. good morning it's 11:00 a.m. on the floor of the house of representatives, it's 11:00 a.m. on wall street, and "squawk alley" is live ♪ good wednesday morning welcome to squawk alley. i'm carl quintanilla with morgan brennan and jon fortt. obviously an historic day today at least in politics as the house of representatives kicks off a day of debate expected to end tonight with the impeachment of the president of the united states

eamon javers joins us this morning with the latest. good morning. >> reporter: good morning, carl. it's oddly quiet here at the white house today. we don't see senior administration officials out here defending the president or making arguments we don't see any events scheduled with the president publicly, other than his departure later on this afternoon. nonetheless, the president has been venting some of his frustration that we saw boil over in that letter to nancy pelosi yesterday and continues in tweets this morning the president saying can you believe that 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 and, carl, having covered the last impeachment, so far today this day feels very different than the day on which the president -- president bill clinton was impeached back in the late 1990s on that day, there was a real sense of uncertainty about what would happen it was magnified by the fact that the sexual scandals going on at that time were sort of evolving and hitting a lot of

figures, including the speaker of the house, the man we thought would be speaker of the house, bob livingston, resigning on that same day in dramatic fashion. we don't see any of that chaos or high drama today. in fact everyone in washington now assumes they know what's going to happen here and the forecast is for the president to be impeached today and then acquitted by the senate in january. we'll see if that forecast holds true, carl. >> eamon, his twitter account is especially active today, mostly retweeting others this morning at least do we think that sense of calm will translate to battle creek tonight? >> reporter: i don't i think this is the calm before the storm to use an overuse cliche the president is clearly taking to twitter venting some of that frustration. tonight aides like the idea that they'll have a split screen moment tonight the house of representatives may still be impeaching the president even as he takes to the stage in battle creek, michigan he's going to be in front of they estimate about 10,000 adoring fans in a state that he

needs to win, that he's looking to win in 2020 and the message will be america loves the president, or at least these supporters in michigan love the president and the president i think there will deliver his response to what's going on here in washington today >> eamon, thank you. >> reporter: you bet. so how do today's impeachment proceedings impact investors? as the end of 2019 quickly approaches, joining us is ben mandel along with yanna barton ben, i'll start with you the fact that this does seem to be an event, these impeachment proceedings, that the market is largely shrugging off, why why is that the case with clinton the market did not shrug it off so why such a different reaction this time around >> i think there's a consensus that's crystallized around this idea that it gets through the house but not the senate and so that's from a market

perspective, that seems fully baked into the cake. and i think that's right for the most part. it's worth considering what are the ways in which that would have an impact on the economy and markets were that to kind of derail in either direction and i think for us, we think about the interaction with trade policy as something that's very important, so we've rung the alarm bell twice this year on recession risks, both having to do with trade risks. once in may when we were threatening to put tariffs on all of mexican imports, again in the summer when it looked like we were on this path with china and so that's come down. i think the question is would impeachment in either direction have a bearing on how aggressive u.s. trade policy is and actually to be frank, i don't think it does. so i think we're comfortable with the consensus view that this is an event but not a significant event from a market perspective. i think the consensus is right. >> yanna, i want to get your thoughts on this if impeachment does not have a

bearing on the market right now, meantime what we have seen is some pretty meaty legislation finally begin to make its way through congress simultaneously. does that have an impact on the market here, whether it's usmca, spendsi spending bill, drug prices,som of the other things that are poised to become reality >> that's a great point, morgan. i think at the end of the day while we are infatuated by the politics, i think the market is focused on the policies driving the markets. they are looking forward and i think they are shrugging off the event, it will be a nonevent come january what will have an impact and hopefully a positive one, the trade policies, tariff resolutions and talks that really lead to positive implication to the sentiment capital spending and so forth. so i think that's what the markets are telling us slowly we're seeing that come through in terms of earnings

revisions and growth expectations into the next year. >> ben, once we're in january, the first trading day, we'll be about 60 days from super tuesday, right it's coming right down on us so i think even if we're looking forward, there's a political question is there probably more market turmoil if there appears to be a moderate democrat in a leading position who might actually beat the president, or if there's a more left-leaning democrat who has less of a chance of beating the president but is more hostile to corporate interests >> i think we can approach that with a degree of humility when people made two mistakes, the consensus on who was going to be elected and also the market reaction to that a lot can happen in 60 days. it's probably not going to be clear who the democratic front-runner is until super tuesday. so until then, i think that risk premium adds a little volatility but not a lot of direction at the beginning of the year. keep in mind, that's all taking

place against the backdrop of an economy globally that's looking a little better next year than it did this year so the fact that the global industrials -- i'm sorry, the global industrial sector manufacturing had a very difficult 2019, and that's starting to improve, starting to stabilize in our forecast, it improves over the course of the next year. so i think that's a relatively constructive backdrop. keep in mind recession risk is a little bit lower than it was recently and monetary policy is a back stop so all of that is a relatively favorable environment for risk assets. so we've been edging into equities a little bit less into credit and duration. >> although consensus is we're not going to get the rate cuts next year, i woke up and there's headlines about eu trade, there's headlines about working with india on a potential deal obviously chinese are not confirming phase one how much do you think the market is overestimating the simplicity of the trade dynamic right now

>> well, what's interesting is that imagine if all these headwinds become tailwinds or at least some form of resolution and that's exactly what we're seeing in the marketplace right now. when you turn back to politics, i think there were areas of the market that got really punished. health care has been a perfect example where it's second worst performer to date, particularly because we don't know who the front-runner might be. and whoever it is, will obviously have a negative implications to the policies that relate to that space. but looking forward, i think the missing link of the leadership that we've seen is really investors' sentiment and consumer really backing up the trend here and what you need to say is really the sentiment coming through on the capital spending side so once we know what the rules of engagement are, i think what you're seeing, you will see a lot more resolution come through and, again, revenues and earnings growth story will come to fruition and that's what

we're seeing we're still extremely positive on the equity market i think the wall that we've climbed to date has been extraordinary but it's been on the heels of multiple expansion with no earnings to speak of if that reverses, i think you can see a really healthy run into the next year. >> so, ben, what does worry you next year? >> on the trade question, i don't think it's totally off the question, first of all the ink is not even on the paper, never mind dry on this phase one agreement, so there's some downside and convexity there. but the complexion of the trade issue is very different. we've had some resolution on nafta, on u.s./china, there's this bilateral deal with japan but you still have a lot of open-ended issues with europe, the wto is effectively being dismantled so i think what we're seeing is we're in the middle of the process of going from multilateral trading system to one that's much more regional and bilateral. that's going to be a bumpy ride. >> but more broadly going into an election, does the

president's thinking, is it more i'm going to look like a fighter and get hawkish or maybe more hawkish or i want stability for the economy sake and i get more dovish, at least on trade? >> in principle i think you can have it both ways. you can be a fighter against europe where it doesn't have global systemic implications for markets. the idea is right to back away from u.s./china and move on to these smaller, not irrelevant, but from a market perspective. so i think you can be a fighter and a peace maker at the same time let's see. >> we certainly will see i'm sure we're not done talking about all of this by any means ben and yana, thank you for joining us today well, tech tops 2019 as the best performer so far this year. our next guest says there may be more room to run before the year ends dan niles, hedge fund manager and the founder of apple one capital partners joins us now. dan, good morning. >> good morning, john. >> well, it's been a tough year

to call. you told us that around midyear, i think it was august. you made a call mid-year about semi conductors. semi conductors have continued to do well you were iffy on the iphone launch, the iphone 11. that's done pretty well. what's going on here what did you get wrong and what do you see happening as we head into 2020? >> yeah, i mean i think everybody has been surprised at how strong the u.s. economy has held up given all the things going on in trade. obviously getting to a phase one trade deal, that's been great. the other thing quite honestly i didn't really count on was the fed starting to go through qe again. they're saying it's not qe but at the point you're buying $60 billion a month, i think most people would say that is qe. and you've had the fed obviously being very dovish going forward. so all of those things lining up, obviously getting through the brexit, the vote this last

weekend where boris johnson won a landslide, that takes disorderly brexit off the table and so when you look at that the market just keeps melting up and that's why i put out that tweet on monday morning under my handle saying when the market is up 20%, over 20% going into the last two weeks of the year, it gains another 1.2% on average to finish the year. this year with a lot of these risks behind us that's why it happens that way and that's why people talk about a santa claus rally or a january effect. >> we were just looking at some of your favorite picks heading into 2020 on trends like 5g, chips, et cetera, et cetera. one thing i didn't see up there was cloud. and so i look at names like sal salesforce, adobe, sap, vmware

are those less significant than the 5g plays some say 5g will start to have an impact in 2021, not 2020. >> yeah, we actually do like the cloud but we're looking at it more from the hardware side. so, you know, if you look at the cloud, probably about six to nine months of digestion going on there what you've seen is you've started to see the demand on the hardware side start to pick up again. public cloud is only 15% of the workload today but that's growing at about 30% per year so that's obviously going up quite a bit. people get amd, for example, we own that one their data processor sales were 50%. we like nvidia as well where the numbers have been coming down for about a year those started to go up again their data center revenues were up 11% in their most recent quarter. so we actually do like the cloud. we've gone through the six to nine-month digestion phase and now that should start to turn back on as you look into next

year. >> dan, u.s./china trade deal or not, there has been arguably this shift happening, this decoupling happening between the u.s. and china in terms of tech, whether it's chips or some of the other key technologies to watch right now. it's been happening for the last couple of years as china has been investing to start to lower its reliance on u.s. technology. number of executives i've spoken to both on camera and off have voiced concerns that what this trade war has done is basically accelerated china's move to cutaway from dependence on u.s. chips and other tech companies how do you see it, and what does that mean in terms of investments in 2020 and beyond in the sector? >> yeah, morgan, i think you brought up probably the most important point from a fundamental basis when you look at 2020. you're absolutely correct. china now views getting into areas like semi conductors,

technology, as something of a national security issue. it's not just even a financial opportunity. and so unfortunately i think what you're going to see happen or not necessarily unfortunately, but what you're going to see happen is there's going to end up being almost two ecosystems starting to develop where the chinese do not want to have reliance on u.s. technology products for example, if you look at huawei's new 5g phone that just came out, when that was torn down, there were no u.s. chips in it at all you're going to start to see memory production starting to ramp up early this next year where they're going go from 0% of the worldwide market in drams, for example, which are chips that go into everything, it's goingto get to 5% and kee climbing so i think when you get to the back half of next year in particular, it's going to get very interesting because a lot of the new phones that come out, typically u.s. wireless companies, for example, they gain content every year.

every year it goes up. i think what will get interesting is the end of next year when you go into the holiday season, you may see chinese phones that don't have u.s. chips in them right now the market doesn't care stocks are going up, which means they go up even more apple sounds great and air pods are sold out until january 13th, i think i saw when i looked online so the market just follows the path of least resistance, which is higher. but eventually you will go back to focusing on fundamentals and the point you brought up i think is one of the most important. >> dan niles of alpha one making calls and naming names, which i appreciate a lot of people will shy away from that, but right or wrong, you put yourself on the record we love it viewers love it. dan, thanks. >> thank you, jon, appreciate it when we come back, fedex obviously getting slammed here, down almost 10% after that big miss we'll discuss. plus, peloton parody how one congressionacaide l ndat

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amazon is in the spotlight today. a new report from business insider says the company is helping protect some of its vendors from the trump tariffs by paying up to 25% more for the goods it resells the report says amazon buys products wholesale for these suppliers commonly called first party vendors. erica poe is managing partner

that's invested in e-commerce companies and farhud mangi welcome. there's been so much coverage of amazon and discussion of regulatory risk, practices regarding vendors, is that why returns on the year have been subpar on a relative basis to faang >> i don't know the direct correlation but here's a good thing amazon is doing. they're protecting the consumer by paying more wholesale for the products and selling them for the same price for once despite all of the criticism that amazon gets, they're doing a good thing. >> certainly with victims in its path far out, if you look at fedex today. >> this war between them and fedex has been sort of ramping up i mean it's interesting. what a read, amazon is now shipping almost half of its own stuff. so they are kind of building up their own delivery network, which we kind of knew for a

while. i saw these amazon trucks delivering stuff to me i've got to say i think they are more reliable than when another carrier delivers it. so maybe that's their obsession, customer service so that's what they're winning on. >> eric, is amazon going too far in a lot of these different areas? we were just talking about this "new york times" piece about the cloud and how they might be crowding out by copying some of the people trying to operate on their cloud and the enterprise space. we were talking about shipping with fedex is it brazen, is it okay, is it just the way big companies do business >> some of it is brazen. making an exact copy of a shoe, now, you can't copyright a shoe, right? so anybody can copy it but to say, hey, this is an exact copy, i'm going to sell it to you for half the price.

it's not biodegradable, that's brazen but on the other hand they're following the playbook of all the big tech companies which is use your platform with the amount of data that you have and all the customer interactions and then start another business. amazon started this with the cloud business cloud business is the most profitable part of amazon probably a $40 billion business. stand-alone would be worth a lot of money now they're going into shipping. they're definitely going to be a competitor to fedex and to u.p.s. they deliver almost as many packages as fedex today. now we see this in advertising as well. the advertising business is growing leaps and bounds and doesn't rival google yet but is definitely going very fast so you've seen this with uber, uber eats, uber freight. you see this with facebook and the messaging business, google with cloud and a.i., so this is the same playbook that all big tech companies are using. >> you mean going vertical at scale? >> and attacking somebody else's

business getting out of their lane to attack somebody else's business. >> or it comes as amazon blocking sellers from using f fedex. that stock is down 10%. >> that isn't the worth move for the stock but brings us closer to a fresh 52-week low there are company-specific things happening at fedex, but they are also very impacted by the macro environment slowing, global economic growth, all of the trade frictions we've seen, 40% in quarterly profit, 3% drop in revenue, cut earnings forecast for the fourth time this calendar year and the fifth time since last december here's how ceo, founder and chairman fred smith categorized the quarter on the conference call last night. >> the quarter just ended as an anomaly because of the compressed shipping season before christmas and the volumes that will largely fall in our

third fiscal quarter in addition, this quarter has seen significant -- >> all right so we just showed you a picture of alan graf, but that was fred smith that was speaking right there, basically calling a bottom to all the pain that fedex has been seeing over the past year plus but saying that it is going to probably take a few quarters to materialize. basically there's three big factors that are pressuring fedex right now. it's got these headwinds from the macro trade issues which has been affecting fedex's air shipments, which is really the most profitable or one of the mostprofitable businesses for the company. that's the express unit where you're seeing a lot of that pain meantime it is continuing to invest billions of dollars for its e-commerce strategy including expanding to seven-day delivery higher-than-expected costs there and when you are talking about ground you're talking about lower margins because you're talking about shipments from

warehouses to people's door steps. lastly, at&t integration, it's still a drag but you're seeing a drag from amazon as well this is a company that chose to cut ties and not renew certain contracts with amazon as amazon continues to build out its own logistics and delivery network that is having an impact on this company even as u.p.s. continue to work with amazon. i have a feeling we're not done talking about that story, especially on a day where amazon also has agreed to lease another 10 boeing 737-800 cargo planes which is going to bring its numbers for its air fleet up close to 80 over the next year to two years >> yeah, in a time when fuel isn't that expensive, when the economy is booming, all other things if they were equal, obviously they're not, you would have thought fedex would be doing just fine as e-commerce

overall continues to expand. but it's those little details around competition and investment that can snag an investor. >> and certainly fedex said that they are going to start cutting some of their numbers, reducing flight hours by 8% after this peak season. reducing cap ex, which is key. they have held steady on their cap exnumb numbers to 7% of rev. but this is a longer term bet by fred smith in terms of drawing a line in the sand to reinvent the company and take on amazon as it takes on more of its own deliveries >> our favorite fan fiction this morning is that bezos wants to bang this thing down and then buy it do you want to put odds on that? >> he has an advantage because he has complete data visibility all the way from the consumer to the delivery he could decide which is the best delivery way to do it in the future you'll have drones, you'll have robots on the streets, and he'll be able

to mix and match between airplanes and trucks and drones and this in a much better way than fedex can. >> so the network is not even worth buying whole >> maybe not why would you want to buy some old planes. >> have you got a thought on that >> i think the one thing i would say is that amazon risks getting sloppy a little bit as it grows quickly. we're seeing -- we saw a bunch of stories this year about the messiness of its marketplace, the lax rules they have about letting products in. "the wall street journal" had a great story about how people dumpster dive and then sell stuff on amazon's marketplace. their warehouses don't have a great record kind of getting sloppy all over the network as it grows very quickly. i think that's a risk. >> guys, let's finish up with uber officially announcing the launch of its new app uber works. the company is partnering with staff agencies to pair shift workers with shifts for other

jobs you were just making this pointed about getting into other people's lanes. >> in the case of uber, there's two things going on. their core business is not profitable there's no visibility to profitability because they're both subsidizing the consumer, the passenger as well as the driver and they have to stop doing that in order to make money. so what they're trying to do is amor tize their business and with now works but there's another angle to this they're fighting this new law in california which is likely to be similar laws passed in new york and new jersey and other big states. >> you mean about contractors? >> about contractors becoming full-time employees, which basically is a stab in the heart of uber's business model if they're not profitable today with gig workers, how are they going to be profitable when they have to pay health care and all

of the other costs associated with full-time employees they're trying to prove also that their workers are real gig workers, they're not employees of uber. >> and i guess they also may be trying to prove that people driving cars is not their business model i kinds of laughed at them when they tried to make that argument, but i guess if they're launching uber works and becoming a platform for other types of work, it aids that argument at the same time, though, i wonder whose side is uber on in this arrangement are they actually going to advocate for the worker or just take advantage of the fact that there are a lot of gig workers who are looking to work even more money on the side >> yeah, it's a good question. what an incredible story this is this company had a long kinds of saga to get to being public and they are still searching for a business model it's crazy you know, we followed this company for a while. they seemed to have kind of a fairly straightforward thing they were doing, but there's all this regulatory risk there's the fundamental business

doesn't work, and they're still searching for kind of what to do with this company and this idea that everyone -- lots of people use, there's lots of drivers, it works on the roads people use it. but as a business, it just doesn't work >> farhad you always distill it into the simplest form eric, thanks for the time. good to see you. as we head to a quick break, keeping a close eye on the market as we follow the impeachment proceedings on capitol hill fresh high earlier today for the s&p and the nasdaq we've got more "squawkll" teth bak aey i'm tom er, and i approve this message. climate is the number one priority. i would declare a state of emergency on day one. congress has never passed an important climate bill, ever. this is a problem which continues to get worse. i've spent a decade fighting and beating oil companies, stopping pipelines, stopping fossil fuel plants, ensuring clean energy across the country. how are we going to pull this country together?

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european markets are closed and seema mody joins us with a look at today's action. >> jon, it's those comments from fedex's management on europe that are being passed around by traders today. while we have seen a slight improvement in economic data as of late across europe, fedex ceo fred smith flagging eurozone

concerns saying the industrial economy, particularly in europe, was hit by the ricochet bullets of a u.s./china trade war and it still hasn't recovered, and germany in particular is extreme. those comments come as fedex is still in the process of closing its $4.4 billion acquisition of tnt express which was supposed to help it gain a stronger footprint across europe. elsewhere, a major deal in the european auto sector fiat chrysler and the owner of peugot signing a $50 billion merger agreement creating the world's fourth largest car maker. total vehicle sales would put it ahead of both ford and gm. it's a deal, though, that will likely face antitrust scrutiny from both u.s. and european regulators. finally, guys, dutch luxury tv and stereo maker plunging 16% after issuing fourth quarter

guidance given pretty strong earnings from other carriers. let's get over to sue herera for a news update. >> good morning, morgan. good morning, everybody. here's what's happening at this hour members of the house gathering on the floor to debate and then vote on the two articles of impeachment against president trump. republicans attempted to slow things down by presenting a motion to adjourn the session. a judge threw out paul manafort's new york mortgage fraud case on double jeopardy grounds. manafort's lawyer had argued that state charges should be dismissed because they involve some of the same allegations as the federal cases that have landed manafort behind bars. new york life will spend more than $6 billion in cash to acquire the group life and disability coverage business of insurer cigna. new york life, which is owned by policyholders and does not trade publicly said it will add millions of customers to its business. and about one out of five high school students in the u.s. have vaped marijuana in the past

year its popularity has been booming faster than nicotine vaping. that's according to a new report by the national institute on drug abuse vaping nicotine, though, is still more popular about one in four high schoolers say that they have done that within the last year you are up to date that's the news update i'll send it back down to you guys on "squawk alley. let's get a check on shares of tesla closing in on not just a 52-week high but an all-time high, just a couple of bucks above this level on pace for the best quarter since 2013, up some 70% in six months. amazing story. "squawk alley" is back in a moment the cnbc trend tracker live data board is brought to you by the cme group. - [narrator] at southern new hampshire university,

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the president is facing an impeachment vote tonight ylan mui joins us with more. >> reporter: the last time the house impeached a president 20 years ago, of course there were no iphones, there was no social media, there was barely even an internet now digital advertising is the fastest growing type of political advertising. cantor media projecting $1.2 billion in digital ads during

the 2020 election cycle. that's about 20% of total ad spending and only counts ads from the candidates themselves or their campaigns and doesn't include ads from outside groups and pacs facebook is the main beneficiary. they said political ads don't make a big difference to their bottom line but clearly it does to the candidates and impeachment is driving a lot of their dollars. president trump has spent $2.3 million on ads relating to impeachment just since democrats began their formal inquiry that's way more than the next biggest spender, billionaire tom steyer, whose presidential campaign has bought $1.45 million in facebook ads, the organization he founded has invested $700,000. after that america first policies, a pro trump group has spent $179,000 since the inquiry began, but for the trump campaign, the real value in these ads, guys, is not just

messaging but also driving action the campaign says that online donor growth is up nearly 50% so far this year. guys >> ylan, thank you very much ylan mui obviously this is going to be an issue where once again the interaction between the social and political fallout from social media collides with the business element, which we talk about all the time. >> there's the campaigns themselves there are also these third-party actors trying to test the limits of what they can post on facebook, with factual content or lack of factual content, misleading content in political ads. that's going to make it wild and woolly especially post impeachment as this campaign season heats up. >> as you get this headline from buzzfeed today facebook says it will not remove an ad claiming that mitch mcconnell endorses impeaching trump. i think this is a conversation we'll continue to have it is a case study when you look across the social media

landscape in terms of what different companies are doing around political advertising in general right now. >> obviously all eyes are on impeachment right now. let's talk about what it means to investors we're joined by art cashen who's here good to see you. >> good to be here. >> how would you overall characterize the market's focus of attention on impeachment today? >> it's dominating the media not just here but everywhere else but it is having little to no impact on the market the market has shrugged it off, nowhere near the chatter about the china deal and whatnot i think that's because they believe that the result is already known. that we'll get to the senate and he will be acquitted or not removed from office and then we move on to the next case, which will be the election and that probably will also not be a major factor until we get

much closer to determining who the democratic nominee is. so i have a couple of mileposts that i'm looking at for potential volatility first, the end of january because that's when the brexit thing is really going to heat up then the very beginning of march, that will be super tuesday. and if it still looks blurry then, it could be a brokered convention, so that will be mid-july as we go into the new year, those are some of the areas or mileposts i'll be looking at. >> so all this coverage and talk of melt up you don't disagree with necessarily >> no. >> if the calendar is clear until then >> i think we need to see more detail i was a little distressed, i would say, with the fedex chairman's report because it made it sounding like the economy, particularly in europe, nowhere near what it appears to us you know, we're getting better numbers and you see the market react to some degree to that

right now we're facing some immediate resistance i wrote in my opening comments that 3,200 is a little resistance in the s&p and 28,345 in the dow so we'll keep an eye on that we got very close to it. we didn't punch through. we are somewhat overbought but the market deservescredit. it's taken on all that and still with the overbought managed to make new record closings. >> art, when do you expect super tuesday to become a factor is it the week before when we're seeing the polling ahead of the vote or just the vote itself are we at a point where we can tell a moderate in the lead will mean something different from somebody further to the left in the ead? >> absolutely. but again, for now it is not moving the market because it's very unclear i mean, you know, bernie sanders is hanging on and coming on a little stronger in iowa, which,

you know, you would think the market might react you might see it when elizabeth warren moves up in the polls, that health care would move. it's far enough away that they don't see it as to super tuesday, i would think you begin to get the attention a little bit before, but i think it really has to be how it comes out it's going to be clearly over one-third of the population will be voting then things like will mike bloomberg have a viable chance he would love to get to a brokered convention. he's got a tough time in the primaries, but he may be able to talk some of the democratic leadership into accepting him if his polling numbers are okay. >> so fedex on the call last night also said it hired labor costs. if you continue to zese see see robustness in the u.s. economy, does that start to ding small caps. >> yes, it could if we get

there. you know, we had some paradoxical stuff come out there were more job openings, but when you compare the job placement and replacement, not quite as strong. so there is some smoke and mirrors in some of these numbers. but you're right, if wages begin to go up, then some of the smaller cap companies are going to feel the pressure >> art, don't go too far, we'll see you soon art cashin when we come back, a now infamous commercial getting spoofed again. we will tell you how "squawk alley" is back after a quick break. ouse. ouse. hi. this is the man that's going to check your eyes grandma. cognizant ai solutions are helping healthcare companies advance diagnostics and prevent blindness in patients with diabetes. everything looks good. you have beautiful eyes.

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here's a live shot of the house of representatives as we get at least six hours of debate today about house resolution 755 and a possible vote tonight about whether to impeach the presenofhenid stidt t uteates dow is up 4. "squawk alley" is back after this - [spokesman] if you've tried college but never finished, (group cheering) snhu lets you transfer up to 90 credits toward you bachelor's degree.

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rick santelli is going to have the santelli exchange at the cme. rick >> hi. i'm going to be talking to michael. he's the chief investment officer of global fixed income at morgan stanley ch michael, good morning let's get right into it. >> good morning. >> optimism. it's an important kind of fairy dust for the economic gears of global markets and you believe optimism is going to be impro improving into 2020, but not necessarily the actual data. explain. >> that the a lot of the negatives which hit financial markets and economies in the past 12 to 18 months have disapated. central banks have cut rates including the united states in 2019 and that's all good has a nice tail wind in 2019 brexit seemed to be get iting better although again, the

johnson government in the u.k. may be adopting a more aggressive stance with regard to negotiations with the eu which may lead to a hard brexit probability at the end of next year then of course the trade situation, which has gotten a lot pbetter to where it was in september. so the optimism for 2020 is quite positive and reasonable, however, asset prices have done quite well in the fourth quarter of 2019. with high yields doing well, equities doing well, yet underlying indexes have not improved nearly as much as you might have suspected considering the improvement in asset prices. >> you know, everything you said is true. i like to try to find the most basic way to get my arms wrapped around and issue and for this issue, i chose the following chart. this is a chart of five to six weeks in the dow jones industrial average and right in the middle of it was the november 2016 election

and there was no major economic news but yet in a very short time, we went from 18,000 to 20,000 and we have never lookedd back there's optimism and i think the optimism wasn't necessarily for the person that was elected. i think it was optimism of policies not dpoipg to be implemented by hillary clinton who was not elected. and i do think that it turned into real positives for the economy. you need optimism to turn that straw into economic gold your thoughts on that. >> inlg you're exactly right with the weak link in the u.s. and global economy the past couple of years has been the lack of business confidence. consumers and householdshave done their bit they have spent money. haven't borrowed a lot, but have spent money. but corporate ceos have been unwilling to commit corporate cash flow to reinvestment into their businesses and grow the understood lying capable ilitief

the economy. so business investment have been weak and that's what we need to turn around if we're going to get out of this low 2% kind of growth trajectory for the u.s. economy. that looks possible, but i would argue we're not quite, i'm not convinced yet that for sure it's going to happen. >> excellent, michael, i can't argue with that and we want to see if capital expenditures start to increase now that global uncertainty is at a freeze thank you for your time and thaukts. carl, back to you. >> thank you very much awfully range bound today. dow's down a point s&p really hanging on to the mid 3190 sidewa "squawk alley" is back in less than three minutes your cash is automatically invested at a great rate. that's why fidelity leads the industry in value while our competition continues to talk. ♪ talk, talk while our competition continues to talk. we're committed to making college more affordable., that's why we're keeping our tuition the same through the year 2021. - [woman] i knew snhu was the place for me

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that now infamous peloton holiday ad is proving to be the gift that keeps on giving. wendy davis, running as a democrat to represent the 21st district released a new campaign video spoofing peloton >> we're going to kind of -- >> got to get back into campaign shape. i'm a little bit nervous, but exciteded. let's do this. >> all right so you work with what you're given and if you're looking for widespread notoriety or acceptance of an idea, that's a

good start >> this is good for aviation gen and maybe for wendy davis. we're talk iing about her becau we were talking about peloton because we were talking b about an ad that didn't get received so well. >> it was a fun ad regardless of your politics. i kind of wonder what's been a bigger marketing push lately whether it's this or cyber chunk, which has led to a lot of spin offs as well. >> this took out the controversy over elon musk taking out the traffic sign >> yeah. >> the outrage, the benefit of this social media driven outrage machine is it's always hungry so there's always something new if they're mad at you today, just wait a few minutes, they'll be mad at someone else >> we've talked politics so much today, and a lot of you believe it's irrelevant. tonight though, we'll get micron and confirmation as to whether the run semis have been on is deseved. >> this has been a tough one as

dan niles tried to say there was f going to be bad news in semiconductors we'll get information from on thousand trade it. the question >> it's difficult at these levels here, above 52 after a couple of upgrades earlier in the week we'll look for the vote around 7:30 for now, the judge and the half. >> all right, carl, thanks so much i'm scott wapner front and center this hour, what the tech surge means for the trade in the new year ahead. several marquee names hitting all time highs it is 12:00 noon and this is the halftime report. >> the rally rolling on. what's work ng this market right now? and historic day on capitol hill lawmakers debating whether to impeach president trump. the risks facing investors nike, mcdonald's, amazon, uber and many, many more. the best stock ideas for 2020 are straight ahead this drug stock is is up almost 20% in the past tw