to the eu gordon sondland is about to testify in front of house intelligence, for that to ylan mui in washington >> good morning. blockbuster new testimony from gordon sondland, nbc news received a copy of his opening statement and in it he will say explicitly that he believes there was a quid pro quo now, here is the relevant portion of the testimony, laying some of the blame here at the feet of rudy giuliani, president trump's personal attorney. he says mr. giuliani's requests for a quid pro quo for arranging a white house visit for president zelensky mr. giuliani demanded that ukraine make a public statement announcing investigations in the 2016 election dnc serverand burisma. he was expressing the desires of the president of the united states and we knew that these investigations were important to the president. he's saying in his testimony that these were an open secret, also pointing the finger at john

bolton and mike pompeo as folks who were complicit in these arrangements the testimony of gordon sondland had been widely anticipated because he's one of the only witnesses being called who has spoken directly with the president. there is uncertainty over how many times he spoke with the president, but he's someone who appears to have the president's thinking and now in his opening statement he will say that he believes there was a quid pro quo. guys, back to you. >> really quick, the times this morning also adding another layer that he kept the secretary of state mike pompeo perhaps more informed than we were previously led to believe. any sign of that in the testimony that you have seen >> reporter: the testimony itself is 19 pages long for his opening statement. so we're still digging through it and, of course, we'll hear him deliver it in just a few minutes. but one thing we also do know is that he largely confirms the account of a state department aide who says he overheard gordon sondland and the president discussing the investigations and ukraine's response so we'll see exactly how he

characterizes that both in his statement and in the many hours of testimony ahead of us >> all right, thank you for that starting us off a little earlier than the top of the hour i'm carl quintanilla, david faber at the new york stock exchange jim cramer at one market as dream force enters day two a lot of news regarding china trade. retail the big story target and lowe's offsetting the home depot calls mood we got yesterday. >> yeah, let's just put to rest any notion that the tariffs really are hurting spending, there is any real inflation, that the consumer is being hurt. kohl's is an outlier home depot had a glitch, if they manage to get it back on track, they said they will, numbers are okay lowe's extraordinary, marvin ellison working his magic, still feels it is a work in progress what can i say about target? that's where people are shopping i think this whole story line that it is kohl's and home depot versus lowe's and target is false. the dichotomy is if you spend a

lot of money on technology, you're winning if you didn't, you're losing the places that you're spending represent america make me feel bullish about the consumer >> home depot's whole framework, they are spending money. just that the benefits weren't coming soon enough >> well, they screwed up usually they don't screw up. the fact is they thought there was a timeline that they had about where they were going to be, and one of the things that was most, i think, discouraging to people was that they said their legacy systems needed to be adjusted. we didn't know they had legacy systems. we thought the systems were good that's what is responsible for six points of that 12 point decline. >> so yesterday you said that you thought lowe's was becoming the better buy that's been ratified today >> yeah. yeah marvin is doing a great job. and, look, ellison worked at home depot for a long time it looks like lowe's didn't really spend nearly as much money as home depot. he's catching up on that

how about the fact he's biting the bullet a huge chain of stores, in canada, it was too much. one of the reasons why the previous administration had to go he's closing the stores that aren't working well. that's really kind of a new thing for lowe's he's still getting rid of the managers he doesn't think are doing a good job home depot said they're taking share. i believe they're taking share from mom and pops. not taking it from lowe's. remarkable number. lowe's and target, their stocks are going to get a halo, indicates if you buy them, target up 10, lowe's up 6, at some point -- both stocks are now up stocks. and they become the anointed ones target anointed through christmas. brian cornell's interview with becky was extraordinary. this man has the pulse of the consumer he's winning he's in places nobody else is. he's taking share. i think by -- from bed bath too. what a remarkable performance. very self-effacing, which i love. >> yeah. it is worth -- worth coming back

to the numbers themselves, i think. and to your point, jim, those who bought the stock after that surprisingly strong last quarter are being rewarded yet again it was not a one off, it is a sign of a long-term seminal change of the company. they're talking about a 10% increase at this point over the last two years and comp store sales. that's pretty darn significant that's this quarter to two years ago's quarter. you that kind of increase, your margin expands dramatically. and in this case, they're talking about margin dollars increasing more than 22% compared with the year ago that has resulted in a 25% increase in adjusted earnings per share. and there is why the stock is hitting new highs all the time in sharp contrast,of course, t what we saw yesterday, with kohl's in particular, down dramatically, 19% on that pricing world that they described as being very

competitive and one they had as sort of try to keep a lead on, though tjx, which i now point out the market cap of every time, $74 billion market cap tjx did have a good quarter as well. very mixed bag >> look, target managed to use technology to make it so that their omni channel is working. tjx, they openly disdain the online world why? they had value they have the lowest prices. it is such a love stock. i didn't want to -- i knew everybody else was going to raise the price target it has become a given. kohl's talks about promotional target is talking promotional. tjx, you are a lot have extra iy the companies that are saying it is promotional and home depot says it is promotional. they're not doing that well. the companies that say things are good, they're not talking about promotional. they're talking about winning traffic.

david, traffic is the goal and target is getting the traffic. again, that leveraging as you pointed out, you get the traffic, you do get the gross margins, gross margins, you get the big numbers, target is not done going higher. people are trying to seriously adjust the fact that target not only is back to the old target, but maybe the most superior retailer that is online in america. i can never say that -- >> that goes to what were digital comps up 31%, 49% a year ago. again. >> and driven -- they said 80% of the digital comp growth was because of same day delivery essentially. people wanting it the next -- yeah and traffic up 3.1 to your point versus the prior 2.4 as you mentioned, brian cornell, we did hear from earlier this morning on "squawk". this is what he said about the consumer. >> we continue to see a very healthy consumer environment a very strong labor environment, unemployment continues to be very low the percentage of consumers that

are in the workforce continues to grow. wages are rising consumer confidence is strong. and all the indicators right now would say this is going to be a very solid holiday season. >> and by solid, i guess they're looking at three to four excre street is already at 3.4. >> these are gigantic companies. if he does four, that's a big deal, probably more than that. the number raises were extraordinary. i've been in visiting stores with brian the stores are -- he has multiple formats, by the way, which everyone told him he couldn't do. inner city formats, formats at college campuses, chic stores and some downtowns in america. when i hear him and hear his confidence, i feel confident i think the tape is reflecting once again both the impeachment and perhaps more tariffs, look at what the market has done with this reflection of tariffs you listen to these guys and they're not talking tariffs.

that's amazing not supposed to be happening i hate trump and tariffs really hurt they haven't done that they're talking about the fact that the consumer spending and they're not being hurt by the tariffs. they're not -- the tariffs aren't that important. >> well, we don't know what it would look like without them we don't know what business investment would look like we don't know what margins would look like. mcmillan did tell becky we would love to see these issues resolved >> we're getting -- if we get them in the middle of december, that is ones that will apply specifically to a lot of the stuff that comes out of a target or walmart, right? >> well, look, target admitted to becky they have a lot of chinese merchandise, but every single month that goes by, he would tell you, anyone would tell you, they pull out of china. it is a supply chain issue they don't have the container ships you see behind me later on today to be able to go into high fong harbor.

india is winning, thailand is winning, indonesia is winning, korea is winning, japan is winning, vietnam is winning. and the longer it drags out, the more these guys recognize they have to leave. i had gary friedman on last night, restoration hardware. he was very pro our strategy and he said, look, the tariffs that cost them a little bit everybody admits it is a little bit. the consumer is doing so well, it just seems to be lost in the shuffle. a lot of the vendors are taking the heat i know that we can argue that i'm being way too let's say glib about the tariffs. but so are the really good retailers. the bad retailers are feeling the tariffs. they'll blame anything the bad retailers don't like how the football season is going >> we have been dealing with that for generations, right? blaming weather, holiday seasons. calendars. >> i know that kohl's -- there is some kohls located near targets. can you believe that it is so

sunny on the target side of the street, but pouring rain on kohl's side. it is extraordinary, isn't it? we need al roker to figure out what is going on with some of the retailers. >> we'll get him on in the next hour, jim. let's turn to your workout at dream force. last night on "mad money," marc benioff of sales force take a listen. >> we're creating a $1 trillion economy, you can already see that is fully under way. millions of jobs, millions of people, who are participating in the sales force ecosystem. and we're absolutely 100% committed to making sure everybody can join this new economy. that's why we built trail head so we can rescale and retrain and many of the people who are here learned their skillsonlin at trail head. >> we get the slide deck lookin at fiscal 20-21. >> first time i heard this year

that maybe sales force has gotten too expensive the return on investment sales force, there isn't an analyst who doesn't think it is worthwhile a lot of companies out here are partnering with sales force. what we didn't run in the clip is when i directly confronted marc with the current performance of the stock, not by referencing how i feel, but i mentioned david faber by name. i thought it was important to say david openly questioned how well the stock is doing. >> i appreciate that and your never-ending attempts to make sure marc and i are very close. i know he really appreciates that too. >> i think it is important >> next time he's out here, he won't even recognize me when i'm speaking as he likes to sort of do i love that. looks at me. i'm invisible to him specifically, though, to the numbers, jim, they -- they raise their fiscal 20 revenues to the high end of guidance, around 17 billion. preliminary guidance of 21 billion. what the street was

anticipating, not seeing a big premarket move up here in the stock. >> no. and it wasn't like -- marc was much more talking about how well tableau is doing he had adam come in and crash my interview. adam has nothing against you at all, david adam, of course, amazon, making amazon -- what they're doing is leveraging and downing a ling af things with amazon services. that was a continual theme this year he's talking about lamborghini and personalization of lamborghini, and also i got to tell you, one thing he's saying is look at louis vuitton, how well they're doing with us, those characters behind him, those are -- they made me feel like it was a disney world experience. >> you hate mascots. you hate them. did they know that >> well, they didn't really converse with me as much as i would have liked no real back and forth. >> sorry you had to conduct an

interview with those people. you probably wanted to go over and punch that thing in the head i know you did. >> i was thinking more like a 2 by 4 fisticuffs are fine. the guy in the middle. the guy in the middle is trying to -- just totally throw us off. the whole time the bear starts -- >> look at him look at that oh, he deserved to be knocked out. >> well, my wife is coming to town, she can get him a 1-2. she's beaten me up many times. i know it was hard. >> very well done with those ridiculous characters jumping up and down >> i said, i think you're doing well, but david faber has a different view >> jim, we'll see you after the break. we're going to get your mad dash we'll count down to the opening bell still got to get to some calls on names like j&j, big day for apple, we'll cover the trade headlines that have futures down 74 obvious.

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opening bell on what jim and i like to call hump day, even when we are 3,000 miles apart what are we doing for mad dash this morning medtronic is my understanding? >> $148 billion company that nobody ever talks about. it is quietly been winning the device war this medical diagnostic device, a big market they bought mazore, working for spine surgery, difficult to do, intuitive surgical for spines. i see so much to like here in terms of tdevices that go into your heart, atrial defibrillation what a great job he's done, very self-effacing, last year, the stock at 82, he didn't feel he gave a good presentation at the jpmorgan healthcare conference what a buy it was. it was the absolute bottom this year medtronic goes higher. >> why doesn't he get talked about? why isn't it something to the

point you made that is sort of discussed more often given its size and importance? >> well, i think one of the reasons, first of all, i had to kind of coax how well it was doing out of omar. he just wouldn't know what promotion was to save his life and another thing is that there are some -- every single company in the industry is doing well. there is just a plethora of companies, abbott labs, that do well he was basing, i'm part of this cohort that is doing very well but, david, these companies save the healthcare system money. they all talk about that no one wants to give them credit we're too busy talking about how some drugs are wildly overpriced this is a terrific company that sells less than 20 times earnings, that is growing consistently i like this stock. >> all right can see right there, roughly in line with the s&p's performance over the course of the year. jim, stay right there. we'll take a quick break but coming up, the road ahead for rates and the economy. it is an exclusive with fed

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futures week as the journal says a phase one deal with china is at a risk of an impasse the mood on retail much better today than yesterday we'll get the opening bell in just over seven minutes. it was sophie's big day.

by the way, she's the next mozart. as usual we were behind schedule. but sophie's enthusiasm cannot be dampened. not even by a run-away donut. we powered through it in our toyota prius. because a star's got to shine, no matter what. it's unbelievable what you can do in the prius. toyota let's go places. nice rock. it's time to drop gold. go digital. go grayscale.

♪ you're watching cnbc's "squawk on the street. live from the financial capital of the world opening bell in 4 1/2 minutes. very busy wednesday as we keep one eye on the hill, and one eye on trade these renewed trade concerns weighing on sentiment today. the journal says that stalled u.s. china talks are raising the threat of an impasse and deadlock which could derail the plan to move forward with phase one this year.

both sides reportedly standing firm on key issues like tariff rollbacks and ag purchases goldman last night comes out and says we recently wrote we thought tariffs peaked we also believed the probability of a tariff increase now has risen. >> yeah, by the day. i don't know where goldman gets its stuff. maybe talking to the wrong people mostly to treasury secretary there is no desire to do anything other than raise the tariffs. i think the president is even questioning whether big ag buy at this point would stop them from raising tariffs the president believes very strongly that the tariffs are bringing in a lot of money he's watching the dow. watching the s&p and remember he talked about the nasdaq. so not just talking about indices. i think the president feels that not only is he in the driver's seat, he wants to press the bet. you're seeing a part of the white house saying they're snubbing us, not doing anything right and let's not forget hong kong they don't look sogood in hong kong so right now i know that the

chinese are playing the long game, they have been playing the wrong game. >> yeah. listen, i think people would be wise to listen to what you've been saying, jim i would point out by the journal story today, not saying anything new, they're citing former administration officials and people from -- people watching the talks, so not adding that much that we didn't already know. >> they'll write this story every three days you know i saw the story on wednesday the editors must love that story. it is fun. >> what is interesting is that the marketdoesn't really seem concerned if i can put it that way in terms of the possibility that we're not going to get a phase one deal, that we are going to see more tariffs put on within a month i don't see any real reaction i can point to in the stock market unless you're telling me it is already discounting that, which seems hard to imagine. >> i think it is discounting and not only that, but gary friedman from rh, he's saying

bring them on. he's ready and they mack a lke a lot of st from china >> you don't think then that the stock market is going to suffer a fall when we get a headline or get a tweet from the president that says we're done for now, tariffs are going on, you don't think there is going to be a reaction, already discounting that possibility >> 2% to 3% decline. when you listen to brian cornell talk or doug mcmillan, the tariffs are not that much of a factor remember, david, we should be having roaring inflation now, in a trade war with the rest of the world now. i think that the story is that a lot of people think that the chinese are all powerful and there is nothing you can do, but the president is not buying that no more than reagan bought it. reagan didn't believe that the soviet union was all powerful. i don't know i think hate them or like them, you got to recognize that the tariffs are just not bringing

down the american consumer the american consumer is -- >> they are impacting business investment as well -- >> and rolling three month retail sales have gone from 10 to 4 since the spring. we are seeing a deceleration in the consumer >> target, amazon and walmart are saying great things. who else is there? >> market share stories, jim, are they not >> look, we're not trading joe's hardware store what we trade, what we invest in, these companies really coupled with the technology i see are doing well and i struggle i struggle to see where president xi is hurting the comparable store sales of lowe's >> they cut rates again for the third time this year one of their new benchmark rates. that helped asia overnight. >> i'm worried about the chinese. i'm worried. i'm worried about the chinese.

i'm thinking that chinese stock market is value. look at this pin duo duo that's another company that was -- it was up, it was a stock that became public and now they're online exchange from china. look at how that stock -- look at pdd they need tariffs cut. pdd. >> big short squeeze huge short squeeze well orchestrated by the chinese and some american managers including -- >> the most important barometer we have did price at 180 over in hong kong, raising $13 billion >> did they not have a road show they didn't need it? or they didn't have a road show because the road was blocked by protesters >> here, meanwhile, completely different tone is the harlem globetrotters ringing the opening bell, playing some catch with the crowd that's here at the big board at the nasdaq, of course, watching the opening bell there

as well. globetrott globetrotters, 94th year of touring at msg, december 27th at the nasdaq >> i saw the boston shamrocks actually give the globetrotters a run. and for a moment, i thought the shamrocks were going to take them they have never, in over 90 years, have never beaten the globetrotters. who plays for the shamrocks? >> the washington generals, wasn't that the other team that -- >> the washington generals i thought this would be the game that they won. i saw the generals have a run, but in the end, the generals lost too how is it possible that the sham rocks and generals never won how? who do they play who is the general manager >> don't have an answer for you. >> no, of course not >> jim, a lot of talk yesterday about amd having the fifth highest rsi of the russell 3,000.

and wondering whether or not you think it is time to ring the register here. >> no. no lisa su has an unbelievable lineup of chips. i think she is the only person to give jensen huang a run for his money. on last night for nvidia what a story about landing people on mars, with the ship actually hurling at 10,000 miles a second and he can -- he found a way to model it so it won't crash lisa su and jensen huang are the winners in that segment. let's not forget that broadcom is doing very well too so i would not sell amd, not here, not with this momentum, not stock momentum, momentum in chips. i really think lisa su has a fabulous lineup versus intel >> is jensen huang creating the matrix is that what's going on here >> i don't think it was jensen huang. i think artificial intelligence version of him, in simulation. he's unbelievable.

that jacket -- i got to get one of those jackets maybe that's what makes it happen. >> what is he modeling modeling going to mars >> landing a bunch of guys on mars in 2025 and apparently you have to send that thing hurdling in and i think jensen figured out exactly the way to make it so that the spacecraft does not crash. talk about a guy thinking five years ahead of us, david >> all right i didn't even know we were planning on that >> oh, my. are you kidding me i thought you would be on it >> only if you're going, baby. >> no, i'm talking -- i'm going to jump, i'm going to do a jump at u.s. air force academy. >> jump out of an airplane. >> yeah. i got to talk to my life insurance guy first, see what i can get. >> not solo, though. attached to somebody, right? >> do a tandem don't do a static line. >> to start i'll do tandem, just because i'm a little -- my wife asked me to use four people to hang on to

in case one falls. >> jim, we're going to watch apple today. tim cook already tweeting about their new facility in austin president is going to tour aymeamon javers is there. you talked to tim recently. >> this thing is so the facility is a marvel of how big it is and how much money they're spending but i will also tell you he had an amazing conversation yesterday with marc benioff about finally getting the enterprise we all have the great phones, right? they're all connected with an outfit that is involved with the tussle with xerox, hp. i think what tim is say, we'll break that hammer lock that hp has on all the information technology, and it is going to be done through accenture, through sap. we're all sick of one device not talking to the other this is a major breakthrough apple has struck out in the

enterprise i think we're all tired of the hostage of hp. we're hostage. it is driving us crazy >> i'll tell you a company that has killed it in the enterprise, you know, of course, microsoft not hp microsoft. which is up again today. and that's -- >> satya. >> that market cap contest between microsoft and apple is very, very close right now amazing what nadella has done over there, jim. not just the cloud. >> revered. >> 365, they're coming after slack. just in terms of so many different areas right now. gaming we don't really ever talk about. >> do you know, david, that in gaming they're starting to make hardware very quietly making hardware. in gaming. and it is fantastic. i think whatever satya sets his

mind on -- i remember when steve was using the microsoft phone, the only person i think mostly in northeast america using it, but i do think that it is remarkable, satya has no longer -- remember, they are no longer in league with sales force. it is an access of satya, adobe, they are doing their own thing and because azure is so powerful, they're getting away with it. azure is with them amazon web services is with marc, marc's world, benioff, enough room for everybody. is there enough room for alphabet and google? cloud services i'm going to work on that one the rest of the week quietly behind the scenes, you know >> yeah, they have been the also ran so far changing the leadership at their cloud division not that long ago from diane green, jim. but -- >> thomas curry. >> you wonder what they can do, if they would entertain an acquisition of some kind and then there is ibm, which we

really haven't talked about. your friend whitehurst who i don't know, will he get that job if ginny leaves? >> he's out here this is the purchase of red hat. i think ibm didn't deliver last quarter. but i do think they'll the longer that red hat gets integrated, the better vm ware, they're pretty much with everybody another great stock. kind of unbelievable, michael dell ibm is not really not making this splash that i thought they would by this point. by the way, sales force down probably confirms your theory, david. >> i don't have a theory, jim. i just pointed out that the stock, listen, by the way, it is fine last three months, up 11%. last 12 months but it is -- it had been flat for a while. that's all that's all i said. >> is theory to you a shirt, a clothing company.

>> at tjx, you get the shirts for $39.99 yeah, $39.99 >> did i tell you about the pair of black slacks i got for 17 bucks and i saw at macy's for 40 and they stretch they're perfect. >> the one here, the only store i actually ever enter -- go into the bargains are so -- >> i took a picture of it the other day. i cannot stand how long the line is it is worth the wait like i'm, like, wrong that i'm in that line to buy a belt because i forgot my belt that day. >> yeah. >> people could tell >> speaking of retail, target is up 7.5%, following -- >> not enough. >> given -- >> not enough? you think more you think it deserves to be higher than $119.48? >> it will be at $121, $122. you can say all you want about tariffs, brian cornell, he's more worried about the weather than he is tariffs >> well, we do have lower today

l brands, ulta, harley, gap, nordstrom's. we haven't talked about urban much. >> urban very downbeat at the top of their conference call their online is not hitting it this is the brick and mortar conundrum. and they're in a lot of malls. the mall is -- we see carl icahn betting into the mall. i think for every one good mall there is two or three bad malls. and mall is no way to shop you can't pull up to it. no one runs your car from a mall >> macy's and nordstrom down sharply yesterday on the kohl's numbers. macy's now has roughly a 10% yield, jim >> the bam shelance sheet improb jeff gannett i think it is just existential why shop at macy's you can get a lot of that stuff online becky asked a great question about nike, they're leaving

amazon, will it benefitcornell answer i go macy's, they haven't been able to distinguish like kohl's why i should buy there, why it should live, why does it live? >> wholesale models challenged jim, really quick, we have not talked about oil worst day since september. yesterday, down 304. down 17% from the april high what is it going to take to stabilize crude? >> i think that crude is in such long -- we're so long. we got -- i don't know venezuela knocked offline. the saudis cutting back a couple million barrels to boost their own boeing ogus ipo. international drilling is picking up that's going to put more pressure they got the -- the permian has to stop pumping. the occidental deal, that was

it that was it. that was the last straw. >> last straw for what the top? what >> you know, remember the straw in there will be blood that was the last straw. there is too many straws they got to stop they have to just shut down pumping, but they won't. all they know how to do is pump. i remember them saying the biggest problem with oil is, all they know how to do is pump. they don't hold back they pump and pump and pump and they're pumping. >> that's a horrible looking chart. >> isn't that awful? even you recognize a bad chart when you see it. even you >> i just -- yeah. even i do. you crack me up more when you're 3,000 miles away i don't know why when you're here -- >> you can't hit me during the commercial. >> that's true >> working out, people don't realize how hard you hit me

during the commercials a beatdown every commercial. i don't get that out here. carl, i feel liberated and i no longer feel like i got to take boxing lessons because he can't hit me doesn't have the reach. >> still should have hit the plush characters that were bombarding your interview with benioff. you were nice to them. guys, at&t down again, 1.2%. we didn't mention it yesterday >> moffett downgrade. >> i missed it, i didn't miss it, i forgot down 4% yesterday, another 1.2%. significant decline in at&t. pointing to what he believes is going to be the difficulty they're going to have, hitting that 1% revenue growth and eps targets given roughly 60% of the business is made up of warner media and directv and those are not performing particularly well and that so much is going to be reliant on wireless growing at a rate it hasn't grown at previously. >> cowan has a great piece out this morning, probably saw, on even though we're getting

flooded with new entrants on streaming, they don't expect consumer spending on streaming to rise more than for the next three years you expect people to spend more? >> i don't know. i think there will be winners and losers, not unlike what we saw with dotcoms roku, you can't stop it. incredible i thought that at&t piece, when i finished reading that, i wanted to cry. there isn't anything -- everything that they're doing according to that piece is not working. and particularly wire line, i read that piece and i just said, i feel bad for those guys. no matter what they do, they need to bring back the great america. >> mr. bewkes, yeah. by the way, we'll talk about the different issues with john malone tomorrow. my annual interview with mr. malone, of course, the chairman of liberty media and a whole cast of others as well on liberty's big analyst or

investor day you can take a look at some of people i'll be speaking to led off by mr. malone, who i always look forward to speaking to >> david, last year discovery went up $10 after that interview. could you please do that to viacom you get into -- >> discovery is up this week in part because he did -- he did buy 2.67 million shares on monday sold some -- i want to find out about discovery, as well, which had a good week on part on the purchase by malone >> all right, guys early session lows, dow down 66. let's get to bob good morning, bob. >> 2 to 1 declining to advancing stocks tariff and trade, very narrow trading range. this has been going on for a while now. sectors and consumer staples, defensive group leading. the only reason consumer discretionary is up because

target and lowe's is pushing them higher. most are down. utilities flattish semis predictably down banks, keep an eye on banks here straight down on yields for a couple of weeks now. 1.96 on the ten year a couple of weeks ago? 1.76, 1.75 today keep an eye on that one. that might bear watching retail, you talked about what was going on here, we got target and lowe's, great numbers from them tjx decent numbers as well flat, home depot disappointing numbers yesterday. but really rather modest response overall what these have in common, two things, they're all winners, target up 80%. that's not a typo this year. we're looking at that. that's a new high. lowe's huge this year. that's up 29% i believe. tjx big, up 35%. these are winners in retail. despite that 5% drop yesterday, 30% to the upside. so this is what they have in common they're all winners. second thing they have in

common, basically when they were asked if they had the opportunity, the consumer is strong brian cornell, becky's interview with brian, noted here, we continue to see very healthy consumer -- holiday season nonetheless, the stock market, a lot of complacency, grinding higher, not a lot of news, very narrow range in the last couple of weeks, very low volatility. there is seasonal strength, we get upticks, day after day and more money kind of comes in, that fomo we keep talking about. no reason for anybody to get panicky or concerned, but it is a little bit complacent right now. i think people are talking about that as for the tariffs, you can't help but feel that the talks are stalled somehow. sort of three choices, the market keeps talking about number one, an actual situation where you get a real deal, a phase one deal no new tariffs and existing tariffs are rolled back. the question is what kind of concessions would the president get for that, that seems to be stalled out a little bit that's a problem now what everybody down here calls

phase one light, there is -- you get essentially where you remove one kind of tariff, no new tariffs coming on and exchange for some kind of buying of agricultural products. phase one light. and then no phase one deal at all. and you do have tariffs come on, on december 15th three choices here we can't figure out what the probabilities of them happening are. if you want to know what moves the markets in the next couple of days, i think it is going to be the manufacturing numbers that are going to come out overall. here is, by the way, brian cornell's number, the quote we saw earlier, we continue to see healthy consumer environment, strong labor environment, all the indicators now say this is going to be a very strong holiday season pmi out on friday. that's the next potential market mover. there is a belief that somehow the global economy is starting to bottom. no recession talk. but keep an eye on what happens, the s&p near new highs right now. we get pmis for the united states we get pmis for the eurozone france and germany getting manufacturing pmis

we had a nice move up there. they're off the highs, japan, also, pmis on friday so remember, in idea, lower global growth, but still solid, test that on friday. carl, back to you. >> thank you very much fed minutes this afternoon let's keep our eye on the bond pits rick santelli in chicago good morning, rick. >> good morning, carl. you know, the globe has this feeling and the markets several weeks ago especially the fixed income, the interest rate markets i cover certainly seem to buy into what bob was talking about. global bottoming but if you really start to kick the tires, it seems to me it is more of a hint of more fiscal involvement in the months and quarters ahead but, boy, we're pretty sketchy on details and actual dates on that and i also want to point out china tinkered with rates lowering them a bit. lowering rates doesn't have the same effect it does many economies because of the way the government actually doles out capital to circumvent how

important an interest rate the clust of your capital actually is we continue to see the downward move in rates. it has been continuous and a low volatility environment but it is impossible not to see the breadth of it globally look at november start to two year note yields remember, pretty much everything on the curve is hovering near the lowest closing yields of november, outside of the first several sessions as you see on that chart look at one week of 10s, you see the dynamic i'm talking about. we continue to cascade lower first closer, 180, two and a half weeks 30 year bonds, maybe this says it the most, the most squeamish as the yields go down. 218 would be the violation, 221. we get under 218, lowest closing yield since october. and finally how is all this made us on the relative value trade the distance between our ten year yields and european ten year yields continues to narrow and right now it is not very many basis points away from the

tightest, the closest it has been in 21 months. carl, jim, david, back to you. >> thanks. still to come this morning, the ceo of booking holdings, the shares of priceline's parent in the green this year, unlike some of the rivals, expedia and trip. dow down 65 to start this wednesday. we're at 3115. don't go away. ♪ ♪ 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. the nissan altima. now offering the most tech-advanced engine in its class.

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major indices are lower but a bright spot on retail today thanks to those first two names, target and lowe's out with results and guidance that's largely positive we're back in a moment don't go away. tom steyer: wall street banks took advantage of millions of americans during the recession. so, my wife kat and i took action. we started a non-profit community bank with a simple theory - give people a fair deal and real economic power. invest in the community, in businesses owned by women and people of color, in affordable housing. the difference between words and actions matters. that's a lesson politicians in washington could use right now.

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jim, what's on mad tonight >> boone powers, great railers for objection, data for analyzing data and making sure that it all works. that's who we have. >> are you getting enough rest out there? i know you've got late nights and it's an early call time. >> tonight is fleetwood mac and i'd like to talk with stevie knicks at the end of it, so i won't go to bed tonight. that's what makeup is for. >> it's good for you really good for your health not to get any sleep at all. i recommend it highly. >> thank you, david. thank you, david. >> hasn't affected his on-air

performance. >> david can't punch me. i'm playing a new game >> i will give you a little whack. i know, i can't. >> you're beat down. they last about as long as my -- i don't know, as "mad money" has. >> jim, we will see you tonight 6:00 p.m. eastern. when we come back liesman with airdlalusive fed governor el brna don't go away. does your broker offer more than just free trades?

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♪ good wednesday morning welcome back to "squawk on the street" i'm carl quintanilla, david faber. markets having a little trouble getting out of the gate but not by much. s&p down by 4 as we keep our eye on the impeachment hearing, china trade and retail earnings. >> retail earnings continue to roll on. our roadmap starts retail resurgence, target and lowe's moving higher ahead of the big holiday shopping season. plus the enduring power of american ingenuity, tim cook hosting the president at apple's

manufacturing plant in austin today. later an exclusive with hud reserve governor lael brainard ahead of today's fed. >> we do begin with retail target trading at record highs on the heels of its blowout quarter, raising their full year guidance, shares of lowe's will be higher after raising its own forecast for theyear, a bit of mixed result all of today's numbers coming in a week ahead of one of the biggest shopping days of the year earlier today becky quick sat down with target ceo brian cornell and got his thoughts on the state of the consumer. >> we continue to see a healthy consumer environment obviously a strong labor environment, unemployment continues to be very low, the percentage of consumers that are in the workforce continues to grow, wages are rising, consumer confidence is strong and all the indicators right now would say this is going to be a very solid holiday season >> you know, i think cornell has obviously been talking about the strength of the consumer for some time, but many of the

retailers even those that put up less than tell be results like a home depot saying, look, the consumer is strong, home depot pointing to internal factors for some of the disappointments with the sales. i think that's good because we know it's been the linchpin holding up the economy and perhaps some of the market strength we have seen as well. urban outfitters reported after the bell, shares down sharply by more than 13%. seems a little overdone for me, they did miss on the top and bottom line but just slightly. they said sales quarters to date are up, though they didn't give a ton more color beyond that seems like a bit of an overreaction but still goes to show you all of these barbell stocks either you are good or you are not. seems like there's two camps to sit in. >> yesterday of course as well, both home depot and even more so kohl's which you're obviously reporting on getting hammered yesterday, macy's and nordstrom thrown into the mix because they're mall based but today target so strong 10% more or less 10% comp store

sales growth over a two-year period this quarter to two years ago quarter and the marge.en improvement is dramatic which is why their rise in guidance is substantial. >> target has this unique mix, it sells consumable products, you have to refill your shampoo, condition conditioner, but they also have a good private label brand business, they have rebuilt a lot of those brands, introduced new ones if you go in for your tide you are also walking out with new apparel. i mean, apparel and accessories up 10% for target in the quarter. that's pretty astonishing when we see apparel weak at many other players. certainly they must be taking share there. >> stocks having their best day here since august when it was up 20% in a day we will see if we can top that quite an amazing performance out of target. for a closer look at the retail movers let's bring in jerry storch because paul trestle. good morning. >> good morning. >> we mentioned the price today,

you're eyeing 136 now? >> yes. >> is that december 19 or december 2020? >> we have a 12-month outlook and we have raised our price target to $136, certainly the results today were extremely strong, both on the top line as already mentioned, strong positive traffic, also with 31% growth in digital sales, but even more impressive was the ebit gain year over year of 22% from an operating income standpoint and they're doing this through lower fulfillment costs, they're also really improving the category mix and they're taking a lot of share in discretionary categories we see a ton of catalysts ahead as we think about the newly rolled out target circle membership program, the good and gather on the food side and we think there is a strong free cash flow profile here as well that's not only leading to remodel stores today, but will

buy back a ton of shares in the outer years. >> jerry, i'm wondering when you think about target and they talk a lot about using everything together, stores and online, fulfilling from stores, lowering the cost by 40% or 90% if a customer actually comes in and picks it up themselves but a lot of retailers offer this now, buy online, pick up in store why is it working so well for target and not as well for others >> they're doing a great job 92.5% of target sales are still store based. you can see that in what their reporting today. in this internet era their store comp was 2.8%. that would have been good before the internet that was a good number then they have a 31% net growth on top of that they are going to keep growing the 4.5% out of target for a total comp, that's like what we used to do in the old days when the economy was just on fire by the way, people ask about the health of the consumer, one of the best signs i see that the consumer is very healthy is that in good times target beats

walmart, at bad times walmart beats target target did a 4.5 comp, wall mat did a 3.2% comp. target better. the consumer is very strong. >> i want to stop you for one second what's the lesson in terms of what we learned that target has done right we've been sitting at this desk with you for years talking about all the pressures retailers were under, particularly mall-based retailers but all across the board. they have done something that's changed the paradigm. >> first of all, they're value-based. as we've discussed at this desk the value retailers are doing great. >> but not all of them kohl's isn't do so well. >> i don't agree with you about kohl's kohl's is a department store who could be worse >> not a mall. >> at least they're off a mall sometimes, sometimes not look, they are apparel focused apparel has been very weak target is the first good apparel number i have seen in ages, even walmart said their apparel was poor target has always stood for

apparel. the customer is trading down in apparel, trading at lower price points and kohl's is stuck in the middle they're a department store that's apparel focused beyond all of that at the end of the day as their business shifts to the internet, unlike many of these players, their economics degrade might iilmightily. >> back to the lessons on target, though, because you're making your points what were the other ones >> target is a differentiated player, to succeed you have to have what nobody's has there is a continued focus on the only label, we've been talking about that for decades at target. there are products you can't buy anywhere else or can't go somewhere else on the internet, you have to go to target in order to get it. so differentiated your product, value-based player and they have done a great job on the internet the heck with the old traditional amazonian model, not amazon's current model but the direct model shipping from timbuktu to your home, they're

doing it from the stores and that draws additional traffic, store pickup for driving up to the store, they're leveraging what they own in order to succeed. a lot of retailers are watching as this takes place, but none of them have that combination of a fantastic store environment with positive comps and internet growth a lot of these players when they do their comp it's a negative store number negative along with a positive internet which is destroying their economics. >> why wasn't the kohl's partnership, the pick up partnership worked or is it working and we just don't see it yet? >> look, i think it's too early to tell for kohl's, amazon we would actually argue that it is absolutely driving traffic. >> better than it would have been otherwise. >> certainly better than it would have been otherwise, but ultimately we think what it comes down to in terms of differentiation between target and a kohl's is really selling and focused on national brands, all right, and what i think are very distinct value-based proprietary labels and we really

give target a lot of credit for the way they've started from scratch and put out a cat and jack which is now like the largest children's brand in the country. so that along with what we really emphasize is same day fulfillment options. i think that, again, this is what amazon can't do and i think is really underappreciated the acquisition that target made of shipt and when you add that to the way they've changed their supply chain and the back of store to be able to do that curb side pickup i think the customer has found a convenience factor that's almost like a better mousetrap and ultimately i think the customer is continuing to come back because of that appreciation of that customer experience. >> if i can tie the two together and i know that you're saying target has these good differentiated brands, you have to go there to get them, they're off mall, but so is kohl's, kohl's is off mall, they have a number of differentiated brands. i'm just trying to play devil's

advocate what are the difference? the products differentiated at target are just better or you're already going there for something else so you're already in the store >> i think it's both the fact that target does have a different mix, right, which you outlined, they are able to do both sides of the aisle, so it's doing strong in apparel and home, but also they are able to really provide your essentials and they're doing great when it comes to beauty and health items and picking up on the grocery side and i think that one stop shopping experience is absolutely a competitive advantage to target, but in addition i really do think that their private brands have been superior in terms of quality plus value, all right, and i think that the customer really finds that to be distinct and unique to target's offering. >> we're getting into the holiday season so between walmart and target who benefits from the disruption in toy supply chains, toy distribution? >> they are both going to do

amazing. walmart is the largest toy reseller in the world. target doing amazing with toys and they're taking a differentiated angle with disney component, et cetera, they will do amazing, the two largest players in the field, they will both capture share, and amazon will grow mightily with toys this so-called disruption, i don't know, target's margins were up, walmart did great i have said this for a long time i think the impact of these tariffs is grossly exaggerated when you look at the magnitude of the tariffs against the entire consumer economy nobody seems to have trouble with it. >> not yet >> you say not yet but even then they are all saying we're going to manage through it, our merchants are geniuses and i happen to know as a fact they're getting great deals over in china right now, they really are, because the vendors don't want to lose the business which is shifting as rapidly as people can shift it to another country. i have been saying that for a very long time you show it to me in anybody's

number who is not doing bad otherwise and we will have a conversation about it. >> everybody found a way to -- somehow to find efficiency. >> magic, everybody lovey like hell. >> if we do reverse the tariffs that would be a real ben fit. >> it would be fantastic i'm saying the impact of tariffs has been grossly overblown having said that target is a fine player. i just have to say kohl's is a minimum market department store, do you know who else is, jcpenney, sears, montgomery wards. why do we think this is going to succeed over the long term. >> target reduced their promotions year offer year, had fewer mark downs and that shows you that the customer finds their price adequate as listed kohl's actually discussed having to increase promotional intensity. >> leading into their value principle, what was the line >> correct. >> it's hard to be in the middle. >> right so ultimately that does show you that there is -- while it's value there's clearly a distinction that's being made

here. >> that was good, guys wish you could stay longer we will see you next time. >> lots of fun. >> thank you. when we come back right here an exclusive with federal reserve governor lael brainard ahead of the fed minutes. don't miss the ceo of bmw north america. i know phil lebeau is out there. we have a big show ahead for you. dot awhe. n'gonyer it was sophie's big day. by the way, she's the next mozart.

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let's get out to the federal reserve where our steve liesman is alongside is a very special guest. good morning, steve. >> good morning, carl. thanks very much inside the federal reserve special library with federal reserve governor lael brainard thanks for joining us. >> thanks for inviting me. >> so a couple months ago when we thought about doing this interview the idea was maybe there was going to be a trade deal and i would have been interested in your comments about how to incorporate that into the outlook but there is none now, at least not yet how do you think about that? how does the trade dispute or trade war as it's going on factor in your outlook >> well, i would say over the course of the last year trade uncertainty has been a major theme and we see it in the decline in business investment, we see it on exports and we see it in the manufacturing sector so trade uncertainty has been a major factor weighing on the economy for the past year. >> did you factor in the idea

that perhaps there would be some easing of trade this year and that tariffs would not go up >> so it's certainly the case that as i've thought about my outlook, prominent among the down side risk to that outlook has been trade conflict and we've taken out some insurance against that, but we still hear from our business conflicts -- contacts that they're sitting on the sideline waiting for some of this uncertainty to be resolved. i don't think the expectation is for a major deal, but even a truce would be a significant reduction in uncertainty for a lot of businesses around the country that are sitting on the sidelines in terms of investment. >> how would it change your outlook if there were additional tariffs in december? >> well, certainly that would be a negative factor. that would be a realization of some of that downside risk that we've been seeing, but some of the research that we see suggests that just uncertainty

alone can be a back for reducing business confidence and reducing business investment, we think we've seen that in the data. >> definitely in your prior life and to some extent in your prior life life with the treasury you were deeply involved with international economic relations. how much does the trade war bear responsibility for the global economic weakness or is that a separate phenomenon? >> yeah, so i think it's hard to pull those apart they are completely intertwined for china, of course, china already had some big imbalances in domestic credit that it was working through and trade conflict has greatly exacerbated the challenges that they're facing, but if you look at the euro area, their brexit has been a factor, but there are other factors that are also affecting the euro area outlook. and japan, too, has been

certainly affected by trade conflict in the region, but there's some internal factors that are also weighing on their growth prospects. >> if you put it all together, the new york fed's now cast, the atlanta fed's gdp now they are both at 0.4% for the current quarter. is that where you are in terms of thinking about the economic -- economic growth right now? >> yeah, so that's quite a bit lower than a lot of the consensus drafts that are out there. i mean, i think we did have some strength in the first half, we expected somewhat of a moderation, we're seeing that in the second half, but just don't forget the u.s. consumer, the u.s. consumer has proven enormously resilient if you look at retail sales, if you look at consumer sentiment the u.s. consumer continued to feel good about the job market and the job market continues to be strong.

most of the businesses that we talk to that are consumer facing continue to be quite upbeat. >> so our cnbc rapid update which we take a median of all the tracking drafts is at 1.5. can you tell us where you are for this quarter and your outlook say for the next year. >> yeah, so i can't give you my precise forecast but i will say that we have seen a bit of slowing, which i would expect. we also saw some special factors weighing on the manufacturing sector that we will begin to see turn around in the first quarter of next year, so we will see some bounce back from those special factors there, but certainly if i look out over the next year, you know, i see the economy growing slightly above trend, i see continued tightening in a very strong labor market and i see inflation continuing to move up two and hopefully a little bit above 2%. >> a lot of wall street economists think the fourth

quarter or perhaps the first quarter of 2020 is the bottom of the slowdown is that kind of how you see it cycling out? >> so, you know, it really matters here whether you're talking about the slowdown in manufacturing and trade globally, and i think that's still a question mark, but certainly in terms of the domestic economy, again, powered by the consumer i do expect to see a trend or above trend growth actually continuing out over the course of the next year, year and a half. >> i want to ask about your policy outlook, but i'd like to ask you first about the president who says that rates should be used to weaken the dollar and that u.s. rates should be below european rates does that make sense to you? >> so we have a framework under law that we operate under and so we are according to law asked to set interest rates to keep the economy with the labor market

operating at maximum employment and inflation coming at 2%, which is our target, and that's the set of criteria that we use in assessing the appropriate path of policy rates i will say relative to some of the jurisdictions where you see negative rates today our economy is just much stronger. >> would you use rates to weaken the dollar and help the manufacturing industries >> so, again, that's outside of our statutory framework. our statutory framework is very clear, we are supposed to use monetary policy to achieve maximum employment and inflation target and, you know, we're pretty pleased with the labor market, you know, we've seen the employment to population ratio returning to pre crisis peaks, we're seeing more people coming into the labor market, we're seeing consumers feeling good

about their job prospects. so we're really seeing a lot of progress there inflation has been slower, but it's certainly something that we're going to track and make sure that we see 2% inflation, which is our target. >> the market took a strong message of pause from the last statement and the chairman's last press conference. in fact, the december fed futures was trading with a 0.8% chance of a rate cut, which means in a room of 100 people you can't get one full person to say the fed is going to hike in december >> well, i can certainly tell you my own thinking is that the committee has made pretty substantial adjustment in the path of rates over the last few meetings three rate cuts and, you know, it will take some time to see that work through the economy. so i certainly want to monitor

and assess how the economy is reacting to those cuts we're starting to see some improvement in residential investments and turn around there which is the kind of thing you would expect to see in a lower rate environment so i think for my own part i want to monitor, i want to wait for a little bit as i assess how the outlook is adjusting. >> one of the assessments out there right now is that there's two bars, one to hike and one to cut, but that the bar to hike is quite a bit further, that the fed is no longer normalizing rates for normalizing sake, but that the only reason it would hike is if inflation were higher above the 2% target for a sustained period is that a right way to think about it is the bar relatively low to cut but relatively high to raise >> i think, first of all, i

would be looking carefully at incoming data and seeing whether there is some set of factors that calls for a material kind of change in the outlook which would lead me to want to reassess that rate path. so i'd really be looking for material change. in terms of how do i see the balance of risks, certainly the plans of risks has been tilted to the downside for some time as we assess potential upside risk to the economy, they just seem to be somewhat less prominent than the risks that we talked about earlier which are risk of trade conflict, risks of global slowing. >> a big portfolio inside the fed here and i want to get to all of it, but one area where you specialize is on this idea of financial stability and it's not unrelated to the discussion we just had. with rates down the market is at an all time high or near one almost every day, do you worry about systemic risk building in

markets, particularly fueled by low interest rates >> i do worry about financial imbalances rising in this environment. we certainly called out in our financial stability report the risks associated with a low for long environment globally, which is greater accumulation of debt, greater reach for yield behavior and the one area where i'm seeing some imbalances that i think merit heightened vigilance is in the area of business debt, particularly debt among risky debt borrowers and credit spreads in that area are low relative to historic levels which that combination we've seen in previous business cycles tends to amplify any downward shocks. >> so what do you want to do about that i mean, also what about the

stock market as well being at all time highs >> yeah, so in my own kind of assessment the way that we should be addressing those financial imbalances that are building is through macro prudential tools, through building greater buffers that would help to cushion any amplification of shocks to the downside you know, we are actually not doing as much of that as i'd like to do, i've proposed turning on the countercyclical buffer, it was intended to be used for precisely these kinds of circumstances, others haven't shared my assessment, but those are the kinds of macro -- what we call macro prudential tools that i think are appropriate i don't see monetary policy as the first line of defense. >> i'm sorry to keep coming back to this, but with the stock market at all time highs does that also give you concern is that something that the fed

should be addressing >> so we don't look at any particular set of valuations, we really look for broader patterns of valuations in a variety of markets that might be out of line with either historical norms or kind of fundamentals, relationships, and that's the basis on which we make our financial stability assessments and as i said earlier, the thing that i've been very focused on is that area of business debt, particularly to the riskiest borrowers. >> you recently gave an in-depth speech about climate change and said that the federal reserve needs to be involved with assessing this the journal wrote an editorial that said bankers aren't climate scientists how do you respond to that >> yeah, so i think financial sector participants and central bankers both do and have historically taken into account all of the material risks to

valuations, to the economy and that's appropriate you think about globalization, for instance that was very pertinent to us in terms of monetary policy, it was very pertinent to financial markets, risk assessments. climate change by all accounts is going to have important impacts differentially across the economy over a long period of time. you just look at areas that have been afflicted by wildfires or by more frequent historic levels of flooding. those areas you may find that property becomes unsureable. that's a risk for financial institutions that may be holding some of those loans on their books. so already we're seeing ratings agencies looking at this, the insurance sector taking a very close look at it and of course banks are also assessing their risks and in our kind of risk

management framework we would expect them to be taking those risks into account. >> governor brainard, thank you for joining us. >> thank you. >> courtney, back to you. >> thank you very much, steve liesman. now we are going to send it back over to sue herrera she is at cnbc headquarters and has a news update. >> good morning, courtney. good morning, everyone here is what's happening at this hour at the dubai air show the faa says it will not be pressured by boeing to get its 737 max back into the air the faa chief steve dixon said there is no timeline as to when that plane will get certification. >> i'm absolutely committed to honoring the memory of those who lost their lives in the lion air and ethiopian airlines accidents by working tirelessly each and every day of my tenure to ensure the highest possible margin of safety in the global aviation system. syria says its air defense foiled an intensive israeli

rocket assault on the outskirts of damascus. two people were killed when an israeli missile hit a house in a nearby town. the israeli military said it struck to sees of iranian targets in syria. the california brush fire that burned last month caused $500,000 in damages to the ronald reagan library. the blaze consumed trees and surrounding landscape and burned all internet, network and cabling at the library you are up to date, that's the news update this hour. carl, i will send it back downtown to you. >> suh, thank you very much. when we come back the president visiting apple's macbook pro assembly facility alongside tim cook today a live report from austin ahead of tay tr ensqwkn od'souwh "ua o the street" comes back for every dollar you spend at a small business, an average of 67 cents stays local. shop small and watch it add up. small business saturday by american express

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(people talking) for every dollar you spend at a small business, an average of 67 cents stays local. shop small and watch it add up. small business saturday by american express is november 30th. still to come we are going to take you live to the l.a. auto show and we're going to hear from north america's ceo of bmw. and tomorrow don't miss an exclusive the annual interview i do with liberty media's chairman

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it's now time for our etf spotlight. taking a look at semis, trading slightly off the record highs this morning, down just a hair, still the sector is really on pace for its best year since 2009 back then the smh posted a gain of almost 60%. four of its components, amd, universal display corporation, lam research and tara dine all more than doubling year to date. amd up over 120% this year, tech strong overall but semis particularly a strong group despite the small weakness today. we continue to monitor the impeachment hearings at house

intelligence, ambassador sondland continues to make headlines, ylan mui has the latest. >> eu ambassador carl sondland delivered blistering testimony this morning, answering for himself the question that is at the very center of the impeachment investigation, was there a quid pro quo >> i know that members of this committee frequently framed these complicated issues in the form of a simple question, was there a quid pro quo as i testified previously with regard to the requested white house call and the white house meeting, the answer is yes. >> now sondland said that he worked with rudy giuliani at the direction of president trump and that rudy giuliani in turn then told him that president trump needed to hear the ukrainian president publicly acknowledge an investigation into the 2016 election, including the dnc

server, as well as breurisma ultimately to not only himself but also secretary of state mike pompeo and former national security adviser john bolton as he put it, everyone was in the loop >> we all understood that these prerequisites for the white house call and the white house meeting reflected president trump's desires and requirements. >> reporter: the chairman of the committee adam schiff and his chief counsel are in the midst of their 45 minutes of questioning of sondland. he has been one of the most highly anticipated witnesses in these hearings so far, guys. that is the reason why he is sitting in that hot seat all by himself this morning back over to you. >> quite interesting testimony thank you. meantime, the president is making his way down to austin, texas, later today to tour a manufacturing plant alongside the ceo of apple, tim cook

our eamon javers is live from austin, he has more on what to expect later >> reporter: that's right, the president is going to get a bit of a respite from the impeachment drama in washington, d.c., he is expected to leave the white house in just a couple of minute's time to come here to austin, texas, where he will face a different kind of drama this drama at the intersection of the president's trade war and one of the country's most important companies, that is, apple. the president is going to be during a facility where they manufacture the mac pro computer, a very high end apple product, about $6,000 retail price. that product is manufactured here in austin because the company was able to secure some exemptions to tariffs back in september. the company is also going to be announcing an expansion of its facility here, they announced a $1 billion project last year, they are announcing the official ground breaking today of this new 133-acre campus here in austin, tacks. they've also got about $200

million invested in this mac pro facility here and 7,000 employees in austin, texas so this is an important area for the company and for the president of the united states now, the drama is going to be as the president of the united states and tim cook both try to balance often competing interests here the president is going to be trying to signal to the american public that his tariff program is working, driving companies to bring manufacturing and jobs back to the united states, tim cook is likely to use this opportunity to press the president not to harm apple any further if it takes any steps on increasing tariffs on december 15th that is a possible deadline that we are looking ahead to in that china trade war, could have significant impact on apple because the vast majority of their products are manufactured overseas and a lot in china and those tariffs would specifically impact that company, potentially if they are put in place tim cook wants to use this opportunity for a lobbying campaign to the president, the president wants to use it for a

lobbying campaign to the american public. >> we'll see if he takes questions on tariffs and obviously what's happening at house intel this morning as well eamon, thank you for that. eamon javers as we go to break, take a look at the markets, dow is down 79, 80, right here around 3,115 a range we've been stuck in for some time now. more "squawk on the street" when we come back

the worst performing s&p 500 stock is about to report earnings, where one trader sees nderrtunity in the misy. fi out more on "trading nation" at cnbc.com. - [spokesman] if you've tried college but never finished,

(group cheering) snhu lets you transfer up to 90 credits toward you bachelor's degree. - [woman] it doesn't matter how old you are, you can do it, you can finish. - [spokesman] finish your degree at snhu.edu welcome back to "squawk on the street." let's get right over to the l.a. auto show where phil lebeau is alongside a special guest. good morning, phil. >> good morning, courtney. bernard guhn the ceo of bmw

north america joining us always an important show for you guys, especially given the importance of california give me your sense of what the luxury market is looking like in california and in the united states as well. >> well, the luxury market is slightly growing but only slightly in the luxury market that's what we are really proud of i think we had the last 25 months of growth and we play a good role in it, generally it's stable but a slight growth. >> we are awaiting for the trump administration to make some kind of a decision about potentially putting tariffs on vehicles built in europe, imported here to the u.s., of which bmw has a sizable percentage what's your sense in terms of what might happen and when you might get a decision, not only you but other european auto makers >> i knew that you were going to ask that question but reality is i am not a politician and we are proud that we have such a foundation in america. we are celebrating spartanburg 25 years now we are producing

cars and we will continue to invest i'm against tariffs, we are for free trade if it happens, which i think is bad for the manufacturers, the dealers and the customers, then we will react, but still i have to hope that it will not happen. >> meanwhile, the chinese market seasons to slow down in terms of total auto sales, you export a number of vehicles that go over there, you also have the x 3 being built in china as that slowdown continues to go on does that impact what you're doing in terms of your experts out of spartan during. >> spartan about urg is booming, our biggest factory in the global network and for the fifth year running the automotive company with the highest export value. to answer your question precisely we don't see any slowdown. >> you are at record production down there. >> we are. >> over 400,000. >> this year will be record production, yes. >> one last question so much focus at the l.a. auto show when it comes to electric vehicles i hear this question from people

all the time yeah, there are more of these electrics coming you are standing in front of a high bid electric 3 series that you guys are rolling out. when do we see the tipping point in sales when we see more americans saying, all right, i'm ready to plug in >> to start with i think america is truly the land of tree tomorrow and choice. we have got within one side luxury, performance and electrification. so from a company point of view last year we sold 140,000 electrified vehicles, we started 2013 with can the i 3. going forward this year we have 500,000, in 2021 about a million electrified vehicles tipping point hard to foresee. we're proud that we're launching this beautiful 5 series next year, 5 series is already in place. hybrid, a huge range of choices. >> you have choices but do you think that the plug in hybrid electric -- maybe not a transition step, but you believe that's a market not just full electric but that hybrid electric that also is going to

grow. >> hybrid is absolutely growing. we lead in the hybrid segment. i could take an x 5 every day go to work, plug it in, drive electric back home and never use the engine, but if i'm driving to texas or cross-country i have an engine. i think that choice is a great choice to have. >> but you know that there are people who say tesla has shown it's pure electric that people want more than anything else do you dispute that? >> no, absolutely not. what i would like to say is electric as bmw we're going to launch 25 electrified vehicles, 12 of which are pure electric by the year 2025. so i'm sure we are going to see each other the next show where we will show you some new also full electric vehicles. >> bernard, ceo of bmw north ameri america. a big show not only for bmw but all the luxury auto makers more coming up a little bit later on this morning. back to you. >> thank you for now phil lebeau in l.a. let's send it over to jon fortt, he has white house coming up on "squawk alley." >> we are going to talk

technology and travel. the ceo of booking holdings, glen fogle, is going to join us and kind of a pivotal time for that industry heading into 2020. that's cinomg up on "squawk alley. it was sophie's big day. by the way, she's the next mozart. as usual we were behind schedule. but sophie's enthusiasm cannot be dampened. not even by a run-away donut. we powered through it in our toyota prius.

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welcome back to "squunawk on the street." i'm dominic chu. stocks are off their worst levels of the day. consumer focus stocks still outperforming today but the financials are lagging ahead of the release of this afternoon's big fed meeting minutes. shares of invesco, you've also got etrade, sbv financial and lincoln national among the worst performers on the day so far in early trading. also, though, keep an eye on the broader interest rate picture. yields on 10-year u.s. treasury notes have been trending lower the last couple of weeks that difference in yield between longer and shorter term treasurying has been narrowing in that span as well so it could factor into how bank stocks trade in the coming days and weeks so keep an eye on financia financials i'll send it back down to you guys, courtney, at the new york stock exchange. let's get another check on today's big retail movers with

target and lowe's trading at all-time highs lowe's putting up a mixed report they didn't beat home depot on those u.s. comps as they did the last two quarters but that was something of an anomaly for them to have done so. target shares are higher by 12%, lowe's shares higher by 5% home depot shares continuing to slide further, down 1.3% afternoon reporting a disappointing report yesterday, but still saying, look, the u.s. consumer is strong there is nothing wrong there nor with the housing market. we're taking down our estimates purely because of what we're doing with our strategic investments. we've heard from a lot of retailers about the holiday forecast almost everyone says that it's relatively strong, although urban outfitters did say q4 is typically the most unpredictable time of the year with the shortened selling season this year, there was some inherent uncertainty shares are selling off by more than 13%, as you can see by and large, the holiday season has been at least a break forecast spot for many of these

retailers. >> it was interesting to note a seminal change in the business that took place at target. if you're an investor and you're able to understand that prior to august, by the way, and it's now been confirmed with the latest quarter, you're up enormously in terms of the stock price but we sort of were watching cornell and saw some of the data, but they had some difficult periods as well at target, didn't they? >> oh, absolutely. when he first announced this sort of multi-year strategy, thaec that he was leaning into the stores as opposed to closing the stores, that day the stock price sold off and people were like i don't know if that's the right thing. i know we had an interview where we pushed him pretty hard on it and it did take some time and it wasn't always smooth but now it does appear to be paying off. >> the data breaches from six years ago are long forgotten as for the price action for the year, it's $8 away from doubling for the year you need to get to 132 and change, if you can believe that. >> that is really amazing.

it's also interesting if you look at the other big box retailers, target is not necessarily lifting that group sometimes we see this ripple effect but investors are starting to be understand that there are individual stories happening in retail. you've really got to do your homework there brian cornell, the ceo of target, was on "squawk box" this season talking about the holiday season which is ever in focus this time of year. take a listen to what he had to say. >> it's going to be a very intense shopping season. every day counts so we've really made sure we're investing in rt so $50 million of additional wages during the holiday season we put a lot of time into training 500,000 additional hours of training to make sure our teams are ready for the holiday season we'll have twice as many team members working on same-day fulfillment. so we're really making sure that from a team standpoint we're investing in that important asset. >> and i think it's interesting that cornell talked about the team because i talked to many

people just casually who say when i go into a store, i can't find anybody to help me when i need help. so i think it's something important to watch i think i underestimated how important that was at walmart as well it seems to be paying off. invest in the team in the stores so when consumers go in, there's someone to help them. >> thanks for being here today when we come back, an exclusive with the ceo of priceline's parent, booking holdings, outperforming expedia and trip so far. dois down 61 "squawk alley" starts in a few moments. sundown vitamins are all

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good morning it is 10:00 a.m. at the mac book pro manufacturing plant in austin, texas. it's 11:00 a.m. on wall street and "squawk alley" is live ♪