welcome back to "squawk. breaking news, the department of justice and the fcc planning to file a statement this morning in the federal trial of t-mobile and sprint advocating for the rejection of the minority of state ags and their arguments to block the merger jason, thank you for being with us meantime, want to hand it over to the folks at "squawk on the street." ♪ ♪ good morning, welcome to "squawk on the street. i'm david faber with jim cramer. we're live from the new york stock exchange carl has this friday morning

off. let's give you a look at futures as we get ready to wrap up another exciting week in our markets and you can see we are looking for a higher open this morning. we'll see how we end let's get to our road map. it does start with boeing yet again. space trouble. its new starliner spacecraft failing to enter the planned target orbit for docking with the international space station. plus, of course, can't forget that record run for stocks the s&p is on track for what would be the fourth straight weekly gain and it is closing in on its best year since 2010. and in corporate news, nike earnings beat, sales for the jordan brand hit a billion dollars, we'll talk about nike and the exit of mark parker, long time ceo, also growing very near futures are pointing to more record highs for stocks. nike is pulling back in the premarket despite posting better than expected quarterly earnings

and revenue. mark parker gets ready to pass the ceo reins to john donahoe, that's going to be next month. and we can see the stock is looking now to be down a bit but it was a -- >> that's ridiculous 72 price target increases, it is crazy. it is going to be up, up on monday if not now. it is a magnificent quarter. people are upset about the 40 basis points, tariffs. the chuck is selling low. >> the who >> the chuck i don't think i can take you seriously. >> i knew you were going to comment on what i was wearing. you wear a tie -- >> i sleep in a tie. >> i've seen you all hours. >> what is that, though? >> a sweater, it was cold this morning. i put it on and i didn't want to take it off. >> we're not outside, we're inside go ahead, go ahead. >> let's talk about nike. >> oh, my god, now, john donahoe is taking the job. this is such a magnificent transition

parker is without a doubt the great leader he's belichick, he's a belichick figure and now it is time for a kinder, gentler ceo. >> donahoe will be kinder and gentler? >> absolutely. most importantly, it is a technology company that sells shoes, and in order to be able to do that, you need a technologist personalized technology to make your shoes direct to consumer, really rather remarkable this conference call had everything you want, including some interesting discussion between matthew boss, my favorite at jpmorgan and parker about how they can beat their algorithm every single quarter and the answer is the product, the people love it i don't know if most people know who jordan is. it is like crossing jordan do they know he played basketball. >> there is some awareness of him, having a couple of teenagers, my older ones knows who michael jordan is. >> the numbers are incredible. >> that is where i was going they spend a lot of time on the conference call discussing how

important china is and they continue to make inroads, important market for them. >> my conclusion, a lot of feet in china >> yes, there are. >> a lot of feet. >> a lot >> but i have to tell you, david, in terms of well orchestrated conference call, always the best there is, i will miss mark parker for his rigor he is probably the most rigorous conference call giver anyone has ever seen. and he will be missed. >> that's quite a statement. anyone has ever seen >> they give you three bullet points and everyone has to go through the three -- like very good shakespearean play, more of a history than a comedy, and he just doesn't miss the point. it is but reesed over and over again. when you're finished, they get the super bowl lombardi trophy bloelongs to thm every time the fact that the stock is down reflects lunatics who don't have anything else to do. >> look at his performance during his tenure -- now salazar stuff, the number of other things >> you have to rain on my parade here, his parade

go read shoe dog. >> i read shoe dog quite some time back already. >> the company has -- there is some warts and all. >> yes, there are. >> i'm not happy with some of that -- look, between the lines -- >> nothing to do with what i'm talking about now. >> between the lines this is the best company, one of the best american manufacturers, outside the lines, not so hot. john donahoe, i think, service now, david, look at the -- let's get the service now to see how john donahoe has done, he inherited it from sluteman who is taking over service now >> yeah. >> sap. >> i know. i know he already has, hasn't he? >> yeah. >> he's there. >> he's running it and i have to tell you that this is such a right move by nike that's who they need boy, the next level

personalization technology, nothing donahoe didn't know. i was surprised that big mcdermott, so big at sap, went and took service now he's going to make service now into accenture meets deloitte and tackles even, yes, sap i love parker. i will -- he's going to be -- look, he's the executive chairman we're not done with him yet. i think -- i revere him, david i'm over here. >> i know. i want to talk about what's coming up. can't have a morning where we don't talk about boeing. >> you have to here is tesla knocking on the 420 door, 420 being what, david? 420 being what we're on air, you can stop looking at -- listen, sparky. >> this is important and explains something i was wondering about, so -- >> well -- >> i don't advise, i've told young journalists out there, don't report by text when you're on live television,

it is a way to communicate and i'm learning a couple of things that will be helpful during the course of our show that said, let's talk about the broader market for a second. we did hit new highs on the s&p yesterday. i've heard you say, well, as typical, different things. but you seem a bit worried about -- >> look, we are -- >> the levels. >> we are overbought it is just we come in every day, and there is tesla short covers, we come in every day and my favorite stock nvidia, someone comes in and says top idea there is nobody saying, you know what, can we take a little break and sort things out? i would like to hear that. i am bullish, i would like to hear that. i listen to the democratic debate yesterday last night none of those candidates are interested in your 401(k). >> no. they're talking -- we're going to get to that, actually what they were talking about. >> they're not in favor of china, i got to tell you xi should take the deal.

>> you think that any of the democrats would be as tough if not tougher than the current administration >> they -- it is about climate control. it is religious. and it is religious. it is also religious persecution. they didn't talk about jobs at all, big ag buys they're talking about a titanic struggle between two great nations. >> that sounds like your buddy ron vera >> kind of ron's not just -- i keep trying to get ron to focus on coal. >> ron doesn't care about climate change. >> no. >> the entire administration is not particularly interested. the president spends a lot of his time railing against -- >> 28%. >> lightbulbs, and -- >> it has cut electric use by 40%. >> and use too little water. >> that i'm not as focused on. there is a -- coal is 28% of our -- get your coal, what is the second greatest greenhouse

destroyer of our environment? >> methane. >> and who produces methane after coal plants, number two >> the oil and gas -- >> no! cows >> cows. >> that's why we want to go beyond meat. >> cows, right >> i'm looking at my executive producer, is he focused on what i'm saying because this beyond meat call is so big, he's focused. he just said moo which is mu, micron, breaking out, what didyou think of sanjay murota? i'm doing a shoutout because it is the season to be jolly. i want people to -- >> thank our staff. >> our staff is amazing. thank them, because it is right to do. >> we have to talk about boeing. let's get to it. the starliner launched hours ago, the spacecraft has been experiencing some issues morgan brennan is at the kennedy space center in florida, best place for her to be to explain what's going on. morgan >> reporter: yeah, it is

definitely the right place to be, especially as we await a press conference that was originally supposed to start at 9:00 a.m. eastern and pushed back to 9:30 the launch itself this morning which took place at 6:36 this morning went off successfully. went off as was to be expected the liftoff itself was good. when it came time to get into orbit that is when the anomaly occurred and off nominal insertion. that's the term being used what happened is starliner did not achieve the correct orbit to be able to achieve rendezvous with the international space station, which is where that spacecraft is headed and has been planned to go -- to go visit, to go dock to and stay with for the next week for the unmanned test. there are no people on board this vehicle right now, however,

this was a key -- really essentially final test, supposed to be a final test to show that starliner, how it would operate when it goes to space. this was first flight to space before astronauts are poised to begin getting on board and using it to go to the international space station. so as i mentioned, it is still very much a developing story what we do know is that the flight controllers do have control of the spacecraft. that it is in a stable orbit we have been getting updates along the way as well. little windy here. along the way as well. boeing space said flight controllers have just completed an adjustment burn and are assessing next steps a few moments ago, jim bridenstine, the administrator of nasa, saying that because starliner believed it was in an orbital insertion burn that the dead bands burned more fuel than

needed to maintain precise control. they're getting good burns and elevating the orbit of the spacecraft still unclear what is going to happen now with starliner. we're expecting updates at this news conference and whether there is still an opportunity, still a window in which they can basically adjust and fix the situation and the spacecraft can actually make its way to the iss or whether they're going to have to find a way to land it it is developing we don't have a whole lot of details yet. but i will bring you the headlines once i get them. >> morgan, real quick for me, find a way to land it, can you give us any more idea what that means? what that would be >> yes so this is a -- this is a spacecraft this is a vehicle that was designed for a ground-based or land-based landing, which is pretty unusual. and the way it would land is it comes back into the atmosphere,

you have three parachutes that deploy, and then a cushion that basically comes up, erupts from the bottom of the vehicle to help it land and cushion the landing on the ground. now it was expected it was supposed to link up with the iss early tomorrow morning, stay for a week, it is bringing cargo as well to the astronauts at the iss and then come back down for this type of landing next saturday, the 28th, at white sands in new mexico. so presumably if that is the decision that they make now, with starliner, to bring it back, i would imagine that they're going to be targeting that type of landing and look to recover the spacecraft which, by the way, these boeing spacecraft have been designed for multiple re-use just like the spacex crew dragon spacecraft part of this nasa program called commercial crew, such a big deal given the fact that it has such big implications for returning human space flight capability to this

country. >> got it. morgan, we will be standing by for your updated reporting thank you. morgan brennan, of course, at the kennedy space center. >> i spent a lot of time with jensen huang. >> the ceo of nvidia yesterday, you said he's the smartest man in the world maybe, i forget. >> he is and he has the machine -- the chips that are developing the sequence that will make it so that our men, our men and women, nasa, will land precisely on mars >> yes, you told me that >> and these guys can't get this trajectory right i mean, jensen's got it to the point where you can send the thing, it goes 20,000 miles an hour and still land safely on mars it is a calculations issue. >> except he hasn't done it. >> he's working on the simulation now. >> he hasn't done it. >> it takes a long time. >> i would imagine. >> jensen does simulations in his sleep that people who are brilliant an awake at stanford cannot do. in his sleep

>> what a romance that is. >> sure. >> up next, jim's going to have his mad dash and he's not going to talk about jensen huang or nvidia something entirely different. >> tesla. >> look at futures as we get you ready for an opening bell here it is friday last day of trading this week. one of the last of the actual year here as we wrap things up more "squawk on the street" straight ahead from the nyse each day our planet awakens with signs of opportunity. but with opportunity comes risk. 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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♪ ♪ safe and sound let's get to a mad dash, get ready for an opening bell here about 13 minutes or so from now. apple, it had quite a year. >> i only want one present i told my kids i told my wife. >> the ear things. >> yes david, i told everyone because i think no one is going to be able to find them tony sag nanetti, piece of brilliant work at bernstein, i love tony, i'll say that right now, i love him, super guy, super. am i making that clear people say are you friends i say we're good friends they say how good? great friends, life-long friends. david, he says airpods could be huge for 2020, but then watch out on the other side it could be terrible. >> the other side of what? >> in 2021, he's predicting a

dramatic deceleration in airpod revenue growth so, i mean, in other words, he's saying 2020 is going to be gigantic, but look out, 2021 will be -- david, this is -- this is it, david. this is it >> it is what? >> i really don't know but i would say that the consensus airpods are way too low, and airpod pro too low and we talk about the product as if it is an iphone, and that's what matters. it is something else that could move the needle, a lot of people feel there is nothing ancillary that could be near the phone, this piece makes it sound like, look out, this actually may be that big and so far my kids have not been able to come up with the pro >> right >> they are hard to find. >> yes >> when do we expect that apple will somehow increase production to meet -- >> they have been able to meet demand for the airpods how do they meet demand for pro is that not amazing? no one talks about it. who has that high quality problem right now? who has that kind of demand for

something? but, no, first of all, tim cook never invented interesting at all. >> the company that is inventing things >> that was facetious. >> i understand what you're saying you like to attribute it to one person he's sitting in his office coming up with this stuff. >> this is an hermes tie, i'll let you wear it for the second half of the show i can't take you seriously whatsoever anyway, this is -- tony has the guts to talk about how bad this is going to be in 2021 that is not -- that's not as rigorous as i would like. >> you pointed out your differences of opinion with mr. -- >> still advise suboptimal research. >> watch out on the other side. >> watch out on the other side. >> incredible year >> jordan river deep and wide, but when you get to the other side, it is impossible elizabeth warren loves this piece. it is about taking rich people's money away from them >> okay. stick around

a lot more things that we're going to hear from jim myself all of our reporters we're going to talk a lot about that trial that is going to wrap up actually today, uptown, involving the states -- >> and elon musk. >> and t-mobile. >> tesla >> tesla >> i have nothing to say about tesla other than 420 you're gngoi to tell me what 44420 means later on >> we're back after this most people think of verizon as a reliable phone company. but to businesses, we're a reliable partner. we keep companies ready for what's next. (man) we weave security into their business. (second man) virtualize their operations.

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little less than seven minutes before we get started with trading here. we're set up for what would be a higher open for the markets. as we hit some records yesterday. we'll keep an eye on the s&p 500, the opening bell a few minutes away ♪

♪ ♪

you're watching cnbc's "squawk on the street. we're live from the financial capital of the world not london it's new york. >> all right >> all right, why not? 3 1/2 minutes to go before we

get started here with trading. always gives me a chance, when our dear colleague carl is taking the day off, to ask you at this point what is the key to the market what is one of the keys you see this sort of the sentiment trading going on today >> amd. >> amd >> web bush says something people are starting to really realize, these intel manufacturing problems aren't getting any better they continue to bedevil pcmakers but, you know who has the chips? and is winning everyone. now, andy grove alive today, he would not believe this jerry sanders amd was kept alive by andy grover, didn't have a monopolistic case against him. amd has got it, $39 to $51.50 at web bush that's right lisa su does not crow. never once has she mentioned the name intel to me in her interviews because it is not her

style. they are the winner in semiconductors >> amd sporting a 47, $48 billion market value. >> isn't that incredible the first thing she did was clean up the balance sheet, giving up how thorough she is. rick hill, the genius behind novellus, sold to lamb and by the incredible symantec told me she worked for him, the most rigorous thinker that he has come across. >> what -- >> ibm, you know, she's -- m.i.t. she's not west coast i continue to believe the east coast people are every bit as smart other than jens e e en hug >> she grew up in queens you mentioned hp inc. >> yes >> because of their reliance on -- >> they're going to miss first quarter, they're too reliant but i just think that this move of amd is the move of the year if we were doing the show the

last day of the year, i would say the amd move is probably most -- move i've seen in ages, taking an also ran company and making it a powerhouse and maybe in 18 months >> it has been quite a thing to watch. and the stock did come off dramatically as you know from sort of -- what was that, early in -- in late '18, during the -- and the fall, last year, and then this year, of course. >> there is will be reacceleration of the data center that's fantastic for amd you get offline with people out west, whose chips do they think are the best other than nvidia, amd. they have a new iteration. lisa su uses the cities in italy as rome, naples, i said, listen, you start -- >> yeah. >> you start getting checks, now we're going. >> check that house out one of these days the applause building, of course they do that every day

but in particular on a friday, you know you'll be on vacation soon. >> we don't talk about that. winneba winnebago, the millennials are back by winnebago. >> you see the opening bell, of course real time exchange s&p 500 as well, big board, howard hughes corporation, 13 d saying he wanted to talk to management, i thought that was the funniest. >> funny >> chairman, didn't sell the company, though. i did that story they went out and tried. they couldn't find buyers. >> why do you think that -- >> get to the nasdaq real quick. tell people, elevate network global community for professional women doing the honors there. >> thank you what do you think about the stories about goldman and the justice department and 1 mdb

the justice department doesn't talk and goldman doesn't talk. why are we so sure it is going to happen soon someone is talking and when goldman puts this behind them, we're going to be talking about the revolution at goldman, the retailization of the company, and the credit cardization of the company and people are going to like that, even though it is -- i think goldman and i -- >> i don't know where those leaks are coming from. certainly not coming from goldman. as for the doj, i don't know. >> i don't know how much they talk. >> journal yesterday reporting it could be about 2 billion, that's below what sort of has been originally anticipated. >> took the $5 billion reserve. >> don't forget, they're dealing with malaysians. >> yeah, they got that -- >> also working that >> malaysians are after everybody. >> right meanwhile, they were right at the center of the actual -- >> well, the bonds they sold, david, red flag. >> it was a red flag some questions there about risk controls that goldman has claimed was not really -- not

really out of line with what others would have done i hear different things. but to your point about goldman, which is down a bit today, 37% forthe year, sporting a market cap slightly below that of its one time main competitor morgan stanley, sort of diverged in terms of their business models, to some extent. >> has a ten multiple. >> it does. >> the people were horrified when it had -- when it was in the bottom decile of multiples where the multiple of viacom is, seven multi. >> talk about viacom and the latest deal, stock moving up this week. on goldman, jim, mr. solomon is pushing change pretty quickly within the organization. >> i've been working on the apple card the cultures are just not synonymous a credit card company, which is apple, which, of course, says in its ads not with the bank, the

bank is goldman, but i just think that if it really gets rolling, goldman has to spin it off. >> mm-hmm. >> just under the same roof, it is just hard to imagine. >> isn't it central to a certain extent, to the overall efforts they're making. >> i'm not sure. >> outside of the large institutional business -- >> they have done a good job building it out, the other banks are jealous, they could never do it because the rate that apple wanted would have made it so every other major credit card user would have said, you got to give us that rate. american airline, the -- i don't know what's in your wallet but the airline credit cards, they would come in and say we want apple's rate. i don't know they only have one customer, and that gets -- they're in a no conflict situation it is so secretive, you can't find out a thing and yet i've been working endlessly to see how it is doing and the work that i've been doing says it is a phenomenal

success. >> i know you've been saying that >> david, no one else has done any work on it to speak of. >> they haven't in. >> no. >> hard to do the work on it, it is very early. >> what is called reporting. >> the kbw bank, quite a move. >> because, david, the yield curve -- >> goldman lagged some of the larger names not much, but -- >> bank of america, up 42%, but -- citi is up 50%. >> selling at below tangible book and mike is buying back 8% of the bag 8% of the stock, every single year and it was just way too cheap versus the group remember, though, it is really still a fin tech year, a mastercard, if i bought that index, i'm not performing the s&p, i'm pretty happy. >> you're dealing with the pal

bear market. pal sent all these banks back. we're in the thick right now of when powell was really destroying the economy >> a year ago? >> yeah. >> he comes back second year, come back kid. sophomore year, no slump there. >> no. >> no. >> and then we head into next year with the expectations that rates are not going to do much of anything. >> i think, yeah, look, i think that the economy reaccelerated after the fed cut, you get that from retail, you get that from the retailers -- >> right now, a belief there is an acceleration and you pointed out and i have as well and we have been talking to ceos who do business around the world that europe is even starting to -- >> europe is as -- >> signs of life. >> collateral damage of the trade war, the trade war diminishes, that is absolutely terrific i like that. that was still the worst conference call of the year.

>> really? >> yeah. >> that was the worst one of the year. >> yeah. that was horrible. >> the fedex call. >> alan graph saying at one point, cfo, it is a bottom it is a bottom >> you don't do that >> now, sanjay murota called the bottom and said it is the bottom in the inflexion. >> you don't like the way they inflected when they said it was the bottom you liked it at micron and micron was -- it is a bottom, but fedex is not because -- >> it is like the team at 77 now, it is the bottom, and then lose out i didn't care for it. >> i want to come back to the trial, that we have been following. i don't know how many others have, but i still continue to believe it is pretty important sprint and t-mobile. >> yes >> how much are you going to pay for this. >> softbank, the owner of sprint, very much watching this closely. dish, the beneficialry of the divestitures that would take place in its attempt to create a

fourth what would be -- because you have 4-3, a fourth wireless nationwide player in 5g. all this at play the closing arguments are not going to be until january. today, they're starting, they started 9:00 a.m., up the street here, from here. and the states are going to be calling a couple of witnesses, dr. fiona scott morton, and dr. carl shapiro they are both economists, both going to talk. >> carl shapiro was involved with the previous -- >> with the time warner, yes. >> he's hilarious. >> he was. >> hilarious economist. >> the states said why they believe it would be anti-competitive, they haven't had somebody attack the remedy, remember that's the doj part of this where -- you heard sorkin talking about this at the very end, he squeezed it in there, the doj will file around 10:00, they're filing, which is expected, saying why all the things they did and what they

did are pro competition in terms of allowing this deal to go through. i will say this, when this trial began, with the new york state ag being one of the leads here, a new york democratically appointed judge, and 4 going to 3 and the hhi scores and how easy it would be given precedent to just say this is anti-competitive, i'm going to issue an injunction, going in, many people believe, jim, 65, 70% chance that the states would win. >> really? >> given -- >> yes. >> i don't think that -- i think the other way. >> i will tell you the people that watch these things closely and, again, i mean, let's -- putting a percentage on a difficult -- believe that it has come closer to 5050. >> i think that's true >> that the arguments put up, that morgan did a good job, charlie ergen, dish's founder, chairman, did a very good job, sort of in terms of giving credibility to the idea that there would be -- that he would

be a real potential competitor and so we'll see we're not going to get a decision. >> why does it not get the coverage that it deserves since it determined probably most inflationary it could really change the cpi why don't people talk about it >> i don't know. you do >> incredibly important, the tower stocks ran yesterday, by the way. tower stocks i think it has to do with -- >> really? >> yeah. >> dish also had a nice move, a bit of a nice move. >> facebook reversed what newspaper is attacking facebook pull the negative piece. just -- >> an article today in the journal, of course, citing that big rally in biotech we talked about the overall rally in healthcare, related to elizabeth warren's poll numbers, but also when if comes to biotech, a number of successes, number oflarge, huge premium deals for smaller cap companies, by the big guys and i'm watching merck up 1.6%.

>> the move, this time, was because of the -- incredible -- dave ricks came on "mad money," david, the idea that eli lilly has this unbelievable pipe -- and only selling 20 times earnings elizabeth, senator warren yesterday, seems like one of many >> speaking of elizabeth warren, last night, in los angeles, as you any, seven democratic candidates squared off in the presidential debate. the iowa caucuses weeks away, the economy among the major issues discussed south bend, indiana, mayor pete buttigieg says the record-setting stock market is not indicative of how many americans are faring in the economy. >> where i live, folks aren't measuring the economy by how the dow jones is looking measuring the economy by how they're doing, when you're doing the bills at the end of the month, at your kitchen table and you find if your wages have gone up it is not nearly going as

fast as the cost of health and this economy is not working for most of us >> an interesting line there i agree with him, the dow is not the way to measure it. you want to use the s&p as you well know. >> there is -- there are trillions of dollars in wealth being created. i don't -- i think the mayor -- the mayor is -- has done a lot of credible stuff last night i think there is a component that does matter, because of 401(k)s, changes in 401(k)s, they added annuities. healthcare has not been resolved your healthcare premiums did go up, because aca was not allowed to be adjusted had they been -- had congress subsidized certain districts, where there was too much -- too many pre-existing, nobody wanted to write, it would have lowered your healthcare bills. i would not say -- >> healthcare is still a black hole. >> it is >> a lot of it is just the last ten days of life. >> you look at what hospital charges are for -- >> ten times, they mark up

distribution ten times >> no idea, still, what you're paying for. >> why can't -- >> miscellaneous, miscellaneous. >> why can't congress investigate -- for instance, eli lilly has a drug, an insulin drug, that is half priced of their other insulin drug that they provided, but the formularies, the big drugstores are not using it >> yeah. >> so why aren't the drugstores being called into account. no, because the lunacy of the healthcare system is that they just blame the healthcare system i have a lot of -- the villains are very easy to find. and they are -- if you just had some serious hearings, you would hear why things are marked up, how they're marked up, and who is marking them up and a lot of it would be the hospitals. >> there was also an interchange between buttigieg and warren about campaign donations, buttigieg holding fund-raisers and -- >> cave man? >> very wealthy people warren taking issue with that, take a listen.

>> we made the decision many years ago, that rich people in smoke-filled rooms would not pick the next president of the united states. billionaires in wine caves should not pick the next president of the united states >> mr. mayor, your response. >> you know, according to forbes magazine, i'm literally the only person on this stage who is not a millionaire or a billionaire so if -- this is important this is the problem with issuing purity tests you cannot yourself pass >> that was interesting. >> the wine cave >> smoke-filled rooms i think is -- takes you back a little bit. people don't smoke any longer for the most part. certainly not very wealthy people who seem to want to live forever. and are very focused on the latest of ability to actually

extend their life as far as possible so i don't -- i think she should get rid of the smoke-filled rooms. >> there was -- >> wine caves i kind of get a little more because that is certainly something when you amass great wealth, you're looking for new things to spend it on. and we all know a lot of people who like their wine. >> yeah. >> one more thing i can buy. >> there are -- >> are you going to value it under a wealth tax with elizabeth warren will be interesting. >> are a number of wine caves, this was the haul. david, that was one of the f funnier moments, no one was laughing no laughing. >> the debates will continue, only seven people on the stage, of course, it did not include michael bloomberg, former mayor of new york, who is running. but is funding his own campaign. >> yes >> i do think that if you look at what was consequential for the economy, i did think that the chinese discussion was rather extraordinary it really was, just to hear the other day, eamon javers broke a

story that nobody paid any attention to, kissinger has been doing shuttle diplomacy between beijing and the president and one thing that has come out of that was president xi is hoping that president trump wins, because he does not care for the field of democrats because they're worried about other issues including, david, human rights do you know that a question came up about boycotting the 2022 olympics trump would not boycott the olympics, but, listen, shanghai olympics, if it happens, david, if it happens, if the democrats pull this off, david, it is going to be -- you want to see a trade war? >> right, well, 1980 when we boycotted the olympics in russia tu due to their invasion of afghanistan. let's not talk geopolitics let's get back to the markets and check in with seema mody. >> interesting discussion, another day, another record

high the nasdaq 100 points away from breaking 9,000 also in focus oil trading at a three-month high the s&p 500 with today's gains on track for its fourth straight week of gains. mixed headlines on china overnight, first china's top ag consultancy said china can meet a pledge to purchase $40 billion per year of u.s. ag products another report says that chinese president xi jinping is planning to skip the world economic forum in davos, dampening hopes of a summit with president trump. a lot of positive calls this morning on nike. the stock is trading down, following strong earnings last night, higher average, selling prices helping offset the negative impact of tariffs greater china sales up 23%, versus the 27% sales growth it saw last quarter shares are down 1% right now but nike's management worth noting very positive on the strength of the global consumer on the earnings call last night, referencing the passion for sports and active lifestyles,

growth in emerging markets and that it is digital initiatives are paying off you compare those xecomments th chinese slowdown is continuing through the first half of the year, it is yet another example of this split between a strong consumer story playing out and the struggling manufacturing and industrial part of the economy and, in fact, on that note, take a look at shares of u.s. steel, down now over 8% on a dividend cut, warning on guidance and on pace for a second straight down year also closing a mill in detroit, the ceo of u.s. steel blaming current market conditions, steel tariffs went into effect in early 2018 that stock down 32% this year. david, back to you. >> seema, thank you. to the bond pits now, check in with rick santelli at the cme group in chicago good morning, rick. >> good morning, david pretty much all week treasuries especially the long, the long

end, 10s, 30s, knocking on the door of resistance above the markets in yield not quite penetrating. not so much on the short end look at two-day of two year. unchanged on the day open it up to one week chart, we're up two basis points. really has been a very consolidated tight move in the short end while the fed is in pause mode two day of 10s, they're also up one basis point. not a lot of big movement on any of the curve today but 10s are up 10 basis points on the week as you open up the chart. so are 30 year bonds we seen a steepening of 10s to 2s of 8 basis points thus far. if you open the one week of 10s up to november, you can see the resistance i'm talking about, i have a lot of emails where traders are looking at the quote/unquote double top, around 195, so whether it is going to actually hold or not, if you get through a look for some quick follow through, then assess if it can stay above resistance,

and finally if it does open the chart up to july, that's where we -- same month that bunds are comp to as they hover around minus 23, some of their best level s since the fourth of july as well. >> thank you, rick please make sure to check out our podcast. you can listen to the opening bell hour of "squawk on the street" wherever you listen to podcasts. >> tie on in that picture. >> i'll have a tie on most of the time it is friday it is very nice. you sleep with a tie might want to try -- >> ought to give it a shot. >> try relaxing. >> i do it with my boxer shorts, it really works. >> we're back after this ♪ ♪ i've been a caregiver for 20 years.

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but with opportunity comes risk. 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. all right. we have more news on the failure of that boeing starliner let's get to morgan brennan at the kennedy space center morgan >> reporter: oh, florida

that's right so we have got a press conference under way right now as i speak to you with nasa, boeing and united launch alliance officials here's the key headline from this press conference so far boeing starliner spacecraft will not be able to rendezvous with the international space station. however, it will remain in orbit. they're going to keep it in safe orbit collecting data and they're going to return starliner to earth via the white sands missile range in new mexico in about 48 hours that's the earliest landing they can do it is going to be 7:30 a.m. on sunday although that, too, could change in this conference, though, stressing that the spacecraft looks healthy, that it was the absolute right decision to come back to come home with it and jim breinenstein saying

repeatedly actually today a lot of things wept rig went right ay test so it was an automation issue here basically, the -- as soon as the starliner separated from the upper stage of the atlas 5 rocket it was supposed to start burning, the engines noting that if people, which is what the spacecraft is ultimately designed to carry, if people on board, astronauts could have intervened, would have been safe and that they probably could have taken the spacecraft to the correct orbit and ultimately been able to dock with the international space station. so that is your headline right now. boeing starliner is destined to return to earth in the next 48 hours. however, wrong to call it a failure. not a failure. definitely an anomaly and apparently continuing to collect a lot of information and make as

much success from this mission as possible. >> morgan, thank you we'll be checking back in with you of course in the next hour morgan brennan not a failure not a success. >> no, no. there's no pass/fail arnold - >> arnold donald, the ceo of carnival. >> i salute him. on "closing bell." carnival, blow away. >> stop trading, of course talking about right now. >> yes and i'll get you tie. >> i have a bunch. i knew that this would upset you. >> it does. >> i still chose to do it. >> even wil ford frost shows me the respect not doing that. >> he wears a tuxedo underneath at all time. >> bond, james bond. shaken, not stirred. >> back to carnival. for a second is that a reflection of the

consumer economy >> paychecks on tonight. a reflection of a very good situation. david, things are good i hate to say that just kidding i like to say it miss you this weekend. going to the eagles game with my daughter. >> i'll miss you next week. >> i might be here you don't know i could be a simulation. >> wherever you are, one thing, you will be wearing a tie. >> always. >> on vacation. >> always. >> doesn't matter. put him anywhere he's got a tie on. coming up, on top of the developments regarding that boeing starliner you heard from morgan. not a success but we'll see how they actually term it. keep it here gold!

nice rock. it's time to drop gold. go digital. go grayscale.

♪ welcome to "squawk on the street." i'm david faber with contessa and mike we're live at post nine. let's give you a look at the markets a half hour into trading as we are right now. the s&p forging new ground

28% the gain for 2019. as we wrap up the year with only a handful of trading days left the dow, of course, and the nasdaq both also in positive territory. let's get some economic data this crossing the tape right now. for that we go to rick santelli with the numbers for us. rick >> david, we are awaiting the final read from university of michigan and real personal spending and personal spending and personal income out. income up spoken .5% on the real spending side, it was up .3%, also a beat. let's look at the spending side. spending side is up .4%. the fed likes to look at the consumer deflator month over month and that is .2%

year over year, up 1.5 not a 2 handle in the year over year handle deflator since october of 2018. now, let's look at the year over year core deflatder up 1.6 that's hotter than expected and not 2% or higher since september. university of michigan final read, we toss out 99.2 we replace it with 99.3. so we increase it .1. look at the sub text on inflation and pricing issues looking at a one-year inflation target, 2.3. that's eased .1 to 2.4 drifting south the 5 to 10-year also from 2.3 to 2.2 so we have gone into the high 2s, mid to low 2s, contessa that goes right along with the issues and statements from fed officials. interest rates haven't moved much on that we are still up 10 basis points on the week on 10s and 30s and

the dollar index looks to have the first gain on a weekly basis for december which means two weeks down this week could be up back to you. >> all right, rick thank you for kicking it off for us this morning. the road map this morning starting with more record highs. all continuing their runs higher with just a few trading sessions left in 2019 >> boeing space trouble. we'll take you live to the kennedy space center boeing's new spacecraft failed to reach the correct orbit. >> pot stocks going up in smoke? tom daschle will join us at post nine to break down the industry headwinds. the market, of course, rolling on the s&p 500 on pace for a best december since 2013 best year i think thins 2010 joining us is chief global strategist david kelly and equities strategist scott wren can this continue? >> david, i tell you, we had a

3030 year end target for 2019. obviously we'll blow that away unless something crazy happens and we expect some positive returns next year but, you know, total return may be something in the mid single digit range and not expecting certainly a repeat of this 30% total return we have seen so far in 2019. >> yeah. it is quite a significant rally off the -- off the lows. if you want to call it that. scott, what do you see sort of becoming more of themes moving into next year >> i tell you. you know, for us, we did expect minor trade positives. if you see a rollback on september, 50% orr whatever, that's a little bit better than the market expected, better than we have been expecting and happened sooner than we expected and i think the theme really for next year it's going to revolve are we indeed seeing some stability and potential increase

in global economic activity or at least something better there? are we going to see cap-x spending the trade deal is not going to cause cap-x spending to increase overnight. this takes a little bit of time. maybe some time in the latter quarter, half of 2020 you start to see some numbers that reflect it but certainly the market's going to be, if it appears that's going to happen, the market reflects that well in advance. for me and our group as we look out it is are we going to see some trade positives are we going to see some stabilization and little bit better news abroad >> david, i guess the big question is, now that we have had this rally, the market seems to be kind of emptying the tank on the way to the year end, getting this 30% total return. what is priced in, in terms of a global recovery next year in u.s. markets and non-u.s. markets? is there any opportunity left?

>> i think there are opportunities particularly outside the united states. the u.s. economy is almost exactly the right place and like in your house if you crank up the heat and then throw open all the windows and cranked up the heat with the tax cut. throw open all the windows with the trade and then the heating bill is yet to come and the u.s. is in a nice place but if you look at relative valuations, the rest of the world is cheaper i think trade tensions will diminish and the global manufacturing sector will pick up and should help the rest of the world much more than the united states so i think 2020 will be a year in which international equities do better than u.s. equities. >> you have written about brexit extensively here how do you think the election in the uk and a hard brexit will affect opportunities there >> well, i don't think that we will have a hard brexit. i think the problem is that

theresa may and boris johnson relying on the northern ireland unionists who said there could be no border in the irish sea. he can make the compromises he wants and actually very pragmatic from an ideological perspective on this issue. not a hard brexiteer at all. i believe he'll get it done and then from an economic perspective, the closer the coordination of regulations, the lower the tariffs, the more everybody wins and i think boris johnson will look forward a few years into the premiership and wants to make sure that the british economy is in good shape and means coming a deal with the europeans and much closer to the current arrangements when we finish up than people so i think in the end it's a soft brexit. >> scott, looking ahead to perhaps mid single digit returns next year, it is kind of where the consensus is roughly coa lesing and where the math gets

you to you had a 20% plus up year the averages next year are single digit positive returns but in any individual calendar year it almost never happens so i wonder where you think the direction of surprise might be either on interest rates or something that we are not yet computing that's kind of generating that consensus for next year. >> the surprise could be we see better economic activity globally, maybe even here in the united states. our official number right now set back in september is 1.8 gdp next year. you gate surprise there, you gate little bit better economic activity abroad, another factor i didn't mention earlier is you have a lot of retail investors meaningfully underinvested in the market and have been for a long time and professionals, as well the fuse is lit. there's a little bit of chasing going on you get a little bit of positive news from some of these other areas i just spoke about and the market could carry itself higher than a lot of people really

think if a few things come together so you know, those are a few things we are trying to watch. we don't sense a lot of chasing right now but certainly when you are at this stage of an economic cycle it is really common the chasing starts, plays out over 12 or 24 months to the top. >> and david, i know you mentioned that you think international equities may be a better place in the new year in 2020 and you gave a little bit. give me a sense of perhap what is markets talk about, i would assume or perhaps not that emerging markets are not a part of that little more specifics. >> no. i think emerging markets are more levered to the global trade cycle than anyone else and relatively cheap and i think emerging markets do much better. also europe will get a bit of a dividend out of a brexit deal or clarity. remember, the biggest tax of brexit isn't brexit or tariffs but uncertainty.

that should help the european economy and certainly europeans markets. one thing to see in europe is some move away from the negative interest rates european central bank is pursuing this disastrous policy and critical for more sensible european monetary policy but one bet is in emerging markets because of diminished trade tensions. >> yeah. we say that as the embassy world index which is large and mid cap representation about 23, developed markets sets a new all-time high. thank you both have a great weekend. >> thank you. boeing's starliner launched hours ago and the spacecraft is experiencing some issues morgan brennan is at the kennedy space center right now what are you learning, morgan? >> reporter: what a morning it's been, contessa we have this nasa/boeing press conference under way right now still. it started at about 9:30 a.m.

eastern. here's what we know. the launch of boeing starliner, atop an atlas 5 rocket, went according to plan. the issues arose when that starliner spacecraft separated from the upper stage of that atlas 5 rocket, the engines supposed to burn it didn't happen as was planned it is what's called an automation issue by nasa and boeing officials right now and one they said if people were ideas starliner could have probably been overridden astronauts could have taken over, they could have controlled the spacecraft and would have been safe and potentially would be on their way to the international space station to dock right now. that was the plan. it is no longer the plan it is burning up a lot of fuel and not taking that trip to the iss. instead it is going to stay in a

safe orbit, it is going to collect as much data as possible in an as early as 48 hours it is going to come back and attempt the lands landing here back on earth at white sands in new mexico that's going to happen at the earliest about 7:30 in the morning on sunday. officials saying that the spacecraft looks healthy and also, saying that there is still a lot that's successful and has been good and positive about this mission so far and that this is exactly why they test but we'll continue to monitor and bring you more head loins as we get them. >> all right morgan, battling the wind out there. stick around for a minute. i want to bring in phil lebeau, as well. what's the impact for boeing >> i don't know if it's a huge impact near term morgan pointed out that there are a number of things that went correctly with this launch clearly not achieving the orbit that was scheduled to be

achieved is not going to be viewed as a success. people say it's a mission failure but this is not catastrophic i think morgan made an interesting point earlier today saying, look, when you compare what happened here and what's going on with space-x, perhaps this is an indication that space-x at least for now clearly in the lead in terms of manned space flight and what we are going to be seeing over next couple of years. it is interesting that we have a number of boeing executives down there. but you don't see dennis mullenberg talking this morning, nor a couple other executives. it is the team in charge of the space program. they're the ones talking certainly not good news, certainly will have an impact on the program in the near term but this is not catastrophic this is not like boeing is like, oh boy this is the worst thing in the world to happen to us. i wouldn't put in it that category. >> and morgan, as you move through and cover this, what other details could possibly

come out do they look ahead to the weather for the landing and that kind of thing? >> reporter: i think all of that is on the table right now. also, they don't know -- this did not -- this was an anomaly that did not show up in the simulations ahead of today's flight this is the first for starliner and simulating this and other tests here ahead of this it did not show up in any of the simulations, not sure what the root cause was and because of that, they don't know -- it is not still clear whether they will have to do another unmanned, uncrewed test flight before they can start putting astronauts on board starliner and remains to be seen what it does to the timeline for boeing to take humans back from u.s. soil to space to the international space station and it does, it makes that race that much closer, that much tighter with space-x which also has a last key safety test that it has to do early next year.

nonetheless, still the expectation seems to be to be u.s. astronauts launching from u.s. soil next year. who does it first? big question mark. especially as they move through the situation with boeing starliner today. >> all right yeah morgan, thank you. phil, i want to get to you finally on the topic that we most often talk about with boeing which is not the starliner but the 737 max. what is new today? >> it is the revenue generator of this company. huge we have done some calculations, david, in terms of the total number of max flights that have been canceled by u.s. carriers, comes out to 137,000 so far, we know that southwest and american, they have moved their plans to bring the plane back, back into april. proeb probably hearing from united some point and also tonight spirit aero systems making the fuselages for the max and announced it will halt max

fuselage production. that will stop on january 1st. not a huge surprise here given that they have about 100 of these max fuselages that have been built but are not yet delivered out to boeing so to keep the production line going at 52 would not have made sense. unclear what will happen to about 12,000 workers who were there. they may be working with the state of kansas to make sure that these guys are still -- guys and girls are still being paid but at some point clearly they're stopping production and happening january 1st. >> yeah. hey, phil, i may have asked this before where are all of these airplanes being held while they're not going to be in use >> well, the airplanes that boeing has built but not yet delivered, they're on tarmacs, a few parked in parking lots in washington some are at moses lake which is about an hour, hour and a half east of seattle. some down in san antonio

they're looking for parking places wherever they can for the planes and in terms of spirit and the fuselages that are built, it's a great aerial shot. i thought we'd have it in there. we'll show it later on today they're stacked up on the tarmac in kansas. about all you can do. >> crazy phil, thank you. when we come back right here, are pot investments going up in smoke in former leader tom daschle will join us here for an industry outlook following what was a rough year rionhetrt"ilbe wl ght back

the pot stock boom hit a bit of a wall in 2019. the sector measured by the etf alternative harvest tumbled more than 30% this year is it temporary or did cannabis stocks get too high for their own good here to discuss, former senator tom daschle and ceo of clever leaves kyle detwiler we know that there were companies put on notice just recently that they were violating fda rules by selling cbd products in drugstores nationwide where are we at in terms of regulation what are you expecting for next year, kyle >> this is the issue of a state legal but federally illegal system if the government is more

progressive to allow high grade processors, we operate outside of the united states and second largest federally legal producer in the western hemisphere, that said, i think it takes time. they're concerned about patient safety and licenses being given out in the right way but i think i'm optimistic there's no major movement in 2020 but maybe 2021. >> is the united states market important for you? >> we hope so. we are really focused on europe right now and the largest landowner of any cannabis company in europe so the scale at which we are building is all being destined for jemny maybe south africa or the united kingdom but we obviously think the united states is a very big market and love to enter and need to wait for the proper laws bah we run a federally legal business. >> senator daschle, give me your sense of the federal legislation that so many of the producers are waiting for here in the u.s. not 2020

does the democratic nominee who perhaps wins the presidency change the calculus at all does it matter >> i think all the presidential candidates on the democratic side have come out in favor of the legalization so i think if you have a democratic administration and congress you will see an accelerated schedule around legalization. i think descheduling is something that is growing in support, not only in the states, you have over 70 bills in congress that have been proposed in the house and senate, plens and democrats, who all favor some form of modernization of the regulatory structure so it will happen. the question is time. >> why do you think it's not happened so far? you are looking in colorado where recreational pot is legal for sometime business owners in this space i know say they're being forced to turn to criminals because they can't deposit the money legally in a bank. >> well, of course, the safe banking act passed the house now and we are very excited about that we hope to see the same result

in the senate sometime soon. there is a growing realization to do this there's conflicting information. a lot of people come into this with a mentality that the war on drugs was something we had to adhere to. that's changing but as it changes people are becoming more realistic about how we change it. >> kyle, obviously, there's urgency here, so much capital thrown into the industry before clarity on the regulatory side and i wonder what this industry might look like if you get decriminalization and rationalization of the regulatory structure because it doesn't seem necessarily like that's automatically going to mean higher prices and better margins and even greater usage right? it could just mean prices go down with more supply. >> i think it's very interesting and i think despite us being one of the largest producers in the world, our business is supplying others and with pullback in

valuations is that people wake up to the fact probably not the most efficient to grow cannabis in canada. might be more efficient of columbus or portugal and i think it creates a spreading of the industry, branded companies, producers like us,specialists in extraction, happens in every industry in the world and for some reason in cannabis it's not occurred yet. >> you know, when you look at a company like tilray, last year, a stock price high of $145 i checked this morning 17 and change. it is a steep dropoff. are there lessons to pay close attention to with the other publicly traded companies for your own companies >> a key lesson is don't do everything be the best at something and we think of a low-coast sustainable producer is ours we will be cash flow positive some time next year and that way

we don't have to depend on the capital markets to run a business. >> i want to come back to this idea of federal legalization what will it mean for the marketplace? >> what it does is single most important thing to do from a policy perspective to create the market and create the confidence you need to allow commerce to grow and to develop in all 50 states not just the 30-some states that legalized it so i think that's the key and a realization that there are health benefit that is we can explore far more effectively with the green light to do the research necessary so that is really one of the motivating factors to make this happen. >> i'm aware that it's very difficult to even do research to understand sort of what the benefits are and or not of certain products. >> exactly. >> senator daschle, you served

in the senate during bill clinton's impeachment. i got to ask what you make of the news on capitol hill we had news this morning that nancy pelosi may delay sending over the articles of impeachment. give us your sense of the import of this matter. >> i don't think there's anything more important for any democratic republic than to go through this process in the most thoughtful and reasonable way obviously, we did experience it 20 years ago hard to believe it's been that long but the lessons learned is to find ways to bring the country back together once this has been completed i don't think there's any question speaker pelosi will turn over the articles, probably right after the first of the year i think they're waiting to coordinate with regard to the senate and how to proceed with impeachment but clearly we have gt got to get this behind us. >> do you think we can bring the country together the partisan divide seems so

deep and hard to imagine. >> it is hard to imagine at this point. we have been -- we have haddadi vicive tim -- had dy visive times before sometimes it's an external threat that brings us together 9/11 is a good example of that that brought us together very rapidly. let's hope it's not a 9/11 that brings us together the next time but nonetheless i think leadership is really key to making it happen and even though it's hard to understand and you're right so much easier to talk about than to do we have to do it. >> former majority leader, thank you. kyle, thank you. and when we come back, nike reporting the final quarterly results of the year up more than 30% in 2019. but with new leadership set to kick in, can the stock continue to run higher? we'll ba tt detehanext when "squawk on the street" returns

(vo) in every trip, there's room for more than just the business you came for. ♪ whether that's taking in every moment... or capturing a moment worth bringing back. that's room for possibility. ♪ how far we can go, oh oh ♪ we're about to begin. yeah! i'm a magic cat. i love it. and now for the icing on the cake. [ hiss ] time now for our etf spotlight taking a look this morning at the energy spdr up

more than 1% for the week. currently trading as you see up about .4% today. energy up more than 4% this month but it remains the only s&p sector unable so far to achieve double digit gains in 2019 and also, a mixed picture for oil and for natural gas prices at the moment. take a look there. wti crude down more than 1% and natural gas popping more than 2% on the day as for the decade,ing in is on a downward spiral. wti faulting 24% brent down 15% natural gas with a decline almost 60% big reason that inflation readings cannot really get off the mat. let's send it over to sue herrera with a news update for us at this hour. >> thank you so much everyone, family members of missing texas mom broussard said that police found her body in the trunk of a car near houston and the 1-month-old daughter is located alive. fbi agents had been searching

for the pair who mistier sli disappeared a week ago after dropping off another broussard's children at school for the first time in 200 years, noter dame will be dark on christmas eve the landmark gothic style cathedral devastated by a fire in april services will be held a mile aw away where some of the precious artifacts are being kept. if you stopped at a wawa recently, the credit card information may have been stolen the company said a breach impacted thousands of customers. wawa is offering free credit monitoring and identity theft for those who may have been impacted. miss virginia hernandez a new title. miss america the 24-year-old beat out runner-up miss georgia for the crown. you are up to date that's the news this hour. contessa, back to you. >> i'm really looking forward to see oning of the pageants ending with a woman who does not do this you know what i'm saying >> you may have to wait a while

for this. >> exhausted it. move on to a different reaction. anyway as my one-time pageant contestant self says thank you. appreciate this. >> you're welcome. your money, your vote. democrat ek presidential stpefuls squares off in the la de debate of the year we'll bring you highlights when "squawk on the street" returns

one day after hitting a record intraday high, nike shares pulling back a bit despite a beat on earnings and revenue preparing for john donahue to sucede the ceo. a buy and hold rating. good to see you both this little dow say 1.4% on

nike does it say something about the set-up of the nomar befoumbers >> price target's 106. 31 times next year's fiscal earnings so valuation was somewhat elevated. expectations elevated and the momentum is incredible 13% for a brand this size just show it is momentum. >> jonathan, how about you anything in the quarter that gives you any sense of what the next act is? obviously new ceo coming in. or is the strategy essentially prebuilt >> i think you are seeing the strategy outlined two years ago really start to play out i think the stock row action today largely is noise for a stock that doubled the s&p gains over three months, up strong year to date and it is impressive from a fundamental perspective of a $4 billion brand growing the way nike is at an accelerated pace through digital innovation, strength internationally. china being a standout and

elements to expect to continue. >> jon, you are looking at digital growth that's stunning 38% growth nike app more than doubled sneakers app up 20%. how important is the increasing push to digital? and also, how does it play into the international strategy which is now making up so much of nike's revenue >> sure. serving consumers in a personal level with the apps and nike membership level and that's driving great economics for nike there's a big benefit to gross margin long term from the shift from digital not only in north america but internationally, particularly in china where nearly 40% of our incremental e bit growth comes from china. >> they've been able to do that in spite of the trade tensions and the back and forth with china. how much room is there for growth in that country >> yeah. it speaks to nike's positioning within china less than 20% of total sales today. arguably maybe the biggest

opportunity long term. nike a couple years ago highlighted a 50 million population in terms of adjustable market in north america. in china that could be 10x over time and you see the secular tailwinds, well positioned aspirational brand and leading with the digital strategy in china. all of that coming together to sustain. it's been 22 quarters where they have averaged 22% growth over that period. >> it's amazing, jon gross margin expanded in the second quarter in china. can they continue to move that margin higher or not >> we think they can there's mixed benefit from nike. asps rising. a best product cycle average selling prices are rising also mixed mix shift to china and other regions. >> the entire conversation it sounds like it is just kind of a lock right? only question is how much to pay for the stock. are we done talking about market

share issues we were worried about momentum on the part of adisdas or talking about a basketball shoe down cycle that's gone by the wayside >> yeah. if you look over the last two years, nike when they outlined their digital direct offense for the first time back in 2017, the stock has roughly doubled since then and it's largely been the result of everything we have talked about with digital and product innovation and the outlook for those areas perhaps is as strong as we have seen for the company. our take on the stock really has been that doubling in the share price over the last two plus years. more than half is valuation expansion and i think here at a low 30s times on the forward pe multiple there's not a lot of room for further expansion and so it's much harder to make the upside case here where consensus expectations are bullish already looking forward. >> finally, the parker era ends. a good one for shareholders.

>> incredible. >> what do we expect with donaho different ceo, different things occur. >> nike is in a position of strength and expected for john to start the digital -- accelerate the digital transformation they're seeing. donahoe's background in background, software and strategy and bringing insight into the nike brand. >> thanks a lot. >> thank you. all right. update our continued coverage of the trial going on, the states ags, 13 plus washington, d.c., against t-mobile and sprint. not far from here. uptown on pearl street the doj weighing in, of course, important to this because, remember, the department of justice okayed the merger of the two demanding divestitures and your agreements that it felt to create a viable fourth competitor in the nation's

wireless industry as it rolls out 5g around the country. also, agreeing to certain things in terms of dish's ability to find partners to capitalize its new business, as well. and now weighing in and saying as for the current efforts of the states, that they must convince this honorable court not merely acceptable but beneficial to the public to deprive consumers nationwide of a higher quality t-mobile network and dish's commitment to build nationwide retail mobile wireless network and to deprive consumers in rural states to support the settlement rather than join in the litigation of new access to networks indeed gnat litigating states propose remedy to harm consumers in rural states by denying these benefits they say weighs strongly against a nationwide injunction it's going to be a while until we hear from the judge in terms of decision, final arguments won't take place until january

but they are wrapping up with a couple of witnesses in terms of today in the court meantime, democratic candidates squaring off in the last debate of the year. jan wells in los angeles for us today with the highlights and the impact of this debate. hi, jane. >> reporter: hi, contessa. more give and take with seven candidates he's leading in iowa >> the mayor just recently had a fund-raiser there was a held in a wine cave full of crystals and served $900 a bottle wine. think about who comes to that. he had promised that every fund-raiser he would do would be open door but this one was closed door. billionaires and wine caves should not pick the next president. >> you know, according to "forbes" magazine i'm the only person on this stage who's not a millionaire or a billionaire

so if -- this is important this is the problem with issuing purity tests you cannot yourself pass >> reporter: the second theme andrew yang got a lot of air time and made the most of it here's a medley. >> i know what you're thinking, america. how am i still on this stage with them. it's both an honor and disappointment to be the lone candidate of color on the stage tonight. i miss kamala and corey and corey i think will be back i have sat with our leading technologists saying they cannot match the chinese resources. china just produced a major smartphone without google apps and trying to go to the world. we need a coalition to set technology standards and then bring the chinese to the table in a real way because this is the top priority and need to outcome pete them and win. >> reporter: possibly a good

night for the yang gang. the next debate is january 14th in des moines. three weeks before the iowa caucuses guys >> thank you jane wells as we head to break right here, take a look at shares of apple all-time high. never been that high never been there will it be there again who knows? a price target increase aver piper jaffray. pointing in point to higher interest in a potential, look, 5g phone fits right in with what yang was just talking about stock up near lib 80% for the year more "squawk on the street" after this

not all tech stocks have been winner this is quarter but there are three games that could play catch-up to the rally find out which on adtring nation more "squawk on the street" is coming up.

let's get right to the cme group in chicago and rick santelli rick >> good morning. thank you. i'd like to welcome my special guest casey mulligan, professor

at university of chicago but he spent a year in the trump white house. he's the former chief economist of the counsel of economic advisers i love talking to you because you were there we have friends of cnbc like larry kudlow that are there. how's the country in your eyes we had 2. 1/3 look at gdp. some data on income and spending improving. how's it to have a businessman run the country like a business? >> you would think that there wouldn't be much to it but there's amazing things coming out of the businessman's attitude one is a budget for the managers of regulation. a budget for the managers. radical in government. been around in private business forever. another thing he has is kind of nothing is free sort of attitude >> that's a wild statement nowadays because everything i see says you're wrong. there's things for free and want to give us more. >> and one area he took that is in the international aid area. we pay money to other countries and literally hundred of them

and every time one of those visitors he would talk to or visit he would ask the staff, how much do we give them and what are we getting for it because there should be nothing for free at the white house at first we were like, oh wow, that's novel, pretty cool and got used to it now it kind of came into the news about the hundredth time the country ukraine and asked the same questions how much are we paying them and what are we getting for it >> i don't want to get into the politics but many americans voted for him. a bull in the china shop or not it is about results. what do you think about the notion of trade? h how's he doing in your opinion would you expect the ball over the finish line on phase one and taken 18 months to do it do you think it was too long do you think he did a good job >> i look back at reagan an threatened tariffs to japan unless they got the intellectual

property rights into better order. i figured it would take president trump to do it it two terms. >> he must have a heck of a personality because it's raining all around him and he has an umbrella from so many things hitting him, dropping on him and he does seem to accomplish something. interest rates interest rates have been firm and still a lot lower than they closed last year other than the notion that the global economy slowed, do you' anything on the horizon to cause a significant rise in global rates? do you think lower for longer? >> you know, rates are not quite my area. >> well, considering the economic underpinnings that you pay attention to. >> the profit on business i think is the important rate to look at. if we saw medicare for all, one of those sort of policies, green new deal, that is bad for the rate of profit on businesses. >> look at health care to kind of handicap which politicians have a better chance

how much quickly do you think capital spending will ramp up once we get the deal signed behind us on phase one real quick. >> when the manufacturing area i would se >> in manufacturing, they're the ones that have been nervous, how is the stance with china looking. >> professor casey, always a pleasure wish i had a professor like you when i was in college back in the dark ages. mike, back to you. >> rick, thank you very much. going to break, look at the best performing stocks for the week market is hungry, netflix and undera underarmor more "squawk on the street" when we come back through the at&t network, edge-to-edge intelligence gives you the power to see every corner of your growing business.

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analysts are naming three names as top picks with biggest up side potential based on analyst target prices, energy, energy, all expecting to gain 10% or more these are electricity providers covering the south and northeast. not surprisingly there are only 8 utility stock analysts could see rally by 5% or more, makes sense given broader sector trades 22 times earnings higher than the five year average. guys, back to you. >> seema, thank you for that. chinese president is in the biggest gaming mecca to mark the handover from portugal to china. he is praising macau's polite behavior lawrence hough spoke to us.

>> there are more and more opportunities. if the stock exchange or that comes to materialize, i think that's another avenue for macau to diversify going forward. >> he mentions that, there are reports beijing will establish a securities exchange center in macau, in an effort to diversify the economy beyond gaming. sources in the gaming industry told me that seems ambitious they see it rather as a shot across the bow to asia's financial center or hong kong. they're working to expand beyond gambling when resort ceo says we believe the investment we are making in transformative crystal pavilion i will i don't know expansion in macau, coupled with accelerated growth make us even more

optimistic about the economy the casinos are due for concession renewal in 2022, they're trying to up the ante. the president's visit is expected to hit them hard because of restrictions on visas and overnight visits sources expect the december gaming revenues to decline that segment down more than 30% year over year in part because of the breakdown on those that bring in the high rollers, that new bridge that connects hong kong to macau, the mass business is not enough to support bigger bottom lines >> 2022, do you expect there's an issue in terms of big names here, sands and wynn >> largely no. the analysts think it is a no brainer, would send a horrible message to western companies if

you yank licenses from companies that invested so much. >> all right thank you, contessa. when we come back, back out to the kennedy space center, hear from nasa's administrator, jim bridenstine. what happened to the launch that failed apps are used everywhere...

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good morning it is 11:00 a.m. at kennedy space center in florida, it is 11:00 a.m. on wall street. and "squawk alley" is live ♪ ♪ good friday morning. welcom