stocks have been the worst hit. no longer the industrials. you would think the industrials, but the industrials have been able to be very deft about moving out of china. >> you're counting on a continued rise in yields goldman says ten year will struggle to get past 2-2. >> the mortgage demand is so high i think the economy got a little bit of pickup. i see it across the board with texas and louisiana. if we don't get a democrat in the house -- in the white house, there is just -- they're not stopping they're pumping and pumping and pumping. you get a company like occidental that levered up, i don't know. >> they haven't -- i thought there were some indications things were leveling off a bit. >> oil can't go higher

i got the curves >> we're going to produce how much >> just too much that's why if you have a democrat in the white house and you start fracking that would be the greatest thing for -- >> they're not going to stop fracking not going to outlaw fracking >> if you got a democrat in the white house, it is not -- >> a democrat is not -- which democrat >> they're all kind of anti-fraccing. >> plenty of fracking under obama. >> well, he was not pro or anti-fracking. elizabeth warren is going to be -- david, it is too early. >> it is too early >> but elizabeth warren wants to shut down fracking, which would make it so you want to buy every oil stock if you think she's going to take the white house, you want to buy chevron until the cows come home. >> really? >> absolutely. >> production gets slashed. >> we have -- >> supply gets tight. >> no longer energy independent?

>> we wouldn't be. >> what are the chances that would happen >> very good rusty brazil saying that, rbn.com. >> what law could you outlaw fracking wouldn't you have to pass a law? >> what they would do, they would create a thing, i think nixon thought of it, an environmental protection agency. >> we have one but now it is led by a bunch of lobbyists. >> well, the aramco prospectus says we won't peak out on demand until 2035. >> electronic vehicles, how about now that this man doesn't tweet, you got to -- musk, now he's putting up a factory in germany. ev is -- we talked about ev being too slow in europe. >> that berlin factory is what he tweeted about yesterday and morgan stanley's jonas saying that the -- could get some decent margins in china.

>> i was at an investment dinner last night, people are making investment case for tesla. the bears, david, are growling because i said that. >> opening bell. at the big board, sap, kline and morgan at the nasdaq, it is dexcom for people with diabetes. >> you see who is retiring. >> powell's remarks are being released let's get to steve liesman. >> thank you very much fed chairman jerome powell will say the current monetary policy stance is, quote, likely to re main appropriate he says the full effects of rate cuts done, three this year, will be realized over time. the fed will pause here and wait to see what effects they have. but he does say the federal response to material changes in the outlook and the policy is not on a preset course

he talks about what would happen in the event of another downturn he says lower rates may limit the ability of the federal reserve to support the economy, his fiscal support may be needed in a downturn scenario here, he makes one of his most impassioned pleas i can remember for the congress to get its fiscal act together, the federal budget is on an unsustainable path and that we may have to rely on fiscal policy in the event of a downturn. so there should be some fiscal space there for congress to do so overall on the outlook, it remains favorable. business investment restrained by slow growth and it is restrained by the trade war. inflation is running below the 2% target and talks about downside risk to the outlook, which include global economic weakness along with the trade war and muted inflation. risks to the financial system, he says, remain moderate he does say that the debt load of businesses is historically high >> steve, in your mind what is

the biggest change here? >> there is two things going on, the fed is involved in this fed listens thing, it is rethinking the framework and part of that rethink fg ting of the framewora do we do with rates so low and they talked about that, and they talked about additional quantitative easing. i think they really like to see congress get its act together to have some fiscal space to move in the event of a downturn the next time around i will tell you, i'll check this while i'm talking, we went into this speech with a 2.3% probability of rate hike in december and you had to go all the way out to july, carl, to find a greater than 50% probability of another rate cut and so i don't see that changed here. what happened, i think, is we have settled into the fed being a kind of nonfactor here the fed is on the sidelines unless there is a material change in the outlook, and then you can go crunch your numbers on earnings and crunch your

numbers on politics because the fed is going to remain on hold here and that's the market has baked that in. >> that goes right to your point about how the president no longer has him in a box. >> he doesn't. look, i -- i know the market is saying i'm wrong, things are slowing. maybe reflecting the fact there are some fearful things that powell mentioned and also maybe that the navarro camp is going to win but as we finish earnings season, it is the industrials are good and the others are so solid. it is supposed to be the other way. rockwell automation was a terrific example tyson was -- tyson has issues involving food safety, but look at the bags, they're getting killed they're getting killed it looks like that, you know, interest rates are going down. they need rates higher i find this hard to -- things are better i really believe things are better you think i'm too larry kudlow, don't you?

>> he's talking quietly again. >> i think things are better the market at this very moment is saying i'm wrong. >> steve, thanks steve liesman bringing us powell's comments and we'll hear him speak at the top of the 11:00 a.m. hour. >> he said some thing, what steve said, you know, to -- if we get in trouble, i don't want to hear that, i don't think we're getting in trouble i think things are strong. dex com rings the opening bell end of an era, miles white, the chairman and ceo of abbott labs, the second longest -- 21-year tenure, second longest for nonfounder of the s&p 500, he created $220 billion in shareholder value, total shareholder return of 575% one of the great --being replaced by robert ford, glucose monitor, the high end, is dex com. these guys are more the mass congratulation on a fabulous run. staying executive chairman for a

while. those of us who have followed what miles white has done, if you did whatever he told you to do, and you owned his stock, just one of the great -- maybe only the blue chip left, now the change has always these issues, talc, opioid, so congratulations for what a great run a fabulous run. >> strong tsr. >> strong tsr. >> total shareholder return. >> expansion emerging markets. he doesn't like tv, doesn't do tv medical devices, st. jude, great acquisition. good acquisition >> yeah, they didn't want to do -- >> 500 million. >> they did, yeah. >> congratulations sometimes you have to say some people are money makers. and mileeast of our time. >> healthcare has been a big contributor to q 3 revenue growth >> yes >> more than half.

>> stocks, they stalled unless they're buying somebody. abbvie and bristol-myers are doing very well. $40 billion of demand. >> raising 28 billion is what the original was we know the fixed income market are wide open in a lot of -- >> that's why -- >> back to our conversation we have all the time, where rates are and the appetite for good credit >> yeah. >> right now, people are buying the slowdown thesis again. >> why you can have a conversation about something like walgreens lbo, as hard as it would be to imagine, the debt side is probably not the hard part to imagine. finding buyers for that paper. >> bullish or reckless. >> leveraging a company to seven or eight times is not necessarily the smartest thing

to do. >> ft said maybe you can do 30 in debt and then the rest is the hard part. >> yeah. you can do more, i think you have to, enterprise value with the 16.8 you already have. and the equity val you, you have to do it. >> amazon is targeting the front end of the store. >> say it again. >> anybody been to a amazon self-no checkout go to the store, don't have to deal with anybody, not a soul. millennials, they don't know how to talk. they just text they don't want to deal with the checker. they don't that's even an interaction they're uncomfortable with. >> amazon is a story because of nike today, no longer going to sell their goods on amazon going to focus on its own direct sales, back in 17. you remember they did agree to sell products in exchange for stricter policing on counterfeits and they say that's a problem. unauthorized vendors they keep aws as part of their

app. but they'll do this on their own. >> there is chatter that this is great for dick's i would say that nike's web presence is brilliant. and the idea that you can personalize, mark parker created this whole -- mark parker was -- he's still there, visionary. and their website is great anyone who has gone on fifth avenue store, that's a showroom. i find that place -- i've gone there just is a tourist. >> i have been to that -- >> what did you think about it >> i had no idea where to pay for anything so i left. >> you go to nike.com, that's kind of the point i'm making. >> i couldn't find anybody >> the point is, you look and then you -- you go on nike.com. >> a lot of floors, very vertical >> that's really informed. >> thank you. >> 30% of their sales are direct, so they are -- that's a significant percentage. >> they figured -- they cracked the code you don't need amazon. but i can't tell you another

retailer where amazon isn't a better -- i don't. amazon is the channel that -- because of the way it comes. >> third party sellers, 16% of the amazon platform. you can go on there, try to buy a book, you know, i got a xerox copy of a book from somebody. >> working in xerox, didn't you? i knew you had to work in xerox. you did that, didn't you >> nothing to say on xerox and hp, things are quiet right now. >> are they? >> yeah. for a little bit. >> boeing? >> say again. >> boeing. >> disney plus. >> all the names -- >> i had -- my late great editor don force, at the l.a. examiner, i said, i have nothing to write about. he said okay, rockets. >> i'm happy to talk about alibaba. and the enormous listing that

will take place in hong kong we talked about it a number of times. they did file. >> did you watch eunice yoon this morning >> no, i didn't. >> they have pro and anti-companies, companies they feel are identified with chinese and the protesters i think this is an interesting deal because this identifies with the government >> yes, it will -- it says has confidence to do an enormous listing on the hong kong exchange despite all the unrest there. >> schools closed today. unimaginable consequences if this goes on. >> this is every day used to be the weekend we have to talk about this every day. her reporting is so good >> yes >> i was scared today for the everyday person. i thought of you immediately in this they shut this exchange down >> i have no idea, jim i'm just here to deliver some specifics on the actual filing itself and what alibaba's plans are for going public -- or

listing on the hong kong exchange let me -- i'll do that this is interesting. there is lots of u.s. investors who want to be focused on this $13 billion deal, 500 million shares, 75 million green -- about 2.8% dilutive. and these are all new shares not selling shareholder. this is being sold by the company, to raise what could be as much as $13 billion depending where it gets priced by the way, the road show going on now, pricing expected on the 19th of november evening of, the morning in hong kong of the 20th then they have the five-day waiting period in hong kong. you basically, you can't actually hit the market right away it is an administrative process, several days are needed, for retail investments to prepay, to subscribe for shares won't start trading until the week of thanksgiving one of the questions i've

gotten, though, is what about the ability to be fundable with what trades here that will be the case. it is 8 ordinary shares listed for each ads listed here, right here on the new york stock exchange and you will have the ability to -- to be fundable a conversion, with days to process, but fundable with the u.s. ads that's what alibaba is doing they're on the road. they're going to see what they get. $13 billion as much as could be raised for the company fundability, and a plan to actually start trading by thanksgiving >> good quarter. a lot of people use them and ten cent we don't talk about so many of our merchants put a lot of stuff out there. china is such a good market. no one is denying the consumer side that china is a bad market. on the industrial side, people are telling me, this is where the weakness is and the state-owned, state-owned enterprises and banks are the

things that say that navarro -- are on the ropes here. >> really quick, three pieces of news on apple. rbc initiates outperform president to texas next week with tim cook, and tour some facilities this new mac book pro, 16 inch, starts at $23.99 depending on your outfit, could be making a $6,000 machine. >> i tried to go and give everybody there a thousand dollars. that store in midtown. a thousand, no one would take it they were so busy. i don't know this is -- it is elegant and there is, again, keep pointing out the disposable income this it country, they have a market. they're very good at trying to figure out the market. they also -- i think they could use another -- a doubling of stores people like to look at these things and trial them. i was up -- i like to go to that, like i like to go to the nike store, i love to go -- sometimes incognito to the store in the old gm building. >> how do you go incognito

what disguise do you wear? >> a hoodie. >> a hoodie, hat. >> you show up together? your hoodies. >> no, we're not that close. >> you're not? >> am i closer than navarro? >> it is a great question. >> america would like to know. who texted you recently. >> it is called sourcing he doesn't -- he has sources, but -- >> thankfully. >> i have sources. >> i use this, i'm not afraid to talk on the phone. >> no, you can't be. >> no, i'm no millennial got to move on -- >> don't just text or email. >> that's right. >> we had a sharp reversal from the opening low. dow down 44. to bob. >> only down 6 president didn't sound terribly enthusiastic about the whole negotiating process yesterday. that's weighing on the markets here is your banks down, yields have moved back down, transports, which was a big market leader, weaker, semis, and utilities, defensive, not

surprisingly on the upside we have other hot spots in the world, though. independent of the whole trade issue. want to point out, hang seng, three days now of demonstrations over in hong kong. and look at that, it is when you see the hang seng down 2% on overnight basis, it is down 5% in the last few days, this is starting to show up on commentary on trading desks, you start getting a 5% decline in a major market like that, keep an eye on that. spain, well, the socialists are forming some kind of coalition, and they don't like banks particularly they want to put a big tax on the banks. all of the banks, particularly spanish banks are to the downside look at some of the european markets. not surprisingly, with the yields lower, santander, spanish banks, ing, which is dutch and tesla, torin in italy, all to the downside these had big runs in the last two months or so as they come off the lows

autos, of course, these are ping-pong balls for global trade. they have come off the low dramatically in the last month as trade prospects have improved you see all of the usual suspects are to the downside today here powell's testimony, you heard steve give us highlights about what he's been saying here the fed, of course, is the mover of the markets everyone expects him to remain neutral. the indications are the testimony will stay there, appropriate is the word they're using. the question for the market and everybody is trying to figure out is what is the range of trading for the ten year is the bottom in and is there much more upside to the ten year yield we have been in that channel from about 1.4% or so, put up the ten year, to about close to 2% here, here is the channel that we have been in, and everybody is trying to figure out are we going to break above that or just stay in this channel? goldman sachs out this morning with a note interestingly that weighed in on this whole prospect and they said, a major portion of the bond sell-off is behind us, essentially saying that the yield right spike we have seen, we about hit the

limit of that, ten year treasury, will struggle to stay above 2.2. i said 2% was the high we saw recently central banks setting a high threshold for future changes goldman is saying we're range bound right now. that has a lot of implications, carl, for where the banks have been, that big, big rally, according to goldman, implications may be essentially done carl, back to you. >> we'll see if that changes thanks, bob. >> so bad for the jpmorgans, the leaders of this market bizarre confluence here. the banks have been so great i would hate -- if we lost the banks, that's a bad sign that's also a sign that the kudlow wing is losing. >> really? even if we got great pricing in semis, you would rather have the banks lean >> the banks are a sign that the economy is alive and well. that's what i believe and i think people take their cue from jpmorgan, which has been such an extraordinary stock. >> that's for sure let's get to the bond pits rick santelli at the cme

>> good morning, carl. first, let's look at 24-hour chart of two year note yields. long before the sun rose on the east coast, we saw the drop in rates. rates are higher now than then the point is that release of the 11:00 eastern talk that chairman powell is going to give in front of the joint sessions of congress over the next two days didn't move the market at all. but i want to pull out just two of the key headlines that were out there. the first is debt load of business historically high and next one, that plays right into that, the federal budget on unsustainable path do you think aiding and abetting with low interest rates has to do with either of those conditions and especially on a corporate debt load. that was part of the plan, moving the riskier assets. in order to move into them, you have to issue them anyway, it is amazing to me that the medicine for what is wrong with us is pretty much the medicine they gave us to cure us

in the first place look at two-day of 10s you see that today, notwithstanding the lack of effects on the early word from our fed chairman, we have really dropped down we dropped out of the range. matter of fact, if we were to close here, all treasuries on the curve would be at one-week lows and bund yields would be the lowest yields since tuesday. add one extra day. let's look at september 5th of 10s. bob was talking about what goldman thoughts are about 220 first, we have to really clear the zone on that high in september at 190 we dabbled with it but we have slipped below it that's a negative. we want to see how it closes four-day of bunds, i talked about them earlier four days ago, friday, the high water mark minus 22, 17-week high now we dropped down to minus 30. carl, jim, david, back to you. >> rick, thank you rick santelli. before we go to break, disney's debut of the new streaming platform was anything but glitch free. thousands of users greeted with

error messages and a frowning character from the movie "wreck it ralph . company says demand far exceeded expectatio expectations it was the daily show with trevor noah that might have had the best response. >> disney plus launched today and almost immediately crashed which is too bad but at least the error screen was really cute. look at that though as the day went on, it only got worse >> i think colbert said his favorite show on the platform is buffering. others said frozen >> look, sorry, it is positive th the sampling -- david do you have any idea of the sampling of verizon? they say the sampling there was big. >> that's an important partnership they have. >> we've been through this with netflix in the past, like on christmas eve, remember those days >> so it broke down a little

there's a huge number of people sampling something that i feel -- i understand if you have little kids. there were adults. brian sullivan was watching it like ten times. >> what was he, "the mandalorian. >> when we come back fed chair powell's testimony begins at 11:00 a.m. eastern we'll take you to the committee then the dow is down 64 but in my mind i'm still 25. that's why i take osteo bi-flex, to keep me moving the way i was made to. it nourishes and strengthens my joints for the long term.

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you know what? sky work solutions should be trolling today's talks the ceo did a great job of about how 5g is not a product, but a technology the stock was up huge ahead of the quarter, so don't read into the fact it's down today i felt very emboldened there will be a multiyear -- not 200 million handsets the way that

qualcomm characterized it, but maybe a billion. >> a billion >> everybody who is 3g and 4g has been having trouble with this. >> you think downloading a movie faster will take phone growth? i'm just asking. >> they talk about latency what i say is really good is all the electronics you add are going to need this very fast stuff, especially -- but he did mention streaming, the huge amount of streaming from all the different companies is going to be require to get it to you fast a 5g so it's a matter of flooding the zone may actually slow things do down. there was a stat this week that said every few years there would be a -- >> a huge amount of cars will be

connected. now, i don't want mea car connected. connected to what? >> connected to a network which will network all the autonomous cars the lack of latency is the key there. the edge of the network becomes the key part of where the computing lies that's important. >> do you think google is trying to fidget out where you might want to go in 2021. >> don't forget tesla? they might have the most data. >> if you want a read, why anyone would think that 5g a valuable, go to his conference call he's a very transparent good guy. i think you can make a lot of sense of what's going on. what's tonight >> we have a company was hersha. i don't know if you've noticed, some feel that the reits have been bad

jay shah has been fantastic. i'm trying to gauge everything hotels, cruise ships i really believe consumers are going. even the gas prices -- >> don't be negative 90 million households do not have stocks. don't ever forget the elevator. >> going down the elevator got it i'll remember that. >> jim, thanks. when we come back, a big day on capitol hill is about to begin, from the fed chair's testimony to public impeachment hearings don't go away. se roads se roads shhh, sorry, i didn't catch that. i said ask how soon they can be here right now? what's now? he says they're surveying our property now they're probably at the wrong house i don't see any hovering his name is hovering? look up? by automating claims with machine learning and analytics, cognizant is helping insurance companies advance how they serve even hard to reach customers.

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♪ ♪ good wednesday morning well cub back to "squawk on the street." dow coming off an initial low, currently down 31. a very busy day on capitol hill. three big events that investors are monitoring front and center for wall street, of course, is the fed chair jay powell delivering his latest outlook after his

testifies before the joint economic committee. the first public impeachment hearings kicking off this hour. and then vape, e-cigarettes and the public health response in focus for senate health we are going to among tore all those developments. we'll begin with the fed let's get out to our own steve liesman about what investors should expect. hi there, steve. >> good morning, jay powell telling the committee essentia rates are on hold as long as nothing being changes to the outlook. current policy stance is likely to remain -- the full effects of the three rate cuts the fed has been already done will be realized over time and the fed will respond to a material change in the outlook. that's the same standard he's been talking about for quite a while. he does say downside risks remain to -- business investment restrained by slow global

growth federal budget he says is on an unsustainable path, and the debt load of businesses is historically high. he does say the risks to the system remain moderate he says the outlook is favorable, but in a downturn scenario we may have to rely on fiscal support and he urges congress to get hits act together the market has fully embraced the scenario you won't you have to go out to july 2020 to get above the 50% probability for a single rate cut. i don't think the market hats a rate cut priced in there, in part because i think that's a flier on hedging your risk there. we'll probably see that go down if things remain the same, and the market will price out that

rate cut the pause is fully priced in, and powell will emphasize that today. >> not on a preset course. >> right thank you for running all that through for us there were stocks in a flattery yield curve. meanwhile, trump's trade threats and public impeachment hears are giving investors at least some cause for caution. libby cantrell, and david leave ko wits, libby there's a lot going on should the market be concerned about it >> i don't think the market will be concerned thisl they haven't been concerned, and for good reason i think the market will only be concerned in the short term tess if it looks like conviction is possible it's just a question of whether

you ca to vote with those 47 democrats in the senate to convict the president. that's when i think the market will care, and that seems like a very far away from that, from that probability. >> david, if we can turn your attention to powell. obviously steve liesman giving us a rundown very unlikely we'll see any action in december, as he noted, with probability does the course of action feel appropriate for you for the current scenario >> yeah, in our view we think what the fed has done so far is probably enough. there are some risks, though if the trade tariffs do go forward, we could see some further slowdown in economic growth in 2020, and as a result we could see the fed resume some of its cutting, but until we see if that doesn't happen, then i think the fed is probably likely

done with the cutting stance i think the market is generally correct in terms of what its own outlook is >> will iy, trade continues to be that major, major question mark might be we're close, maybe we're not, how risky is it that we may not get a trade deal? >> it's a greet point, something we're spending time at pimco discussion there's a deadline for the president to make a decision about auto tariffs the market expects him to delay that deadline, but that's an uncertainly that will remain in the marketplace. of course the bigger one is the china and u.s. trait tensions. it feels like the mart is priced for -- assuming that there is appetite, to reach this phase

one agreement, but wow are there still sticking points just to get to this phase one, that should make investors more conscious. a face one, sort of the easy stuff is this hard, i think phase 2 will be much more different. >> do you even think we get a phase one signing by the end of the year >> this is probably more of a hard slog. president trump obviously has electoral incentives to get something done, but the big issues, the shuts that have been the stumbling blocks are still those issues u.s. negotiators are trying very hard in order to overcome them, but they still remain obstacles. to your question, sure it's our base case you get a phase one.

>> david, if you are the chinese and you're watching the impeachment hearings, and looking at iowa in ten weeks, what incentive there to sign a phase one? unless the tariffs come off? >> i think for both sides the tariffs have done some damage, certainly to business confidence so i think the incentive is to try to mitigate it it if there is no deal, hi 'threatening to -- i think there's enough common ground to pullet this to the back burner

>> david, it seems like we've been back and forth with the market what do you think could be a major breaking point >> the next couple weeks, it's going to somewhat quiet. earnings season is winding down. i think everybody knows that earnings season was okay, not fantastic, but certainly wasn't as bad as some people were fearing. we don't get any big economic data either in the next couple weeks. seeing how retail sales come in, i think will be an important

look >> david, quickly, can you give our investors some advice? i think the consumer remains healthy. so consumer discretionary, consumer staples look to be well positioned you have the internet services companies, as well as some of the telcos, so those would be the areas we would be focused on. thank you both for joining us here today. when we come back. federal health officials are pointing to black market thc products as the likely caught of the vape illnesses on the rise wheel talk about what today's hearing could mean. and later, we'll debate

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meg tirrell is monitoring the hearing. >> they identified a potential culprit in the illnesses, pointing to vitamin e acetate.

the administration began a crack down on e-cigarettes there was an alarming spike in the number of kids using e-cigarettes, most using juul. just last week they stopped the sale of mint flair they'll cut 16% in workforce where are we now it's been more than two months since the trump administration said it planned to ban all flavors of e-cigarettes, and there's a sign of possibly softening their position mitch zeller will be testifying this morning, and anne schukic

of course, guys, they're likely to have quite a few questions, including on -- that products should be just pulled from the market completely >> meg, it's david you can help we're talking about two separate issues one is the thc-related health issues from vaping thc-related products the other is just the nicotine vaping for minors, which is also obviously big issue. >> yes, these thence have happened at the same time. that now health officials are homing in on particularly black market thc products, as the things that are causing that we're hoping to hear more about that investigation today and get more clarity

at the same time people are have i worse about youth use, namely products that have not been associated with the lung illnesses that we know of. yes, two separate issues, leading to a lot of fears around this. >> that is for sure. meg, thanks for setting us up on that curran, thanks for joining us today. >> thanks for having me. >> i wonder if you're worried about the space. >> no, i think as you were talking about, it's becoming clear that black market is the vale issue here. the real cannabis markets in states like where i am, have very strict standards for monitoring the space, both on testing, as well as overall compliance ensure that we know

where all our products are so while it's certainly an issue where we're all concerned, in the legal structure, i think we're in quite good shape. i think the public markets always do lead to some price softening in what happens in our world in private markets, but clearly we're dealing with two very different issues.

there's certainly a pullback in miswe all anticipated, but certainly not as dramatic as what you've seen a lot of concern for the public health about the illnesses and deaths associated with vaping. while there's still a lot of unanswered questions, perhaps some of t the commonality is, did you certainly highlighting it and knowing that it's an issue is something that would be addressed immediately.

what about -- the commission may have overturned that, but is that a concern for you as in the continuing to resonate again what happens when you stop the legal sales? you draw people further into the black market where there's no regulation, no testing standards and you can have all sorts of cutting agents, so i think regulators need to be more mindful, what is actually drawing consumers toward potentially much more harmful products. is there any situation where you were in a case where it's legal for recreational use, you had a choice between flower to a

vape pen, would you go to a vape pen with no misgivings >> i think products before they hefl the shelves as they move from flower into distill at. >> it looks like the prices are falling. we know this is a growing industry, but what about it ultimately being a profitable there is becoming much more focus on profitabilities >> that renewed focus will ultimately lead to a much more healthy industry >> karan, thank you for the

insight. we'll monitor senate health today as well. thank you. when we come back, nike and amazon parting ways. we'll tell you what's best hind e thpartnership, when "squawk on the street" returns after this break.

nike says it's decided to focus on its own direct-sale business nike had agreed to sell products to amazon in exchange for stricter policies on counter -- counter fits they look at it as just another distribution platform like a retailer others certainly feel differently. we know birkenstock has pulled their brand from amazon fairly publicly some other smaller brandt have done the same thing. i just got this amazon fashion catalog, there's a very big adidas spread in it. new balance is also mentioned in here as well, but there is no

nikes in here. perhaps this was a deal that had been coming for some time. nike gets about 30% every the sales direct-to-consumer now. >> how big can it get? is that the plan to increasing it in? >> when you're looking at distribution, how much -- some people i think have said it could be 50/50 i think for a long time when consumers were going online, amazon is the place to go, but now that so many retailers have honed their supply change and distribution, maybe you don't need an amazon like you used to. what is the advantage? speed or ease? but if you want a brand experience, you want to go to the brand, and they can give you more there >> as shoes get more customer

manyizable, you can decide the color of the eyelets on the shoe, the more that gless done, the more you'll want to do it online i know nike isn't luxury, about you a lot of luxury companies struggled with online. so i think it's still something they're figuring out, but the customizable experience is something you have to do yourself i think there's fear about the data and what happens to the data when you have a partner like amazon that is so powerful, auch how much do you give away >> we are surprise when they joined. it's time for the etf spotlight. up more than 25% this year, despite rough times for a number of companies that have gone public one of them is pile direct stocks down better than 16%, now

about 60% below ipo. a different story for china's luck in coffee, surging on better than expected results, so two different directions, as we watch both those names, but probably smile direct more. >> >> and the names that come to minds have not done well when we come back right here, what an elizabeth warren presidency, would it be bad for wall street? we'll debate when "squawk on the street" comes right back ♪ ♪ ♪ ♪ ♪ ♪

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good morning, everything the israeli military continues to carry out airstrikes with smoke rising from the city's skyline. israel's defense minister says the country will not hesitate to target nor gaza militants. >> the past 24 hours, the jihad islamic terrorists shot over 250 rockets and missiles on israelis, on our families, on our children but these terrorists are not only out to kill israelis. in in fact they're killing their own people in gaza. a car bulk in kabul during the morning commute killed seven people and at least injured seven more the target of the attack was not immediately clear. in hong kong, police arresting protesters, as they brace for more violence after sharp clashes overnight.

police have arrested over 3500 people since the movement began back in june carl, i will send it back downtown to you. >> sue, thank you very much. a new poll this week showing that mayor pete buttigieg surged to the top spot in iowa. kayla tausche is looking at what his economy policies may look like. >> headlines was on a central entrance, and another mayor pete buttigieg has been chipping away at moderate support for former vice president biden, and taking the lead from elizabeth warren according to monmouth, 19% biden, followed by senators warren and sanders at 18 and 13%. the shifts are important for two

reasons. first the caucus on february 3rd is the dun's first primary snapshot, but also because in eight of the last ten, the candy who won't iowa went on to become the democratic party's nominee buttigieg is -- but not nearly as progressive as warren he's proposed free state tuition for families earning less than $100,000, and would fund the 1.5 2ri8he's proposing by rolling back the corporate tax cut. the remains balance would be funded by a tax on unrealized capital gains for the top 1% of earners. as for the mayor's campaign finances, he ended the third quarter with $23.4 million cash on hand. courtney, it's more than double what the vice president had. >> those are some interesting moves. thank you, kayla

meantime the chamber of commerce releasing a report on elizabeth warren's stop -- >> the chamber of commerce coming out swinging in defense the private equity it sought to address the impact of senator warren's plan to reform the industry. the so-called stop wall street looting act would -- it goes on to say the legislation would result in the loss of as many as 26 million jobs, up to about half a trillion in annual tax revenue and cost billions per year in investor losses. the stop wall street looting act would, among other things make p.e. firms response for the doble eliminate firms' ability to extract dividends and change the way carried interest is taxed. senator warren responded, say,

quote -- it confirms exactly why we need for fundamentally reform the industry they control the fate of millions of workers, and the models puts communities at risk. wall street is panicking, because my bill would finally make these firms take real responsibilities for the outcomes of the companies they cover. the industry has long had a campaign to showcase where p.e. can do good. last week he received one say popeye's checking is back, thanks to private equity guys >> thanks, leslie senator warren's plans are generating debate hedge fund manager and columbia professor richard robb joins us of a new book

"willful "willful." we're also joined by economist mark zandy she does seem intent on closing down that industry, if not curbing it. >> the industry shows that private equity exists and flewitious in the united states and elsewhere not because of the tax advantages, but because it's a better model for corporate governance i think that will last it will find a way through these tax plans. i think the notion of jobs is somewhat absurd. kkr takes over walgreen boots alliance, 415,000 people that work there i don't think they can take credit for those jobs. in concocting these statistics, it's common to say the worker in walgreen's gets their car fixed, the mechanic goes to a restaurant, so we take partial responsibility for those jobs. i think the industry will continue to contribute to our

well-being. >> there is those who say it's benefited a great from interest through the years, and obviously a capital gains structure. >> but if you look across companies and across countries, we don't find that that's what drives it. it's mostly value added that they seem to create, because they ked operate in private, take a long-term view of things. >> true. >> bring the company back out again. >> they do leverage quite a bit. mark, let me come to you buttigieg may be surging, but we're still talking about warren what are you hearing and what are you responding when you're engaging in conversations about or a potential tax plan on what it would mean for economic growth, or the lack of it, in the united states. >> it's big, there's a lot of moving parts she has a lot of different

policy proposals you consider if you stake any one of her proposals there's a lot of good, a lot of bad we can debate it, but i think it's increasingly important that we consider this in totality he has a housing plan, a clean energy plan, a plan for child care, a social security reform plan, medicare for all plan, each of them have tax proposals attached to them all of these things will conflate with each other, have impacts, and to really understand what's going on, i think we need to consider in its totality picking off one of the proposals would be a mistake to try to understand what she's trying to do and if she'll be effective. >> is there any part that would promote growth we were talking about her plan to ban fracking through

executive order. that wouldn't see to be that good for economic growth the chamber of commerce sis 46 million jobs, that certainly is overstated, but is there in her plan that would increase growth? >> the housing plan. we have a crisis in affordable housing. vacancy rates across housing stocks are falling, all at the low end of the housing market, so low income, moderate income americans can't afford to live close to where they work, so she's put together a proposal to help plo mott more supply of affordable housing in places where we need it in urban centers where vacancy rates are low, rents are very high she funds that by pumping up the estate tax in my mind, if you take that proposal, just that one, that's probably a pretty good proposal.

it's addressing a good problem, reducing mobile of the population and she's paying for it, it's paid for, not adding budget definite at this time with a higher estate tax. in my mind if you want to tax high net worth incomes, that's the most effective way to do it. that's an example. >> richard it sounds like mayor pete has something for unrealize ed capital gains i mean, is that something that would help redistribute wealth in the country >> in theory a wealth tax could be pro-growth. the people at the high wealth levels will continue supplying the same amount of effort. they don't work to give up an amount of leisure. it's the kind of game they play, and they'll continue doing it. whether you think it's fair,

whether you think it may be theoretically pro-growth or if the rich will do more with the money, i think it's unworkable, and maybe people know that it would be like -- jim my hendrix's estate is still unsettled, and the rich will be there trying to overcome it, the cat and mouse between the rich and the i.r.s., it's hard to think how that could work. mayor pete's plan seems much more practical than a wealth tax. >> that's a great point. we talk about these taxings in conceptual terms no one talks about the --. irs can barely close the tax gap. >> i'm sympathetic to that

we know that government is being starved. woe also now the distribution has become more skewed it's double what it was two generations ago. if you're solvinging for those two problems, it's reasonable for focus on how do we raise more retch to fund the things we fund, particularly innage aging population in my mind, i don't think i would go the wealth tax way, because of the all the things that richard mentioned that you referred to, it would be pretty tough to execute on that i would juice up the estate tax. i would go back and take a look at capital gains tax as the preferential tax treatment around that. i would let the tax cuts to

high-income households, i would let that evaporate i am sympathetic to the goals. government is being starved, and we need to address the wealth and inequalities that are getting worse. >> thank you, gentlemen. as we go to break, dow has gone green to the tune of about four points. s&p is hanging on to 3090, as we keep one eye on the hill don't go anywhere. solution. introducing... smartdogs. the first dogs trained to train humans. stopping drivers from: liking. selfie-ing. and whatever this is. available to the public... never. smartdogs are not the answer. but geico has a simple tip. turn on "do not disturb while driving" mode. brought to you by geico.

as the tag of war continues, a strategist has a strategy. check it out on cnbc.com more "squawk on the street" to come ♪

♪ we are awailing jay powell rick san telle will join us with

a special exchange i'd like to welcome mr. bond himself. jim, thank you for joining me. chaim powell getting ready to speak soon one thing -- is current will oy the overhyped liquidity operations, what do you think the total will be by year end? as of now, to just about yesterday, we tallied up on a gross basis line, adding up all the dollars spent day by day, upwards of $3 trillion this is a lot of money even when you say it fast. >> wow, i would get by year end that would be multiples of that. is this a de facto enactization

of the repo market that was once the venue of all the large institutions and primary dealers that seems to have exited the space. >> the funds market in which banks would transact on the basis of price signals to buy and sell bank reserves, that market is kind of a ghost town it exists in name only, and the fed funds rate is for show only. what has superseded it is the repo rate, which of course is the collateralized rate. you charge that rate for money against the collateral, mr. mnuchin's stock, bonds and bills. so the repo market is completely dominated by the federal reserve. to that extent, yes, it's the property of the government, and we are dealing with administered rates in huge amounts of money i think it's worrisome

>> you know, you used a great word basically it all happened in a y even i thought, well, it's going to provide some liquidity, but now its most likely going to be a permanent operation. you know, i've been around a while, what happened to using the discount window. it seems as though we have moved from lender of last resorts, helping banks to the market maker of last resort, the market lendish of last resort they're the last resort for pretty much everything karen is the author of that piece you mentioned in the f.t. last week. what we have done to simplify this is swap price discovery, which is, you know, what chicago -- what made chicago great, right

especially of money market interest rates what chairman powell will not say is, in the past three mon s months, the assets have grown an annualized rate, and way back in september, before the eruption in the repo market, that was shrinking at about 9% so ver quietly the fed has done an about-face whatever he says about the funds rate, the fed is very, very accommodative. the rate of injection of high-powered money is very fast. it calls to mind a bit exactly what happened 20 years ago on the eve of y2k the fed is equally worried about

what might happen if something forgets to bid in the repo market. we'll have to leave it there, but what you said hits home market participants in aggregate, all their decision making now boils down to a group of several men thank you for your time today, jim. david back to you. when we come back here, what investors should be watching ahead of the testimony we'll be right back. this piece is talking to me. yeah? so what do you see? i see an unbelievable opportunity. i see best-in-class platforms and education. i see award-winning service, and a trade desk full of experts, available to answer your toughest questions.

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welcome back to "squawk on the street." stocks are trading just about the flat line as investors await testimony from fed chair powell. cyclical sectors like energy and industrials are under pressure so this is amid reports that tariffs continue to be a stumbling block in trade negotiations between the u.s. and china. now, where we're seeing strength is in the more defensive names like consumer stap 'lestaples. among the names leading staples higher, hershey, conagra and clorox, all up more than a percent. carl, back to you. as we have mentioned already

this morning, powell is not the only one on the hill today ylan mui is monitoring the latest from those impeachment hearings that began pretty much at the top of the hour. >> reporter: carl, we are still in opening statements in this hearing. two witnesses testifying today, bill taylor and george kent. they are focusing on the attempts by the trump administration to establish back channels of diplomacy to ukraine and also what they saw as attempts to pressure ukrainian officials into investigating president trump's political rivals now, the tone of this hearing so far has been serious and measured, even though it is clear that there is plenty of acrimony between the two parties. >> anyone familiar with the democrats' scorched earth war against president trump would not be surprised to see all the typical signs that this is a carefully orchestrated media smear campaign. >> reporter: now, the chairman of the committee, adam schiff,

has said that he will insist on decorum and he wants to focus on whether president trump has exploited his position, whether he's coerced foreign governments and whether amidst all of this he has obstructed congress' investigation. >> if the president can simply refuse all oversight, particularly in the context of an impeachment proceeding, the balance of power between our two branches of government will be irrevokably altered. that is not what the founders intended. >> reporter: now, from the very start of this hearing, republicans have raised points of order on procedural issues. they are clearly trying to draw out the length of this hearing guys, already we are expecting this to last well into the afternoon. back over to you >> ylan, after this afternoon, what would be the next step here >> reporter: after this afternoon, there are more hearings on deck there's another hearing scheduled for friday, eight more witnesses are slated to testify next week. after that, lawmakers will take

a break for the thanksgiving rece recess, take the temperature of the voters back at home and then we will see where this goes after that the intel committee would have to develop a final report after the hearings are over that it sends over to the judiciary committee, which would be the committee that actually considers potential articles of impeachment. >> ylan, thanks for bringing us that update on this very first day of public hearings ylan mui on capitol hill markets have not been swayed by many of the headlines we've gotten so far,but here's a liv picture of the joint economic committee where in a few moments the fed chair, jay powell, will testify on the economic outlook. he just had his comments released around 9:30 eastern time liesman brought us though. markets have been able to shave its losses and go slightly into the green since that happened. we're sitting right at 3092. >> it's been an amazing couple of days in the markets with the lack of real movement, even though there are so many things percolating below the surface.

it was amazing to see the dow finish exactly unchanged yesterday after getting some movement perhaps on the president's speech selling off after we didn't learn anything new on that trade war. relatively flat here ahead of powell. >> you can argue things are a bit less constructive on the prospects for an agreement with china than they were a year ago. obviously it's unclear but we've had a couple of guests this morning who sort of indicated, libby cantrell, saying maybe the market is priced for a deal and there would be downside if we don't get one. >> we tried to push larry kudlow yesterday on "the closing bell" to give us more clarity on what does close mean. is that days, is that weeks, what are the final details you're working over and really couldn't get anywhere, so i think that leaves the picture still pretty cloudy. >> larry has a very strong ability to just keep talking. >> absolutely. >> we've teased him about wrapping his questions even when he's a guest. we've the cpi out this

morning and at 2:00 we'll get treasury's budget for the month which powell has made some references to. we'll get to powell's hearing in a few minutes here "squawk alley" starts in three minutes. through the at&t network, edge-to-edge intelligence gives you the power to see every corner of your growing business. from using feedback to innovate... to introducing products faster...

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good morning it is 11:00 a.m. on capitol hill, it is 11:00 a.m. on wall street and "squawk alley" is live >> if we had a federal reserve that worked with us, you could have added another 25% to each one of those number, i guarantee you that the federal reserve doesn't let us play at that game it puts us at a competitive disadvantage to other countries. give me some of that money i want some of that money. our federal reserve doesn't let us do it