♪ it is 5:00 a.m. at cnbc global headquarters, and here is your five at 5 totally done the top u.s. trade negotiators selling the phase 1 u.s./china trade deal as details remain elusive. grounded for good. reports this morning boeing is taking a hard look at the future of its 737 max model jet dupont strikes again this time inking a more than $26 billion deal creating a new consumer products power house. and, room to run a week-long series kicking off today, a sector by sector look

into whether it's time for investors to cash out or ride this bull wave for another year. and the house of mouse, yes, disney, do it again, adding a sixth movie to its $2019 billion box office machine as "worldwide exchange" begins right now ♪ good morning i'm dominic chu in for brian sullivan it's monday, december 16th, 2019 more than stock futures in the green after another record-setting session on friday. the s&p coming off its 28th record close of the year the nasdaq coming off its 23rd as you can see here, the dow would open up another 55 points if these gains hold into the opening bell the s&p up by 12 and the nasdaq up by around 36 points if you take a look at the bond market, we are seeing slight

movements there as well. the ten-year note yield 1.3837%. two-year note yield 1.624% let's go worldwide in the asian trade. it was positive, although a little more muted. you can see there the nikkei in japan, off hang seng off by half a percent. shanghai, stocks rising to a six-year high. data helping markets outperform. industrial production at the strongest reading since june. in european trading, it is strongly positive here today, in fact, the euro stock 600, that broad measure of stocks there hitting a record intraday high today. the german dax up 1 half of 1% and the ftse 100 in the uk still optimism over that big vote in parliament this past week, up 2% for the ftse 100 but we begin this morning with trade. u.s. trade representative robert lighthizer saying the phase 1

deal with china is, quote, totally done and will nearly double u.s. exports to china over the next two years. but details and a timeline remain murky at best >> we don't have a date now. what we have to do is get this we have to get the final translations worked out the formalities. we're going to sign this agreement, but i'll tell you this, the second phase 2 will be determined by how we implement phase 1. phase 1 will be implemented right down to every detail it really is a remarkable agreement, but it's not going to solve all the problems >> all right ambassador lighthizer's comments conflicting with the president's tweet friday saying, phase 2 talks will begin immediately so let's now head out to our own eunice yoon, live in beijing with the latest here eunice, what can policymakers in china glean from this kind of conflict are we going to see phase 2 kicking off already given what we have seen this past week?

>> well, i think that there are a lot of conflicting statements. and where the officials do seem to be on the same page is that a phase 1 trade deal, at least is good for the markets that is one of the key points that was reiterated again today by the national statistics bureau when it released the november data. the officials there had said that this phase 1 trade deal helped to improve and would help to improve market expectations and just to recap the deal, the december 15th tariffs that were supposed to apply to $160 billion worth of goods were cancelled. it never came into effect over the weekend. $120 billion worth of goods will have their tariffs cut from 15% in half. and then the chinese are going to be stepping up efforts to buy american products. so, all of those things were seen as positive developments. however, there are indications that some of these key points

have been lost in translation. the main one is over the hard targets. the u.s. says that the chinese have promised to buy as much as $40 billion worth of goods could maybe go up to 50 billion when it comes to agricultural products the chinese have not confirmed that number. the chinese have said that the u.s. wourld agree -- had agreed to a tariff roll back and that would come step by step. the u.s. says no promises. there is no promise of a future tariff roll back and then on the phase 2 negotiations, president trump had said that this would come immediately. lighthizer, as you had pointed out, dom, said no date, but the chinese have said that a phase 2 negotiation would be dependent on the execution of phase 1. and i spoke to a couple of people here just to kind of get a better sense and they said that the tariff roll back part

probably is just linguistics, that from the u.s. side, the u.s. believes that this is conditional. the chinese believe they can meet the conditions. so at least that is one area that's more or less the same >> eunice, the big crux of these phase 1 trade talks were about those agricultural purchases there is some skepticism among analysts, not just on wall street but elsewhere in the investing community, that those agricultural targets are going to be perhaps either difficult to meet or perhaps a little more anomalous at best. take us through what exactly -- how important are the farm goods to this particular leg of the discussions? >> they're very important. i mean the chinese think that they do need agricultural products, especially because of domestic issues. they're having problems with their pig population, rebuilding it, so they want to have soy beans. they want pork, especially ahead of the lunar new year holiday. there is an interest in buying

these agricultural products, but i think what was interesting in my conversations with people here is that there are a lot of people here who have been saying, you know, the chinese officially say that we will be doing our buying based on market needs. and they said that the chinese wouldn't want to embrace these types of hard targets, but that is publicly. so they are saying to me that publicly china wouldn't want to say that 40 to $50 billion because it could make them accountable to the chinese publicly, but most people here believe that the chinese negotiators have agreed to that 40 to $50 billion number, though the way it's been explained to me is that it's probably not a hard target but a soft target and that the chinese would be able to kind of get away with what was described to me as a best endeavor target, as long as they make their best endeavor to reach the target, kind of sort of that the u.s. would find that acceptable. >> hard, soft, best endeavor, it's all very, very tricky right

now. eunice yoon, live in beijing with the latest. thank you very much for that. joining me now from irvine, california, live, chief investment officer, john rut ledge. you just heard eunice's report here that there are so many details about this u.s./china trade discussion that are still up for debate, discussion, clarificati clarification, is this enough now to continue the bull run in markets that we have seen, not just in the u.s., but in europe as well and other parts of the world into 20201234. >> well, for a little while. we have seen a lot of this baked in already and we aren't going to get any more drops in the interest rates and earnings next year are going to grow about minus 0.3% so i don't think we should get too excited about that but i do think we should be very happy that they have an agreement of some kind whether it gets worked out in words or not, it's important to understand that these two languages, each side gets to release its own press release

and say whatever it wants without the other guy being able to read it we're so lucky to have eunice in beijing helping us with the inside scoop on this i do think that people should keep in mind that we have a $20 trillion gdp, actually more than that, which means 1% of it is $200 billion this trade war for two years probably cost us half a percent a year, that's somethinglike $200 billion worth of output so, $16 billion of more soy beans doesn't exactly make up for it it's also cost the rest of the world about half a percent of growth over that time. but i'm very glad we have a phase 1 agreement. whatever they call it. they'll buy a lot of soy beans they'll boy a lot of bacon and we can get on with business for a while. >> let's get on with business. the thing i heard over the course of the past maybe few days here in the wake of the parliamentary vote in the united kingdom and also this phase 1 trade deal being agreed to is

that uncertainty has been taken off the table. is it really true uncertainty has been taken off the table i heard the trade negotiations between the eu and uk and u.s. and china phase 2 agreements are anything but clear how much uncertainty has raerl been removed from the market at this point >> my table is still plenty full of uncertainty, dom. and i think it's definitely better than it was a week ago. we have some clarity on the uk and brexit we have some clarity on trade going forward. we have -- we had the aramco ipo which i think is very good for oil prices and so, it ought to be a little better, but basically until you get a clear path ahead for the trade policy, it's going to be tough for ceos to do a lot of capital spending and capital spending is really been what took the hit from the trade war here, uk and especially in europe >> all right john, before we let you go here because it is our week-long

series on whether there is room to run for this market, in 2020, how bullish or bearish are you does the bull run continue >> i think no. i think that we have had it on the interest rates and we've had up on the trade. so, i think going forward we're looking at a single digit year at best on the u.s. indexes. like many people, i think the emerging markets ought to do better because china's trade surplus is actually higher than it was a year ago because their exports to asia have increased more than their exports to the u.s. have fallen so, asia, thailand, malaysia, singapore and vietnam and the like ought to have a very strong year and those markets tugt do quiou quite a bit better. >> it's 2:00 a.m. pacific time we appreciate you staying up late or waking up very early thank you very much, john. >> my pleasure, dom.

trouble for boeing as it takes a hard look at the future of its grounded 737 max jet fleet. plus, why uber is waiving the white flag in india. and then later on, disney's billion dollar box office machine kicks into sixth gear. a very busy hour still ahead when "worldwide exchange" returns after this ♪ as a principal i can tell you this. when one student gets left behind, we all get left behind. this is a problem that affects each and every one of us. together with ibm, we created a whole new kind of school called p-tech. within six years, students can graduate with a high school diploma, a college degree, and a pathway to a competitive job. you know what's going up today? my poster. today, there are more than a hundred thousand p-tech students around the world. it's a game changer.

♪ new this morning, boeing could be close to a decision on whether to make further cuts to production of its embattled model 737 max jet. rahel solomon joins us with the latest there good morning. >> good morning. boeing's board is reportedly discussing whether to cut back or temporarily halt 737 max. the max has been grounded worldwide since march and boeing's time line of when it may return to service has been repeat lid pushed back in april, boeing cut production by 20% from 52 to 42 planes a month. taking a $5 billion charge in the second quarter and that was to compensate airlines hit by the grounding. last week, the company acknowledged that the faa and also some over global regulators aren't likely to recertify the max by the end of the year appearing before congress, faa administrator steve dixon

expressed concerns that boeing was pursuing an unrealistic schedule boeing has been forced to ground 383 planes already in service and another 400 jets are waiting to be delivered to customers it also has a seven-year backlog of 4,500 orders for the max. boeing shares are down more than 2% year to date still up 3.4% dom, back to you. >> thank you very much for that update on boeing, rahel. still on deck for the show, $26 billion deal breaking overnight to create a new consumer goods power house. plus, the first install of this week's "worldwide exchange" series "room to run" as we look at the sectors that matter over the last ten years and ask the question, is it time to cash out or is there still room to run? ♪ >> announcer: today's big number -- $4.5 billion that's the net assets of the fxi, the largest etf to track ngheese stocks traded on t

ho kong stock exchange

my mom washes the dishes... ...before she puts them in the dishwasher. so what does the dishwasher do? cascade platinum does the work for you, prewashing and removing stuck-on foods, the first time. wow, that's clean! cascade platinum. welcome back to the show get a check on some of the big stocks on the move this morning. dupont will merge its nutrition business with international flavors and fragrances to become a top supplier of ingredients to food makers. the deal values the new division at $26 billion with $11 billion in annual revenues the iff shares down about 6%in

pre-market trading. don't miss a first on cnbc interview with dupont executive chairman ed breen and international ceo andreas fibig today. ""squawk on the street"" 9:00 a.m. eastern time. uber is in talks to sell its food delivery business in india to a local rival "the wall street journal" reports a deal could be announced as soon as this week analysts say uber eats is a distant third in the indian market those uber shares up fractionally in the premarket trade. novartis is dropping what it hoped would be a billion dollar asthma drug from development after it failed a number of key trials they're hopeful they have two other potential block buster drugs in its pipeline. novartis shares down in swiss trading. still to come on the show, the how judiciary committee releasing its full report on the impeachment of president trump over night we are live in washington, d.c. with those details and they're coming up next to say two wordsi'm about that will make washington insiders

very uncomfortable: term limits. you and i both know we need term limits, that congress shouldn't be a lifetime appointment. but members of congress, and the corporations who've bought our democracy hate term limits. too bad. i'm tom steyer and i approve this message because the only way we get universal healthcare, address climate change and make our economy more fair is to change business as usual in washington.

♪ it's 5:23 a.m. eastern time. that's what time it is in washington, d.c. you're seeing a live shot of the capitol building in washington the house judiciary committee releasing its full report on the impeachment of president trump overnight. it comes as the full house prepares to take up the two articles of impeachment against him this week. nbc's tracie potts joins us live from washington, d.c good morning, tracie. >> hey there, dom. so we really sort of know how this is going to go.

there are few democrats expected to defect but not for the most part the house of representatives now poised to do something they've only done twice before in history. impeach a president. >> no president is supposed to be a dictator. >> reporter: accusations and evidence the house judiciary committee 658 page report released overnight articles two outlines of impeachment against president trump, abuse of power with holding aid to ukraine while pressuring the country to investigate political rival joe biden and obstruction of congress for blocking white house staff from testifying about it the final impeachment vote is expected wednesday >> there's not going to be any republicans in the house in fact, there will be a handful of democrats who will vote against impeachment in the house. >> reporter: including new jersey democrat jeff van drew who report lid switching parties to vote no while most democrats vote yes. >> we cannot take the risk that the next election will be corrupted through foreign interference solicited by the

president. >> reporter: after wednesday the focus moves to the senate where democrats are asking for a trial to begin january 9th, with acting white house chief of staff mick mulvaney and former national security adviser john bolton as witnesses. >> get this thing over with. i am clearly made up my mind i don't need any witnesses >> reporter: president trump wants to call his personal lawyer, rudy giuliani, just back from ukraine democrats worry republicans in charge will rush to clear the president in a quick trial. >> the majority leader in the senate saying we're going to get this over with we don't -- we know he's not going to be convicted. >> reporter: but the process must play out, beginning with a likely impeachment vote this week now, that is going to be setting up for the next step, which of course is the trial in the senate and, dom, they are still trying to wrk out details of what that trial might look like. >> so, tracie, there is the prevailing kind of thought

process here is that there is not going to be an impeachment that is ratified by the senate, even if they take up their own trial. as we take us through the steps here, what exactly are we going to be looking for, and will it be a failure if president trump does not get impeached in terms of how the house democrats and senate democrats view the current state of affairs >> well, if he doesn't get impeached, dom, this is going to be a huge story to figure out why because democrats have the numbers to do just that, even with the handful of democrats who are either not voting or voting no or in one case switching parties to vote no it is almost assured, you never say for sure on capitol hill, but it's almost assured that he will get impeached, essentially charged with these crimes. and it's almost assured that he will not be removed from office. so, we're pretty much walking through the process with an outcome that's known >> all right tracie potts with the latest on the impeachment inquiry and trial, thank you very much for that we appreciate it. when we come back on the show, a live report from doha with our own hadley gamble on

her exclusive conversation with treasury secretary steven mnuchin, that's next when "worldwide ehae"etns teth quick break

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case for the plan to cnbc. plus, room to run. our week-long series looking at key sectors over the last decade and whether investors should stay or go in the year ahead "worldwide exchange" rolls on. ♪ ♪ should i stay or should i go now ♪ ♪ good morning and welcome back to the show i'm dominic chu in today for brian sullivan. a check of today's top head lines outside of the world of business nbc's francis rivera with the latest there happy monday, francis. >> happy monday, dom we start with this brutal winter storm barrelling across the country this morning bearing down on as many as 42 million people across 2,000 miles. the massive system has hammered the midwest and winter weather alerts began overnight in the plains and parts of the northeast. in missouri, the state highway patrol reporting more than 500 crashes because of the storm

they say four people died from weather-related causes and five were killed in two separate crashes in nebraska where up to four inches of snow fell the storm is expected to move across the central and eastern part of the country today and tomorrow there is a new twist in that massive college admission scandal. actress lori lock lin is accusing prosecutors of concealing evidence. the couple claims the concealed documents would help them show that they believe their payments would be used for legitimate purposes they are asking the judge to intervene in the u.s. attorney's office in massachusetts. they declined to comment on sunday. an autographed bat used by legendary baseball player babe ruth sold for over a million dollars at auction ruth used the bat to hit his 500th home run in 1929 and became the first baseball player to reach that mark and for monday morning, dom, those are our headlines. >> francis rivera, thank you for

that. turning back to the market here is how stock futures are looking through the 5:00 a.m. eastern hour if you look at the futures trading right now, we are seeing slight gains the dow would open up by 55 points heading into the opening bell the dow jones again up by 55 the s&p up by 12 points and the nasdaq up by 34. taking a look at the bond market, we are seeing slight up ticks in yields across many parts of the curve the ten-year benchmark u.s. treasury note yield 1.84% the last trade there and two-year government note yield 1.628% check on the asian markets we did see mixed trading over there. japan was down about 1 quart you are of 1%. hang seng up half of 1% but the shanghai up 1 half of 1% what's happening in the early trade in europe where it's very positive european markets there stocks hitting all-time highs germany lagging on the heels of some weaker manufacturing data still up half a percent but the ftse is up almost 2% at that

point. the trump administration continues to celebrate the announcement of a phase 1 trade deal with china despite some details of that agreement remaining murky. the two sides are expected to sign off on the deal in the coming weeks cnbc hadley gamble joins us now from doha, qatar where she spoke with steven mnuchin this weekend in a cnbc exclusive sbrier hadley, what did steven mnuchin tell you >> well, a lot of things on the mind of steven mnuchin, i have to tell you, dom he said this was a historic deal unlike anything we have ever seen before, but he stopped short of really filling in the details. listen in. ♪ >> the deal will be signed in early january and then we'll start phase 2. phase 2 may be 2a, 2b, 2c. we'll see. but this in to itself is a huge accomplishment for the president. >> what do you say to those

critics who complain that this phase 1 didn't accomplish anything really? >> well n all fairness, people are just beginning to understand the details of phase 1 we're in the process of putting out fact sheets that go through what it is this has been a long process over the last two years and people have seen the ups and downs. i think it's going to take a little bit of time for people to digest the significance of this. >> it's interesting because what we see so far is that this is expected to double exports to china, give a real boost to the american pharma via billions of exports to china address financial services and intellectual profit theft and does stop short of explaining, dom, how they're actually going to get that endorsed. >> hadley, what does secretary mnuchin actually saying about the importance overall of this trade deal heading into the 2020 presidential election for president trump? >> it's interesting that you asked that, dom, because that was my exact question to him

next essentially, does the president have to get this deal signed to get re-elected in 2020 he told me the president is getting re-elected on the bases of health of the u.s. economy, no doubt so it's interesting the fact that we were ginn a timeline here in terms of getting this signed, but so far at least no date in january set and no location set either. >> all right hadley gamble, live in doha for us thank you very much. more on the latest developments in on going trade talks, let's bring in a cnbc contributor. so, jim, we just spoke with l hadley you just heard the interview let's talk about what this means. is this phase 1 trade deal enough to keep the things going in the markets and the economy, especially in the u.s. >> here is the weird part, in my opinion, dom it's actually not enough the market likes a little bit of a lingering on going trade war because then that seems to give the fed some ground cover to be able to stay dovish. if you took -- if all of a

sudden the trade deal was signed and done and we never had to worry about it again, now all of a sudden the fed has to look -- remember that unemployment number from last week, that was relatively block buster. all of a sudden the fed would probably have to switch hawkish just on the domestic situation i think the lingering trade deal is the thing that keeps them dovish i think that's where the magic happens for the market right now. that's why i've been bullish i've been bullish for the last six months because of that and nothing has changed for now. so that takes care of the trade headlines here we're also following these reports on boeing this morning "the wall street journal" saying that the company could disclose as early as today whether it will make further cuts to or suspend the actual production of the boeing 737 max jet the company has reportedly warned it could cut output again or temporarily shut down its assembly line all together if the worldwide grounding of that jet drags on longer than expected jim, boeing, big driver of the dow and of the markets overall here in the u.s.

is this boeing story important >> well, it is, but it's already played out a long time over the last year. and the time that it's been dragging down the dow, in my opinion, is probably past april when this really all hit boeing broke into a very clear range and seems like it's staying in there as far as it having a broader impact, i think i would rather look at the transportation index as a whole and look at the dow jones trend is in a decent up trend as well. if it goes above 11 tlourks, the rest of the market is still positive as well i think it's a big deal. but i think it's a big deal that's already more played out now than it's going to be. >> really quickly, would you be a buyer of boeing at these levels >> i personally wouldn't be. just too many other things to buy in this -- i'm broadly bullish like i said before there's too many other things that look good that don't have whatever this unsettle flaw is, whatever is going to happen in

the future. >> another dow component, this positive for you, one more for you the disney machine continues to march on, laying waste to everything in its past it's a juggernaut. "frozen 2" topping the $1 billion market at the box office this weekend that means it's the sixth disney movie to hit that billion dollar mark just this year alone. joining captain marvel, aladdin, the lion king, avengers end game, toy story 4. disney goes for lucky number 7 this week as the star wars rise of sky walker movie opens on friday this year, take a look at the chart for disney a lot of it was on streaming and everything else up this is a massive deal up half a percent premarket. up already 34% year to date. can anything stop disney >> well, it certainly checking all the boxes. like you said, disney plus, streaming is checked right now the economy is doing quite well coming into the christmas season, a block buster with "frozen 2. star wars movies don't have to

be good anymore. people just -- in their head they have to go to see them. it's like a collection and they have to have every model as it comes out. right now disney is sitting pretty i prnlly again are not making any recommendations to anyone else disney trades above 150, i would be interested in going long in that because i think the stories even somewhat better than the stocks moved itself. >> so how important then is the disney plus streaming service to the future of that trade and the thesis that you're making? >> i think it's a big deal i think everybody is going to talk about streaming for 2020. and everybody can't be in that market, so netflix obviously has a position carved in and out that but then when you look at other names that have the cachet and have the size to be part of it, disney has to be one of them to me that seems like an interesting thing. >> 30 seconds left here, our series on room to run n your mind, as a trader, is 2020 bullish or bearish for traders and investors? >> well, again, i'm a trader, so i look at more short-term time frames and medium term time

frames i think in the near term everything seems fine to me. the things i would worry about is when the trade deal is done and we don't have to worry about that anymore and if the economy starts to turn even a little bit going into the election, i fear that the market might view that there will be less business friendly candidates who could possibly become president and the market could worry about that to answer your question, i'm fine with the market everything seems like smooth sailing today. >> thank you very much for joining us always appreciate it. >> thank you. >> thanks, jimmy. coming up on the show, stocks are set to put a cap on a decade of gains. the chief global investment strategist of citi private bank is here. his take on whether global markets still have room to run in 2020 and beyond all of that when "worldwide exchange" returns after this ♪

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♪ that's a live shot of new york city right now. 5:42 a.m. eastern time it's still dark but the sun will be up soon enough. let's kick off our week long room to run series u.s. markets surging to record highs in the recent weeks. now europe as well i.t., communications services, financials and industrials leading that year to date path again, you can see some big moves for those seg tors energy lagging the market by a wide margin but massively low interest rates, tax reform and record job reforms giving investors a reason to buy does the road to 2020 and beyond look quite as rosie joining me is global chief investment strategist at citi bank it's been staggering the nay sayers will say it took a massive pullback in correction in q4 of 2018 to set the market up for the big run that we've had this year. so, is it something where the room is there for this bull market to keep going and running? >> well, our outlook for 2020 has a record high for u.s. corporate profits in the coming

year we think 7% roughly, probably a little upside if we were to completely take out trade disruptions entirely i do think that that's global. but we have to remember this was over 20% return year, that the expectation for where we're doing in the economy has been set in financial markets we think that the coming year will not repeat that full gain but there's a very, very big difference from that from sort of believing that the end is there and simply just having great year behind us means there's no room for any appreciation and getting increasingly optimistic again that the world economy can follow through, that there's been a great anticipation as you were just seeing for economic downturn, that producers everywhere poised for this collapse and it's not happening. that requires a bounce back. >> all right so the positioning has been maybe a little more cynical and that's the reason why we're seeing a fuel for this right now. >> trillion and a half out put. >> we talk about trade deals and

brexit let's take a worldwide view, where is the opportunity right now. if you were to say, hey, i have to put money somewhere, u.s. abroad and if it's abroad way? >> well, look, there's been a nice big valuation gap between the united states and international equities for a very long period of time in some cases that reflects different industry competition, simpbt growth opportunities. if we look at the ten years ahead, valuation differences become much more critical over a decade and we can see that non-u.s. equity returns particularly emerging markets. >>reporter: poised for stronger ten-year returns i don't think that the coming year is telling us that this is going to be some dramatic difference, but you certainly have a lack of confidence in some of the markets whether this is asia or europe and lower valuations shades us to be a little more optimistic overall there. a big issue for us right now is there are bounceback sectors, industrials had twice the return of health care in 2019 but if you look at over two years health care outperformed industrials. and why is that? industrials are cyclicals.

there was the expectation of collapse coming into 2019, so they got deep lly depressed but bouncebacks don't last forever. what we really think about is driving long-term economic growth there are these unstoppable trends inside technology, in terms of -- >> like what >> well, cyber security is just one simple example where it's very, very high up the list of absolutely critical spending for companies. small segment within i.t., software generally applications are rising faster than technology hardware. they're gaining share in the economy. the best applications. they may be expensive. they may be volatile, but they outperform in the long run investing in longevity the amount of spending for a globally ageing population is going up in health care. we don't necessarily have the political issues just in the united states. these are examples, again, of industries that are outperforming. they're not just bouncing back. >> what about financial technology, fin tech as people call it. >> absolutely.

>> it could be payment services, alternative banking or credit-related products. >> specially globally. >> how big of a deal is that globally >> it's incipient. it's become these companies the concentrated firms in that area are growing their revenue 12% annually, consistently if you think about that revenue growth rate, how much faster that is than the world economy this again is something that doesn't have a 40-year track record behind it, but we definitely overweight in find companies quite compelling for long-term investments. >> and also, 2019 an interesting year, as it has been most recently in the past decade, a bull market for stocks and a real bull market for bonds. >> oh, yes. >> i mean to the point where we have negative trillions of dollars of negative yield debt. >> 13 trillion. >> so where is it? stocks or bonds? which is more overvalued and where would you tilt towards in 2020 >> compared to long-term valuation history, fixed income is the greater anomaly equity valuations in the u.s.

compared to the long-run history point to somewhat below average long-term returns. nothing like where we were in 1999 and certainly not the opportunity that we had ten years ago when markets were deeply depressed and no one wanted to invest now, if you look at fixed income, though, the global yield including emerging markets, including high yield debts, sub investment grade just 1.6% the u.s. higher, so we can take a higher position, particularly in u.s. municipal bonds for those investors that can take advantage of that tax situation, but overall, we're under weight fixed income, we're overweight global equities because of these relative valuations and the fact is that we don't believe we're at the end of an economic expansion. >> all right still room to run. thank you very much for joining us. >> my pleasure thank you weren't appreciate that. we'll be asking that question all week -- "is there room to run" right here on "worldwide exchange. tomorrow, we investigate technology coming up on deck for the show, a look at the moves you

need to make with your money. plus, a potential hurdle in the push to finalize the new nafta usmca. a provision in the agreement orwi eeft mexico angered "wlddexchange" is back in just a moment. ♪ beyond the not-so-routine cases. comcast business is helping doctors provide care in whole new ways. all working with a new generation of technologies powered by our gig-speed network. because beyond technology... there is human ingenuity. every day, comcast business is helping businesses go beyond the expected. to do the extraordinary. take your business beyond. >> i'm not your charity case. >> i am not your excuse to buy a new dress for the annual fundraiser. >> i am not the poster child for your big donation. >> i am out of debts and in my own home. >> i am off opioids. >> i'm graduating on time and on my way to a great job.

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it is time for your executive recap, the headlines you need in 60 seconds mexico has thrown the trump administration a late curveball in its bid to finalize the u.s./mexico/canada agreement a top mexican trade negotiator arrived in washington, d.c. yesterday for urgent talks on the deal the country says it was blind sided by the language in the agreement that would allow the trump administration to deploy full-time diplomats to mexico to make sure the country is

upholding labor standards. dupont will merge its nutrition business with international flavors and fragrances to become a top supplier of ingredients to food makers the deal values the new division at around $26 billion and that division will have $11 billion in annual sales. coming up in a first on c interview, iff chairman and ceo andreas fibig and dupont executive chairman ed breen joins "squawk on the street" to discuss that multimerger. elizabeth warren continues to defend her push to tax the wealthy in this country. speaking with cnbc's john harwood warren disputed criticisms from the very people her tax would impact >> you would have to ask them, but i will say this, a lot of them just don't want to pay the taxes. you know, and that's part of the problem we've got here is government listens disproportionately to rich guys who don't want to pay taxes.

remember for everybody who says that this government is caught in gridlock, remember that when the question was cutting taxes for the richest and for the biggest corporations, it took the republicans about five weeks in order to call everybody in and do a trillion and a half dollars in tax breaks, tax breaks that went mostly to those at the top >> well, for more on that big interview go to cnbc.com for all of john harwood's speak easy with elizabeth warren. stock futures looking to add to friday's gains on the heels of the up beat news around trade talks. we are looking ahead to the new year, crunching the numbers for all of major investment banks with their s&p outlooks for the year 2020. topping the list, the biggest bull on the street btig with a 34.50 target for the s&p 500 so joining me now is the man behind that big bold number, julian emmanuel, managing director and chief executive and

derivative strategist at btig. boy, among bulls, you're a raging one, julian what's driving it and can this bull run continue in 2020? i guess the answer is yes in your mind? >> well, first off we're surprised we're high on the street because if you look at the history of years following up 20 years and we think clearly we're going to -- and more than up 20 this year. nine times, eight out of nine, they have been higher and the average is more than 14% so, in reality, when you think about the fact that we're getting more clarity on trade, more clarity on european politics and, in fact, valuations aren't terribly stretched in our view, we think our number may end up being well, quite honestly. >> it's my job here to bring balance to the force so let's talk a little bit about the bull case that you're laying out and some of the points that go against it. there are still points out there in the global economy with regard to manufacturing data,

perhaps some services data, pmis, isms that sort of thing that all still point to some softness globally speaking some say it's a turn around, but others say it cannot fuel the bull market like it has been what do you say about the economic data, especially the soft economic data so far? >> so the economic data has been reasonably soft throughout the year, and our view that's part of the theme as to why the defensive areas tended to outperform until you saw bond markets start to really yields bottomed in september. we would say what's interesting to us is that if you look at the manufacturing pmis they have actually started to turn in the places we were most concerned about, that's the rest of the world. it's our expectation that going forward we'll see those numbers start to turn in the u.s and if you think about it, and obviously this trade agreement is one of the manifestations of it, politicians are very incentivized to make sure there's upside to economic numbers next year.

>> all right so speaking of politicians, 2020 is a big election year there's a lots of uncertainty there as well. people will say that the base case scenario is president trump gets re-elected. other people have to dethrone him. how much of this is going to play out in markets around the unsurge uncertainty presidential election. >> it's almost record levels of uncertainty. from our point of view it's interesting in a contrarian situation is basically the price of downside puts versus calls to hedge past the election term is almost record high so, essentially what it's saying is the fear of an outcome that however it ends up sorting itself out is likely to be less than what the market is discounting. it's a positive. >> so what you're referencing right now are stats on what people call option skew. >> right. >> that people will pay a lot more for downside protection in the market and similar percentage upside protection in the marketplace. are you saying that that's going

to be the fuel for the bull run as well? the contrarian aspect of this whole thing? >> absolutely. even though we're at new all-time highs, the glass seems to be half empty, whether it's thinking about the enforceability of a deal with china or thinking about this idea that we've got to still negotiate further trade deals after brexit gets done people are looking at the glass half empty rather than the fact that you've had resolutions of uncertainty and we expect further resolution of uncertainty which is likely to fuel markets. >> all right let's put some names, sectors and industries that you like around here. we know that mega cap technology and come services is the driving force behind the s&p's record run. do you expect the microsofts, amazons, facebooks, alphabets of the world, apple to continue that run higher or is there a slight change in leadership in 2020 >> we actually like financials and cyclicals in the area.

and sort of greater economic activity energy very much left for dead but when you think about technology and we're neutral on the technology sector, the upside to technology comes, the public really has not been an enthusiastic buyer of stocks this entire ten-year bull run. we think the conditions are setting up for more public interest, and i would say this if the public does, in fact, turn to the stock market and perhaps flows come out of bonds and money markets, they'll be buying technology? >> there place for utilities, those dividend type proxy, the bond-type proxy plays? >> look, a diversified portfolio certainly there is a place for those types of plays and again, the downside is that those areas may outperform in the event that the economy is slower than we expect. so, we're not saying abandon those, but they may actually lag a market that trades higher next

year. >> all right so high estimate on the street for the s&p, julian emmanuel at btig thank you very much. that does it for "worldwide exchange" this morning remember, stocks are set for gains. the dow would open up by 50 to 60 points at this stage if those gains hold to the opening bell "squawk box" beginning right now. good morning. phase 1 deal is china is totally done live reaction from beijing. boeing shares falling. a new report says the company is considering halting or scaling back production of the grounded 737 max. and senator elizabeth warren speaking to cnbc about her wealth tax plan and her call to break up the big companies it's monday, december 16th, 2019, and "squawk box" begins right now.

♪ good morning, everybody. welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square i'm becky quick along with joe kernen and andrew ross sorkin and the u.s. equity futures at this hour are indicated higher all the talk of the trade deal boosted prices on thursday and on friday of last week this morning, you see the dow futures indicated up by 64 points both the s&p 500 and nasdaq closed at new highs once again on friday and this morning the s&p indicated up another 12 points nasdaq indicated up in the 33 points the dow is seeing some pressure from shares of boeing and we'll talk more about that in just a moment but in the meantime, very quickly, look at treasury yields the ten. year right now in the united states, yielding 1.8 h 2%. >> the top corporate story of the morning and maybe of the week, boeing shares falling. "the wall street journal" reporting the company is now