good morning we are live from the marketsite in time square if you look at the u.s. equity futures, you will see green ar owes across the board. we have now seen 30 record closes for the s&p 500 this year the nasdaq with the biggest gains up nearly 33% year-to-date nasdaq up by about eight points. s&p up by 1.5. the 10-year seems to be yielding about 1.87%. the house prepares to vote on articles of impeachment today. joining us right now with more on president trump's president

trump card which is the economy. >> americansare deeply divided over impeachment showing over half of voters, 51%, believe trump should not be impeached and removed from office compared to 45% that is reverse where the numbers stood before the many hours of hearings. before they began, more voters voted for impeachment than against it the data on the economy is unequivocal. showing three quarters of voters have it any time in the past 18 years. for those who believe the economy is on the right track

approve. the white house wants to capitalize and that angry letter sent yesterday he wrote that, quote, democrats are desperate. your party simply cannot compete with our record. thank you. one of the big questions is the proxy for the election a lot of people have said, don't impeach. let's wait and deal with this election and see where the public stands. if you have a group of candidates arguing that you need to bump up this election because of trump what does that suggest >> one of the interesting things is when this poll looked at the people who felt the economy was

in good or excellent shape about a third still said that they would vote for any number of the kabd dats elizabeth warren got about a third of those. even though warren and biden have varied ideas, there is still room to capture some of those voters who feel like things are going well. saying one of the x factors could be the personality of the people running personalities do play a role we'll see what happens at least for now, the economy seems to be the calling card for this whole political division we

are seeing in washington >> we'll be watching and speaking with you many times throughout the day thank you very much. >> let's go to talk about this and effects on the markets looking no further on the futures. we are closing in on 3,200 in the s&p. the last president that was impeached was clinton in 1998. the markets took it in stride. rising slightly when all was said and done. the chief investment officer and the managing partner also a cnbc contributor. the term there was when it was all said and done. the market rose slightly

there are other things happening. there is the tech boom and dot com boom it has been setting a series of new highs in the mist of the process. >> the economy is going to drive this the impeachment is important the economy is going to drive this at least the next 12 to 18 months we've had a nice expansion the way we have a set up with the economy. employment interest rates and gdp growth, stock market will rise here. >> is it important on both sides that it bolsters tribalism or whatever corner you are in

it energizes both sides. >> who is that >> i think the stock market will win out here the stock market will rise because of what is happening with our economy the economy is actually doing okay >> it doesn't matter what happens in the house or senate >> it is important what happens. all of this could be a lot of noise. at the end of the day, if things are going the way we think they are, which is that the senate won't do anything, the markets will go forward. now that you've got elections coming up and you have to see what the other side will do. >> it is not 2020 yet. they are getting it in under the wire november is around the corner. you can still say, look, we had

to do this and all of that but it is still 2019 i think even more people would say, we are going to litigate this at the ballot box >> exactly if what we see is right now markets will react to this if nothing really comes out of this it could if it doesn't, you could see the market have more legs from here. >> you think president trump will become stronger and be a stronger candidate in the fall and the markets will like that more than elizabeth warren or bernie sanders >> i think the policy is in place has fared pretty well. >> where do you fair on this what did you say there >> markets make opinions

what we are seeing in the opinion polls. people have made up their minds on it and we've seen it confirmed in the market. i think impeachment, one, it is priced two, it is basically yesterday's news people are expecting that and will get it. when we pivot right back to trade earnings and the like. >> for 2020, if you were to look at 2020 and not be talking about impeachment, what do those things look like for you earnings, trade, global growth, how does that look is. >> that's where it gets more interesting, those are the issues you'll have to contend with in 2020 i expect they'll be somewhere on the order of 4% to 6%. the question is what will you pay for those earnings people have to pay more for any

quantum of earnings. the bigger thing in 2020 we are likely to see is a reversal in a strong dollar regime if this happens, it will help the long suffering emerging stocks europe is probably the story in 2020 because we have new political leadership there it gets interesting in the new year >> why would the dollar weaken the rest of the world are advantage and the capital flow in the united states because the rest of the world starts recovering and the dollar becomes weaker >> it is a bit of a reverse. i think what we are seeing is the growth rate of the united states the growth rate are coming down relative to the rest of the of the world that is certainly happening in the interest rate, which typically uphold the dollar finally, the amount of new debt

that we are hitting the market with combine that with qe 4, is it? version four right now when you get those events happening, that is all dollar negative >> i don't see rates going up anytime soon on the continent in europe and i don't see them going down here. that doesn't seem to follow, does it? >> the bigger issue is the quantitative easing is going on again. the government is issuing a lot more debt. >> okay. you agree with that and the weaker dollar? is. >> i'm not sure about the dollar i think you'll see a rotation because of where valuations are. within the market, you could see rotation and value, which is underperformed for years it has some really good areas

and the beaten down sector there. the earnings growth will be better in financials it will be energy stocks. you don't have to hold you should put a majority in the value side >> the inflation of your view for 2020 you don't have any price pressures here or elsewhere. at the top line, they have some leverage on the earnings side. >> the inflation through qe 1, 2 and 3, they never came home to ruft this time around, if you see the dollar and the qe 4 is that the

regulation if you look at the sticky numbers the cleveland fed puts out. those all push higher. the fed has told us they are going to let it run hot. i don't know if 3% is hot but they'll let it run for their target a bit i think they can live with that. >> thanks, hans. thank you. >> happy holidays. >> thank you coming up, fedex chairs getting slammed. we'll show you what ceo fred smith said about the big head winds for the company. we'll talk about it next >> announcer: today's big number, $500 billion that's the annualized dividend

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>> check out shares of fed ex-falling hard after the shipping giant reported disappointing earnings

falling 39% missing forecast also cutting the 2020 earnings outlook for this year. adding sunday deliveries for the holidays impacted, the china tariff fight and continued fall outfrom the break with amazon. the ceo fred smith discussed this in a conference call. >> seeing effects on the industrial economy due to continuing trade disputes and reductions in airfreight and domestic parcel and freight shipping despite these issues, we remain highly confident in our strategies which we believe will begin to bear fruit by fourth quarter and into fy 21, absent negative macroeconomic developments >> the holiday shipping season is six days shorter adding pressure when retailers are

already demanding faster shipping times the big question is was it the right decision for fedex to walk away from amazon how much is that you've lost the volume you used to have on what was supposedly a low-margin business >> the useless calories or whatever we are getting rid of the unprofitable stuff >> the same thing the cable companies are doing. >> empty calories. the question is was it really empty calories >> the same thing the cable companies are doing. we are not going to discount and keep you around. we'd rather not have you >> it is a bet on the future we saw it with the discount

brokers too. seems like the right thing it is $200 million in revenue. remember when cvs stopped selling cigarettes. >> you always want to do things in the short term. you hate short term. hate it. >> what does this mean for ups and their numbers. will they be able to weather through this or will they be hit hard to have packages delivered on time. >> like the postal service, i always wonder if it is really sunday when i see them where you are, you can't even go to the mall. what a stupid law that is. >> on sundays? >> because they don't want to be crowded on the streets on sunday there is nothing to do

>> paramas, they have so many malls there. >> that one interchange, route 4 and 20 it is the worst in the country >> shares of cintas. do you know what cin stands for? cincinnati better than expected second quarter results. raising its guidance for 2020. you know what xavier huskies play >> the cintas center >> exactly >> new this morning, fiat, chrysler and peugeot making a binding agreement over a roughly $50 billion merger creating the

fourth largest automaker putting brands like fiat, jeep, maserati, alpha romaro under one roof deal expected to close in the next 12 to 15 months and the companies work to come up with a new name >> so far from what you have i see you are lusting for it >> yes. >> you are in your minivan >> we are not doing a minivan yet. >> you have a high lander. >> my wife wants the chrysler pacifica >> because you want a vacuum cleaner. >> can't you get a dirt buster

in a macan >> i made that argument. >> he's going to lose. >> happy wife. >> i know where my bread is buttered >> no kidding. >> she's telling me to move on when we come back, the ceo of eli lily fires back after senator elizabeth warren accused his company of failing to provide the pledged lower-priced insulin. that is next no, it's not in my records. you've got a lot on your plate. deliveries. billy, come in. shift times. i just need to know if it's there. compliance. can i get your 20? for 100 drivers. doug... doug? and where is doug? he should be sleeping. so should you. just because you're married to my sister, you could lose this job, billy! this isn't working. introducing samsung connected fleet solutions.

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eli lily's ceo is firing back at elizabeth warren the senator released a survey that found 83% of pharmacies did not have lily's cheaper insulin and in some cases, they did not inform customers a cheaper option was available lily ceo disputed the statement. >> that's nonsense >> nonsense? >> i haven't read the retails of the report i read their press release i can tell you what the facts are. many policymakers encouraged us to just lower the price of insul in we did that. we halved the price. but only one in four americans

with part d coverage will have access this doesn't show we tried we did try you can order this today this shows what is broken in the rest of the pharmaceutical system >> shares of eli lily with shares of the price there. >> i don't understand it senators say it is not available in 83% of pharmacies >> maybe people don't know about this program >> the entire system is hard to understand pretty opaque with all of the drug distributors. a lot of people are nowhere near a pharmacy it comes in the mail >> that's right. some of the plans were pushing like cvs, they are pushing to only get prescriptions on line or filled through the mail >> it becomes an important part of your life nothing yet. but down the road, you even need

a little pill box to keep it straight >> there is a new service called capsule where they messenger it all comes in a little pack. >> it is much more difficult in rural areas even in this area, i've had a hard time finding the right drug i could imagine how much more difficult it is in the areas where there is no choice >> new this morning facing a backlash after his campaign emitted the measures key names left off that list wall street super lawyer and

guest on this show the buttigieg released the list over a dispute with the elizabeth warren campaign. buttigieg said they made an error when tagged wall street peat and groups that showed up at his campaign events to oppose reliance on big money donors to fund his campaign we know he is lawyer to all big wall street banks. the producer in new york of "lala land" i would not put him on some list >> he's so woke. saying all the right things you got to decide which woke is more

woke this is the old woke >> this is the left of the left of the part of the progressive or democratic wing >> i understand. i asked the producer for a flow chart. i need to understand which woke is before woke do i like him now? he's with pete, i don't like him. now i remember i don't like him. just give me a flow chart. >> i thought of the candidates you would have liked him >> i like mayor pete the way he talks and his actual politics, he's not very moderate he's an impressive guy when he talks, i don't go, wtf like the other ones. the other ones, i go are you kidding me what >> you are right >> it is not a very high bar for me to be impressed with one of

the democrats. >> i think if you give your support to one of the democrats, one of these woke folks. >> as good a person i am and as woke as i am -- >> i wasn't suggesting that. >> as woke as i am, i would taint or ruin the candidate si of any democrat. you are right. >> it changes everyday it is so difficult to be woke. >> you flip flop you are not that woke. you may have overlooked that news that you can use. squauk booze is next but first, yesterday's s&p 500 winners and losers

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what we do after the show. good morning and welcome back. >> doesn't fit that alcoholism and the the alarm clock, it does not go well. >> early to bed, early to rise, makes a man healthy, wealthy and

wise house democrats are set to impeach a sitting u.s. president for the third time in our nation's history we'll have live coverage coming up and tell you what it means for the market economy >> the massive 1.4 trillion spending package that could spend off the shut down through december 2020. the senate is expected to vote this week before the friday deadline bringing us to this morning's squawk booze news. extended is the spending tax break for beer, wine and spirits. those exceptions are estimated to save distillers $275 million in higher taxes.

$130 million for brewers and $150 million for the wine industry tax breaks are worth about $12 million a year >> wework has reported a lifeline this time from goldman sach giving the office a credit of nearly $1.8 billion this is part of the bailout announced in october remember, wework doesn't own the buildings in terms of the credit

stack. believing these companies. maybe there is some guarantee itself essentially if you think wework is worth a zero there may be an underlying business there >> what are the assets if it is not the buildings? >> i wonder if you are right about soft bank? >> tesla reportedly considering cutting the price of the model 3s sold in china reducing by more than 20% or more. looking to lower costs by using more locally sourced components, joe. >> yes excellent. i like the nice one. the little ones are growing on me too, the cheaper ones i don't know about the truck cramer is on board now, right?

i have to rethink. is he on board with the car or the business >> the car, i think he likes because his wife and kids do >> i know. but what about the whole -- >> if you become a convert, one bleeds into the other. >> i don't know ifs that the right. >> let's ask cramer. >> to be clear, wework and softbank are co-obligators >> so they are like the parents signing off on the loan? that makes sense. >> some c suite concerns challenges top execs face and what issues matter most. should be some hefty issues. later, we'll hear from the former sec commissioner about the impact on investing.

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return home. and who doesn't love going home. welcome back many ce o's are been vocal supporters the push for trade and the challenges in 2020

always nice to see you and have you here in person help us understand, you spend a lot of time with ceos in the room as they've been thinking about some of these trade issues we have a phase one deal what happens next? >> that's always the question these days, right? geopolitical uncertainty is what ceos have found difficult to navigate it has been a challenging month with the deescalation of china you have told others in the business world, effectively, get out of china >> no. >> move your supply chains, really push out or no? >> no. >> because >> because in the long term, china is the second biggest on the path to be the second biggest economy in the world but what we have talked about is the ability to build more

diversified supply chains is important. the change in cost, the ability, the roll of labor. you can build more supply chains you see that coming around the world. that will affect china the demand inside china and will affect supply chains beyond that >> where are you suggesting people go? we are suggesting to look at supply chains and being able to look at the customer in need particularly ai to optimize the flow and manage risks at a different level. risks related to geopolitics not just optimizing for one but having an adaptive supply across multiple scenarios >> the markets don't appear to be moving on any of this news, when you think of ceos, you

think about capital spending and this election in 2020. >> i think right now, more optimism, most look at the skub rant way there is uncertainty around the election. i would say it has been more positive than the news when you read the press every day. >> the ceos, have they seen other recessions coming or crashes coming i'm guessing they are not as counter intuitive as investors

would be i agree with that. this is been a lot of talk and i think ceos remain generally confident and the economy serves them very well there are different sectors. finding right now, a lot of the discussion is not so much about near-term outlook and the look ahead. >> just the investments ceos can make now going through every industry talking about the industry cable companies and digital companies. you can look at every industry and locate where you are putting in a big spend right now do you think 2020 will be a year of investment?

is. >> one is that ai at scale every business not just in the tech sector, people are recognizing you have to invest to not just do nice pilot trials but translate to core processes the offerings you bring, relationships you build, supply chains you operate that requires investment in technology and human capital and up scaling ways of working how do you combine machines and people we've done a lot of work around the world with leading companies about how they introduce ai and technology almost always, you combine people an technology, you get to better answers how to make that work but also human capital. the third is about dealing in a world where you need to build boast society and share holder value. >> can i ask you a question and

this goes back to the supply chain issue. how often are you telling boards to move supply chains back to the united states? i get diversifying in china. my question is do you ever think it is really coming back here, politically or otherwise >> we've been saying six or seven years with opportunities to bring things back to the u.s. it is not a new theme for us what we have is more of a work force challenge than a cost challenge to be able to hire people i do think there is a chance for manufacturing to come back from a supply chain logic a cost logic, you need the p emto do it >> your supplier, his role with

different countries and different issues that have been on the cases does this affect you in a good way or bad in terms of hiring or your ability to do business >> so mainly when we look at the scrutiny other companies in our industry and beyond get, it just reinforces for us what we talk about all the time long before this happens we have a responsibility for the world and the way we operate in everything we do it is built on four pillars, values translated to policy. clear purpose, transparency to those issues to come up. a culture of humility. we tend to use what we see going on to reinforce those pillars. >> thank you happy new year >> when we come back, the retail srt has been volatile.

we'll look at stocks you should consider for your portfolio as we head into 2020.

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with christmas just one week away, let's take a look at what's been working this holiday shopping season. joining us is suturina, a retail analyst. we've been watching a lot of these. i think i know it's the watt marts, targets, business box office retailers that are working. the stores in the mall are not >> you have good sales with the mass merchants online.com has been on fire for years and continues to be so

expect amazon to have another banner year. merchants like j. crew, gap, some of those traditional mall merchants are the ones that are struggling brands are doing well, too, like nike. >> probably not a huge surprise when you look at stocks, those are the ones that are performing well anything surprising you this holiday season anything that says this is going against the grain? >> actually, not really because it's been a pretty consistent story. the momentum from the earlier part of the year is continuing to carry through to q4 if anything, we get a lot of questions about tariffs and if that's going to have an impact the truth is most of the merchandise retailers are selling came in before the merchants took it and the tariffs came in. that's not happening >> is there anything that could stop any of the big retailers,

target, walmart, amazon, the ones doing so well, anything that could throw a wrench in the things would it be a recession? would they do well even in case of a recession because they tend to be discounters so more consumers would go there what do you think? >> well, during the last recession we saw that walmart was outpacing the rest of the market but even they had softness so definitely a recession would be bad for every retailer. that would not insulate even companies like amazon. they end up out pacing, companies like amazon that are diversified into so many other sectors, that helps them you have aws, you have their marketing and ad business so they have that insulation. other retail lors unfortunately don't. they have to lean into categories like grocery and commodities.

there are discretionary items they would have had. >> good to see you. >> thanks, becky. coming up when we return, impeachment and your money we'll have full coverage of today's house vote and what it could mean for your portfolio. u.s. equity futures, dow looks like it would open up 17 points higher s&p 500 off just marginally. nasdaq looking to open about five points higher we're watching shares of federal express this morning under pressure after yesterday's poor earnings report. more on that stock a little later in the show. shares right now trading down over 12%. >> $12 12.5%. >> we're back in a minute. beyond the routine checkups. 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.

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wall street watching washington as the house gets set for a vote on whether to impeach the president. today's events with the economy and your money ahead. shares of fed ex grounded. missing its mark and the company is paying the price. >> tesla's record run. why investors are all charged up despite a year of headlines and

cryptic tweets from elon musk. the second hour of "squawk box" begins right now. good morning and welcome back to "squawk box" right here on cnbc. i'm andrew ross sorkin along with becky quick and joe kernen. the house getting ready on whether to impeach the president. last night the president sending a scathing letter to nancy pelosi demanding she immediately se cease this impeachment fantasy. not much moving. the dow looks like it will open up higher, 22 points higher. s&p 500 we'll call it up for now. flicked between green and red by a point or two here.

the nasdaq looking to open about 6 points higher. ahead of this historic vote, we have the results of a new cnbc survey. steve liesman has the results. >> split on the issue of impeachment as the house moves towards an historic vote today they find 44% of the congress believes they should impeach, 45% does not it has a margin of error plus or minus 3.5% the split comes as a result of a deep partisan divide 78% favor, 83% oppose it some americans say they could change their mind. 4% who favor impeachment say they're open minded. 6% don't know and 11% are

unsure >> how do 4 and 6 equal 11 >> those are separate. >> oh, okay. >> thank you for asking that i never know if they're understandable 4% who favor impeachment say they could change their mind 6% who don't. >> 21%. >> one in five americans say they could potentially be swayed these numbers are astonishing. they approve of president trump's handling of the economy. there's a september survey that you remember that split of 49/40. overall.

40 mers percent approve. 12% more independents like the job the president's doing on the econo economy than they like the job he's doing 20% of democrats approve of the job he's doing on the economy. >> trying to think about what happened back in september. >> you know, i've been thinking about this a lot i've been doing this poll for a long time. sometimes you want to be on the news and maybe sometimes you don't. we came out with this poll or we went into the field just as the democrats said they were going to impeach the president what we picked up -- >> three years ago three years ago? >> the most recent >> oh, i'm sorry. >> i get it. i'll answer it clinically.

>> thinking all america. >> do the all america routine? >> i can't wait. >> you look forward to that? >> i do. >> athletes. >> see, the army/navy game, they love trump there i would think athletes in general would be more, less impeachment. right? >> you are correct, joe. you are correct, sir >> we did our -- >> i was telling people, you know why we call it the all-american survey. >> no. >> 13 years ago. nobody could believe we were interviewing anybody but rich people and wall street. >> all america >> the distinction they make what happened to answer becky's question, it was like a visceral reaction where the president's economic numbers took a huge hit. >> there was nothing going on with the economy. >> right if you don't mind very quickly, the overall approval numbers

really don't change very much. just 40% our republican pollster yesterday, we have a good pollster, said as volatile presidency as this is, the stability of the approval versus the disapproval is one of the most astonishing things. >> right that gets back to the idea of people digging into their trenches. >> base versus the other base. you do not have that kind of stability. >> that's the only place to see stability. it's interesting because people are just so dead set on this they are entrenched. they are dug in. it's the tribalism playing out >> it is fascinating, becky, how narrow the window is to get the majorities if you notice there is not a majority for impeachment, there is a dead split at 44/45 one in five americans are at play. >> we can't under estimate the 266 on that friday.

>> for the jobs number >> yeah. if that were to be reversed, i mean, a lot of these -- that sort of -- we had come to think that 130, 150. >> 180 was even high >> yeah. that came out and even the mainstream media picked up that those numbers, that was such a -- there were some wage gains. >> the headlines have gone -- >> 3.5 that brought us to 3.5 which brought us to 50 year lows. >> you're jumping the gun on the holiday spending stuff, wink, wink, looks pretty good. overall economic views of the public they also look good. we'll talk about that tomorrow joe is absolutely right. the stock market, for a country where only like 50 or 55% of the public actually owns stocks, the extent to which the stock market influences the economy is astonishing. >> was it 50 highs >> we have 56% in the poll

again, i'm jumping the gun on tomorrow, but if you were to do a regression between the views on the stock market and views on the economy, it is very essential to the american people. >> the s&p has had a record. >> 17 or 18. >> those people see those headlines. they see those headlines and it sinks into their sentiment and it sinks into their views on how much they should spent for the holidays. >> good tease for tomorrow. >> tomorrow. >> thank you for more on the impeachment this morning, the impact on the president's trade agenda i want to bring in our guest, senator rick scott good morning to you, sir it's nice to see you. >> good morning. >> you know, we've all been trying to assess today, what this impeachment means i know where you stand on it, but what do you think it means politically? >> i think it's a waste of time by the democrats

he's not going to be convicted in the senate. in the senate we're not going to allow in hearsay evidence. that's all they did in the houshous house. the only person here who has been transparent is trump. if they vote today, we'll have the trial. both sides will present their case, we'll take a vote and it will be over we won't allow the hearsay evidence it's a waste of time they should be securing the border, pass a budget where people have time to look at it the democrats in the house, they don't care this is just a partisan hate trump. >> are you of the view that this ultimately helps trump's re-election? >> oh, yeah. i mean -- well, first off, the thing that helps trump's re-election the most is the economy. in florida, our economy is on fire he's going to have a big win in florida. i go home. i see people on mondays and fridays and some on the weekends and they're not even talking

about this impeachment it's just not a big event to the normal person, working their job. i think it disappears. to a lot of people, this is just partisan people hate trump. they've hated trump all along. they've started this impeachment process years ago and this is another step in it that ultimately he's not going to get convicted in the senate. >> senator, can i ask just a question, i don't know if it's a personal question or not, but it feels to me -- and i understand the position you take on the impeachment. one of the things i found fascinating by the whole process. we've known each other a long time i have to imagine elements of this situation that there are elements and -- >> moral and ethical guy how do you look the other way for all of this stuff? >> can i ask this question >> i hear it every time. >> i imagine there are elements of this that must trouble you. i have to think there are some elements of it that trouble you

and yet -- >> never gets old. >> -- you and many of your peers seem unwilling to acknowledge them i wonder whether not acknowledging them hurts the case on the other side. >> let's think about it. the test is high crimes and misdemeanors. >> yes, i appreciate that. >> let's think about it. you could like or dislike donald trump, you can like or dislike how he does his tweets you can like or dislike the conversations he has, he's involved in so many different issues, but the bottom line is this is an impeachment trial high crimes and misdemeanors you have to think about it that way. you don't let hearsay evidence in this is a trial and that's all they've done the only person that's been transparent again is trump so this is just -- this is just a partisan fight and in the meantime we don't pass budgets on time -- >> senator, i will say one thing. the people who do know who it's

not hearsay have not testified because the administration won't allow them. >> but stop and think about it, every administration, you go back to -- you can go back to all of them, they have the opportunity to defend themselves that means they can go to court and do that. what the house has said is they don't want to take the time, they want to rush this through. >> they even withdraw a subpoena and they didn't want to wait they could subpoena all those people they have to show up and now mcconnell or, i'm sorry, schumer wants to turn the senate into the evidence gathering phase. >> mcconnell's point is the house didn't do it properly. >> it proves he didn't do anything wrong there's no evidence. it's all hearsay they could have -- they could have done their jobs, taken their time if they believed something happened here but they didn't i think they're -- they believe that trump is going to win in 2020 and they're just trying to rush this through to try to impact his election or maybe take him out because, you know,

they're scared to death. they just want to change the results. it makes no sense what they're doing. >> so you sleep okay at night? i'll help you, your conscience is actually clear? >> my conscience is clear. i'm very comfortable. >> are you able to look at your kids >> that's joe there by the way. >> that's me talking. >> i'm channelling -- >> i want to pivot the conversation. >> you don't go to church anymore. >> stop it i want to pivot the conversation to a different place i want to get your thoughts about mayor bloomberg's entry into this race he comes from the private sector, had a successful career. you came from the private sector and had a successful and accomplished career. how do you deal with him do you see yourself supporting him? >> he's been very successful mike's been very successful. i've known him for a very long time the issue he has is he's running in a primary that is a bunch of

socialists now. >> i appreciate the politics of it i'm asking you, senator, given your own politics in life and also i think your support of people that are competent and accomplished, i'm asking you, would you ever give your support to mayor bloomberg because in many ways he seems much more aligned, at least in my mind, to you in certain ways than our current president. >> here's where i think mike has a problem. what's the thing most american know about him he wanted to tell us the size of soft drinks. >> or climate change, gun control. nanny state. which is his most favorite out of bloomberg's position? what about bloomberg does he like >> look at what happened in new york while he and de blasio have been mayors and i was governor of florida people flocked out of there. they didn't reduce taxes they didn't reduce regulation. they didn't make it easier to get permits, the things that

make businesses want to grow and create jobs. that's not what he did >> mayor bloomberg de blasio i can have this conversation with you about. >> they came in under mayor bloomberg. i recruited him. this didn't just start it was my entire eight years as governor you look at climate change the climate is changing, but what do you do about it? what's the solution? you do things like i did, you build a good economy so you can invest and solve these problems. you look at it he can't get through a socialist primary. take everybody's money and redistribute it. that's what socialism is that's what the democrats do i believe in capitalism. i grew up in a poor family. >> the right and the left doesn't like him because he's a millionaire. he's a man without a country you think conservatives are going to like bloomberg?

they're never going to. >> i look at the senator here and i think to myself, he's an accomplished business person, he's looked -- he's a mayor, accomplished business person who's also given himself -- >> how much better would the economy be if someone competent like bloomberg 12%. >> for a total incompetent, things are going pretty well. >> happy holidays. >> happy holidays. >> it gets reallcoety mpent in there. fed ex here. we'll be right back. we call it the mother standard of care. it's how we bring hope to our patients- like viola. her team treated her cancer and strengthened her spirit. so viola could focus on their future. cancer treatment centers of america. appointments available now.

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so come ask, shop, discover at your local xfinity store today. i'm trying to explain. dom chu might be able to time for the market movers what, dom? >> i'm trying to figure out what's going on here this tall, that short? >> we're having a conversation trying to figure out what the proper woke priorities are 's like poker. is a straight above a three of a kind what about a straight flush, is that above a full house? >> straight flush is definitely above a full house. >> is a three of a kind -- >> straight is above a three of a kind and a royal flush is just a straight flush that's really high up there. >> so unlike us. >> all right i'm going to get going because i

know producers are going to kick my butt if i don't let's look at shares of eli lilly up fractionally. the drug maker was upgraded to an over weight rating from a prior equal weight from analysts at morgan stanley. it was at 150, it is 116 they like better growth prospects and business dynamics around the growth pipeline more investor prospects and their research and development we have shares of delta airlines which are up just about a percent or so. roughly 5,000 shares of pre-market volume. analysts at deutsch bank upgraded that stock from a buy rating they raised the target price from 70 bucks to 61. they like improving prospects and the ability for delta to leverage the partner network to alliance network, that's sky team network we're going to end on another transportation related stock fed ex down after the disappointing earnings from last night. today we have analysts across wall street revising forecasts including oppenheimer which

downgraded to perform from outperform they expect business head winds to continue and profit margins running at historically below levels becky, those shares, 7.5% down premarket. i'm trying to figure out the woke meter >> why do you always take us off topic, dom it's all your fault. >> i'm trying to -- i'm trying to play. get in there. >> well done we appreciate it. >> you've got it. let's dig a little deeper into fedex numbers ken hockster is joining us ken, trying to figure out what happened here. fred smith saying it's three different things adding up, what they need to keep spending, the loss of amazon, the trade talks and tariffs that have been put on that. how do you break it down which is the most important of the three factors? >> yeah, there's no doubt. good morning happy holidays there's no doubt there's three items for each, ground and express. the loss of the amazon business really is huge at both ground and express. the addition of the seventh day,

that's a high cost up front before you start getting the revenue from that. and then the shift to ecommerce, that is also hurting margins as you continue to roll out more to residences and less b2b as b2b stalls in the manufacturing economy. you had the loss of amazon last quarter you had the addition of tnt. they bought tnt over in europe that integration continues years later. they're still paying for that with high costs. again, the trade overhang with china continued to slow the manufacturing economy. so you had two really different things at ground and express, and a lot of them were really if he had fed ex related. >> we wonder what this means for ups numbers. what does this mean for fed ex it's low margin business, forget it was that the right call? >> yeah, you know, we believe it's the right call for fed ex

which had 1.5% it was a constant question they were getting as to the overhang for them, and so it highlights that they were -- >> if it's only 1.5% -- here's what i don't get if it's only 1.5%, why is it having such a big impact when they said it, it made perfect sense to me. when they explained it if it's still popping up, that's why i'm trying to figure out how much is fed exwalking away or how much of it is issues outside their control? >> great question. if you think about it, last quarter was the impact of losing express. this quarter was all of the loss at ground, fed ex ground it started on this quarter when you think about it you can blame amazon as having high fixed cost coverage. so a low margin business when it's in your bailiwick when you start losing that business, something else becomes your fixed cost coverage and the business that walks away ends up being the highest margin business, all profit so the similar impact for ups, taking that on when you have other business covering your fixed costs, this now becomes

incremental and very profitable. a great win for ups. >> what do you do right now in terms of fedex shares, do you buy it >> so we downgraded a year ago on fedex we were early and very differentiated in making that call back then but you think about the ongoing costs of tnt, you think about the management changes they've had. the inability to actually cut cap ex we would love to see them cut cap ex and grow free cash flow these are moves they are not making and that continues to be an overhang on the stock we remain neutral on the shares. >> ken, would you buy shares of ups here >> we would, actually. i think ups gets the benefit of growing amazon they've been automating their network. they've been doing a network transformation that focuses on automating the facilities. we've seen them go from flat margins to increasing domestic margins last quarter that was a surprise to the market we think that continues.

as you work through peak season with these additional volumes, we think ups actually handles this peak season quite well. >> ken, thank you. great to see you. >> thank you very much good morning coming up when we return, former sec commissioner dan gallagher is going to join us to discuss socially responsible investing which has become a little bit of a sticking point maybe more than a little bit for the sec. take a look at futures ahead of today's historic house vote on impeachment. dow looks like it will open up 14 points higher s&p 500 off less than a point and nasdaq looking to open four points higher. "squawk box" returns right after this time now for today's aflac trivia question. on this day in what year did nasa launch project score, the world's first communication satellite into space the answer when cn'ssqwk x"onnuesbc "ua mitting to aflac. why aflac? because health insurance doesn't always pay it all.

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wall street's growing interest, some might debate that, impact investing has drawn scrutiny from the sec which is calling for the creation of esg standards. kind of funny. on cnbc sec commissioner hester pierce voiced her concern. >> the notion that we can come together and we can get our regulator to focus on amorphous set of qualities other than the long-term financial value of a corporation i think we're fooling ourselves. >> joining us now, dan gallagher, former sec commissioner he's deputy chief of the firm's security department at wilmur hail it's all fine and good if people have their own sort of values and interests, and it's okay that they can invest in a fund that reflects theirs in this polarized country i can

certainly see -- i can see one fund that invests in something, you know, avoids defense stock i can see another fund that katers to people that want to go into space and want our aerospace companies to flourish and want patriot missiles to flourish you say that's fine. you want disclosure that they may not do better than other funds? >> disclosure how you got there. how the investment choices were made is it understandable how the esg product was put together >> i see it as a gap for moochs for people that are not that bright about what they're doing. >> there is inconsistency. it's truly apples to oranges i don't think there's a call for the sec to set standards i think it's clear there are no standards. there's evidence in the wall street journal about disclosure to investors >> you pointed out they don't do as well. >> no. no i'm not the person who pointed

it out there was a consultant who looked at calpers decision years ago to no longer invest in tobacco companies and what the consultant decided or determined was that it's possible given what they ultimately invested in instead of tobacco that they would have made $3 billion more had they actually stuck in it. so i think there's actually a reasonable question to be asked about all of this. the question i would ask dan is slightly different, which is let's say you're creating an etf or some kind of fund, some kind of index that eliminates coal oriented companies for whatever reason some people would call that esg. joe has an opinion that coal isn't problematic. >> right. >> is it the issue of sort of how they decided not to -- what do you want to know about why they decided not to invest in coal >> how did you get there how did you get to the decision

that this is an esg? >> that's my question. let's say -- i'm making this up. let's say t. row price says we've looked at five studies, the five studies say coal creates more c o2 and c o2 is a problem. joe kernen, as you know, has a different view around -- >> i've heard that. >> -- that and its relation to c o2 i'm not saying whose study is right. we can all determine -- we can all make our own judgment about that. >> right >> all you want to know is they looked at five studies >> as long as the asset managers are doing their work consistent with their fiduciary duty? >> because you think they're not? >> here's the issue. there's asset managers putting together products that investors want, and they do want these esg products, let's be clear >> right. >> then you have the raters. there's a whole separate bucket of entities. they're saying this is esg compliant and -- >> raters, when you say raters --

>> raters. not like corporate r-a-t-e-r-s, and saying -- >> not carl icahn. >> the raiders. >> no, i don't think he's -- >> the raters? >> yes there's a body of raters, including the proxy firms that are bringing the pressure to bear on the companies. >> right. >> right that's where the rub is. >> here's the thing. i just saw the esg fund. 18 billion what's blackrock at, 17 trillion, 18 billion should they be sold as giving you an advantage in performance and what you would get out of it or should they be sold as something you want to support because it's important to you? >> yeah. i think the latter. >> that's former the former -- >> i don't think you can sell the former the latter is fine i've always said water.org they lend out -- you can go into a

micro loan program and get your money. you might get it back. if you do, if they do really well, you might get 1 or 2%. that's fine. it's econometric a whole bunch of studies didn't. >> what happens if the funds just said, look, we don't know if we're going to make it better we just decide we don't know if we're going to get better performance. we know this is what you can invest in. >> absolutely. >> what happens if it has a line at the top and says, we don't know if there's going to be improved economic performance but we do have this view >> my guess is there's a lot of that in there already with these

disclosures. remember, the issue is on the companies, right are the companies pursuing getting pressed to pursue these esg -- >> when you say companies, you're talking about the -- >> the underlying -- >> in the -- in these funds? >> absolutely. that pressure being brought to bear. >> that's what does get more problematic. >> apple, i believe in the united states they're not fully removable, i think they're pretty close if not completely removable. that's their goal. is that a good thing or a bad thing? >> they've made a decision. >> they've made a decision to do that. >> the board, management has made a decision that's in the best interests of the company. >> so you're saying it should be second guessed >> no, it shouldn't be if they've arrived at that decision on their own.

>> let's say they feel like they're under a little bit of pressure i don't think they feel this way. they felt some pressure from an i.s.s. or some other organization you know what, if we do this, we might actually get in this other pool, etf that might help us. >> they don't get to say, like you said with the asset managers, this might actually not be the best performance for us we're going to pursue this. >> that's not consistent. >> this has nothing to do with this prime equity funds in the past year or two have moved from partnerships to c corpse, rig ? they changed their structure why? because they wanted to be eligible for some of the big index funds they weren't eligible for before. >> automatically you get more dollars and more investors can look at you. the question is, there are companies that say i want to do x on the esg front because more

dollars will be available to me. >> there will be a backlash. do you alienate someone like joe who says that's not esg? >> you do. the asset management issue is interesting but the issuer being rated piece of this is where the real tension lies. >> i could see all kinds of issues you know, defense contractors in addition to making weapons that kill people, they make patriot missiles and they do space we want to have a space force. you could have a whole movement based on employees not wanting to do any business with defense contractors. that moves to esg funds that have no companies -- that don't have anything to do with defense. suddenly you have this ridiculous misguided woke mission that you're doing something right. it's detrimental to the country and society. >> it's all theoretical until proxy season. >> god, i don't want somebody

deciding what is woke for me >> you should buy the regular index. >> i'm talking about companies, too. pressure on companies to be -- >> sure. >> we're going that way. >> this proxy season, i'll tell you, will be the most real pressure brought down on companies. >> at least with companies you can -- you can vote with your feet if they're going down this ridiculous woke path, i'm out and you can load up on it. we can't but if we could. >> coming up, a lot more right here on "squawk box. it's been a strong week for housing. the rate of home construction has reached numbers not seen in more than a dozen years. this morning we have mortgage application data as we head to a break. here's jim cramer last night on "mad money" talking about the health of housing. right back after this. i don't know a soul who noted that it was good news because housing punches above its weight so the strength will ben knefite

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welcome back, everybody. new weekly mortgage data is out. diana olick is here. she's got the details on what happened hi, diana. >> reporter: good morning, becky. mortgage demands takes a step back as interest rates flattened. it fell 5% with rephis leading the way down fell 7% all according to the mortgage bankers association it's likely because the average rate on the 30 year fixed did not move stuck at 3.98 with a 20% downpayment. rates were a full percentage point higher at the same time last year. mortgage applications to purchase a home were also down 2% during the week but 10% higher than a year ago economists at the mba are encouraged by the recent

strength in the housing market especially in new construction mortgage applications to buy a new home are up double digits year over year this morning fan any ni year over year this morning fan any ne mae is predicting the housing starts will ramp up to 10% growth next year and top 1 billion newly built homes in 2021. they're basing that on stronger overall economic growth thanks to a robust labor market and increased consumer spending. back to you guys. >> diana, part of the problem is we didn't have more housing starts not because people wanted them, there wasn't more supply, more out there what's going to change between now and then if you're going to see an increase of 10% or more >> what you have is a very severe shortage of the housing supply builders were not building that entry-level product for the past, you know, ten years because of that crash in the market so now you're seeing them start to pivot back to that entry level and the move up level buyers so you're going to see a lot more demand for that new

construction and hopefully we'll start to see more existing homes come on the market it's really, really tough out there if you're looking to buy an older home and you have to go out to the new construction. >> we've got to always think about what they want, diana. >> all about the millennials. >> we have to. we have to. >> forget the rest of us. >> here to stay. regardless of what we think. coming up, tesla's stock surge. elon musk and the company having an incredible run over the past month or so. the stock doubling despite negative headlines earlier in the year what changed why are investors jumping in now. we'll discuss after the break. at the top of the hour, impeachment and your money what today's vote means for your money and beyond "squawk box" coming back

tesla's reportedly considering cutting the price of its model 3s built in china. reports say that the company would reduce the price of those vehicles by 20% or more next year tesla working to lower costs by using more locally sourced components >> it has been quite a year for tesla. elon musk has had battles with the sec. he's unveiled two new car models and the company's report sent the stock soaring. since hitting lows back in june, the stock is up nearly 70% joining us with a review of

tes tesla's teflon year, we have bethany mcqueen and collin rush is managing director and senior researcher at oppenheimer. i'm going to start with you, collin you have an outperform up 70% from the lows do you think they've made it through the most difficult days? >> we do think they have the issue is they've forced it upon themselves and it was unnecessary. they're hitting their stride in terms of manufacturing costs and driving them lower hearing about the potential price reduction in china inour view is endemic of their ability to drive costs out of the production process and we think they're going to pass that profit on to consumers. >> bethany, the big question is, look, he had a surprise earnings beat much better numbers than had been anticipating. can he follow that up in the next quarter has he bought himself time or is he setting standard he is not making

>> for sure he has bought himself time which is what musk has excelled at. reports of my death have been greatly exaggerated, right that should be musk's theme song essentially. as long as he can pull out quarters that buy the stock, that buys him a life line. people would argue that the numbers aren't quite as good as they appear on the surface you have to remember that last year at this time musk promised tesla would be profitable on an earnings basis and cash flow basis going forward. like many of his promises, that did not materialize. >> what are the numbers behind the numbers that concern people? >> so just the games that were played in order to produce -- arguably in order to produce profits in third quarter and cash flow. are those sustainable. with the expiration of the electric vehicle tax credits coming, you could ask what that might mean for the stock as well. >> what's the answer to those questions? >> i would disagree with that

assessment if we look at what's going on with daimler and the changes in europe in terms of emission standards, tesla's got a billion dollars of free cash coming from credit sales in europe that no one's really accounting for in the models going forward that we see coming forward for a couple of years. >> that goes back to bethany's point. let's just -- i'll let you finish your second point in a moment let's focus on the first point if you are profitable because you are selling tax credits, that's back to bethany's first point. can you be profitable just of your own right >> they're at a point where volumes are high enough that they can be profitable without the tax credits. we're saying there's another billion dollars of cash available to them over the next two years if not longer given where the european holdings are. at this point, there's an awful lot of leverage on volume on the platform to control operating costs. >> that was your second point, operating costs? >> yes.

>> bethany, going back to that if they're big enough, if they have -- >> if, if, if. >> are the shorts disappearing this is a stock that has been so heavily shorted? are they willing to come back in >> the shorts are still there. this is a religious battle, right, between shorts and longs. people say it doesn't matter the company's performance will tell the truth at the end of the day, but it won't. >> why won't it? why do you say won't >> as long as elon musk can obtain access to the capital markets he has a chance to pull it out >> right. >> if he loses access to the capital markets, then the entire story changes. the stock price literally influences the future of this company. i wouldn't count him out if there are enough believers if that shuts down, then the story changes. so that's why the battle is so pitched, because it literally influences the future. it's not just -- >> you've got to feed the beast for ten years? >> what's the count? >> for ten years he feeds the beast? when does the beast start feeding him? >> that's the question

it goes back to colin's point. are the profits sustainable? if they are sustainable, then it goes away. he doesn't need access to capital markets. >> show my the chart. >> do you believe musk, do you not believe musk >> i don't think this is about elon anymore i think this is about what's going on in the market with cars consumers are going towards premium and sustainable solutions. they're willing to pay for that sustainability secondari secondarily, four of the last five quarters have been sustainable. they have $5 million of cash on the balance sheet. they're growing with an awful lot of operating leverage. i think your point was relevant a year and a half ago, two years ago. the car market is moving and they're ahead of the game. >> what's sustainable about bigger suvs and trucks. >> if you looked at that truck we're not counting on that -- >> i'm talking about what people are buying. >> that's in america you have to look on a global basis. people are buying smaller cars they have a lot of growth in europe we think there's an awful lot of

demand as it demonstrated for the model 3 and model s and x. they're continuing to put numbers up in terms of sales volume and gross margin. i'm not sure what the debate is with their sustainability. >> is it a sustainability question or is it a multiple question >> i think it's a multiple question we've got a debate around technology evolution within the auto market. you're seeing what's going on with gm in terms of having to reconfigure their technology and manufacturing base daimler is laying off the manufacturing team they came out with a range it's a subpar, you know, solution or product versus what's going on at tesla i kind of don't see the arguments here. >> i would argue there's still a sustainability question here. >> about how sustainable the profits are going forward and whether musk is going to need to raise -- whether tesla needs to raise capital again. i would argue there's still a sustainability question. i would argue there's a question over the -- >> to live and grow?

living and growing are two different things that's why i said multiple you get a multiple for growing you don't necessarily get a multiple for living but you don't go to zero for living either. >> i think it's going to be hard to kill tesla, flat out kill it, right? somebody is going to want it the growth question is a big one. i still think there are questions around how sustainable the production actually is and whether they can pull it off they've made a lot of promises thus far and everything you're saying hinges on their ability to produce. >> where are you >> we're over $400 on the price target >> based on what >> based on future operating leverage we're looking at over $20 of earnings. >> what's your comp? >> tell me what the comp is. this is a disruptive company in the market. >> i'm saying what automobile maker do you know -- >> well, you're talking about two different things if you're talking about automobile maker or talking aboutautonomous. we have issues in terms of what

they're doing with testing on their customers. i'm not convinced on that. but i think they have a huge advantage with miles driven on the roads with their vehicles. >> we've got to run. >> thank you for being here. a lot more on "squawk" this morning. the house of representatives preparing to vote on articles of impeachment. we'll talk with senator mike brahn and what it means for president trump's plans. and charlie mcelligott andee s if markets are set up for a 2020 rally. "squawk box" returns after this. and to manage this risk, the world turns to cme group. we help farmers lock in future prices, banks manage interest rate changes and airlines hedge fuel costs. all so they can manage their risks and move forward. it's simply a matter of following the signs. they all lead here. cme group - how the world advances.

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this hour on "squawk box," impeachment. white house in crisis. as congress moves closer to impeachment, we'll bring you all the market matters that matter coming up, inside president trump's strategy moving forward. how much a strong economy matters for his political strength we'll break down the mounting advertising costs surrounding impeachment and a top strategist who called some of the biggest market moves this year weighs in the final hour of "squawk box" starts right now.

good morning welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square. i'm joe kernen along with becky quick and andrew ross sorkin u.s. equity futures are in the green. the s&p just turned red. down a couple of ticks as you can see. the dow jones indicated up 18. that will be another high. nasdaq at another new high depending on what happens to the rest of the session. treasury yields are about where they have been it's been 1.7 to 1.9. >> in very recent days although you had different numbers when the fed came out with fmoc minutes. it looked like the fed was going to move again.

we've had strong economic data. >> 18th and the 19th. >> the 18th? >> the year's ending soon. >> it is. >> next week i think it's christmas. >> yes, you're right. >> then new year's. >> and then it's january 1st. >> i never took my vacation days, did you? >> not all of them >> i still have time we don't have time. >> no. >> it's really going quickly. >> that's okay we love what we do. >> we do. we are expecting a vote in the house to impeach donald trump. that vote is not likely to take place until later this evening and it will be proceeded by hours of debate, potentially lots of procedural votes for lawmakers. however, when all is said and done, the democrats are expected to impeach a president for only the third time in history. we're going to begin with the question of president trump's strategy when it comes to surviving the aftermath of the impeachment process. eamon javers joins us now with more. >> reporter: there is frustration here at this white

house. the president does not like the idea of being impeached by the house of representatives but aides say that's what's expected to happen today. expressing some of that. can you believe i'll be impeached today by the radical left do nothing democrats and i did nothing wrong. a terrible thing read the transcripts this should never happen to another president again. say a prayer i just talked to a senior administration official who tells me the staff here feels battle tested from three years of the trump administration, all of the scandals and controversies they've been through, including the mueller fight and others leave them with a sense that this is sort of just another day at the office here at the white house even though it is a momentous and historic day a lot of the issues that the president can right a political shift including prescription drug bill that they feel does have a significant chance of

passing in a contentious and divided time period. trade wars, immigration and the border wall will be heard about tonight. tax cut 2.0. so the opportunity here for this white house to move past this if this goes as expected and the president's impeached today, the timing winds up such that you might see a state of the union address by the president of the united states relatively soon after the impeachment trial concludes in the senate. this is all going to be about igniting the base out on the campaign trail the idea here is that there will be a lot of votes against him but needs to fire up the energy level of those voters who are with him he needs every single one of

those 2016 voters to come back this will be a fiery time. he views his vindication as a re-election. that's what it will be about once we get pass the congressional debate >> at the very worst, they haven't moved as much as probably the democrats had hoped in terms of drumming up support. the white house raised a lot of money in the last week do you know anecdotally, are candidates on the democratic side also using this to raise money and we're back in our corners? who's winning in terms of 2020 who's got the pr on their side

>> it's such a divided year. this is not going to be about who's across the aisle this is going to be both camps firing up their bases, getting that intensity and emotion as high as possible. >> what about independents they seemed to have moved a little bit against it. >> i think that's right. i've talked to an official here. they suggested that they've seen what this person called a slow turning of the ship. they had hoped that the numbers would turn more quickly than they have. they feel like the impeachment numbers are going in their direction. >> eamon, what does this mean in terms of trump's agenda in terms of what congress would be willing or not willing to pass in the next year. >> reporter: this is an election year not much passes in an election year this is not going to be a year about big legislation, not going

to be about bill signings. this is going to be about rhetoric and red meat on the campaign trail the prescription drug thing is the one thing they think has the opportunity to move in a bipartisan way starting in january. beyond that, there's not much in the elective cover here in washington in is going to be an all out bare knuckles brawl going into 2020. >> eamon, thank you. for more on the potential fallout of impeachment and what it means for president trump's agenda, let's bring in our guest. senator mike brown senator, thank you for being with us this morning >> big honor. >> how are you seeing this politically and economically and what it means for the potential of any legislation getting done in washington? >> politically the song "at last." we've been dealing with this idea of impeachment, unlike with nixon and clinton, there was not

the pronouncement that we're going to impeach and try to get rid of our president before there was actually some crime. here the democrats have to be disappointed politically that the mueller report flopped, they tonight have a lot of time five senators running against the senator to rush this through. mitch mcconnell made a perfect point. they're now trying to do what they should have done more thoroughly in the house and adopt rules and further litigate so when independents in the swing states started showing that they were getting enough of this two, three weeks ago, it got to be excruciating for them politically. when it came to the economic effects, we are going to see once we remove the haze and static of the impeachment, that the economy is as strong as it's ever been and people will hear more about it.

household incomes going up 5,000 bucks a family when it only went up 1,000 in the 16 year stretch bush and obama i'm a mainstream entrepreneur and i can tell you and i know you had rick scott on earlier. we are probably the two people in the senate that can say is this economy good? yes, it is yes, president trump is battle tested he can get through this. i think his agenda and the benefits of it have become very clear. >> in terms of what you see in the economy, how important is it to reach a phase one deal with china, at least an agreement to cease-fire and stop throwing rocks at each other? >> well, that was a part that was so sanctimonious on the part of people berating him where they've been talking about china and so forth president trump had the nerve to take them on geo politically, china is our

challenge in the future. they're so much more dependent on us than we are on them. that was president trump's belief all along we see that coming to fruition you take that, you see the usmca and the best economy we've ever had and the fact that they have been wanting -- what got me when i looked at the clips from november, december '16, january before he was inaugurated, people talking about removing a preside president. that has teed off a lot of people i think the ballot box will show that in 2020. >> i think if you look at the country, both sides are pretty entrenched people who thought he should be removed before people who didn't think he should be removed before you're talking a pretty thin margin of people in the middle i just wonder as we look at both sides becoming so entrenched, is there any chance that the two sides could work together to pass other legislation next

year is eamon right, this will be a situation where very little gets done i know that often happens next year but this year would be less getting done. >> there were 80 u.s. senators that weighed in on health care if that's not getting a 2x4 across the head from the health care industry, i took health care on 11 years ago in my own business, found a solution because it was that big a deal 11 years ago the industry is digging in not wanting to reform itself but, yes, on prescription drug prices, transparency if they fight that when almost every senator's got an idea how to make them better at it, i think we'll come together on it. sadly, that probably will be it because it's like the hatfields and mccoys here, one side believes in big government and more of it and even many in my own party, as you see, the nbaa which we voted on, the budget

today, there aren't many of us who know how to fix it or have the political will to do it. but health care i think is the critical issue i think climate in the long run will be something that we discuss and i'm glad that some of us on the republican side now are involved in a discussion so we don't get rolled like we did with obamacare back when we drug our feet. >> i want to thank you for your time i'll have you back to talk more about prescription drug prices, other issues in health care, too. >> thank you. coming up when we return right here on "squawk," the fallout for the bull market on impeaching a president and what the savviest investors will be watching in the new year charlie mcelligott joins us right after a quick break. ♪

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mortgage applications fell 5% refinancing activity declined. the average 30 year mortgage down 3.98%. earnings in from food maker general mills, profit of 95 cents per share. that was above estimates there was a 60% jump in sales at blue buffalo pet food. peugeot and fiat chrysler had a binding deal markets making more gains yesterday and a little bit higher for the fifth consecutive session. the dow in the longest winning streak in three months and futures this morning up about 25, 26 on the dow. the s&p is positive again. up about a point nasdaq up just about 9 and we know that today is the

impeachment vote it will be had in the house of representatives. joining us to talk market strategy in the last few trading days on the decade, charlie mcelligott and cnbc markets commentator mike santoli so impeachment is today. market's been trading a series of new highs how do you -- what's the calculus there what is happening? why is it such a knee-jerk reaction in the markets? >> i think the simple acknowledgment where it stands from the senate perspective, it's another historical footnote it doesn't impact the transition we've seen from the start of 2019 story which was this fear of the end of cycle trade metastasizing into a recession because of the china twrard drar dynamic. now it's repricing of growth

higher into a much more optimistic outlook into 2020 that's where the focus is. you've pivoted back to effectively this goldilocks era of lower rates, monetary policy that's supportive of expansion on top of 2% gdp growth. it's a great environment to be long risk. >> you think that market participants are factoring in what this does for the election in november 2020 and deciding that it may be a positive or maybe not a negative >> i think there's nothing incremental or new to price in to the electoral probabilities based on what's going on with impeachment. i think that's what the market is effectively telling you if you looked at the betting markets for hand did i capping the election, it hasn't moved. i don't think the market's ignoring anything but i don't think they're seeing anything that says it changes the story in november. >> what if the impeachment proceedings had really shifted

to 70% that people were favoring removal from office and what if that had swayed 10, 12, 14 gop senators. >> yeah. >> what would the markets be doing? >> i think the market gets nervous. >> goes down >> probably goes down a little bit. all right. >> we can do something -- so we can deduce something >> right you can deduce the market's non-reaction. >> okay. the analog that i would make was kind of within two months ago where the market began to price in that elizabeth warren move higher with regards to her probabilities, significant amount of hedging that went on into that march period where you'll be coming out of the primaries with regards to the impact of policy on corporate earnings, on the loss of the dollar as kind of this status

with regards to the u.s. tax profile for global corporates, with regards to closing inequality gap, with regards to mmt. all of these policy potentials that, you know, frankly would be a dollar outflow, capital outflow growth negative. that's where this could have gone if you saw a really aggressive shift and there was some sort of smoking gun on the trump stuff. the fact of the matter is, people look at this i think by and large as a pretty politically driven dynamic and pretty divisive. we know that is kind of the state of the world right now it's not changing where people stand going into november. >> yeah. i mean, you have -- i think it hasn't changed the story where you have an economy that, you know, on a neutral field should have a 60% presidential approval rating and you don't you haven't had that that hasn't changed for three years. you've had that polarization interestingly, the dynamic that

charlie is talking about, everyone is aying, hey, we've got this growth revival to price in now it seems like as we get into the end of the year, people are kind of like topping off their tanks of risk and buying high yield bonds, loving the credit, loving the cyclical stocks on the hope that the numbers confirm that going into next year >> so you don't see at this point inflation, the fed, corporate profits, global growth none of those things next year seem to be a problem at this point or what's the biggest worry that you would look for next year to stay long just valuation how long the cycle is in the tooth? >> so inflation is always going to be the volatility catalyst. certainly in a world that's, you know, short, cynical of the concept of inflation in this day and age and that's where investors still are. we call them the three ds, right? the growth of debt is

disinflationary. demographics are disinflationary. tech disruption is disinflationary. that's why i think from a contrarian view, i zig when others zag, i look at where the crowded market narratives can tip over in this case, the sudden shift to a much more optimistic view into next year looks like the more extended story. i don't see a fed which is running a completely asymmetric policy from here on out, which is that there is almost no bar to cut further and an impossibly high bar, meaning suspended inflation beats on hike on top of what i believe in terms of the response to the reap ppo defending dynamic. it will buy duration, move into buying u.s. treasuries instead of just bills. the potential with this benign inflation backdrop for rates to move i don't see bonds selling off. if bonds don't sell off, this kind of myth of the resurgence

of cyclicals and reflation is going to be just that. so like my favorite trade, and i work in a very tactical one month horizon. my favorite trade is a one month reversal strategy which is basically completely doing the opposite of what just happened or what is happening right now in december. january is the best month, going back to 1986, for a one-month reversal strategy. i think the phenomenon this is picking up is how much passive rebalancing, how much quantitative system rebalancing takes place in the market these days and so you're looking at a 3.3% return in january's alone from a one-month reversal strategy into a month that's the second best seasonal for ten-year treasuries dating back to '86 what would a reversal strategy look like? you'd be short all the stuff that ripped this month the best two performing s&p sectors, energy and becks. you'd be long the stuff that's under performed defensives which are the bond products.

this one-month reversal strategy from a market neutral perspective, so it's net flat. you're long something, short something, is up 36% year to date versus an s&p long only total return, it's up 30%. that's incredible. it goes to show how much impact passive has in the market but also, too, how much of a narrative over shoot we're potentially moving into. i think we begin 2020 with 10-year 1.85 right here. >> okay. thank you. >> headed to a mining town to get into a saloon fight? >> silver and gold silver and gold. christmas time of year >> all right thank you. >> i think he means thank you for shaving. >> thank you for sharing -- sharing. >> as he gets older there could be a whole career of santa. >> it's coming inevitability. >> i was impressed and envious there's no way >> no. >> it's a tradeoff, guys

>> manley man. >> i don't care how long i live, it's not going to happen for me. >> comes in patches. >> all right when we come back, on the trail of the big ad spending surrounding impeachment, as the house gets set to vote, we will tell you who's laying out cash, the messages they're pushing and why. stay tuned you're watching "squawk box" on cnbc

>> s&p futures >> cash to take advantage of the unfolding drama. reportedly causing some internal divisions over that company's stance on political ads. we'll cover it and much more when "squawk box" comes right back

welcome back to "squawk box. this is cnbc and we are live from the nasdaq market site in times square let's get you caught up on some of the stories that investors are going to be talking about

today. china based company ucommune plans to go public on the new york stock exchange. they say their ipo could come as soon as next week. hedge funds and money managers are ramping up their bets against natural gas. according to figures from the cftc, natural gas prices will decline are at the highest level since 2008 natural gas prices are down more than 20% this year and biurger king is rolling out a new promotion. it's offering it free for travelers whose flights are delayed. you have to download the restaurant chain's app they will receive a coupon for a free sandwich. that promotion is on through december 30th. we are awaiting some other news too, andrew. >> we are. the start of the impeachment proceedings. the house expected to gavel into session. supposed to happen at 9 a.m.

eastern time the political battle is not just happening in washington, it's being fought on the internet, on the air waves, across the air waves. ylan mui joins us. >> reporter: we are in the middle of impeachment ad blitz and there is big money at steak. >> investigation, lies, witch hunt jared said they would launch the investigation anyway abby saw big drug companies ripping off iowans she's leading the charge to cut drug prices. >> lower drug prices abigail spanberger, thank you for fighting for us. >> reporter: two powerful republican groups are spending more than $10 million on impeachment ads going after vulnerable house democrats in red districts. they're trying to energize the base and solicit donations on the other side of the aisle, that money is being matched by a

new ad campaign. since this summer the group has spent $5 million in ads. the latest wave is airing across 16 tossup house districts. it's being billed as a thank you to those members for supporting a bill to bring down the cost of prescription drugs a little bit of counter programming to impeachment the big bazooka is coming to mike bloomberg he has donated $10 million to a democratic super pac to provide more support that money hasn't even been spent yet so just brace yourself for another round of ads that are likely to launch around the time of the senate trial back over to you >> ylan, stick around if you could. we want to continue this conversation as we go from politics to tech now "the wall street journal" says a rift has developed among senior leaders at facebook over how to respond to criticism of the company's impact of u.s. politics according to the wall street journal, facebook's first investor peter thiel is at the

source of the debate thiel is advising mark zuckerberg to continue accepting politici politician's ads without fact checking them. emily glazer is one of the authors behind that journal story. jim beyers is with us. he's author of one of my favorite newsletters, beyers market emily, let me start with you you know, there seems to be a rift, from what i gather, both in terms of what i've heard but your reporting directly, that peter thiel on one side and other board members on the other side who seem to actually oppose the way mark zuckerberg is approaching this issue >> indeed. so they're actually both senior officials, executives and board directors on one end of it and peter thiel on the other he's saying when it comes to politics, stay the course, facebook especially over political ads. whereas, other senior officials

really want more changes right now. >> so the big question i have to ask, i'll go to dillon on this, dillon, when you think about peter thiel's perspective, is it a principled view or is it a political view because clearly -- i don't want to say clearly i know i'll get in trouble for saying this. it feels like if they were to change their policy, the policy may help one side, or the other. maybe that's a polite way to say it, dillon. >> i would argue when it comes to peter thiel, it is a principled view the frustration with the rift that he's caused among leadership and the board stems from the fact that he's conservative and that makes him an outlier in silicon valley no, i do believe this is actually principled. by the way, i think you would see many progressives, many liberals including even senator elizabeth warren who would argue there are changes to the political ad policy are not so

clean cut as facebook's critics would suggest. i think after twitter chief jack dorsey went out and put a ban on political ads it became very clear how complex and nuanced the issue was and how hard it was to issue a blanket ban on political advertising. i think peter thiel has been a close advisor and a voice in the ear of mark zuckerberg for several years. i don't think that's new i don't think the political rifts he's cuesing are all that new. netflix chairman stepped down due to peter thiel's politics. bowles stepped down. this is significant. at the same time, what we have is a chief executive who is looking for a broad base of opinions across his advisers and across his board and one of them, peter thiel, is an

influential voice in his ear. >> emily, what's your take do you think there's going to be a shift? we've seen what twitter has done we've seen what google has done. do you think there's going to be real movement? >> i do. i think that there are likely going to be changes. we reported that the other week, at least when it comes to political ads. >> right. >> facebook has said they're looking for possible changes i don't think they're going to ban them altogether. that would be surprising and i also think what i've heard from reporting is they're taking their time to figure out the best approach. we know one area they're looking at is targeting and how specific you can target that's something where both twitter and google made changes as well. and in terms of, you know what dylan mentioned before about tension and changes in terms of what peter thinks versus others on the board, i think what's important about this right now is, yes, peter has been an advisor to mark for quite some time there have been different voices on the board for quite some time, but politics are front and center for facebook in a way that they have never been before and it's not just political ads.

there are a lot of issues here with privacy, security, transparency and so we're really at this cross section where the board we know is disagreeing and senior officials are disagreeing on a number of issues related to politics. >> ylan, back in washington, how do these issues play in terms of how you think political leaders and regulators look at facebook given that they're the target of an investigation that's ongoing? >> reporter: yeah, i think the facebook platform is incredibly important, both to the candidates and to president trump himself. i mean, even though facebook has said that political advertising is negligible to their bottom line, we were looking at data that showed that president trump has spent over $2 million on impeachment ads on facebook alone just since the impeachment inquiry was announced. this is a really important way for them to reach and energize their voters i think -- >> ylan, let's have an -- to the

rest of the panel. let's have an honest conversation at least in my view, if facebook were to shut down the advertising, not just of the president but political advertising across the board, you would have an outcry and how would that outcry manifest itself and i ask this of emily and dylan in terms of regulators rachetting up what's going on in the investigations wouldn't you imagine that would get worse and that plays into the thinking. >> they're already doing the investigations they're already investigating facebook over antitrust concerns they said i think it was last week that they want to wrap up the doj investigation by the end of next year, sometime next year they're moving at a rather rapid clip. >> you don't think the outcome changes based on what they do? >> reporter: we already know how president trump feels about facebook he's made it very clear. i don't know that additional changes would rachet up the pressure even more it is already clear that this

administration has a spotlight on these companies and they're investigating them very closely. >> dylan, do you agree with that >> i don't i respectfully disagree. i think making changes to the ad policy would increase the regulatory pressure because all of a sudden you would have a lot of lawmakers asking questions why people are making decisions what people can and cannot say in political ads go back to the decision that twitter chief jack dorsey made he was celebrated for 24 hours for putting a blanket ban on political advertising. when he actually implemented the policy several days later, that isn't what it looked like. it was too hard. it was too mercky. twitter was putting too much influence on the process not just on republicans but democrats and small groups and the ability of that policy to help entrench powers, i think all of those complexities became very clear to people no, i don't think you can institute a blanket ban on

political advertising and i don't think lawmakers would be particularly pleased with mark zuckerberg dictating what political candidates can and can't say in political advertising. >> emily, final word to you? >> i agree with dylan, but i do want to point out that there's a difference between banning ads altogether, which is more or less what twitter did when it comes to political ads, versus potential changes at facebook that might be tweaking what is or isn't allowed, such as changes to targeting, whether they require citations for fact checking like cable companies do, cable networks so i think right now we definitely want to wait. we know there is divisions we know there's this agreement with senior levels and this isn't just on politics political ads. this is on a whole bunch of matters. so i think it's a wait and see moment for sure. >> okay. emily and dylan on the west coast, thank you ylan in washington this morning, thank you as well. coming up, we're getting closer to the start of the day's

impeachment proceedings on capitol hill the house expected to gavel into session around the top of the hour take a look at the futures all in the green we're going to talk much more about what today's vote means for d.c. politics and the markets when "ua b" tus.sqwkox

it's just under an hour to go to the opening bell on wall street dominic chu is back. what's leading the way, dom? >> how about some news to start

off with, becky. a lot of them moving on news general mills, those shares are higher by around 2% premarket. around 80,000 shares of volume the packaged brands, they reported better than expected profit on sales pretty much in line with estimates. stronger pet food sales did offset weakness in yogurt and snack bars as a result those shares up 1.5% next up you have shares of amc entertainment. it's down 3% pre-market. 130,000 shares of volume the movie gets downgradeds to an underperform to neutral. the target price gets cut to $7. it was 14. they cited among other things a tougher year in terms of compare as soon as over last year and more pressure from netflix and other small screen operators and media companies. those shares off 3%. we'll end on shares of another company.

viacom cbs they reiterate the buy rating and 50% price target they call this their favorite media stock for the year 2020. they cited cheaper valuations, streaming assets up side for fees and charging local tv stations to retransmit that those shares up half a percent back over to you. >> dom, thanks. the house gives up the vote on the impeachment of president trump, the president fired back in a letter to house speaker nancy pelosi trump denouncing impeachment effort as a partisan coup. for more on what we should be watching today in washington and on wall street, let's welcome on the rhino side, doug greg who served as governor and senate. on the dyno side, evan bye formersenator for indiana. we're going to have agreement. you guys are somewhere in that nether world in the middle have i got that right or am i wrong? >> i usually agree with evan

i'm a big admirer of evan. he's a super guy as i agree with you, joe -- >> a lot. >> you've moved a little far left you were moving left. >> i'm moving left i'm with mrs. gray your more conservative -- >> then you're moving hard right. >> evan, i'll start with you i looked up something on google maps i was trying to see how far indianapolis was from peoria because i'm trying to figure out how this is playing in the midwest. you would know in indiana. what we're really trying to figure out is the impeachment we're going through today, is it helping one side more than the other or is it just helping both bases get even more tribal and more entrenched in their position what do you really think what are you hearing in indiana? >> probably both in my hometown of terre haute it's closer to peoria. return judd's compliment

we have to go pragmatic. happy holidays to judd and all of you joe, i think what's going on, out in the country folks probably think, look, what the president did in ukraine wasn't quite right but what does this have to do with me what does this have to do with my job security, the cost of health care, the cost of college? my concern for my friends in the democratic party, i think what they may be doing here is counter productive because what really matters is the next election we know what's going to happen in the house we know what's going to happen in the senate. what we don't know is what's going to happen in the next election if the democrats look like they're pursuing a course that's divorced from the 6 or 8% in peoria, my concern is it may actually help donald trump in his re-election campaign and eventually be self-defeating for the democrats. >> doug? >> i agree with that you know, i think most people go about their day. they don't think much about the issue. it is not a serious issue in

everybody's everyday life. it is unfortunately a serious issue because we're removing an elected official that's serious unfortunately the house democrats in my opinion have democrats in my opinion have really trivialized it. hating the president is not a high crime and misdemeanor, but that's what the core of this is all about. in fact, to carry evan's point further, they're almost turning the president into a sympathetic figure here which i thought was virtually impossible to do, but they are this is so outrageous. to pursue this course, and it is totally divorced from what most people are confronting in their everyday issues of raising their families, going to their jobs, getting their education, it is just not in touch with main street america, at least here in new hampshire. >> senator gregg, you've written recently about -- i was kidding about republican in name only. you think president trump is

conservative in name only. and you got a lot of problems i think with -- i think it is with not addressing maybe entitlements and a bloated -- bloated government spending. but you must be picking and choosing because there is certain things, tax reform or deregulation, because where the economy is right now is obviously something that most conservatives would take some pride in just -- it is not across the board for you. >> there is no question, but this president has been extremely successful in the area of tax reform. and reducing the regulatory interference with our marketplace. but on issues like spending, we added more debt, on issues like dealing with our allies where he goes to london and insults the countries that stood beside us for years and they're critical to us going forward in this fight against terrorism, on issues of just defining our nation up rather than defining it down, the president is supposed to be the light for

future, not a negative force of about where we are i think the president has stylistic issues and substantive issues if you're conservative. i give them 100% marks on cutting taxes, and reducing regulations and moving this economy forward where it had been stalled. >> senator bayh, everybody remembers your dad and a great political family and everything. and you obviously are observing the democrat nominating process here i guess i can't get you to speak totally frankly. do you ever shake your head in wonderment what is going to happen? what would you like to happen, what do you think is going to happen >> in the democratic party, joe? >> in the nominating process for the 2020 november election >> well, you know -- >> you have a favorite >> i'm a bit old school in this regard and my friendship with judd and several of my other republican colleagues is -- of

that my father used to have close republican friends, they would come over to our home for dinner, they would disagree on policy, disagree about things like that. they were americans first. they knew we had more common than divides us. my hope is we nominate somebody who can actually speak to the middle that you talk about and help bring us together articulate an agenda of change for the country, don't sell out your policies, don't demonize people that have been successful that's not right just as other sorts of division are not right -- >> who would that be >> i think joe biden can speak to that. i think amy klobuchar can speak to that, perhaps mayor buttigieg from my own state, michael bloomberg might be able to speak to that. not a polarizing figure that will just further divide the country because we are a great nation, we can have a great future, but we all got to realize we're in this together and eventually find some kind of common ground to move forward together and we're not getting that now. >> so in a word, judd, you think

this helps the impeachment helps the republicans more or the democrats more and same question to you, evan, judd, you start. >> i think it is the nonevent. i don't think it will influence the next election at all i think the next election will be influenced by bases, both bases activist, right now. more importantly by the economy. if the president maintains this economy in the next election, he's in good shape >> all right how about you, senator bayh. >> i would agree with that i think it is for most people a nonevent for that 6% in the middle when decide the election, they want us to focus on the issues that matter in their daily lives. i think it all depends, joe, i think if we nominate someone perceived as being a divisive candidate on the far left, i think that really helps president trup it really comes down to which path the democrats choose. and the course of the economy, which right now looks like it is pretty strong, and that all as you know tends to favor the

incumbent. >> okay. how far isser have sail versail. i like that it is called to versailles >> we should invite you to french lick. >> i was there last time i was there it needed to be updated. >> nice place, but not quite as interesti ing as it sounds. >> wow, evan, you go >> you can tell he's out of politics >> that's not bad. that's not bad thank you. thank you. thank you to you both. >> happy holidays. >> let's check in with jim cramer at the new york stock exchange jim, what do you think markets haven't paid much attention at all to what is happening impeachment. >> no, they haven't. just to date myself, i work for the election of senator bayh, but it was burt bayh. >> his father. >> i thought he was the right candidate. worked hard. the reason i liked him, he was a

uniter trying to bring country together and at time that was very fractured and just incredible to listen to his son, think, wow, there is a guy saying the same thing and how smart it is. yeah, this is -- this has been a good time for the stock market if you know that the other party is not going to take action or vote against what the first party does, going back to 1998 we're going to run into a rough period, during the vote, in the senate, because there are people who say, you know what, there is going to be some shock, kind of like the october surprise, we used to hear about then we go back to making money and look, i wish that i -- i'm not political, i'm just looking at history and you want to wait until day two of a vote, not this vote but the senate, and -- >> all right, jim, thank you >> birch bayh was the greatest. >> evan was my governor when i lived in indiana too knew him when he was governor. great to see you, jim.

we'll see you soon programming note, cnbc will have continuing coverage on air and online of the impeachment proceedings that are taking place in the house much more coming up on s"squawk on the street. stay tuned "squawk box" will be right back.

quick final check on the markets, dow looks like it would open up about 12 points. s&p 500, we'll call it off, but just call it almost -- nasdaq up about six points right now make sure you join us tomorrow "squawk on the street" begins right now. take you to a live shot of capitol hill, where the house of representatives is about to gavel in and where we expect a vote later today on hr-755, the impeachment of the president of the united states. good wednesday morning withing to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. we're coming off five days of gains and another one today would give stocks the longest win streak since march and april. we're going to be faced whether we like it or not with the blizzard of headlines all day long and an hour of debate on the rules and then six hours o