all right, welcome back. one more look at the markets this morning the futures are indicated up across the board dow futures up by 26 points. they have been down by about 40 points when we came in s&p futures up by 6. the nasdaq up by 19. join us tomorrow right now it is time for "squawk on the street. ♪ you gave me a chance i would take it ♪ ♪ it's a shot in the dark but i'll make it ♪ good tuesday morning welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber at the new york stock exchange. coming off record highs for the major indices, four straight days of gains, maybe a fifth, as the futures are higher despite boeing lower on news that it will halt production next month. ten year 186 housing starts good. industrial production and jolts on the way road map begins with boeing, set to suspend 737 max production in january. shares lower ahead of the bell now in danger of its first

negative year in five years. >> plus, new highs in striking distance stocks set for what would be a muted open after another round of wall street records. >> and the shipping wars, amazon blocking sellers from using fedex ground for prime fedex does report tonight after the bell let's kick off with boeing, though now on track for four straight declines the company confirming it will suspend production of the max beginning in january as regulators make it clear they will take their time in approving the jet's return to service. boeing says the decision is driven by a number of factors including the extension of certification into next year southwest, jim, is delaying return until april now that's the second delay in two months. >> they can't get this right and throughout this, the thing that people talk about, speak to large money managers look i do, we can't move the -- move this to 400 this thing gets through, we can't. we'll stand there and buy the stock. not going to let it go under

300. we want every share we can get it is a matter of when not if. my problem with that is it is the -- it keeps getting pushed out. this stock was down 12 at one point last night and there came the buyers. these buys arevoracious and relentless, as if something fabulous is about to occur now, there isn't anything fabulous about to occur. but these people are afraid of something good happening >> so they just stick with it. >> yes. >> they stick with it. the dividend is safe for now at least at current levels >> yes >> cash flow is going to be significantly impacted as we know what is even more amazing is the impact this will have on overall economic growth of the united states. >> it is the biggest -- the most important export we have, pork will replace it. >> pork will replace boeing 737 max? >> yes it will. something has to --

>> something's got to give. >> backyard pig farms, forget about it. >> if we can raise enough. >> we can. takes 48 months to make enough pigs we have enough pigs now for them, the fact that this matters is completely ridiculous. >> boeing 737 max or the pork? >> the boeing versus pork. >> you can't help but bring up pork within two minutes. >> it is not guns and butter it is planes and pigs. >> planes and -- >> wow that's good. >> i've seen some estimates, macro impact on q1 gdp, .3. >> everybody's got -- some of the companies like spirit were spun off by boeing they were, like, companies that were -- boeing captive they can't make it up. >> spirit aerosystems. >> we want to hear what larry culp has tosay >> over 1.3 billion in terms of the hit? >> we know american is furious. >> american airlines.

>> we know gary kelly is furious. he told us in october. take a listen. >> i've been very clear, we're not happy about our situation. you know, we put -- we put our future in the hands of boeing and the max and we're grounded >> of course that interview was the same one in which he sort of raised the idea maybe we start looking at other planes. >> look, i think the reason why everyone thinks it is going to 400, you got to keep looking airbus doesn't have any planes available. >> no. >> not for years. >> no. southwest took some money already, but there is going to be more coming, i guess. a new negotiation about what they're due from boeing. >> that's why people are worried about the cash flow, is how much does boeing owe. let's not forget, everybody is captive. there are just not enough planes being built. and ate lot of the thing, emire has a huge fleet of the gigantic boeing, airbus planes and airbus

put a fortune in the gigantic planes and there is airports that can handle the emirates plane, the gigantic -- >> yeah. >> i don't know if i -- >> i asked for piano bar in that bar. they have some great d-- >> pianos are heavy, but -- >> that bar, it is like casa blanca during the movie. those planes -- that's what airbus went wrong. they built the wrong plane, we can't get the 737 -- there are no planes. what a chance for the chinese. but, no. no too busy stealing our secrets. >> there is, i mean, you can -- if anybody that covers aviation knows the chinese have ambitions to have their -- they have a planemaker. >> they do >> five years behind. >> they haven't been able to steal enough, appropriate.

you talk about it with the execs, they're all very -- they're very, very careful not to use the terms that i'm using. they're just saying the joint ventures are -- offer unbelievable opportunities for the chinese and they haven't pulled it off. spend a lot of money building aircraft carriers, but, no, no planes so that -- this is just -- look at this stock. honestly why is this stock under 300? >> you buy it at $300? >> yes >> do you think it will get there? >> the buying power of funds that are in this stock, knowing that there is no real competition is incredible. and what happens as they tell me when they get this right what happens when the 737 is certified? where does this stock go they have a -- >> a long time to get things going again, in terms of getting production back up. >> why is the stock not below $300 >> because of all of the reasons you're pointing out. >> right right. >> hope springs eternal.

it is a duopoly, we pointed that out, 150 times. >> we did it 151 times larry culp needs to be heard from >> larry culp, ceo of general electric, ge, needs to be heard from. >> he has a better view of this. >> if you're out there, we're happy to hear from you >> let me give him a jingle during the break. >> do that. >> i'll bring up the stock market, aiming for more milestones the day after hitting all time highs, first record close for the dow since november s&p had its 29th record close of the year, within striking distance of 3200 if the s&p, jim, can get two more percentage points, we're talking the best year since '97. >> that is incredible. '97 was the beginning of when we realized the internet was going to be the greatest thing on earth, we had a tremendous wind tell moment. now, the other day -- we're getting overbought, i have, david had a picture of -- these

are -- these are upgrades. these are upgrades they're just upgrades. look at these -- will you look at this. these are upgrades. >> it is incredible. >> the tale of one city. the best of times, period. >> should i be concerned about that >> that's my point >> there is too many upgrades. >> really goldman sachs, which has done nothing. >> oh, my god. >> i guess -- >> goldman. >> today it is mike mayo, to 280. >> we upgrade goldman, why because goldman is now telling the truth about goldman. >> which is? >> that they're transparent. they have a lot of good things coming read that upgrade and i said there is nothing in that upgrade other than that goldman is going to have an analyst meeting and they didn't used to have analyst meetings nothing else in that upgrade you want to buy all that >> stocks outperform the s&p this year substantially as have all the major -- >> is that a good -- you want truth?

read the unilever, read the unilever piece from unilever they used to be the old -- they did the -- they were all in the underdeveloped economies. >> yes >> they're getting crushed there. >> this is one of the stock stories of the day, this is an enormous company, of course. >> they are firm on eps, the sales -- >> talking about india not so good, and, i don't know, they say southeast asia i say this, i think procter in the developed countries is crushing it. a huge quarter with procter. if procter is down, might want to buy it. unilever, i'm saying -- >> i have an upgrade of -- >> relatively new ceo still. >> i've got so many positive things here, that i could throw this at you, david and you would be happy. >> i would be happy if you threw it at me >> you know what i'm calling it in a piece tonight this is the

year of magical stock picking. >> i love -- >> a lot in there. >> fantastic. >> do some reps with that. >> yeah, you could get some shoulder action. micron, second consecutive day of upgrades. >> another upgrade fatuous upgrade. >> max out here. >> 737 max out >> oh! there it goes. >> sorry here is the micron upgrade don't -- it says don't worry about this quarter okay, that's great how about -- >> i'm grabbing an upgrade -- >> how about -- >> just -- >> close your eyes, david. >> i got lilly. >> can you see this -- which one is the upgrade which one is the upgrade it is ridiculous. >> i got the lilly presentation on neumalin. sales are flat

>> that's diabetes. >> biopharma. >> which one see biohaven >> they're all lilly. >> there is an analyst meeting and i got bricks on my shelf i'm trying to do homework. you ought to give it a shot. >> really? homework. >> is your argument that sell side may be getting a little too -- >> that's my -- >> really? >> i just can't read one more upgrade on the micron piece. it is, like, this quarter is not going to be that good. what is going to happen when they report? just -- it is just with seven points, upgrade after upgrade after upgrade. there is a viacom piece today that said using pt, price target. >> thank you for that. >> of 73. >> 73. >> stocks -- >> $39.75. >> i listened to david faber eviscerate -- >> i did not eviscerate anybody. i asked him a couple of questions. >> that's part of the problem. and $73 price tag. there is no end to it.

quick take, safety and efficacy of loxo. that's good. loxo how about -- how about veggie cream cheese, though this thing is unbelievable how many positives we have >> we're going to -- >> it is crazy >> it is good the guy left. >> jim is not kidding. we're going to get to other upgrades of u.p.s., j&j, cramer's mad dash, count down to the opening bell futures look good here a downgrade of lennar. >> doesn't get the game plan. >> "squawk on the street" back in a moment. don't dgo away.

♪ breaking news on industrial production rick santelli has that in chicago. rick >> yes, our november read on industrial production is up 1.1. that is solid. better than the under 1% we were expecting. we did lose a tenth on a revision have minus six to minus .7 utilization rates, 77.3, that is subsequentially a plus as well pretty good numbers. earlier we had good numbers, let's go to the charts let's go back to january of 2007 on housing starts this morning

that number is the second best number in 12 years permits, how about we start in january '07 again. the best numbers since may of 2007 if you look at two-day chart of 10s, we're within yesterday's range, right in the middle, actually we didn't get any sort of bump on the early data points because in many ways, it seems as though equities and the general state of less uncertainty due to bigger issues potentially getting resolved seems to be the driving force and both seem to be moving together if we open the chart up month to date on 10s, see what i mean, big sweeping arc and the top is around 190, the area you want to pay attention to carl, jim, david, back to you. >> all right, i will take it, thank you, rick santelli now to a mad dash, we count down to the opening bell. we have 14 minutes before we get started with trading here at the

new york stock exchange. j & j. >> it is now a defensive stock again. hold to buy. bear case, 24 billion in legal liability, of course talc and opiate, $6 per share the market is dramatically overstating the legal liability from both talc and from opiate the problem is that if there were a headline, that came out about some jury or somebody that ruled negatively on talc, you say why did i pay 143? it is defensive until it is not. i think j&j is a great american company, that was part of the disclosure in the lawsuit, it came out that i actually sent an email saying could you please send me any information about the lawsuits from your great american company and it was just -- it was disclosed. i think reuters questioned why i used the word great. >> right >> i said, because it is aaa balance sheet, long, good -- i realized i'm being defensive about calling an american company great? i'm not saying make america

great, i'm saying there is a great drug company but this is a great company. i do fear that the headline risk so why don't you wait until they lose a case, like a million cases. >> politics. this is just warren. >> it is >> falling in the polls. >> yes, it is. >> how does -- yes, this is -- it is an inverse chart of elizabeth warren's poll numbers. this is where she attacked -- this is where she attacked kupperman. >> right >> right >> and people realize, wait a second, the guy is giving away every penny, he spent his life being charitable, but he is the guy she targets? i mean, i -- that was ill advised, david don't you think -- >> he's an unrelenting human being. >> why doesn't she target people who don't give money away? >> right >> it was a bridge too far and that's what -- >> i wouldn't necessarily connect it with lee as much as say the medicare plan. >> it is a simile. push it back the third year --

push it -- push it back. defensive -- these are the kinds of pieces i don't like what will happen is they will lose a case. that's when the person should say buy. not now. >> okay. >> all right >> okay. >> i'm just saying that the happy days are here again is exactly had it is not happy. be careful i'm a little -- i am a little more circumspect >> boeing, j&j, the upgrades. >> boeing is up today, david, it is -- it is -- there is no kryptonite anywhere. >> superman. >> yes >> nothing to fear all right, we got a lot more "squawk on the street. stick around we'll count you down the onipeng bell next. >> caterpillar right there. >> yes is the monolithic view of emerging markets obsolete?

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market on pace for a fifth day of gains, and another record high for the s&p and nasdaq. investors look past the boeing news once again. opening bell in eight minutes. steyer: i'm about to say two words

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. you're watching cnbc's "squawk on the street" live from the financial capital of the world. busy tuesday morning tons of sell side research, largely positive if you're watching boeing today, the number to watch is 322.50. that's the number at which it ended 2018 so that's the point of which it would lose its gains for the year. >> the thing that keeps happening is just when you think something is -- it has gotten too bullish, the company called log me in just got acquired. >> log me in we use that. >> incredibly expensive company. it just got a bid. tall grass energy.

$86.50 private equity. that's crazy. >> okay. if you say so. >> it is crazy where are all the buyers when the stock were dramatically lower. there is so much private equity money out there. there is so much equity money trying to find something like a boeing, where frankly -- you understand, there is a limit to how -- how many aircraft you can put in storage, they told you that from the beginning. inventory needs to be managed. they told you that they know the schedule, they have to work around the schedule, they know they don't control the timing the regulators -- people are happy buying boeing. know all of that they want to buy a technology company that some people think it is overvalued log me in gets a bid so many ways to win that the analysts feel like, you know what, i got to capitulate and be more positive. that's what i think is happening. capitulation by an analyst community, truly believe that this was go to be a bad year it turned out not to be. >> yeah. of course, we do have rosenblat

backing up credit suisse on apple saying china sales were down 30% year on year in november rosenblat has a sale at 150 target. >> 150 target is indicative of someone trying to make a case. maybe he's thinking two for one split. when you have been fighting this stock for 129 points, and all you do is reiterate what the other guy said the other day, which is -- that was a bad month. tell me how december will be now that we have a trade agreement so i just find that -- maybe it causes people to trade around apple. no $150 price target, i think you might lose the right to be able to be taken seriously. >> other big story is amazon temporarily blocking some third party sellers from using fedex ground delivery for prime. that ban applies to shipments - the company is trying to fulfill the promise of one day delivery

during the holidays. fedex said the decision affects a minuscule amount of its business. >> so vicious. >> we'll find out more tonight when they report. >> when they report. >> they do very little business together we should point out. and they're completely phasing it out. >> third party sellers >> telling third party sellers, but, again, that's -- amazon, right? >> amazon wants control of it. >> takes care of everything for the very often for many of the third party sellers. >> don't want you to be angry at amazon for third party seller. there is a piece again that amazon best idea -- >> using -- >> 2400. >> $2400 price target. i do think that amazon -- amazon has done nothing of late so down 1300 when the president assassinated over the postage stuff. but there is one you want to buy it got a lot of upside. i think very -- >> youny wh think what has a lof upside. >> good quarter. >> really? >> yeah.

amazon web services is doing a remarkable job log me in. >> i'm reading the log me in press release. >> stock is -- >> 8605. i have not checked in on this. it is a $4.3 billion deal. >> that's what i'm talking about. >> for log me in and, again, it is -- it is elliott. >> it is elliott. >> it is elliott. >> elliott is doing the deal their private equity arm so to speak. they call it -- they call it the ever green coast capital, 8605. >> it is grate compaa great com. do you use the proiduct >> a day before media reports speculated. >> but 16 time 16 times earnings.

it wasn't expensive. there are so many companies and so much money chasing very few stocks, stopped having the wi willy-nilly, but wework put an end to the idea, how much more money can you lose >> it does have the 45 day go shop, typical with these private equity type deals. elliott and log me in, i know we got to talk about -- >> stock was higher in february. >> yeah. >> came down a lot they scooped up. >> there is the opening bell as jim pointed out earlier, caterpillar here today, celebrating the 90th listing anniversary. jim wearing the cap. >> chicago now people think, what is playing in peoria well, they're located in chicago. >> yes they were in peoria, though. at the nasdaq, procure a.m., exchange traded product issuer

how will cat be affected by phase one signing? >> i think caterpillar, jim, such a different ceo, told me at lunch that you should be focus on oil and gas more than china oil and gas is actually more important than china talking about 5%, 6% they tried to diversify, they saw a lot of negativity come and in the meantime, the stock traded down to 116, 117. it has been pretty much traded up since then. it is much more like emerson, kind of a story of, you know what, if china starts growing again, then they'll do well. >> fitch, i think did up their forecast for growth in china back to above 6. >> got the baltic freight starting to do better. we have free port doing better there is a big theory that china as we stop fighting china, china will get better. i agree with that. but i do think that caterpillar is much more a function of the fact that they diversified a way and jim will be -- stood there

and kept buying back shares, one-third, 120, 115, buy, buy, buy, good dividend that's changed the episodic nature of caterpillar, which bought at the high and did nothing he just has been in there, look at catcaterpillar, it acts look premium growth stock >> three month rolling sales have stabilized after having rough patch in the middle of the year >> premium, think about it, the dollar, the dollar has been so manipulated, everyone else taking money away, doing so well, lowering and debasing currency against cat, it still wins it is the best manufacturer and the best manufacturer wins. >> back to log me, i read ahead, francisco partners is partnered with elliott francisco partners is the lead in this log me in deal >> they are --

>> we just got word of about ten minutes ago or so. 8605 a share -- $4.3 billion francisco partners and elliott together. >> this is a company that had -- people thought it lost the way connectivity company and they get a deal so if you were buying a this thing all the way down -- >> they didn't get their high. interesting. >> but, still you could have -- look where you could have bought it at. >> that's true a number of press reports, about a potential sale and stock moved up tha 25% premium. you can see the move up. >> do you not feel the excesses, bullishness that just -- can't miss and that's usually not -- >> equity has been somewhat still -- somewhat cautious there is -- there has been a little bit of a blip in the financing market, private

equity, is deals out there that i heard about -- >> tall grass energy. >> a little bit of trouble in terms of large financing if needed had -- i don't want to overstate it, but a little bit there pe looking for trying to still look for -- things are not cheap. >> they need billion dollar deals. >> things are not cheap. >> i keep coming back to the tall grass. >> very often many years without -- >> would you please acknowledge me on the tall grass. >> where are we going on tall grass? >> it completed -- they got a bid. they bought -- they got the rest of the bid was -- they bought the rest of the company. >> got it. >> map there >> wyoming, has the rex line from ohio to wyoming and then to kushing. you have to focus on that. >> i should focus on that? >> blackstone, here's what they get. express natural gas runs from ohio back to the midwest, east from the rockies, the pony

express, crude oil from colorado, in wyoming to kushing. this is done by blackstone i'm saying, again, this is -- we got to put money to work let's throw $3 billion in tall grass energy, even though i don't see a single pipe worth -- >> not a believer? >> no. >> okay. >> tends to do fairly good deals. not always, but -- >> i don't like -- i don't care for wyoming, i don't like the pipeline deal and i don't want another pipe for kushing got all those already. >> you were here, sitting here for many years talking about the lack of pipelines. >> then we have too many pipes. >> how did the time go by that all the -- >> everybody listened to the show cramer says we got to start building a lot of pipes. that's the way it works. >> i understand. a lot goes on in that mind, most of us don't want to know half of it. >> money to burn. >> come on a week where the journal did the piece on shale

investment in the permian and elsewhere, it is dragging down nonresidential fixed investment overall for the economy. >> it is let's remember that when -- the rigs, even though the rig count is down dramatically, the rigs are much more prolific the rigs are more focund we have -- we need to have gigantic port infrastructure built out to handle all the oil we have to ship. you get that area where sempra is sending stuff cameron, free port, lng factories, lng, like you wouldn't believe, greatest works programs in america. who talks about it >> they are enormous infrastructure projects that have been financed to the tune of tens of billions when you add them all up. >> ge has been building them mcdermott, not that great a company.

beckde beckdell biggest jobs programs in america. >> we don't talk about it perhaps enough or explain it sometimes you need to take pictures of this stuff aerial photos of these enormous terminals, we call them trains. >> i'm going to -- yes, called trains i'm going to take a bottle of -- no, i'm going to bang that lng, launch one of of the lngs. >> nice. >> i am. >> you want me to do korbel? >> sure. >> champagne, direct from flint, michigan like that? >> sure. i'm not a champagne fan. so -- >> crystal. >> i want to come back to the court case, important one taking place up on pearl street here. they're not getting started today in the states versus t-mobile and sprint until about noon the judge will start then. you're going to have one witness and then charlie ergen, founder and ceo of dish, chairman of dish, will take the stand.

gee, i wonder what he's going to say, yes, i think we're going to be a strong wireless nationwide competitor that's what one would imagine. >> there are cases where attorneys general from states have come in and blocked -- >> yes, there was somebody who sent you an email, when i said i was unaware of when the doj had agreed to a deal, and stated ags had come after one but there was a valero deal years ago. >> california blocked. >> yeah. >> pretty good. >> in this case, jim, i think people in the courtroom and i have not yet been able to attend, but people tell me they went in with the expectation that the judge would be perhaps sympathetic, certainly stto the states it could be an easy case 4 goes to 3, typical metrics to measure competition all in favor of saying you can't allow that but he has certainly taken his time in wanting to hear -- while the states made an adequate go

of making their case, i'm told, listen, the judge seemed open to -- as he should, of course, listening to the arguments from t-mobile and sprint that rebut the case that 4 to 3 will be anti-competitive and is going to cost consumers more money. you did have sprint interestingly talking about their plan b, saying if this deal doesn't happen, plan b is really to become a regional carrier, focusing on 41 dense urban markets that cover 78% of the u.s. population. and it is still being studied, but that's the sort of the idea they want to -- that sprint is putting out there. hey, you don't let us go through, we're not going to be the competitor that you think we are. while we do have 2.5 gig spectrum, we don't have enough adequate coverage, we have a lack of free cash flow, in terms of balance sheet capacity to truly take this nationwide and so sprint is making it

clear, they won't be able to compete as a nationwide 5g carrier. and so it will be interesting. >> so, in other words, what you're saying, david, is you're going to get three either way? >> that's what sprint would have you believe. right. that, you know, while marcella came to the company in 14, sort of stabilized things, that their buildout plan, this nontraditional approach they took in terms of dense fiction of the 2.5 spectrum using small cells and these other radios that it didn't really work didn't work as well as they thought. didn't create the network they hoped it would where they could really add a lot of capacity and a lot of customers and so they are saying, yeah, you let us go, you break this thing up, we end up with a lot of churn, not enough cash flow, and an inability to compete nationwide so, yes, jim, that is the argument they're making. where will the judge come down

on their viability as a competitor after, if in fact he says 4 to 3 is not something i can allow? i don't know >> geez. a lot of - >> if he says that. >> we should be camping out. that's probably the biggest court case -- >> interesting one and, again, investors at dish will be watching to hear mr. ergen, if he provides any additional detail. i saw him at goldman saks, but he hasn't offered a great deal in terms of his plan. >> they can grill him. >> they can. >> i've got to tell you, i'm following this one because of the 5g i really have been convinced by john legere, of course, t-mobile moving on, that we will not be able to have credible 5g competitor without that merger i actually believe it. >> you believe it? >> i do believe it. >> you may be right. >> and the chinese are ahead of us in 5g like splitting it when the russians were ahead of us. it is. very similar we would have president kennedy,

talking about, remember, president kennedy said -- >> i'm aware we got to get to the moon, yeah >> i'm saying -- >> like seven years, that speech. >> not because it is easy, but because it is hard netflix is getting mileage out of this 8k, 90% of subs from overseas, the debate continues to how profitable the new subs are. >> it is important because almost every one of the surveys that was negative was involving domestic that may be a false way to look at netflix i've been on the fence about netflix because i've been reading those stories domestic peek i said i'm using the wrong numbers. this is very positive. i'm not ready to be converted like i was with tesla. now a big tesla bull but this was positive. >> yeah. >> tesla, that thing has become

a monster. >> you want to -- let's check in on tesla now. >> down a little today. >> speaking of space, 381, that will be a high for the past 12 months >> that's a -- >> your valero thing was the ftc. >> the ftc. >> yes >> not the doj. >> okay. all right. i sent it to you so you would remember. >> i know you did. >> i think that tesla has been one of those stocks this period where it levitates and netflix, that was just a dramatic change in how we should value netflix. very important >> six, seven more buck and all time high. when is the last time we said tesla, all time high. >> what a year >> look at that thing. >> that's netflix. sorry. >> people are saying tesla will be -- there are people who are looking for big profit in 2020 many people by profit in 2021.

no one heard from elon musk. it is smart, he's not tweet iin. the chinese gigafactory. >> he's got so much go on, that guy. >> the one in nevada starting to impact regional employment i saw fed charts about employment near reno. >> incredible. few more charging stations >> tesla and solar city are together he's got spacex, neurolink don't forget about that one, they will plant stuff in your brain. >> my wife is buying the tiles the tiles are cheaper and they're guaranteed and give you power. >> hyperlink, other thing -- >> i have the power. you can get the power, shingles, roof shingles and that goes to your power charging station, in your garage, which then allows you to power your stuff all over the place. i got the power. >> you got the power >> i got the power. >> don't fight the power.

>> no. the x, the gold wing, cools -- i mean, i am so darn cool. >> yeah, we used to have a saying, you're as cool as -- i won't say it. >> to bob pisani on the heels of what was an opening high for the s&p. >> you're all cool in my book. 2 to 1 advancing to declining stocks not as strong as yesterday good open overall, new highs remember, boeing weighing on the dow, not as much as yesterday. down 3 points. we got goldman, we got johnson & johnson, caterpillar all helping here want to look through the sectors here we have a mini rally going on in china stocks, biggest one i watched, broadest ownership of china stocks here. we're sitting at eight month high, up last several days in a row. emerging markets recently, the dollar has been weak, they have been advancing as well keep an eye on these neglected groups here. semis strong, of course. we had another upgrade of micron over there at web bush securities that's helping

energy, oil is over $60 again today. we don't pay much attention to that but that's it. consumer staples, a little weakness here on some of the food stocks. unilever, talked about this earlier, weak over in europe just doesn't look like a big mac row issue with them. they saw some weakness south asia, north america. they lowered their sales guidance to the lower end of 3% to 5% range. unilever down big. here in the u.s., mixed, conagra, general mills, on the flat side. i don't think there is a big mac row call here in the food stocks wasn't to focus on why we're at new highs again. it is important to review what i call the four horse men that has gotten us to new highs the fed neutral, number one. the u.s. economy, recession chances have faded, rather notably in the last few months let's call it a truce on the trade deal i want to focus on this, though, the global growth. we have been very carefully looking for signs of bottoming global growth. industrial production today pretty good. some china numbers recently

pretty good. the boeing announcement is troublesome, a lot of emails about people making comments, we might have an 0.3% impact on the gdp, the united states as well as elsewhere that's a very large number and a lot of people are concerned about that there is boeing right now, impact there, 323. 322.50 is where they ended the year, 2018 we're essentially flat on the year saffron weak here, deal with general electric, they make the engines for the plane. there is going to be some kind of cash flow hit to general electric spirit aerosystems as well, they're boeing's biggest supplier, out of kansas, they make the max fuselage. that's been down the last couple of days. senior plc, in england, they ma make a wide variety of parts for the company as well. that's getting hit now after being flat yesterday so this is rippling through the global supply chain and it shows you that a little bit of events that are unexpected can sort of

impact that global bottoming story. want to pay close attention to this and how it develops back to you. >> thank you very much meanwhile, pete buttigieg getting big backing for his spre presidential bid reed hastings, reportedly hosted a glitzy fund-raiser for mayor pete ini palo alto last night. he received donations from 39 billionaires in the first 11 months of 2019 >> wow. >> tutor jones mentioned, he's my man >> i wonder what elizabeth warren is thinking. driven off that would have sided with her otherwise. has she alienated a group of people who may have been natural supporters >> you think there may have been a lof a lot of natural supporters for

her among the wealthy americans? >> i do. i think many billionaires were willing to understand the double tax system, where taxing the corporate level and the personal level and a vat tax as well. i think when she decided to go after -- i know you -- that the lee cooperman to me is more important than to you, but when she decided to go after charitable billionaires, i think that people felt, you know what, i'm not immunized one bit. i've done my whole life, i've tried to do the right thing and still get attacked and the billionaire tax is something that there has been a lot of research that says it doesn't raise a lot of money one thing it does do is alienate the people who might have been with her instead of mayor pete. >> also, maybe being a little insincere about why he teared up on the air, not about having to pay the money. that's what she tried to imply. >> true. >> right i think that can't really do what she did and expect that there will be millionaires who want to go for her because

there -- you don't want -- she made a lot of people afraid. that's what i talked about last night on "mad money. it doesn't do good to have people afraid of you good to have people united with you and under common with you i'm not giving her tips for her campaign, but she scared people and that's why i think other people are flocking to other candidates >> don't forget bernie sanders, by the way his support stays right here. >> it doesn't go anywhere, very good point. >> all young people. >> well, i don't know. they text a lot. >> be sure to check out our podcast by the way listen to the opening bell hour, "squawk on the street," wherever you listen to podcasts a lot out there, but ours is the best dow is up 16

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what's on mad tonight? >> one of my favorites david ricks. one of the most consumer friendly people. indiana. probably feels bad because of that beat down they suffered last night at the hands of the saints based in indiana. >> got it.

i was watching drew brees, that guy can throw. >> but see, my guy is from indiana. >> oh, well. >> frank ricks. >> go buffalo. >> wrong team there, david. >> go buffalo. >> andrew luck, no longer the quarterback. >> i'm aware of mr. luck. >> right. >> like a -- >> he did higher than that. >> was he higher -- >> richard sherman had a 4.0. >> "mad money" at 6:00 p.m. >> no way. >> fmefeorr d chair alan greenspan. the dow is up 8.

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every day, our 1,100 investment professionals around the world search out opportunities for alpha. partner with pgim, the global investment management businesses of prudential. ♪ good tuesday morning welcome back to "squawk on the street." i'm carl kwipts with david faber, mike santoli in for sara eisen at post nine of the new york stock exchange. did get a record high for the s&p at the open. looking for a fifth day of gains as boeing continues to be somewhat of a headwind for the dow. our road map begins with their big suspension, the company announcing a production halt of the max with the stock nearing negative territory for the year. >> plus an exclusive with former

fed chair alan greenspan and get his thoughts on the trade war, record rally and more. >> amazon as fedex fight preventing sellers from using fedex ground for prime shipments as the shipping wars heat up. boeing, on track for what would be a fourth straight day of losses after the company confirmed it will suspend the production of the grounded 737 max beginning in january phil lebeau is here, something we're always excited about, but you're following this story wherever you are and this is a significant development. >> the question becomes they made the announcement, we talked yesterday it was expected. now that they've done it, how long does this last? nobody is saying for sure, so the general feeling is, when you talk with people within boeing, talk with people at the faa who are talking with the folks at boeing, most analysts also expect it will be most of the first quarter. that's not a definitive, just the expectation. as of right now no layoffs are

planned. how do you look at the first quarter? what are the times frames. recertification, early to mid february, deliveries might resume mid to late february. then you have production in mid to late march. what about the airlines that have the max in the fleet when will those go back into service. southwest joined american pushing it back into april, back into the southwest schedule on april 14th, and as you take a look at shares of boeing the big question is, how much will the cash burn be impacted by the change in production now that they are not going to be building at all starting in january. jpmorgan bring doug the price target from 370 to 400, in that note the analyst said they're still going to have a cash burn in his estimate of $1 billion a month. it's not like they turned off the costs completely they have brought them down, and they will for the first quarter. it's still there.

>> $2 billion currently per month. >> the estimate from the analyst, yes. >> how quick -- so given that timeline, when do you think the first passenger flight would happen >> well, maybe april again this is all contingent on everything moving and having recertification in mid -- early to mid february. >> in line with what southwest said. >> basically that's what airlines have been doing, if we get certification by mid february, it's likely that, you know, we'll pov it back into early april. united march 4th, don't be surprised if we hear from them if not today in the next couple days. >> what about the employee base here, not laying them off, they're furloughing them >> they're not furloughing. >> they're continuing to pay them. >> the important thing is, that's not a rock-solid guarantee. that is the company's intention as of now. i think they're earnest in that intention that they don't plan to let's say this thing continues to get pushed up and the second quarter where there may not be

production, then they might have to reassess the situation. as of right now they are not planning on any layoffses? >> did that surprise you second quarter, in the past i would say yes it would surprise me, now given the way the timeline keeps getting moved back further and further i would not be surprised >> phil, always appreciate your incredible coverage. nice to see you here. >> fun to be here. >> phil lebeau. what does the struggle of the biggest dow component mean for the overall economy? steve liesman is back at hq with a look at those numbers. hey, steve. >> good morning. boeing's decision to halt production of the 737 max is big enough to move the needle on overall u.s. economic growth, at least for a quarter, and maybe more it could have a large impact on first quarter gross domestic product than last year's government shutdown. we asked a bunch of economists at jpmorgan 0 to 5, oxford 0.5 this is for the first quarter.

and that's what it would mean for that quarter jpmorgan writes, it should have a noticeable effect on first quarter growth, however u.s. annual economic output is over 20 trillion. challenges affecting one company like boeing rarely leave a large input on the overall contour of the expansion. the first quarter outlook was weak forecasts before the boeing shutdown to be the low point of the current slowdown now it could come in closer to 1% for that first quarter of 2020 now when production comes back, it's going to start to add to gdp and they will make up lost ground the question, how long the stoppage lasts boeing as phil was talking about, now more than 400 737 maxes in inventory imagine them drawing down inventory before making new planes the rebound to growth may not show up until later in 2020. i will be talking with new york fed president john williams about the 2020 outlook for the economy and fed along with the repo market, much in question, at this time tomorrow.

carl >> all right steve, wish we had more time to chat but thank you for that. steve liesman. stock still aiming for their fifth day of gains s&p did hit a record high. joining us this morning, jpmorgan's chair of global research joyce chang and brian bellski. great to see the two of you. good morning. >> great to be here. >> if right at jpmorgan, the max is half a point, what sort of offset the benefit we thought we were going to get from usmca and phase one? >> i think you will see some of the u.s. exceptionalism fading and we have u.s. growth next year at 1.7%, compared to 2.3% this year. that fiscal support is coming off. the question we have is, is there really better value in some of the international markets as we look into 2020. >> you did say you advised favoring em, europe and japan? >> yeah. over the united states i mean we're still pretty constructive on u.s. equities, at 3400 at the end of the year,

but emerging markets was really the laggard this year and with more stability in china, we think the valuations are more attractive and we're still watching some of the technical factors in the market as well. >> brian from your view, how are we set up here it's going to be a great calendar year in terms of returns on a flat earnings base coming after a pretty poor year on a strong earnings gain in 2018 so going into next year, it's been common to say well, earnings should pick up single digits, maybe the market does the same we didn't get that kind of synchronicity the past couple years. >> it's one of the things you think, what is going on given the fact that you want to be a fundamental investor and per your point earnings were great last year, but why because of the tax cuts and people bought back stock this year was a confluence of events we write about where we talk there's analysis paralysis that's what caught investors behind the 8 ball this year with respect to trying to time the market with macro factors like too negative based on the yield

curve and missed the forest through the trees. i don't think going forward, i don't think it's so much a point of american excellence, i think it's about american stability on a fundamental perspective. take a look at the standard deviation of earnings growth it's exceedingly stable relative to the rest of the world i know joyce's call and respect the call and i think it's a great call, but it was the same call last year, right. if you were overweighting emerging markets, you dramatically underperformed this year on a global portfolio one of the things people want to think about, mike, probably going to start talking about this, when the calendar turns january 1, the funds and global funds are going to force your portfolio to buy u.s. stocks because they are underweight i think you're going to have another lift off to begin the year. >> yeah. the european broad european stock index just clicked to a 20-year high, meaning it just eclipsed a high from 20 years ago. do you think that's telling you the rest of the world is actually picking up or is it kind of a global liquidity push? >> i think the fourth quarter is

actually the worst quarter for manufacturing. you should see a bit of an uplift, but it's a modest uplift here i actually agree on the 3400 base case. for the u.s., but i think that outside of the u.s., you have better value one thing we're actually more concerned about is that some of these systemic strategies are building up again, probably at the 75th percentile right now on u.s. equities, so we do see -- >> in terms of their exposure. >> fundamental investors we think are average, but we think the systemic strategies actually are building up again. we're a little bit more cautious on the u.s. here given the valuations, although we have a constructive base case ahead for the it but emerging markets was the real laggard you know, even with more clarity in the uk, we don't see that as an opportunity, except for a few domestic, not the ftse 100. >> you mentioned technical factors? >> the technical factors, systemic trading on the repo trading there's a much more proactive approach by the fed.

250 billion injected, 640 bill in total when you look at the year end it would not shock me if you have some of the spikes on the last trading day again, and on the systemic strategy -- >> repo rate. >> in the rates and systemic strategy you get like little mini shocks that we've seen. i think that's become part of what is normal in the markets. >> do you agree? i mean powell addressed this at length last week. >> it could be but i think the bigger picture is, what's going to be the longer term rate with respect to how we're looking in terms of risk-free rates and premiums and what the 10-year will do next year it's clear the fed will not do anything next year until after the election there's been too much near term focus on the repo rate and it's settled down quite a bit it's difficult to make a call that something is going to happen in the last few days given the fact that it's been a tough year on wall street in 2019 i think people will be on vacation i think the trend of the market will start kicking in the first couple weeks of 2020 >> when you say that the 10-year

yield, i assume you mean it's not going anywhere >> i think the fed funds rate is not going anywhere the 10-year yields could creep higher and you will see a stooerp yield curve which benefits our bullish case on financials, money setter banks which you talked about some of the banks hitting 2007 high, principally because it's been a chase trade, right you talked about the last couple days how investors have been so under exposed financials and that kind of poses to the value trade. wing think value and sickly kills you want to know what you're getting into and the value trade in the united states has a long ways to go. i would rather by value in the united states than try to apply value in emerging markets or europe. >> finally, kaplan on the tape this morning, saying you can run a tighter labor force without risking inflation. seems to be consensus on the committee. do you think tlkd be a surprise on that in 2020? >> i think the inflation and the growth expectations are pretty muted right now. if there's any surprise it's one

more ease. that's not out of the question in the second quarter of the year we have to see what the fed review brings, but we are wondering whether they're going to move to a more flexible inflation targeting where they actually try to overshoot. i think the first quarter of the year as mike has pointed out is the weakest quarter. i do see value as well in looking at energy, materials, the industrials, similar to brian, but we are seeing growth still coming off in the u.s. and we are at record highs >> ten more years of the bull. remember that. ten more years of the bull. >> no rate moves. >> no rate moves next year. >> thanks, guys. good to see you both >> thanks. great to be here. >> the latest numbers are out. for that we get to rick santelli >> hi, carl. october read on jolts is really solid. all today's data has been solid. 7 million, about 260,000 better than we were expecting and a revision last month to 7 million

32,000 last month is the only month in a long string, year and a half long that would comp to an under 7 million number, all the way back the march of last year. the reason i bring it up is that this number series, the opening and job openings and labor turnovers is like taxes in illinois it keeps pretty much going up. it did give the market a bit of a boost. we saw long and rates move a basis point or so. >> thank you, mr. santelli when we come back here, amazon/fedex fight the latest in the shipping wars. they're heating up as we head into that final stretch of buying the holiday gifts and getting them to your house later, an exclusive with former fed chairman alan greenspan. we'll talk about the trade war, the global economy, record run among stocks and a lot more. there's a big show still ahead don't go anywhere. ♪ ♪ i've been a caregiver for 20 years.

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the esg or at least the focus on esg, record amounts of money pouring into socially responsible funds, but that is now attracting potentially greater scrutiny from the securities and exchange commission joining us is sec commissioner easter pierce. nice to have you with us this morning. >> thanks, david. >> we have been seeing, at least i think at some expressions from your concerns, in terms of

trying to understand the metrics by which corporations will be measured, if i can put it simply, in terms of applying these esg standards, do we actually have standards we can really believe >> no, i think the first issue is we don't even know what esg means. i think defining that would be an important first step before trying to develop metrics. >> what do you think it means? >> i think it means different things to different people and it's a way for people to signal that they're trendy and they're investing in a way that's consistent with those trends, but it also enables them to have a fair amount of discretion about what they're doing when they're investing using that label. so that's my concern un, people have been thinking about esg type issues for as long as they've been investing because obviously it matters how a company treats its employees, how it treats the community in which it operates. those kinds of things have

always been important. governance has always been important. and so the idea that these things are new i think is wrong. they have been incorporated by investment managers, asset managers and by companies for a long time and so i'm not even sure we need to try to define those things >> right well as we pointed out, of course, and as we've seen this year, a lot of money is moving into funds that at least have an overlay of esg what is the s.e.c. looking at right now in terms of trying to help investors understand what the fund should be doing when they say they have an esg focus? >> well, i think, again, there's nothing new here we're looking at what a fund says to investors about what it does and making sure that what it says matches up with what it actually does. that's really the fundamental role of the s.e.c. is to make sure that if someone is taking your money to manage it for you,

what the person is telling you is accurate about how the money is being managed, whether that's managing according to some kind of model or using an esg strategy you have to be up front with investors about what you're doing. >> commissioner pierce, the usda certifies what's organic, there are standards they set out there and i guess producers have to abide by them if they want to call their product organic could something similar happen from esg from a similar agency >> again, i think given that esg encompasses so many different things, i'm not sure that you could come up with a clear standard even on core financial reporting issues, it's really difficult across the diversity of companies to figure out how to compare from company to company, and that's why we have a the lot of work going on on core accounting standards that's where i think the s.e.c. has more to say than it does on

a nebulous category of esg standards. >> right but there is, to be fair, an effort underway to try to measure these things within peer groups and even across the board. i'm aware of it certainly and i assume you are as well >> yeah. you raise a good point and those efforts are fine industries may want to sit down with their investors and understand what it is the investors want from them and then come up with some metrics that work for those particular industries and that's fine i think those private sector efforts can be valuable and they're going on, but i don't know that we at the s.e.c. need to be involved in that we have a touch stone wisconshi materiality and that applies a range of issues that companies deal with. we expect companies to be disclosing the risks that they face, the material risks they face and sometimes those are in the area that some people might categorize as esg, but there already are rules on the books that have them disclosing those

things. >> right but i think it's fair to say or at least it certainly seems of the expectation, this is not going anywhere it's only going to get more popular, it would seem, as an approach you've got an entire generation that seems much more focused on sort of all the different things that a corporation does, not just in terms of delivering shareholder value. would you agree with that and would you think we're going to have to evolve in some way to be able to adequately measure esg >> well, again, you know, i think there are efforts going on to measure individual components of what people call esg and that's fine. but in terms of evolving, you know, having corporations accountable to one group and that is shareholders, is a really valuable way to make sure that they are doing the most that they can do for society and so i don't think trying to give corporations and their managers multiple targets to multiple audiences to please is really a very wise idea

i think it could end up hurting the very objectives that people who focus a lot on esg purport to care about. >> how would that be the case? >> well, so we've seen that when -- when companies do well, when they contribute to the economy and the economy does well, people start to care more about things like the environment. we can actually dot best by having good, strong, economic growth the way to do that is to have companies focus on their long-term financial value and that's what a shareholder focus cares about, is the long-term financial value of the company then people can take the -- their earnings from those and do with it whatever they want but i think the really valuable point is to make sure that companies know what their objective is, that is to increaser that long-term

financial value. >> from listening to you then, you certainly -- it appears to me you don't -- you would rather there is no esg at all >> absolutely not. i think people should be able to invest their money in any way they choose. i'm the last person to want to tell people you should or shouldn't care about these particular things when you invest, but i think when i look at my role as a securities regulator, it's to get investors information that is material to their long-term financial investing decisions. investors care about lots of other things the things i care about are probably not the same things you care about and so the notion that we can come together and we can get our regulator to focus on amore fis set, i think we're fooling ourselves. >> i think we're going to continue this conversation and debate this is not going anywhere appreciate your time. >> thank you so much as we're talking the

president tweeting this morning, would be so great if the fed would further lower interest rates and quantitative ease. the dollar is very strong against other currencies and there's almost no inflation. this is the time to do it. exports would zoom dollar has come off of the highs, down for maybe ten of the last 12 days also the fed is adding to its balance sheet about 60 billion more >> growth can always be faster if you're bracing for a sub-2% gdp, you want reasons why maybe it could have been quicker >> as we go to a break, the f.a.a.n.g. stocks, tech being the best performing sector of the year by far. only apple among those is in tech communications services has also outperformed the s&p this year colin is live from washington with a look at what's on the show >> good morning to you coming up we'll give you an exclusive look inside those blue amazon vans and how they make

the company's free one-day shipping possible. we also talked to the owner of one of those companies and we hear what it takes to get your package to your house on time. i'm frank colin. that's coming up after the break. i'm happy to give you the tour, i love doing it. hey jay. jay? charlotte! oh hi. he helped me set up my watch lists. oh, he's terrific. excellent tennis player. bye-bye. i recognize that voice. annie? yeah! she helped me find the right bonds for my income strategy. you're very popular around here. there's a birthday going on. karl! he took care of my 401k rollover. wow, you call a lot. yeah, well it's my money we're talking about here. joining us for karaoke later? ah, i'd love to, but people get really emotional when i sing. help from a team that will exceed your expectations. ♪

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it is time now for our etf spotlight. taking a look at the semiconductors etf, the ticker smh. it is up about 0.4%. semis coming off another fresh record high. looking back over the past decade, this group significantly outperforming the nasdaq 100 and the s&p 500 as well. you see there the semiconductors etf over more than 400%, focusing on one of the components, micron pulling back after early morning gains. wedbush upgrading the chipmaker. micron up half a percent, the firm saying upgrading noting improving pricing environment for chips. up two-thirds of a percent, below all-time highs amazon is pushing for free one-day delivery for the first time this holiday season this is the company announced it is blocking sellers from using

fedex ground for their prime delivers deliveries with the heating wars heating up. frank colin is live from washington and has more on the story. frank? >> good morning to you that's just the latest part of this battle that amazon has been waging against traditional shippers and in their arsenal the blue and branded amazon delivery vans has only grown 150%, that fleet globally, since june of 2018 here in seattle, the seattle area, we got an exclusive look at how those blue vans that are operated by independent owners that partner with amazon make free one-day happen. you know, we saw the drivers also the company built 40 more of those in 2019, part of an estimated $3 billion spend on making that free one-day delivery happen. we talked to one of the owners, a former army captain loves owning his own business but it is a challenge making free one day happen. >> with any challenge that you

have, as long as you provide the right equipment, the right task, purpose, mindset, anything is achievable my drivers achieve it and provide feedback if something is not working i work with my partner amazon. >> reporter: these drivers also drive innovation you may have saw that driver taking a picture of a package dropped off, one of the new features for customers that amazon has these van drivers testing. the vans are an important part of amazon's step up of its own delivery service you can see here, former -- it's expected to outpace former partner fedex next year and as it continues to compete with others these vans are important, according to maria, a former top adviser to ceo jeff bezos and the head of delivery experience. >> historically we've worked with large national carriers as well as regional delivery services and as our volume grew we saw the opportunity for more people to come and offer a great experience to our customers.

delivery service providers or dsvs are that important link in the chain. >> reporter: and free one-day shipping is seen as a growth driver for amazon. the number of americans that are prime users expected to increase by 5% in 2021. >> could not be more timely, thanks let's get over to a cnbc news update at this hour. >> hi, carl. here is what's happening at this hour in an interview with "the new york times" rudy giuliani says he provided the president with information that ambassador maria von know vich was impeding investigations and he provided details indicating that the president knew of his attempts boris johnson holding his first cabinet meeting following last week's election victory. he has a majority to get his brexit withdraw bill through the house of commons by the end of january. staying overseas a coal mine

explosion killed 14 people in southwest china. two people are still trapped underground. seven people were lifted to safety after the accident. underground gas concentration has delayed the rescue work. for the second time this month the eiffel tower has been forced to close because of the staff who operate it have gone on have strike it's part of a long-running national dispute over pension benefits that is our cnbc news update at this hour. back to you. >> all right thank you. when we come back an exclusive with former fed chair alan greenspan, trade, the markets, global economy and more dow is up 33 s&p 9531 don't go away. at fidelity, online u.s. stocks and etfs are commission-free.

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the president a few moments ago on twitter calling on the fed to cut rates more, tweeting there is almost no inflation

this is the time to do it. exports would zoom that's in the wake of a strong jobs number, phase one of china trade deal completed, record highs for stocks with us in a cnbc exclusive the former federal reserve chairman alan greenspan good to have you back. good morning >> good morning to all of you. >> i wonder what you think about the president's push for the fed to add more stimulus >> repeat the question, i'm sorry. >> the question again, the president's tweet this morning, about the fed, asking them to cut rates and continue with easing, saying the dollar is too strong against other currencies and inflation is nonexistent, where is he wrong? >> well, first of all, he's wrong on even discussing the issue. the federal reserve is a very professional outfit.

they know more about how the economy functions, how it effects the money market and the interest rate structure far more than he does the best thing, as i've told my colleagues on numerous occasions, former colleagues i should say, on numerous occasions, that the best thing it could do is just disregard it i didn't hear this morning he made -- that the president made a statement. i don't -- i'm sure it was ill-advised. >> statements have changed over years now that we have social media to work with chair greenspan, talk about trade. your reflections on what you thing this phase one deal with china will bring and the degree to which global trade may rebound in 2020, will it >> well, let's start off with what trade does. in a market economy, which

market forces are prirmts and in many cases the only driving forces, economists over the generations have argued that maximum gdp you're going to get is in that state any forms of tariffs effectively reduce that, they distort the economy, in effect by taxing individuals countries. when we, for example, increase our tariffs, the people who are paying the price are americans it makes no sense what so ever to be moving further and so the answer to your question, if schedule one on what they're doing now merely ehim natted all the tariffs between china and the united states, that would be a positive good for china, the

u.s., and the rest of the world. >> do you believe that tariffs, as we have them now, and the potential of bringing them down over the next year, let's say, is going to be an effective tool to get them to make structural changes that we've long sought >> well, whom, the chinese >> yes. >> well the chinese have been doing very peculiar things over the years. i think they are learning that it's not to their self-interest, but i wouldn't think that endeavoring to try to force them to alter by creating trade wars is to their benefit. there are no winners in a trade war. it's just a question of who loses the least. in this particular case it's to the clear to me whether the u.s. or china is being hurt more by

what both of them are doing. if they could pull away and get a complete elimination of tariffs, that would be to everybody's advantage. >> chairman greenspan, even beyond the tariffs on china, we also see other efforts to kind of disengage from global trade you have the uk leaving the european union and stirrings elsewhere about people questioning the value of globalization. what does that mean, do you think, for the outlook for world growth do we have to rethink some of these aspects of globalization >> i think it's unequivocally negative brexit is basically an unwinding of what essentially has been over the decades a major improvement in the structure of international finance and trade. brexit was the first populist

related endeavor which has created nothing but chaos and those who believe it's going to make some positive advantage by getting the united kingdom out of the eu trading system are just making a mistake. >> well, chairman greenspan, i don't know if you got the memo, but, you know, those who believe in globalization don't seem to be in favor right now. if this continues, do you expect that overall we can expect a decline in the growth rate worldwide in terms of the economies? >> well, it depends on the forces involved. the basic problem that is exissing both in the united states and pretty much across the globe is that the populations are aging because

medical is improving so significantly and that is causing people to retire much later than they ordinarily would and the consequence of that is obviously the build up of various pressures, social benefits generally as it would be called and the data unequivocally say that it rises in those social benefits are crowding out gross domestic savings worldwide without question and that in turn is effecting gross domestic investment which is a critical factor determining productivity, that is that factor which standards of living depend on most >> chair greenspan, i'm looking back at some comments you gave us in early '18, 2018, you said the outlook for the budget

deficit long term is, quote, downright scary. you said it inevitably engenders some acceleration of money supply and would lead us into stagnation which you said actually -- and then stagflation, which feels better than stagnation, you said. has there been anything since then that's changed your view on that >> i regret to say no. what's happening is as the deficits widening, we have a trillion dollar deficit in the closing year and it's going up and up and up, that causes unit money supply, usually fairly quickly, to begin to rise and money supply is a critical determinant in the inflation rate right now, it's getting to look -- there's no real inflation for us at play here,

but if we go further than we are currently, inflation is inevitably going to rise that on top of the stagnation we're seeing in many areas is not very beneficial for the world economy and not for the united states and china. >> well when chair powell talks about needing to see inflation that is persistent and significant as a bar to raise fed fund, it sounds like a bar that's impossibly high >> probably. i can't comment on that. >> chairman greenspan, obviously as you know, the federal reserve is back to re-exam panneding its balance sheets and providing liquidity in the markets are there any broader implications of that is it technical mechanical

adjustments or what does it mean the fed has now found itself having to i guess in normal times so to speak have to have a larger balance sheet >> well, the -- that is a very professional operation with those first-class research questions. developing models try to determine how the economy will behave understand certain circumstances. my first approximation is, that if the fed and its staff are holding a particular position, i can start from that position, but with reasonable certainty that it's pretty close to the optimum one. >> finally, chair greenspan, on repo, we heard last week that the volatility appears manageable, that bill purchases are going to plan, that money market pressure is subdued

unlikely to have macro implications for those still hand wringing about it, should they be >> well just remember, that this is a very long bull market and one of the things that we do to try to get a valuation system is we take price earnings and put them inverse into earnings price ratios and then try to determine what's causing that to change. it's basically been real long-term interest rates in the last couple years or so, so i would say that's price earnings ratio is going to be and the question is, where are earnings going to be and that's going to depend on trade probably as the major factor, international trade i should say >> certainly something that the entire market is focused on.

chair greenspan, thank you always good to talk to you >> my pleasure and as we go to a break, let's take a quick look at the best performing stocks in the s&p. netflix leading up more than 3.5% this morning. more "sqwkn e re" en return.stetwh [maniacal laughter] gold. gold! right, uh...thank you, for that, bob. but i think it's time we go with gbtc. it's bitcoin exposure through a traditional investment account. nice rock. it's time to drop gold. go digital. go grayscale. - when i see obstacles, i create opportunities. (soft music) - when i see adversity, i find a way. - when i hear never, i say now.

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u.s. stocks hit record highs but one top strategist sees opportunity elsewhere. find out what he likes for 2020 when trading nation.cnbc.com more "squawk on the street" coming up.

welcome back to "squawk on the street." i'm dominic chu. markets jumping between positive and negative territory this morning. one sector we are keeping a close eye on today is the consumer discretionary one buildings permits and housing data starts come in better than expected this morning helping to lift names related to home

construction and improvement home depot and pulte group and lowe's but the data can serve as a read on the state of the consumer during this key busy holiday season watch those names. now i will send it back downtown to you guys, at the new york stoengs. >> at the new york stock exchange >> thank you, dom. let's send it to jon fortt for a look at what's coming up on "squawk alley." >> hey, david. we're on the countdown to christmas. we have the ceo of atar ee joining us with what he's got for the current season, maybe more important, how the gaming industry is building up towards next holiday that's coming up on "squawk alley. - [narrator] at southern new hampshire university,

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let's get to the cme group in chicago rick santelli is there with the santelli exchange. >> good morning, mike. i want to welcome mark chandler. mark, let's get right into it. we've both been doing this a long time, the notion of the reserve and currency seems to be challenged but never seems to be successful with regard to a challenge. now with economic sanctions and

tariffs and the u.s. using its might and balance sheet to try to control behavior, whether it is iran or china, doesn't this add to the fuel of the dee dollarization in countries like russia and china >> i agree with you. i think the weaponization of dollar, access to the dollar, treasury secretary mnuchin is denying. this will undermine the dollar in the long run. short term, doesn't seem to be a compelling alternative >> if there isn't a compelling alternative, in the past that's always been where i go, then again, other things crop up. as i finished reading articles on dedollarization, central bank is buying up gold. they like gold better than dollars these days what do you think about that >> it is interesting of course i think there's a bifurcation in the world one setthinks the new global

financial regime will be backed by gold. that's why some simple banks are buying gold. i think the federal reserve, when you look at the numbers, what would it take to go back on the gold standard. i think the price of gold would be incredibly high, talking about thousands of dollars, 13 to $15,000 to have some part of u.s. money supply, and also german money supply, japanese money supply bakcked by gold $6.6 trillion a day average turnover the gold market isn't ready to absorb any fraction of those flows. >> the dollar index, mark, isn't really a great way to value the dollar but it is what the market uses and what most traders pay close tae close attention to we're one cent higher from lofty levels

do you think it is issues we're discussing or other issues pulling it down the last six weeks? >> i will try to explain short term factors a lot of good news has been priced into the market look what happened last week uk election, usmca approved, chinese u.s. trade agreement, unwinding some of this i think for me i am in a camp that says dollars long term bull market is coming to an end news from europe, you saw some of this week's pmi flash, news from europe is not good, japanese economy is contracting. i think in the short run, i think this is noise about longer turn dollar up trend i think that's coming to an end. >> mark, great to hear your views, as we move into potential phase two with china carl, back to you. >> thank you very much. when we come back, the ceo

of atari joins us to talk about the gaming industry as we head into the final leg of the holiday season dow up 28, we're at 3193 "squawk alley" starts in three minutes. this is a historic moment. demand has never been higher for what we do. creating compelling, engaging, and informative content and experiences. with this merger, viacomcbs will be one of the largest and most influential content creators in the world. i know we can deliver on the full potential of this amazing new company.

and when you open a new brokerage account, your cash is automatically invested at a great rate. that's why fidelity leads the industry in value while our competition continues to talk. ♪ talk, talk

good morning it is 8:00 a.m. in palo alto, 11:00 a.m. on wall street, and "squawk alley" is live ♪ ♪ ♪ good tuesday morning welcome to "squawk alley." i am carl quintanilla with jon fortt at post nine of the new york stock exchange. morgan brennan has the morning off. looking for record highs within reach. s&p hit one earlier this morning. we start with tech's record run on pace for its best year in abou