my anniversary watch it is a beauty anyway, thank you, dom chu it was so nice of you to give that to me after we hit ten years together >> you're welcome. you're welcome >> not from you. >> you haven't given me anything except -- >> markets turned around show everybody where things are real quick >> 200 point wing. >> join us tomorrow. the guys on "squawk on the street" will take it away. >> good tuesday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber in a moment, chairs will hold a news conference outlining the next steps in the impeachment process. live coverage from capitol hill. in the meantime, futures did rally from early morning loss as the journal says that u.s. and china negotiate herbs aors are e ground work. as we speak, mexico's president says that reps from canada and the u.s. will arrive in mexico today to sign usmca.

>> right now, ambassador lighthizer is on his way which is why it is so curious to see the story being put out by the chinese, the wall street journal, you can't reach him at this very moment but, yes and this is important because both speaker pelosi came on "mad money," this is a done deal, once you finish the articles of impeachment and the president wants this deal, talk about david during the break, but it is the one thing people seem to agree on in washington this is a good deal. and yet the -- a lot of the people i follow who are -- you get a democrat in the white house and companies are allowed to move back south again it not that adventurous to do so because of the big increase in wages. those of us who do business in mexico can tell you the differential is not just cash. but it is also healthcare, where they have universal healthcare and this is a story about pollution control. where both sides are now saying -- both democrat and

republican, there may be some enforcement, plus control rules. right now you can do whatever. not whatever you want. but it is certainly not an epa down there that is very strong about that. >> so we'll hear from pelosi at 10:00 a.m. eastern on usmca, get some color on that in the meantime, do you believe this journal story on tariffs? >> put it put out bit chinese. if i take my cue from what jim said in the previous show, fool me once, fool me twice, fool me six times, fool me nine times, fool me 20 times, can we wait until lighthizer is on the ground and you can reach him lighthizer is the key man. i'm not saying anyone is more important than the president but lighthizer is the negotiator and it is curious he can't be reached. >> hands full on other stuff turning into a very busy week. if we do get a delay in sunday's tariffs, what does that mean for the markets? >> i think that the market wants

any deal the wall street wants in he deal i think that there are a lot of companies that feel like, you know what, if we get a deal here, the key stock in this market has been apple. apple was down 4 yesterday at one point down 6. apple was down 2 before this announcement apple is the stock i'm keen on it is the key to this market without a statement from the president, exempting apple, samsung becomes the cheapest cell phone company >> you made that point >> they believe me >> i'm not sure that is not lost on the administration either >> it was lost for quite a long time. >> it wasn't -- it was until tim cook explained it. >> i don't want to say -- tim cook made a very impassioned plea saying, don't forget, you're subsidizing samsung. tim cook has been the most thoughtful broker during this period hence this -- the fact the stock is up 120 points from the

preannouncement at the beginning of january >> that's largely the business, it is not what they have done or haven't done with the administration >> well, it is largely the new model, service model also the fact that the 11 has been fantastic no one thought the 11 would be great. other than tim cook, i couldn't find anyone. i couldn't find anyone else that thought it was a big deal. i went back the next day to get one, said couple hour wait couple hour wait i know i should have thrown my weight around. and said, hey, i'm -- though don't give a damn. i went there and hat and hand and said i would like to -- thousand dollars, i have a thousand dollars, can i get a phone? no one cared i like to carry around -- just kidding. but there is -- the demand for the phone, the airpods, tried to get -- they're so few, you -- i found a bunch of places where you can get them sorry -- >> give me the stiff arm. >> no, podcast, no one sees

that but i know i can find them for you if you want -- i'm going to charge you at least $100. >> i can use apple card and get 6% off. >> you mentioned the new model streaming content for $5 a month is one reason we have been talking about this needham downgrade of netflix long time skeptic of netflix, prospects rival cuts to sell says you guys have to unveil an ad supported lower tier product. she's talking maybe six to eight minutes an hour of ads for five to seven bucks a month. >> can we say, can all of us admit for one second that the reason why people like netflix is because there are no ads. you watch ads for different shows, all you think of to me is that they have more ads than they do even in a football game. i just think this is -- u.s. sub losses, i'm not buying that. i would like to hear from

netflix before i agree with this i think this piece is basically a hit job. >> well, to be fair to her, she has been consistent. not as though -- and not necessarily wrong. >> well, so i don't know if i call it a hit job. there are certainly many who wonder about the ability to service to continue to penetrate the u.s. now, international subs for netflix are far more important in terms of growth we know the subbase won't grow any significant rate at this point given the streaming -- >> let's get to these committee chairs nadler, schiff, engle, waters and maloney talking about next steps in the impeachment process. >> good morning, everyone. on this solemn day, i recall that the first order of business

for members of congress is the solemn act to take an oath to protect and defend the constitution of the united states with great respect and gratitude that i thank the chairs of the committees, the six committees that have been working to help us honor our oath of office. also want to thank the staff of those committees and the committee members for all of their work over this period of time to help us protect and defend i want to thank the chairman of the judiciary committee, mr. nadler, chair of the intelligence committee, mr. schiff, chair of the ways and means committee, chairman -- all chairman, chairman richey neil, chairman eliot engel of new york, chairman of financial services committee, maxine

waters of california, the chair of the committee on government reform and oversight, congresswoman carolyn maloney. i also want to acknowledge the important work that was done by our dear and departed, may he rest in peace, elijah cummings as chair of the oversight committee. now, i'm pleased to yield to distinguish chair of the judiciary committee, mr. nadler. >> thank you, madam speaker. over the last several months, the investigative committees of the house have been engaged in an impeachment inquiry into president donald trump's efforts to solicit foreign interference in the 2020 elections. efforts that compromised our national security, and threatened the integrity of our elections. throughout this inquiry, he has

attempted to conceal the evidence from congress, and from the american people. our president holds the ultimate public trust when he betrays that trust, and puts himself before country, he endangers the constitution, he endangers our democracy, and he endangers our national security. the framers of the constitution prescribed a clear remedy for presidents who so violate their oath of office that is the power of impeachment. today, in service to our duty to the constitution, and to our country, the house committee on the judiciary is introducing two articles of impeachment charging the president of the united states donald j. trump with committing high crimes and misdemeanors the first article is for abuse of power it is an impeachable offense for the president to exercise the

powers of his public office to obtain an improper personal benefit while ignoring or injuring the national interests. that is exactly what president trump did when he solicited and pressured ukraine to interfere in our 2020 presidential election thus damaging our national security, undermining the integrity of the next election, and violating his oath to the american people. these actions moreover are consistent with president trump's previous invitations of foreign interference in our 2016 presidential election. and when he was caught, when the house investigated, and opened an impeachment inquiry, president trump engaged in unprecedented, categorical and indiscriminate defiance of the

impeachment inquiry. this gives rise to the second article of impeachment for obstruction of congress. here too we see a familiar pattern in president trump's misconduct a president who declared himself above accountability, above the american people, and above congress' power of impeachment, which is meant to protect against threats to our democratic institutions is a president who sees himself as above the law. we must be clear, no one, not even the president, is above the law. i want to recognize the great contributions of the investigative chairs, particularly intelligence committee chairman adam schiff, foreign affairs chairman eliot engel, committee on oversight and reforms former chairman, the late elijah cummings, and new chairwoman carolyn maloney, financial services chairwoman maxine waters, and ways and means chairman richard neil, who helped lay the foundation for

the articles we are introducing today. i also want to thank my judiciary committee colleagues critical in our work to hold the president accountable and in the drafting of these articles later this week, the judiciary committee will meet to consider these articles of impeachment, and to make a recommendation to the full house of representatives. we do not take this action lightly. but we have taken an oath to defend the constitution. and unlike president trump, we understand that our duty first and foremost is to protect the constitution, and to protect the interests of the american people that is why we must take this solemn step today. elections are the cornerstone of democracy and are foundational to the rule of law but the integrity of our next election is at risk, from a president who is already sought foreign interference in the 2016

and 2020 elections and who consistently puts himself above country. that is why we must act now. i want to turn now to chairman schiff, who will explain the evidence that supports these articles and the need for us to act with such urgency today. >> thank you, mr. chairman thank you, madam speaker and to my colleagues, good morning. the framers of the constitution recognized that some day a president might come to office who would abuse that office, betray the public trust, and undermine national security to secure foreign help in his re-election. and seek to abrogate the use of congress to hold him accountable. they prescribed a remedy and that remedy is impeachment it is an extraordinary remedy, and one that i have been reluctant to recommend, until

the actions of president trump gave congress no alternative we stand here today because the president's continuing aabuse of his power has left us no choice. to do nothing would make ourselves complicit in the president's abuse of his high office, the public trust and our national security. the president's misconduct is as simple and as terrible as this president trump solicited a foreign nation, ukraine, to publicly announce investigations into his opponent, and a baseless conspiracy theory promoted by russia, to help his re-election campaign president trump abused the power of his office by conditioning two official acts to get ukraine to help his re-election. the release of hundreds of millions of dollars in military aid that nation desperately needed, and a white house meeting with an ally trying to fend off russian aggression.

in so doing, he undermined our national security and jeopardized the integrity of our next election. and he does so still the evidence of the president's misconduct is overwhelming and uncontested and how could it not be when the president's own words on july 25th, i would like you to do us a favor, though, lays so bare his intentions, his willingness to sacrifice the national security, for his own personal interests and when the president got caught, he committed his second impeachable act, obstruction of congress of the very ability to make sure that no one is above the law, not even the president of the united states the evidence is every bit as strong athat president trump has obstructed congress fully, without precedent and without base nice law. if allowed to stand, it would decimate congress' ability to

conduct oversight of this president or any other in the future, leaving this president and those who follow to be free to be as corrupt, malfeasant or incompetent as they would like with no prospect of discovery or accountability now, some would argue why don't you just wait? why don't you just wait until you get these witnesses, the white house refuses to produce why don't you just wait until you get the documents the white house refuses to turn over and people should understand what that argument really means. it has taken us eight months to get a lower court ruling that don mcgahn has no absolute right to defy congress eight months for one court decision if it takes us another eight months to get a second court or man a supreme court decision, people need to understand that is not the end of the process. it comes back to us and we ask

questions because he no longer has absolute immunity and claims something else, that his answers are privileged and we have to go to -- back to court for another eight or 16 months the argument, why don't you just wait, amounts to this, why don't you just let him cheat in one more election? why not let him cheat just one more time? why not let him have foreign help just one more time? that is what that argument amounts to the president's misconduct goes to the heart of whether we can conduct a free and fair election in 2020. it is bad enough for a candidate to invite foreign interference in our political process, but it is far more corrosivefor a president to do so and 20 abuse his power to make it so. despite everything we have uncovered, the president's misconduct continues to this day, unapologetically, and right now.

as we saw when he stood on the white house lawn and he was asked what did you want in that july 25th call, and he said the answer was a simple one, and not just asom somimple one on july simple one today, he still wants ukraine to interfere in our election to help his campaign. even this week the president's lawyer was back in ukraine, seeking to revive the same debunked conspiracy theory promoted at the president's behest which gets to the final and most pernicious of the arguments that we have heard in the president's defense. that the president can do whatever he wants under article 2, including get foreigners involved in our elections, and we should just, to quote the president's chief of staff, get over it. ben franklin said we have a republic if we can keep it the president and his men say

you can't keep it, and americans should just get over it. americans don't get to decide american elections anymore, not by themselves, not without foreign help for the members of congress this is not a question of fact, because the facts are not seriously contested. it is rather a question of duty, the president's oath of office appears to mean very little to him, but the articles put forward today will give us a chance to show that we will defend the constitution and that our oath means something to us i thank you, mr. chairman. >> that's house intel chairman schiff, along with judiciaries jerry nadler, two articles of impeachment, abuse of power and obstruction of congress. nadler says they expect to hold a vote later in the week

reuters says that vote would be no later than thursday as the market continues to be nonplussed by this, getting what guessing what going to happen in the senate. >> the makeup of the senate is such unless you have some serious breaks from the leadership, this is going to be a lot like the clinton impeachment, and not the nixon impeachment. those of us around long enough for nixon impeachment remember senator rhodes, senator goldwater, senator scott broke with the leadership and once they broke with leadership, it is -- senator goldwater, we do not have that, so i think there say lot of people saying, who have been around who followed the way the senate works, recognize that you need to have people say that -- to repudiate the president and mcconnell. and that's why i think that no one is taking this seriously in the stock market >> yeah. it seems to be quite a long shot that the senate would convict. that's been the assumption the question i hear is will any

republican senators vote to convict and therefore will there be a majority of the senate doing so, get a romney or collins or, a number -- or a number of the other senators. >> always the dark horse possibility that mcconnell makes votes anonymous. people can abstain we'll watch for all of that. before we get to the senate, obviously, a few more steps that need to happen in the house. now what the calendar may look like from here on out. >> well, you did hear chairman nadler there say that the vote is expected to happen in judiciary committee later on this week. perhaps setting up a house floor by early next week but i think the most critical point you heard bojudiciary committee chairman nadler and adam schiff say is that the president's actions amounted to a danger not just to national security, but also to the integrity of the next election

so the messaging is this is about the future, not the past, that's why we did not see an additional article of impeachment structured around the mueller investigation. focus is squarely on the president's actions in regard to ukraine, and that is going to provide important political cover to the house democratic moderates who have been somewhat concerned about moving forward with the impeachment investigation. they said they supported an inquiry, have not yet committed all of their votes toward supporting articles of impeachment until they saw what they were keeping this focus squarely on ukraine, helps ensure they can keep their caucus united when that floor vote happens, potentially early next week. >> indeed. as you say, relatively narrow range. some people mentioned no -- no mention of broibery, for example just two articles and maybe a fewer number than some expected. >> i think part of the

calculation on pelosi here, they wanted to bring forth articles they felt they had absolutely clear evidence for so that is why, again, they focus on abuse of power and on obstruction of congress. you also heard nadler make the argument that this is not just a one-off this is a pattern of behavior and schiff very sort of forcefully made the argument that they do need to move now, not let this be resolved by the next election, because as you said, he is worried that the president could cheat once more. so, of course, the white house has not been participating in the house's investigation. we'll see if they're able to mount a more robust defense once it comes to a senate trial, if and when it comes to a senate trial. but also republicans have been arguing that this process has been rigged from the start, and the outcome as you said is -- seems to be clear and that is why the markets do not seem to have moved much on this news. >> thanks for that eyes and ears on the impeachment process since the beginning in washington

jim, any further thoughts? >> no. i think that the overriding story for us this morning is whether there is truth to the agreement with the chinese, to delay the tariffs. the reason i say that is because this -- this wall street desperately wants a deal, good or bad deal, i think for the american people. they -- i'm not saying anybody in regards to the impeachment is a side show. it is occupied the president's range space, the subject of many tweets, an indicator of where the president is, but, look, wall street wants to see that these tariffs are delayed. and i don't think that anyone believes that anyone on wall street believes there is anything substantive to a vote i went to see james comey recently james comey is a smart opponent of the president he has a list of people who would like to vote with the democrats, but kind of the subtext is afraid of the

president. and i don't think that's to be dismissed. i think there are people who fear the president you're nodding it is a podcast. you have to say yes, jim, or no, jim. >> i think there is no doubt, jim. >> you don't have to say it like that, like you just -- like a marionette argue with me. >> i can't, jim. >> okay. >> i'm just a doctor, jim. >> we'll get cramer's mad dash, we'll count down to the opening bell, a lot to get to other than the press conference we just saw. fed meeting does begin today decision tomorrow. usmca, downgrade of netflix and jpm. back in a moment

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let's get to a mad dash as we sit down, stay seated at the desk what do you got? >> a whole bunch of companies came public around now in terms of research, chewy, stitch fix one thing people are taking a hard look at is mongo db what this shows is, i know we'll talk to -- we'll talk to dave cody, he's got a company that -- >> one of the kevin line

companies. >> subscription growth, what people want to see is subscription growth. nutanix on last night, talking about subscription growth. growth is stk sticky adobe said we're going to get subscription growth and get away from licenses. what i find incredible, david, is the belief, no matter what, if you have subscription and growing at 52%, people want to own the stock. last week, if you were growing fast -- the market has become so mercurial that all i can say is you can see the decline last week in the stock, people didn't want high growth now they want high growth. it is just going too crazy but dev will be on and dev is a visionary he can lay out -- he's very good i happened to catch up with him recently at a dinner, wow. this company is on fire. fire database in the cloud not on prem. >> who is their customers? is it healthcare related >> everybody you got to remember, in the

cloud, like we had a company this morning, another one that is a cybersecurity, z-scaler in the cloud, they didn't like that one that much. but in the cloud is everything >> has been a pretty impressive debut. there is the opening bell, the s&p 500, at the big board tod , today -- at the nasdaq, graduates from nasdaq's milestone makers program in san francisco. didn't really get to the downgrade at jpmorgan out of kbw. not specific other than they believe the gains have been pulled forward for next year. >> i read the downgrade, i said, okay, what do you do do you sell it here, with the idea that somehow you'll be able to get back in almost a hedge fund downgrade. because jpmorgan is a company doing inconsiderably well.

and we have paid more for the bank stocks and we paid more than all the others. but i just don't know you get back in, who do you get back into a company that is doing very well, and if you think that 2020 is going to be a great year, great stock. don't know it is too -- too in out, in out for me. >> yes it has been hitting a series of record highs lately in the 145 range. currently the dow's worst component on a day where we're opening in a range bound fashion. oil, though, leading to the upside, exxon and chevron. >> we find that we buy these stocks when we think there is a china deal as if somehow that means the worldwide economy is going to accelerate. yesterday was a downgrade of chevron saying, it is -- don't believe it is safe got a bunch of oil upgrades today. i don't think the group is safe if there is no deal. because the numbers are all too high >> all too high. >> so you are counting on global growth really being reliant on at least phase one >> exactly

>> otherwise, what happens is you buy these stocks, oil dips to -- five-year curve for oil has not changed. in other words, you would think if things were going to get better in the world, you would be paying 65, 70, paying exactly where we are so what that says is if the u.s. is going to keep pumping, going to be lacking in prosperity, and we are net exporter, using all sorts of oil products, not just -- >> just to -- you've seen the natural gas etf, i think it is a five-year low. >> that's even -- even though we export 8 billion, every single day, can you imagine where it would be if we weren't expo exporting. >> ung. >> can you imagine where we would be if we weren't expo exporting? >> my god it would be -- >> it would be like negative rates. >> you know what the open secret is i'm sure if we went in a satellite, into virgin galactic, you would see the flairing it is too expensive to ship.

it is -- a lot of that is marcellus. utica. the late aubrey mcclenen would be the largest depository of natural gas coming through pennsylvania, ohio >> over the last -- look at five years, it is -- >> there is an investment for you. >> yeah. >> that could kill any hedge fund. >> it could. any hedge fund stupid enough to own it. >> i think you should say ill advised. >> maybe shorted, maybe sthey were smart. >> okay. >> most hedge fund businesses underperforming the s&p this year, i believe. >> how about -- >> often there are people happy to make it because they outperformed by a couple of percentage points. >> what i find to be unbelievable, a group of people believes energy is cheap, stocks are cheap. you meet the 10 million people at robin hood and ask the people who run robin hood, is anybody buying oil and gas they look at you, like, do you

have two heads they don't check off the esg. >> they look at what a low percentage it is of the s&p and think they can -- it is a rental. >> going away. going away i wish i had one oil stock that i could say my travel trust owns bp, deposit raiidn't raise the d >> really quick, we have gotten to even more shuffling as the ceo of lulu will go to -- >> i remember when stewart hayes took control of that company when he was cfo. he did a great job speaking at the april fantastic matthew boss retail conference at jpmorgan. and you tell me that stock is only down that much on his departure, which, by the way, the report, the report tomorrow, and stewart, they say in a curious release, going to not an

apparel industry what is he doing stewart is a great guy you love the guy >> would i >> super guy. >> all right maybe one day we'll meet. >> well, yeah, just a good guy >> i like to meet good guys. and good gals. people >> i would think that this is a -- going to report a good quarter or they wouldn't have announced this today what a gutsy thing to announce it today on the eve of when they report that's something mall-based a lot of mall-based. >> lulu. >> the media conference continues at the hilton in midtown. >> you killed viacom yesterday by asking those hard questions. >> i did not viacom did go down a bit, though >> stock declined, dramatically, when you talked about cash flow rather than earnings per share. >> the disconnect or the lack of free cash flow. >> killed viacom. >> not cash flow free cash flow i don't think that's fair. it is down not been a great debut. >> just a coincidence.

>> we had a -- we had a good conversation >> you were tough. >> okay. >> are we down yesterday, we were down for six minutes. we were down for six minutes i gave a discourse, the best thing i've ever done turns out wasn't on. >> we went black yesterday. >> we think that's been fixed. >> very odd. >> we just kept talking. i enjoyed it we learned a lot i did want to mention, john stankey, who is the coo, at&t, the ceo of warner media assets as well speaking at the same conference this morning. a lot of it been said before, whether by cfo john stevens, but he did say no place is safe when it comes to cost cutting initiatives. nothing is off the table we're aggressively looking at our benefits effectiveness, we found places across the large employer retirement base he goes on to cite any number of different areas where they are,

you know, going to take a look at the potential for cutting costs. and that continues once again, defending that $15 a month price for hbo max, saying it is a sweet spot, even though they have double the content, he says, that's why it is double the price, essentially, almost and believes it is not just for the 33 million existing hbo subscribers, but for lots of others who are going to enjoy that very large library. yesterday, our -- i say our as comcast, parent company our network, cfo, cavanagh, was at the same conference, talking about peacock. the entrant from nbc universal, ad supported potentially free if you're a comcast user talking about $2 billion, first two years, about $2 billion of aggregate investment in years one and two together with the peaking at what they say is 1%

of comcast revenue, achieving break even by year five. different route for comcast/nbc in terms of streaming entrant, peacock, ad supported. back to the conversation we're having before we went to the press conference there, netflix and laura martin is saying they believe they need an ad supported tier, don't have one yet, but she thinks they do. >> still keep marveling at disney, yesterday, we had box office story signups, that's the one that if you're going to ask me, you know, can people take that and netflix and hbo, can millennials afford all these things, and also pay their phone bill, i don't know, a question to me question >> yeah. >> by the way, guys, president tweeting about usmca. >> really? >> looking good. looking like very good democrat support for the bill, he says, that would be great for our country.

so we'll keep our eyes to see if we do get any kind of signing today, which some reports say is possible dow is down 100. to seema mody. >> a volatile 30 minutes of trade here the dow was poised it open lower by 60 points and then losses were evaporated after that headline came out from the wall street journal that the united states and china are working towards delaying the december 15th tariffs and then back to negative territory on that announcement from washington, d.c that house democrats are introducing two articles of impeachment, the dow currently down by around 80 points as it pertains to trade, we did see a pop in shares of apple apple, one of the companies that stands to lose if those december 15th tariffs are implemented web bush securities says that results in a 4% hit to earnings, or 50 cents in fiscal year 2020. here we are, apple at 266, down just fractionally on the day look at caterpillar shares, also popped on that wall street journal report, company that

certainly has been negatively impacted by not just tariffs, but strained u.s./china relationship stock now trading lower by around .6% the dollar also gained a bit of ground against the japanese yen on the prospect of those tariffs being delayed. take a look at it now at 108, just slightly unchanged at the moment take a look at the sector map now, to give you a sense of where we're seeing the gains and losses pretty much negative for technology, industrials, financials and energy as you guys were just discussing as well global markets not really getting any encouragement there. downbeat session in europe china slightly higher on the day. japan lower, though, as well so that is certainly the setup overseas two big events in europe, the ecb decision on thursday the fed tomorrow and uk election coming up later in the week. one big standout that we're watching is stitch fix this is really the type of earnings report that you want to see a better than expected

earnings report, a beat on its bottom line. guide higher for next year and rbc capital, one of the top picks, outperform rating, now up about 30% in the last three months guys, we have an ipo today, that is bill, a payment software company that rivals pay pal. back to you. >> thank you, seema. we have a friend of all shows on cnbc, former honeywell ceo dave cody, working with goadman saks announcing today it is buying a major developer of data center it is part of his spac, gs acquisition holdings he jones us now, first on cnbc, along with rob johnson, rob, i don't mean to slight you, but i do want to talk to your executive chairman first, dave, why are you back in the game and everyone said, you know he what, he's enjoying retirement. >> i am enjoying retirement, but

i like working, like you guys. business is fun. it is this never-ending game you get to play. it is competition, it is just fun. so i like it i don't think we could have found a better opportunity here with vertiv. >> i remember when you took over honeywell in a bit of shambles you changed it your tsr was rather remarkable. >> thank you >> where is this company, which is, again, like aerospace, in great secular increase, where is it versus when you took over honeywell? >> you couldn't have framed it any better i like the secular trends behind this for a couple of reasons data will continue to explode. you could almost call it freakish growth in terms of its ability to grow 20% a year that data has to reside somewhere. that's where we play the other second piece of this is the need to eliminate latency. people don't want to wait for information to get to him.

it is not always going to be able to get to a data center in iceland or the arctic somewhere, it has to be closer by getting things closer to them so you have ten by ten data centers is going to be important and that's a place we're going to excel >> so we're talking about a splintering in the number of potential customers, i assume. >> absolutely. yeah if you look at our customer base, a lot of people think it is just hyperscale and co-location is leading the market but really it is the edge devices, latency driven applications, things like netflix, hulu, things like security, those types of things are going to derive a proliferation of a lot of mini small data centers all over the place. >> that kind of numbers could we be looking at relative to what we have now? >> just think about cell towers or something, and in the millions, you talk about that kind of number of small data centers around, each cell tower, a mini data center if you will with storage and power, processing power, at the base. >> is this awe growth opportunity or one where you see the ability to continue to take

out costs? you're known for doing that in the past but this is a private equity asset, one would expect platinum, 38%. has done that through the years. is there still an opportunity to take costs out >> i like this for a number of reasons. if you look at honeywell, it wasn't just a cost play. we more than doubled sales while we were there. so something happened. why do i like this same reasons i liked honeywell great position in a good industry, differentiation with technology, the ability for organic sales growth, especially driven with innovation and new products, the ability for inorganic sales growth and as you know we made a lot of money in honeywell and margin expansion and we're -- we estimate 500 basis points behind where our peers are, same situation we had at honeywell same opportunity here. and the way i described it is we're about where honeywell was at the 2 to 3 year point the platinum folks with hiring

rob did a great job, establishing the foundation that is necessary to be able to change the trajectory this business, and if you look at sales growth, organic sales growth has been more in the 5% range over the last few years, and that's what we're going to be doing next year also. this is going to be both growth and margin. >> and you're going to still be able to get margin up. >> i'm sorry >> you can get margin out or increased margin. >> absolutely. and it is -- you think about the number of times that honeywell, i said growth sales, whole fixed costs, it is a simple concept, works look a charm you got contribution margins of 45%, it works like a charm we're already embarking on that. rob is taking a lead on making that happen. >> why is this the way platinum was better off going as opposed to taking this thing public? >> it would be a couple of years from now that we would be able to take it public. what works for us here is a couple of things we get to work with rock star like dave, who is a mile wide and mile deep and i really mean that, i had six months with him,

so far, but the opportunity to delever now, there is inorganic opportunities that we just can't go after today because of that and the biggest thing for our employees and our customers to experience now, the certainty where we end up. your private equity, you never know is going to buy you next, where you will be. now we now know where we are going, the dollars to do the innovation, the activities and it makes a lot of uncertainty go away for us. >> one thing i want to be sure people recognize is this is the beginning not the end. maybe this company is going to look two, three years from fnow like a mosaic and look as it a data play. there is a bigger vision here. >> absolutely. and you said it absolutely right. and you think back similar to what we did at honeywell, we started with a certain core. you recall, we dismantled much of that core and then we added a lot to it. so that we did something like 23 1/2 billion dollars on sales

transactions on a company that started at 22. huge amount of change. earnings went from 150 to over 8 bucks this year. the same kind of possibility exists here. you look at the size of the market, how fragmented it is, if you look at top three or four players, they usually account for less than 50% of the industry huge amount of fragmentation, organic growth and inorganic growth and as rob pointed out, we have the balance sheet to do something with this. so if it comes across,i'm pretty pumped up about this, it is because i am. >> i do think it is important to point out that you have been a globalist in sense of where things are so many people feel if there is no china deal, big international company can't do well. obviously that is not the concern here >> we think it works to our advantage either way and rob can explain a bit more about the -- how we positioned the company, but similar to honeywell, we tend to produce in the region where we're selling

and this was a fundamental how we ran honeywell, darius is doing the same thing with it and it just puts you in a much better position overall and rob has done the same thing with vertiv. >> we manufacture in country, for country. a little bit of effect with the china deal, overall, we're in a good position compared to our competitors, mainly asia-based manufacturers. >> gentlemen, we wish you the best of luck dave, welcome back not that you fully ever left rob, i know you've been in this industry, you've been born in this industry, congratulations >> thank you thank you very much. >> when we come back, stairs of stitch fix and mongodb getting a boost. we're getting a little swirly action to start. dow down 100, now down 57. don't go away. (vo) the flock blindly falls into formation.

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. take a look at dow here. some comments down 52 points more headlines on usmca. wires reporting to pelosi this is looking to be a dondiele es

details on that. strong trading with jim after a break. there's a lot of talk about value out there.

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raising estimates. i've never seen a firestorm like that commercial but it is going in favor of peloton even know the ceo had nothing to say yesterday about it but raising estimates, holiday momentum is strong and big short position and i believe this is a few deals that have held up. people believe say it is a commodity. i don't think so i think it has some momentum and i don't try to say a short squeeze, but holy cow, talk about an ad. >> definitely got talked about. >> got a lot of talk. >> it is gone now. i didn't see it on sunday football. >> i'm not buying that gin i my think wife has removed the towels and the clothes from the peloton. >> she bought it herself. >> she bought that gin at the bar. holy cow she has all of the bases covered. >> jim, what are you going to cover tonight? you have plenty of choices. >> well i'm in a safe place here

with extreme it is a joke safe place it is a reference to the ad. >> got it. >> extreme's ed meyercord and they wired foxborough so you could have wi-fi to see how bad the team was. >> congratulations for last night. >> really? >> i didn't think you would stay past -- >> of course i stayed. it was -- wow. that game was a lot like the san francisco -- the saints game. >> right we'll sue you tonight. "mad money" at 6:00 p.m. when can he come back, nancy pelosi and with usmca with the dow down 37. is the monolithic view of emerging markets obsolete?

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press conference on usmca after articles of impeachment from the judiciary. we'll take you live there when it begins. it is a big headlines whether it is the usmca or the journal out about a phase one deal and potentially the sunday tariffs being delayed on all of that let's get to kayla down in d.c kayla? >> reporter: carl, this morning republican lawmakers met as well in a republican house conference and i'm told at that meeting congressman kevin brady the republican from texas told members that usmca is done and that the trads representative ambassador lighthizer is on the way to mexico to sign it according to two sources who were in the room of course, the democrats have been negotiating this deal with the white house and the u.s. trade representative for more than a year after the three countries initially signed this deal trying to, in their view, strengthen the enforcement labor and pharmaceutical provisions in the deal so they could make sure

that some of the lapses that were present in the nafta deal did not happen again we'll await exactly what the final deal includes on that front but we do expect it to be signed today mexico's president in a press conference earlier today said that the three countries will sign it and it is a good deal for all three countries but notes that the mexican senate has to pass it at this point canada is the only of the three countries that has fully ratified the deal. but if the changes are material, perhaps the canadian legislature will have to revisit this also and what about timing? well the white house is suggested to its allies that as long as the full text of this deal is delivered to capitol hill by december 15th it expects the house to vote on the usmca on december 18th so mark that day in your calendars. of of course speaker pelosi holds the final say on exactly when that vote takes place but that is at least what the white house expects and is

telling its allies just as recently as this week, guys. >> pretty rapid vemts -- development on that, thank you, kayla. for more on the trade headlines lets bring in cleat williams and managing director chris kruger good morning. >> good morning. >> afl/cio endorses the treaty and said the president may have opened this deal and working people closed it are you surprised at the rapid finale here? >> i don't think there is any coincidence this will happen the day after the house impeaches president trump. and after that got started, usmca got a huge tail wind from that and nancy pelosi wants to make sure the final vote is not impeachment but something to give the 31 democrats something to go home with. >> and there have been reports of senate republicans that worried they gave back too much

to democrats. >> no. this is a major win for republicans and democrats. if you're a republican, the president has fulfilled his campaign pledge to fix this deal and to modernize it. and first you have these provisions on the auto sector that are going to prevent more outsourcing of jobs to mexico. that is a key promise of the president in the campaign. and then you have for republicans, you have the modernization of the agreement intellectual property provisions and a long time republican priority and digital trade so you have something for both parties to love here and i think why this will come together and get a strong bipartisan vote. >> is there anything in this deal that didn't make it in that you would have liked to see in there. >> any time you have a trade agreement, there is more that you would like to do i think the white house did a good job on agriculture with canada and opening up their dairy market access. there are other areas i think where they could have gone even further. one issue that is out there we'll see what happens is on

pharmaceuticals. and there was a provision in the tpp where only five years of protection for biologic drugs and it was ten years and it sounds like that will slip away. i think for some of the pharmaceutical companies that is seen as a setback but this is the art of the compromise. but that is one thing that i think people will say it would have been great if that was there but overall still great for republicans and great for democrats. >> chris, it is meaningfully different than what nafta was? >> obviously it has a new name a rebrand there. it depends on your baseline. a lot of this was in the trans-pacific partnership and it is president's signature legislation of the year and it is good for nancy pelosi and getting the afl/cio to sign off on a labor deal, it is just -- it is not something that you would have likely seen in a

george w. bush free trade agreement for sure. >> and if i could jump in. it is different from nafta when it comes to the auto rules and that is a key issue that is different. nafta did not include any of the ip provisions or the digital trade provisions there are provisions on financial services that all new and this is good but let me make one quick broader economic point as to why this is important. one of the things that we hear from businesses, they don't like the uncertainty and there is a lot of uncertainty over the last year and a half about what will happen to nafta and what will happen with this agreement i think this will help increase investment in the united states by providing more certainty on the north american supply chain and if you like business and have trade, there is backs of republican votes the democrats haven't been there. so if we can forge a new bipartisan consensus that means we can do the deals in the

republican administration, democratic administrations, and that's good for companies that want to see more trade. >> you make it sound easy. >> yeah. we'll see how that happens while we wait for the speaker turn to china and the journal headlines on the sunday tariffs. what do we think is actually going to happen this weekend >> we were talking about this earlier, the most important is the second sentence in that headline president trump still hasn't decided. it's sort of the highlander principle, there can be only one, he's the only one that matters on this until he decides. we should know by friday, given the federal register notices but if it's a delay, we just continue to do this on tariffs and it continues to hang over the heads like for the future. >> you mentioned consensus on trade. it's interesting because when it comes to china you could argue there is some consensus on both sides as well. >> absolutely. >> republicans and democrats seem somewhat unified in not wanting to give in. >> being tough on china is the

most popular thing in washington, d.c. washington, d.c. right now in china, my expectation is they will delay the tariffs but i agree, the president hasn't made a final decision so we shouldn't jump to conclusions. but what i want to point out -- be. >> before you do let's take a listen as the speaker makes her way here to try to get some clarity. this is mainly about usmca but we'll see if she can give us any other color from the news we've gotten this morning. >> can't come because she has two hearings but she was sad she couldn't >> good morning, everyone. this is a day we've all been

working to and working for on the path to yes. we were in range for a while, but until we could cross a certain threshhold of ep forcement for our workers rights, for environments and for the drug issue, as you know they were three of the areas that we had put out there. i want to thank our chairman ritchie neal, chair of the ways and means committee, the eight members of the task force and i will acknowledge momentarily, but thanking them for their leadership in negotiating on different segments of the legislation. i also want to thank richard trumka, the president of the afl-cio. he was persistent, dissatisfied, knowledgeable. he really got us to a place which is a far distance from where we started with the proposal that was given to us. there is no question, of course,

that this trade agreement is much better than philbin but in terms of our work here, it is infinitely better than what was initially proposed by the administration and i credit our chairman ritchie neal for helping us navigate all of these places the unity of our caucus on a specific priorities in order to get the job done and again, the brilliance and foj of richard trumka as to the ramifications of every provision that was in the legislation. we'll be handing out a memo from the ways and means committee, you may have it, which explains why we are so proud of the distance that we have come from where we started with the administration on this legislation. it's a victory for america's workers. it's one we take great pride in

advancing. the members of the -- the eight members of the task force congresswoman rosa, who has a markup in her committee in appropriations, congressman cha cou ski, mike thompson of california, terry swalwell of alabama, jimmy gomez of california, you'll be hearing from as well, where are my others john larsson john larsson of connecticut. early bloomenhour of oregon. one, two, three, four, five, six. here we are. and now it's my honor to yield to ritchie he was, indeed, a maestro to make this happen it's with great respect and admiration for his work and gratitude that i yield to the chairman of the ways and means committee. >> thanks, madam speaker thank you. [ applause ]

>> every once in a great while you get to participate in a it will never happen moment and we are witnessing that today. the other value of technology i would point out was after a round of intense finishing conversations and negotiations over the weekend that started on saturday morning with the speaker myself and the trade rep robert lighthizer, mr. trumka, the speaker, he was on a hunting expedition, we spoke with him frequently, but the speaker talked to me earnestly about we're near, we're near and on sunday when tom brady was about to take it in all of a sudden i looked at my phone it said pelosi for caller i.d. long wisdom tells me, hell with brady, take the call. >> and i was watching baltimore. >> so this is a transformative agreement. it's a template i believe for

future agreements. our constant emphasis was on enforceability we fixed that. and the idea and the notion that the president of the afl-cio, rich trumka, would be supportive of this initiative, i think tells the story. but this is more than a triumph for organized labor, it's for workers everywhere across america. in terms of the working group members i want to say they strengthened the labor standards, they strengthened the environmental chapters, they enhanced the verification mechanisms for environmental trade with the unfledgling leadership of the speaker we have changes in usmca, to change law to address the crisis we're facing with respect to high prescription drug prices over the intense period of the negotiations with the administration i repeatedly emphasized that usmca will deserve a vote because it's an agreement that democrats shaped. i don't think anybody on this

d would have said we would be able to get as far as we did in this negotiation. based upon goodwill but also a determination that we acknowledged the problems that have existed in the past with enforceability and it's a telling moment shared with the media, on the day of the break, in august, with the working group, i said to the trade rep at the last meeting, i said, nothing has fostered more disagreement about trade thanes the lack of enforceability and the trade rep said to me, you are absolutely right and he said, i want to tell you, i think i'm not speaking out of school, he said, there have been people in the state department, the defense department, and the oval office over the years who said don't get this one upset and that one upset because we might need them on future geographic issues. he said our position has been we are supportive of the thrust you want to do here. i think that initiative that we

offered, his position, i think the offering we have in front of us today is indicative of the goodwill that some of the members on this task force, including the chairman of the subcommittee, what a job they did. these were intense, argumentative, angry negotiations i mean this got really hot on a number of occasions. i think we set a world record for hanging up on each other, myself and the trade rep but at same time we also knew this was an opportunity that we couldn't let getaway from us we did that. we will continue to share more details in texts the last point is a reminder that i traveled to mexico with the delegation to meet the president of mexico, and then right after that i traveled to canada to meet with the prime minister of canada and the minister for defense and trade freeland they are, i believe, they were good partners this and they conceded just about to every point we asked for because of the following -- enforceability,

enforceability, enforceability with that, madam speaker, i turp it back to you >> turn it to the champion on the issue that related to [ inaudible ]. >> thank you, madam speaker. it's been an honor to serve on the working group. >> that was house ways and means chair richard neal talking about this revised usmca, potential dates for a vote which kayla tausche brought to us a few moments ago, backing you up there, kayla. >> yes carl, certainly a moment of levity at the top of the press conference with the chairman of the committee saying that he has always wanted to participate in an unimaginable moment house democrats giving president trump's signature trade deal a floor vote and agreement they are emphasizing the enforcement provisions they have been able to negotiate directly with the u.s. trade representative and a fact sheet that committee released concurrently with the press conference goes into detail a little bit about what some of that enforcement will look like.

there will be an interagency committee monitoring mexico's commitment to its labor reform and regular reporting requirements to congress and this one is important, there will be labor attaches on the grouped in mexico that will be essentially assuring the u.s. that mexico is complying with its end of the bargain this had been something that mexico had been resisting as part of the agreement. they did not want on the ground inspectors and we'll see what the language allows the u.s. to do on that front that is something that specifically the labor unions had been pushing for which is why perhaps in recent days, you had seen the support of the afl-cio and others on this agreement. i'm still reading into some of the facts around environment and pharmaceutical as it pertains to this deal but we'll get you a little bit more when we have that carl >> all right kayla, thank you for ha. yields close to their highs of the session. ten-year near 184. s&p has gone green market may be interested in knowing whether or not this will unleash some cap x plans that

had been on the shelf. is that possible >> perhaps i thinks the digital service tax is going to be the next front on this, though the wto shutters tonight and you have a number -- you have the canadians talking about a digital service tax which would probably have the same retaliation as the french digital service tax. yes tariff man has been replaced by dow man today but he's still there. this is definitely removes the negative of a nafta pullout, sort of a hard brexit on the northern and southern border. >> it's clear that enforceability was the key message here are there any takeaways as to how that was structured for the u.s./china deal where enforceability has been a key issue coming to an agreement >> i think the mechanism here isn't going to be directly analogous to what you have in the china deal because understand the revised usmca, you actually have a situation where you bring disputes against each other and then a third party arbitrator, and that's not

what they're envisioning under china. the importance on enforceability will be the same in china as it is here. i want to just hit on two points that i heard from that press conference and i think are critical the first is, chris did a good job talking about sort of linkage to impeachment and i don't doubt that was part of the impetus here, but the other thing, and something that the democrats talked about, is that this is a template for future trade agreements so i think in addition to the political win that democrats are getting, substantively, they're also setting this up for future trade agreements where they can continue to have a very high baseline on labor, environment and enforcement and i think that's important the other thing is, let's take a step back and say, the afl-cio endorsed this agreement. i don't think that has ever happened for any trade agreement ever that is huge and that does, again, give me hope that they can get this through congress quickly and that this can be a model for moving forward and more trade agreements supported by laber. >> to follow up on that too, in

pelosi's comments i heard trumka's name twice and trump's name zero times. >> trumka mentioned numerous times by neal as well. hunting. apparently out hunting too who knew. >> trumka. >> i think so. didn't he say that >> yeah. >> he's been close to the revisions, we know that, as the speaker said thanks appreciate it very much. all right. let's stay in washington, house democrats, of course, also moving ahead on impeachment that was in the last hour elon has the latest. >> well, president trump is now responding to the impeachment investigation. he's been on a tweet storm writing that he did not pressure ukraine to interfere in the 2020 election he called the process a witch hunt and he attacked house intel committee chairman adam schiff democrats have long argued that president's solicitation of ukraine has left them no alternative but to act and today they did so. democrats are drafting two articles of impeachment against president trump, abuse of power and obstruction of congress.

house intel chairman adam schiff labeled the president's actions as a danger not just to national security, but also to democracy and to the integrity of the next election a kooebts on the impeachment articles could begin in the judiciary committee could begin as soon as tomorrow. multiple outlets reporting that the committee could vote on thursday that would set up a floor vote in the house early next week assuming it passes, trump would be just the third president in history to be impeached. back over to you >> okay. thank you, elon. let's pivot to the markets and bring in the head of research, tom lee. tom, want to talk broadly about markets and other things any reaction to the signing of this trade deal or the potential signing of the usmca is it seen as a positive for markets or no impact >> i think it's marginally a positive because the fact that there's bipartisan support for foreign trade i think really kind of helps us understand why

china/u.s. trade deal ultimately is a positive and the u.s. has a ber bargaining position. i think it's a net positive. >> equity markets overall, we saw -- we've seen a nice recovery, even at this moment today, a little bit, but overall, you've been positive. do you remain so >> yeah. i think it's still one of these markets where more investors are, you know, sitting on too much dry powder and not a lot of people have house money to play with i think it's still a market where you will see the dips being bought and then i just think that you still have this big powerful demographic tailwind taking place. it's a reason the u.s. decoupled this year but also why we're starting to see i think next year, potentially kind of a re-acceleration of growth and upside to s&p earnings >> and that is what? it's related to millennials i know, i've talked about it in the past but give us specifics. >> what's happening is

millennials are really causing a pretty big jump in the 30 to 50-year-old cohort and that's the most important segment of any country's economy because they're the prime income earners. they're also the ones that consume credit for the first time really in almost 12 years, the number of 30 to 50-year-olds is growing again and if you look at sort of the size of the millennial demographic that growth is set to take place for almost a decade it's a tailwind we haven't seen in the u.s. economy since the mid to late 70s. >> and you've seen it specifically as a u.s. tailwind, right? how come other countries aren't experiencing the same kind of demographic tailwind from millennials? they have millennials all over the world, right >> yeah. millennials refers to people born between 1981 and 2000 the u.s. actually had a fairly large boom in terms of births around millennials if you look at europe, japan, china, the number of 30 to

50-year-olds is confracturing. the tailwind that we're seeing from millennials is largely a u.s. and maybe industry centric story. >> i'll give you another boom, the baby boom, tom aren't we at a point where a lot of them are retiring and starting to pull down on 401(k)s, iras and other assets that may be invested in stocks is that not a headwind >> yeah. i am i mean they're going to be exiting the workforce and the consumption will decline that's a bit of a headwind you have to consider there's 100 trillion of u.s. household net worth of which around 70 trillp is controlled by boomers and silent generation. that's die nasticwealth, even at a 3% or 5% burn rate, those net assets are going to grow what i think you have to think about that 68 trillion will be inherited by millennials it's a pretty big tailwind as that money gets passed on to the next generation. >> finally, tom, you've been

stubbornly bullish in the face of the hand wringing over trade. i thought you were year end 3185, maybe closer to 3200 regardless, if we stay at these levels going into the new year, do you tactically take a step back as you await sort of some clarity on politics? >> yeah. the market feels a little over bought so i can sort of see the argument why people want to step aside for a bit, but i think 2019 is going to ultimately look a lot like 2009. the start of a new bull market and i think 2020 is a year where animal spirits recover, where people become pretty confident about earnings growth so i think we're still set up for the next two years being really good for markets but in the first half it would make sense for some type of pullback. >> something we used to talk about underperformance by asset managers, we are in the last few weeks of the year. what have we seep? is there anything that can be

read into perhaps what will come as people try to catch up? >> yeah. i mean it's been a very difficult year for active managers because, you know, a fund manager, a lot of our clients, you know, we're seeing outperformance and lose it within two or three weeks. year to date it's still a very tough year for active managers, but again, i think those who have kind of stayed long and bought the dips and didn't get pushed out of their positions are the ones out performing. >> all right tom, thank you >> thanks. >> tom lee >> when we come back, the s&p is up more than 20% year to date for its best year since 2013 does that mean stock is overvalued what top economists and money managers are saying in our latest fed survey when "squawk on the street" returns

it's time now for our etf spotlight. taking a look at the energy spider, xle, currently trading

up about half a percentage point there. wti and brent crude erasing earlier losses joining the natural gas in the green by upbeat news ahead of the tariff deadline energy still the sector laggard for the year more than 13% off its 52-week highs dating to april. guys >> in the meantime cnbc is out with a new fed survey looking at whether stocks are overvalued. steve liesman is back at hq with those results. >> carl, as we are at or near these high levels for stocks, we are introducing a new question to the cnbc fed survey, we asked our 43 responders, relative to your outlook for growth and earnings over the next year, are stocks overvalued? you can see 67% said high. now, before you go ahead and hit the sell button only 12% say extremely high most of them say somewhat high 31% say about right and only 2% say low. at least according to this group of fund managers, economists and

strategists you can see where they think the risk is then another question that we've been asking, which is, are these low fed funds rate creating the risk of financial instability? 74% say some risk, 10% say very high this is about unchanged compared to how we've been asking it. this group perhaps a little more cautious than your average sell side stock analyst now, let's take a look at the outlook for stocks and bonds very modest outlook for the rise in both stocks and a slight increase in bonds. call it 2% and then 3287, call it 4.5% by the end of 2021. this group in general over time has been underestimating the market and overestimating yields. they see 2.3%. moving on, what about trade? big story today, they're optimistic on the outlook for some trade deal. now before this group was looking for a full trade deal. of course that changed with the politics 61% say there will be a limited trade deal signed by the end of

2020 only 14% say a full trade deal will be signed and 16% say no trade deal whatsoever. so it's something we're looking at also, carl, we can tell you that 95% say the impeachment proceedings will have no effect on stocks. david? >> okay. yeah there it is. that's a lot of people now let's send it over to sue herera and get a news update at this hour. >> good morning, david, everyone here's what's happening at this hour a gunman shot six people dead in a hospital waiting room in the czech republic before fleeing and then taking his own life two others were seriously injured. the gunman fatallyshot himself in the head as police approved his car. unstable conditions h ham perred the rescue workers for searching for at least eight people missing and feared dead after a volcano off the new zealand coast erupted on monday. six deaths have been confirmed. presidential contender

michael bloomberg calling out president trump for not attending the climate summit in madrid he spoke of his private push to organize thousands of u.s. cities and businesses to abide by the terms of a global climate treaty that the trump administration is working to abandon. >> in the u.s. there are hundreds of mayors who are taking climate action and who are working to uphold america's commitment under the paris climate agreement and we want the world to know that americans are continuing to lead on climate change even with a climate denier in the white house. >> you are up to date. that's the news update at this hour david, i will send it back downtown to you. >> still to come we're going to speak with art cashin about what today's moves in washington, d.c., may mean for the markets first bob pisani is in d.c. and a look on what else is head in the show good morning, bob. >> good morning, david i'm at the sec's division of enforcement. this is the room where they

monitor trading activity but the division enforcement is a lot more than that, for example, they go after companies for financial misstatements. they go after mutual fund scams. they go after bitcoin scams involved around the country. i'm going to give you a rundown of what the sec is dng to oi catch all the bad guys when we come back.

markets guy digesting big news, the announcement of the articles of impeachment by the house democrats, developments in the usmca deal as the fed kicks off its two-day policy meeting today. here to help us digest it all is ubs director of floor operations art cashin art, so the markets are digesting it, but they're not moving too much on this morning's news why do you think that is is it all priced in already? what's going on? >> i think, you know, the key

thing remains trade and they're somewhat skeptical we had a "wall street journal" headline that both parties agreed not necessarily to act on december 15th, that it's not a deadline that allowed the futures to reverse over 100 points in the dow. and then the skepticism begins to set in. this market has had its hart broken time and time again we've been told a deal is imminent, about to happen and then our mutual friend larry kudlow is straining his credibility. he's brought us up to the edge several times. this market is somewhat skeptical of where we're going i think the trade deal with mexico and canada could be helpful, but the market is still very much focused on the big u.s./china deal and we'll see where we go from there >> do you think the market needs to see an actual deal or would it be satisfied with a simple

delay in the tariffs if you're able to kick that can down to 2020 would that relieve overhang that has been over stocks from a certainty standpoint >> i think it gives the market some sense of hope that, you know, they haven't slammed the door and walked away but i'm not sure that just postponing the tariffs -- is of itself enough. i think the idea that they're still negotiating and still talking, that is giving the market a little bit of a boost this market would very much like to see a deal. i think if you got a deal, you would get an explosive certainly one or two-day rally out of it, and, you know, we're up at highs we could have a breakout rally here it could begin to feed on itself but they have been heartbroken too many times and they are very skeptical and, you know, where's the beef they want to see where they get

an answer here. >> how do we get that breakout rally you spoke about? >> again, give them something absolutely constructive. it's -- i am impressed that the first hint of cooperation between the administration and congress are showing up. if they're going to approve aspects of the budget that it appears, you know, initially they didn't want to touch it unless they got him to disavow that any of it would be used for the wall, that seems to be disappearing so that's good i don't think cooperation in washington is enough i think it's still got to be china. we'll see where we go from there. >> reports today about s&p having its best year in six years and yet flows from u.s. retail investors have been negative some argue that means there's plenty of people left to be a marginal buyer this rally could go on for a couple years do you buy that? >> yes we've gone through this time and time again

this has been one of the most hated rallies, one of the most powerful, but also one of the most hated rallies we've seen. i am told that one of the top selling books in germany is about the imminent crash of the financial markets. you know, that skepticism is out there. you go back to buffet. you want to be fearful when people are greedy and greedy when people are the other way. >> trading hedging futures have also picked up kind of toward the end of the year. do you make anything of that >> well, the thing that i've noticed is hedge funds, which had been pretty much a way from equities, are starting to move in i don't know if that's going to be a contrary indicator. i will buy the fact that if the public is avoigd stocks and hedge funds are in it's not that big a negative they're holding together the sell-off we had yesterday and a little bit of the weakness

today might be seasonal. the market has a tendency in mid-december to have a bit of a pullback and then they get a sight of santa claus and we head for a year-end rally let's hope it follows that pattern again. >> art cashin, thank you for joining us. the sec is cracking down on investigations and suspicious activities announcing $4 billion worth of fines last year our bob pisani is in live from the market watch enforcement room and has more for us bob? >> fraud steres and insider traders and ponzi schemers and stock spoofers, the sec has seen it all this is the market watch surveillance room where they monitor trading activity right here behind me a lot of the markets surveillance itself is done by the exchanges and the suspicious activities referred here to the sec where they do the actual investigations so this year, i'll give you an example, the sec sued in one

case over two dozen chinese traders for manipulating the prices of over 3,000 stocks. >> initially we got a referral of suspicious activity in a small number of accounts and using our homegrown analytic coalition and i.t. forensics we were able to identify the vast web of traders who manipulated the prices of a huge number of stocks over a long period of time and these are tools that didn't even exist five years ago. >> didn't even exist five years ago. it's not just trading fraud the sec is monitoring. there's also misconduct by companies and financial institutions for example, facebook was hit with $100 million civil fine by these people because they described the misuse of user data as hypothetical when they new the user data had been misused. nissan were hit with a $15 million fine for false financial disclosures. there were cases on fraud and digital assets and unlawful promotion of initial coin offerings, ico cases against 95 investment

firms for charging excessive fees among other things. they even get involved in cyber security issues. they're big on that here they force the options clearing corporation, the only clearing agency for exchange listed options, to pay a $15 million fine because they weren't doing adequate financial risk management and system security in danger of getting hacked into altogether the sec brought 800 enforcement actions and obtained judgments and orders over $4.3 billion in penalties $1.2 billion has been returned to harmed investors in the last year coming up, sec chair jay clayton is going to speak to us on his efforts to protect retail traders and investors and after that we'll go inside the sec's forensic lab this is among the most secure rooms at the sec you can't even go inside live. where they take apart the cell phones and computers we're going to show you examples of that being done lot of very interesting work here being done by the sec

david? >> actually, bob, i'll take it we talk about enforcement but rarely do we get a look at it like this. thanks to you, bob pisani. as we go to break, take a look at shares of netflix after the downgrade to underperform. they do predict the company could lose as many as 4 million u.s. subs as competition increases in the streaming market stock down about 2%. dow up 10. "squawk on the street" continues in a moment. so servicenow put your workflows in the cloud, huh?

mm-hm. your employees must love you. thank you. ah, you could say that. so how are things with you guys? great. thank you. thank you, sir. lunch next week? terrific. say hi to the team. will do. call my office, i will. -sounds good. alrighty. servicenow. works for you.

one of wall street's biggest bulls got more bullish on tradingnation.cnbc.com more "squawk on the street" is coming up.

do you have concerns about mild memory loss related to aging? prevagen is the number one pharmacist-recommended memory support brand. you can find it in the vitamin aisle in stores everywhere. prevagen. healthier brain. better life. let's get to rick santelli with the santelli exchange hey, rick. >> good morning. thank you. i would like to welcome my guest this first day of a two-day fed meeting, deutsch bank securities chief economist. thank you for joining me let's get right into it and start out with this morning's

data productivity third quarter final was one tenth less negative at minus 0.2, but stills the first negative quarter since the end of 2015. your thoughts? >> yeah. so the thing that's going on in the economy at the moment, the impression on business investment, trade uncertainty is pushing down capital expenditures and really declining over the last 12 months at the same time hiring has been doing really well as the employment report showed on friday in that context we simply have fewer computers and more people and in that context it's not a surprise really that productivity is beginning to slow down. >> now, you mentioned what is going on with respect to jobs. you also have done research that shows quite clearly that nonresidential business spending and fixed investment spending both have peaked right at the time the trade war began and that's also having a negative impact on jobs so what went right on this past jobs report?

>> yeah, so somewhat puzzling thing is that employment growth is still so strong what we've been looking at is slow down in particular in business investment. we've seen residential investment do better there's been some offsetting effect in the overall investment picture in that backdrop you would expect if businesses are investing a little less, little more cautious, little more worried about the outlook that begins to have negative consequences for hiring and we've not seen that yet. it's pleasing that the labor market is still doing so well. it does look like something has to give. we cannot have the cap x weak and the employment continues to be so strong. >> well obviously we see when we get optimistic news on either usmca or trade with china, both interest rates and stocks move up a bit, but in the final analysis, what you're telling me seems to be that even if we get everything the market wants, central banks around the globe most likely are going to push

more liquidity in. do you agree with that and think it's needed? >> i do think central banks need to continue to do something to help the global economic outlook. we still have significant uncertainty not only about the trade war here and now, but also going into next year and we have also had that uncertainty associated with issues around the election we are a bit worried that might still hang over the market central banks are trying to counter some of those negative things that are weighing things down and if you look at the speed with which we see the central banks cutting rates at the moment this is happening at the fastest rate since the financial crisis there is a significant in the pipeline that should be helping and to your point should be supporting both markets and the economy. that's why we do not expect a recession, but we are still watching the downside risks very carefully. >> you know, real quickly, another thing that you've demonstrated that i wasn't aware of, we are at a record divergence between consumer confidence and corporate

confidence your final thoughts on why that divergence is occurring historically it always seems to pick the beginning and end of business cycles? >> yeah. this is noteworthy relative to consumers are very optimistic compared to corporate ceo corporate ceo confidence, it is at the lowest level in ten years the divergence is unique it is unusual that you see corporates are pessimistic and consumers are optimistic when divergence gets to the point now, normally means we're in cycle we do believe the trade war worries will begin to fade into next year. should begin to see convergence again. so we do not believe this is th end of the cycle we are watching the divergence and how it plays out. >> thank you for pointing that out to viewers david faber, back to you >> thank you, rick santelli. let's send it over to jon fortt for a look at what's

coming up on "squawk alley." >> hey, david. we have two young tech companies, two earnings reports last night monday dough db up 2%, stctih fix up 10. the ceos of both coming up on "squawk alley.

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i am dominic chu markets moving between gains and losses on incrementally positive development on u.s./china trade front helping to provide some positivity, leading to outperformance in economically sensitive sectors. energy is an up side standout, helped by higher oil prices on some trade optimism. among leaders in that sector, devon energy, apache, and baker hughes david, back downtown to you folks at the new york stock exchange >> thank you, dom. million dollar watches going up for sale in new york. robert frank has more on how we might see the most expensive watch ever sold at auction robert >> good morning, david jack nicklaus' gold rolex hits the auction block tonight. watch experts say it could puree sass the $17.8 million that paul

newman's rolex fetched, that was the most expensive watch sold at auction. this watch is one of the holy grails of sports watches, only watch he wore more than 50 years. on his wrist for 12 of 18 major championship presentations >> play golf with a watch on, came on snls i got off the golf course watch and wallet back to me. every time i have a trophy, travel, i have a picture of me with the watch it was part of me. >> all of the proceeds for the sale of the watch go to his charity, the children's health care foundation. and the second hand watch expected to stop $16 billion, as online auction houses attract a new breed of younger collectors. also selling tonight, carl, marlon brando's stainless steel master he wore in "apocalypse

now. he etched his name on the back, it is sold by his daughter the proceeds for that watch also going to charity bidding there starts in six figures. you can bid on all of these today online, guys >> anybody want to go halfsies >> robert, what do they do with watches, put them in a case and show them off or put them on their wrist? >> it is a mix sometimes a museum picks it up you can get hollywood memorabilia types coming in for bra brando, augusta maybe buying jack's watch the newman watch went to a private collector. a lot of them wind up with private collectors, though clearly probably not worn on their wrist. >> that's gorgeous, robert very nice. robert frank when we come back, an exclusive with the ceo of stick fix on the stock popping on earnings "squawk alley" starts in three and a half minutes

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good morning, 8:00 a.m. at apple headquarters, 11:00 a.m. on wall street "squawk alley" is live ♪ ♪ good tuesday morning welcome to "squawk alley." i am carl quintanilla with morgan brennan, jon fortt at post nine of the new york stock exchange start with apple shares are trading higher adding to this year's monster rally apple is up 70% for 2019 so one of the bes