good morning, everybody. welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick along with andrew ross sorkin joe is out today but sitting in for him we have tom farley, the ceo of farpoint ventures and cnbc contributor our guest host for the hoe is joanni lipman. she's also a cnbc contributor. good morning, guys. >> they all got the memo on the festive clothing today. >> great minds think a like, right? >> some clashing shades of maroon and red but we're all festive. >> you team up, we team up, too. we planned this out well >> totally. >> the markets are not color coordinated. look at the u.s. equity futures, green arrows across the board. >> it's the christmas season >> just not red arrows and that's been the surprise this

has been the trend we have been watching for quite some time future indicated 44 points by the dow. s&p futures by 3.5 this comes after we saw all three of the major averages sitting at new highs again on friday that's happened a lot recently the dow and the s&p 500 up for the last seven of the last eight sessions nasdaq on an eight-day winning streak and that's something that you're watching as we kind of rush into the holiday season here also look at what's happening in the treasury market. you'll see that right now the ten year looks like it is yielding 1.91% just below 2% for the ten year we have some news breaking just literally in the past hour now. report saudi arabia sentencing five people to death for the killing of washington post columnist jamal khashoggi, he was murdered of course in that saudi consulate in istanbul just last year by a team of saudi agents saudi-state run tv saying three other people were sentenced to prison over the killings

and reports say that the investigation found that the former top adviser to kraun prince mohammed bin salmon had no proved involvement in the ki killing. so, some form of justice being dolled out today but there will be lots of questions i don't think this is a story that ends. >> i don't think anybody believes it. >> i don't think anybody believes it. so is it justice >> kangaroo court. >> were these the five men that we were seeing on tape hard to know then the question of course i'll ask you, the question, of course, is does this change business -- does any of this change people's view of doing business in saudi or doing business with mbs? >> well, i think this is likely was done with that exact intention. >> right. >> you saw the way institutional

investors stayed away. >> you think because of this >> i was at that first big summit they had. and you were there as well and it was packed. all the great and the good, all the biggest pockets of money in the world twlr the next year, the year after kizzi khashoggi's murder, it was a ghost town. >> administration was back the next year before this ruling came out i think it was time-out. you're in the penalty box for a year, maybe longer. >> yeah, but it's not full on back again, that ipo -- nobody invested in that ipo it was largely arnl twisting of the retail. >> you think that was a function not of the transparency issues, not of disclosure issues but of human rights i thought it was all of these issues. >> it was all of that. absolutely human rights was a part. >> it doesn't help. >> mbs's position within saudi arabia, remember this is a guy

who is a reformer. i put that in quotes to some extent but indeed there are some reforms. locking up i don't remember the exact number over 100 important people in the ritz carlton there. and now this, five people sentenced to death do people look at this and say, wait a minute, they were following out your orders. that doesn't -- >> that's what i mean. i don't know that this turns the page. >> doesn't feel just. >> turns the page or brings them into a new chapter. >> the entire situation is so disheartening. it's hard to talk about. >> right let's tell you what else is new this morning china's finance ministry says it will cut import tariffs for frozen pork, medicine to treat asthma and diabetes and semiconductor products on january 1st. the lower rates will apply to all of china's strading partners tariffs will go to zero on some of the products.

over the weekend, president trump said that the united states and china would sign the phase one trade deal very shortly in his words here is what he said in an event in florida >> we also took the toughest-ever action against china. and as a result, we just achieved a breakthrough on the trade deal and we'll be signing it very shortly. they're already buying billions and billions of dollars of products, agricultural products. obviously the first step was on december 15th when we did not go ahead and raise additional tariffs on this front. but people have still been wondering what happens where is the deal? what interest terms of those deals? watching the moves that china is making over the weekend does answer some of the questions they brought up before about what happens, how does this not violate wto which seemed rich at the time now they're concerned about violating wto? we'll see what happens with it.

meantime, i don't know what everyone's view of this one is, former ceo of uber travis kalani-k sold $2.5 billion of his shares since a lockup period puts him on pace to be completely die vested within days his remaining stake is worth about $250 million and still a member of uber's bhord kalanick is working on cloud kitchens buying real estate around the world in bet that restaurants will pay rent capacity to create food for delivery but this is an indictment, i think, of uber in terms of the view of the company or something else >> sell, sell, sell to quote joe. >> he built the business he knows the competitors i mean, this is a very, very

smart man. >> could bit either some frustration with the direction of the company that he just disagrees with and may not be wrong and/or -- >> the company was not nice to him. >> is it really an indictment of uber or is it just say something about -- >> the relationship. >> the relationship that is so soured >> this guy cares deeply about his own personal net worth the first time i met him, he told me how much that personal net worth was. so, i don't think he's making -- >> he likes to control it. handing over control to somebody else to run his money, if he can take it out and invest it in a project where he has hands on experience even though he's on a board, i don't think he gets much of a say in what happens with the company and disagrees where things are headed as well. things have been so frayed i thought it was poor form they didn't let him stand on the stage of the new york stock exchange.

>> it was very petty. >> you think it's a personality clash. >> i don't know. i don't have any insight into it. >> raise more money for his new promgt i assume he could get a loan. >> he seems like the type of person who would like to run his own money. he doesn't seem like a passive investor or somebody who likes to say you run the show and i'll figure it out. it seems to me that he would-be would want to be more in control of his destiny. >> isn't it also a personality clash. every time i've seen you ask dara and i asked dara the answer you get back suspected an emphatic we love each other. >> we're bestties. >> 100%. >> going to movies. star wars, the rise of sky walker brought in $176 million in north america in its debut. the movie was hit with harsh reviews and 57% rotten score on rotten tomatoes. most of the time i don't care

what the krit ibs say. it's not going to stop me from going to say this. >> what did the family think >> we're going to see it -- part is look it came out and the way the holiday falls this year, you know, i'm going to see it with the entire family over christmas. my brothers, their wives, my parents. it's a big to-do. >> my son already saw it and he said it's way better than what rotten tomatoes said. >> i tend to think that's the case most people i talked to said the same thing if you're a star wars fanatic -- >> if you're a fan and he said it's better than the previous film if you're a fan, you're going. this is the first under $200 million opening. but let's be real, it was $176 million versus cats at $6.5 million. >> the farley family contributed $60 to cats. >> hold on stop stop the show. what happened? give us a review of "cats".

>> it was three members of the farley family and not me >> you saw the early viewing before they updated the digital changes. >> which is crazy. >> the review was scathing it was a big movie weekend "frozen 2" on saturday they said it was actually quite good good music good plot not quite good and then "cats" on sunday. first of all it was confusing. >> what are the ages. >> 14 and 11 all girls. they said it was confusing and most damning taylor swift was in the movie for one short song. >> bait and switch. >> little bit of a bait and switch. >> the fact is they're now putting in a new film. they're replacing the film i have never heard of that ever after the release date i think there's a lot of people like us. we had our big family movie day this weekend and we had bought in advance the "cats" tickets.

the reviews came out and we returned the tickets we went to see "frozen 2" instead and it was great. >> can i ask a question, why does -- as a business person, i'm reading about disney and star wars and frozen 2, why didn't they space out some of these movies 2019 -- >> that's been the way with the studio they have all the releases that come out fast i miss some of them because i don't get to movie theaters with the kids that was part of the problem with the last one they put out, the han solomovie. it came out the middle of cycle because they used to wait a year, that came out the middle of year and didn't do well as a result there is a saturation point, i think. and they tested right up against those limits >> okay. a lot more to come this morning. can we call this a holiday edition of "squawk box." can we do that all week, holiday edition. >> i like the poinsettias they put in. >> can we make sure everyone

appreciates the full holiday spirit. happy hanukkah everybody that was last night for us we do christmas, too we're christmas loving jews. the fed was one of president trump's favorite punching bags in 2019. what to expect from the central bank in the new year right after the break. take a look at u.s. equity futures right now. we got some green on the screen to match our red ties for this holiday season back in a moment >> announcer: today 's big number 5,175%. that's how much patrick industries is up over the past decade ocinhe it the top performing stk t s&p 1500 during that period.

♪ welcome back to "squawk box" this morning the economy and the fed were a big focus for the markets in 2019 the fed particularly was a big target, of course, for president trump. i want to show you steve liesman with a look at what to expect in 2020 on that front ♪ >> reporter: nothing is more central to the outlook in 2020

than what happens to the trade war. it looks to have depressed growth here at home and around the world this year. it led the federal reserve to reverse course and cut rates sharply in 2019. here is what to look out for in 2020 -- first, the trade war should improve somewhat or at least not get worse. as the year drew to a close that seemed to the case with the announcement of a limited u.s./china phase one deal. businesses will learn to informs and prosper with a world of constant rumbling of trade disputes. second, assuming a lot of damage hasn't already done, that should lead to improved global route and help the level of u.s. growth to 2.5% in 2020 or a half point above where it likely closed in and out 2019. >> third, the federal reserve should remain on hold. it could consider raising rates if global growth confirms other central banks start to hike. >> and markets closing last week at record highs once again

how should investors ride the rally and set themselves up for the next year? joining us to talk strategy for the holiday week ahead good morning to you. >> good morning. >> we have a week and a half to go. >> yep. >> there's a couple things going on i want to talk about the technical factors -- little rally into christmas and i don't know if you think that also rides into the new year, but there's also that people will sell, tax harvesting things, there's that point at which certain funds want to be in certain names can show on the disclosure forms next year. >> yep. >> how does that play itself out over the next seven to ten days. >> sure. there's two fears i want to talk about. fear of recession and fear of missing out. most of 2019 there was a fear of recession. two and ten-year invert and fed cut three times where there were concerns about global growth slowing. now we have seen that the market hits record high we have a phase one of the trade agreement. last six weeks we have seen 43

billion go into equity funds investors are now trying to play catch up and that momentum will push stocks little higher for the balance of this year and into the first quarter of next year. >> my fear is a different fear wch we have a nice run and january is softer. that's a polite way to put it. >> strong fourth quarter earnings more validation that the consumer is still strong and still spending and likely record holiday sale which is is going to push the consumer discretionary sector higher particularly ecommerce that's one area we like going into the first quarter. >> what about forecast concerns? right now the forward pe is 17.5, 18 times feels normal, could go up. is it possible earnings will come down? >> not for the first half of the year we'll see them continue. we have 50-year low for the unemployment rate. wages have risen inflation is 1.8%. that feels good.

more disposable income and consumers are working they'll continue to spend. >> is there anything that would happen to would shake your confidence. >> the phase one of the trade agreement doesn't happen, the federal reserve starts to do things we're not expecting but after the second quarter, all eyes are going to start focussing on that november 2020 election around who will be in the white house and who will be controlling congress. >> you think fomo is playing out, fear of missing out or the see if the carpet gets yanked out from underneath them. >> i think we're in the six to 8% upside potential next year. that's going to really be during the first two quarters of year and investors will sit on their hands. >> i have an election fed question. >> sure. >> do you think an election year jay powell wants to do anything? don't you think the whole strategy of saying what he said at the end of this year was to

say, look, hands off the wheel for the next year. you guys have at it. >> i think that's a large part of it. >> right. >> but then also with earnings continuing to grow at least for the first two quarters of next year -- >> if things get either worse than expected or better than expected, you think he puts his hands back on the wheel in an election year? >> worse than expected that's why we had the insurance cuts last year i don't that ip flags will ramp up fed does nothing in 2020. >> i have an election question predicted has bernie sanders and elizabeth warren 20% chance one of them wins the presidency. if we're sitting here in march and it looks like they're not going to win the election but the presidency, what does that look like for the markets? >> june or july we'll see who the candidate is, what the conventions are and a lot will be priced into the markets as we get closer to that point in time and i think for the first half of the year not knowing who the democratic contender will be we'll be riding the strength of

the economy. >> great to see you, kevin happy holidays. coming up, a public service for all you procrastinators out there. we have five gift picks that you can still get if you haven't finished your shopping list. hand selected by the style director at good housekeeper that's next. ♪ ever since we downloaded the 30 day fitness app,

we've been working out every day. together we've already lost 15 pounds. didn't you say you gained a few? yeah of muscle. the point is we're doing it together. this whole process has really made me realise how much extra weight i've been carrying around. i might just want to drop another 180 pounds. that's almost how much i weigh hun. exactly.

♪

♪ all right, if you are a last-minute shopper, you don't want to miss this segment. this morning we'll share with you some hot ticket items for the holiday season you can still pick up before christmas if you hurry. joining us right now is lori, good housekeeping style director lori, thanks for being here. >> thank you for having me happy holiday. >> happy holidays. >> you brought us some interesting, unique gifts, toys almost to a certain extent, but things that most kids would like having in their stocking stuffers and some adults, too. >> last minute doesn't to mean you have to be lazy and only get a gift card. there are some really good options. we'll start with the beauty junkies in your life andrew, will you bo my model this is how you turn it on this is a lacer thing that will

make my skin beautiful. >> you have beautiful skin this is the -- >> you look like eyes wide shut. >> press it one more time. >> okay. here we go. >> you can see it's lighting up. that's l.e.d. light, red and blue light helps to stimulate circulation. >> can someone call my kids and make sure they're watch this up right. it's around $430 it really re -- >> that's pricey does it really work? >> i'll really does work we were just talking about this in the makeup room i've seen this does it really work? it really, really works. >> prevent acne. that's what the blue light does. the red light fights wrinkle, promotes blood circulation, improves your complexion this had over 97% of the people show a significant improvement >> how long am i supposed to keep it on my face. >> three minutes you can take it off now? >> the rest of the show. >> i want the get the benefit. only three minutes >> three minutes it will shut off by itself. >> i do it for three minutes

everyday. >> everyday. >> i hold it to my face like there. >> pick that up at nordstrom move to the next one -- >> can i just ask, do you have one of these. >> i want one of those. >> this is on your wish list. >> we have it in the good houses keeping institute beauty lap it comes with a head strap. >> you can multitask while you're doing it. three minutes. >> i hope i didn't get any makeup on here. >> it's okay if you do, you'll have to keep it >> there's little l.e.d. lights. >> it's light therapy. it replaces going to the dermatologist office to get the light therapy which is extremely expensive and more convenient to do at home that's the blue light. >> what's next on your list? >> next i want to move to this hyperice hyperer volt. >> this is the one i want. >> andrew was so excited about it you must hear about this when people are working out, they have sore muscles. this is a massager. >> put it higher so people can see. >> which camera. so we're going to turn it on

andrew, will you be my model one more time. >> i will. >> so this is available at bloomingdales. >> i'm massaging my arms and you can hear it in my voice. >> it has max power and torque. >> that's the force of movement. that's low if you press that black button in the back you can move the speed setting up it comes with multiple attachments. it's great for athletes, anybody who has store more muscles. >> the competitor to this is the loudest thing. >> the competitor one is more expensive. >> and will give you a headache. >> it has a better handle. i read a lot about these things. >> it's on sale right now. you can pick this up in bloomingdale's gift hub. >> this is nice. >> i was there yesterday and there were four people ahead of me in line buying this it's a hot gift. >> i saw this before you set it up is that a sex toy. >> oh, no, no, no, no. >> hey now. >> that's a great thing to get for anybody in your life working

out a lot or have sore -- don't we all we all are stressed and have sore muscles. >> we do >> we'll let andrew continue doing that >> tell me what's next. >> we'll go to the nintendo switch light you guys have probably heard about this, right? >> no. >> my kid have the switch. what's the switch light? >> the switch lite is obviously a little lighter it's a little less expensive and strictly for hand held you're not going to hook it up to different consoles. it comes in three different colors you can play it. >> this is like 199. >> it's 199. you can get this at game stop or other retailers. this is one of those items that has defined the gift season for 2019 everybody wants this whether you're a millennial, gen xer and boomers picking this up. it's a really fun thing. it's great for commuters because you can play hand held games it's easy. >> i want to get to all five let's move on.

>> this is the mr. potato head moving lips. let's make he's on which camera am i on >> i want that already. >> can you see this. >> it's only 18 bucks. >> it's on amazon. really easy. one click away this tested well in our house keep toy award becky is going on amazon.com as we speak. >> that thing is great our toy tester words, testers absolutely loved it. around parents really like it because it's so nostalgic. >> potato head moving lips. >> sorry i love this. i want this. >> i'm so glad that one maybe i can hook you up with, andrew this is available at best buy. this is the tido care, anybody at the table >> you lost me you lost me. i'm in a race here >> it's like my children right here >> so what this does, you're going to pair this with an app on your phone. it's an at home medical device that you're going to drop.

it comes with a stethoscope and essentially what it does is it can diagnosis you over the phone. if you have insurance, certain insurance programs cover this. you call the doctor through the app. they see you thu this video and -- >> facetiming them. >> but it uses the data, so the physician is getting realtime data you're not just facetiming and saying my fever is 10 3 i'm and i'm really ill. >> this is your own physician who you are calling? >> that's a great question it's through a network that title care provides. it costs around 55 to $65 depending on your health insurance but it's a network provider. >> you pay 250 up front for the device. >> correct the app is free. >> if you want the appointment. >> the appointments are vibl at all different times. >> that's 50 bucks a pop. >> around $50 depending on your insurance. >> i'm a delicate flower and i get ill. then i need to call the doctor because i'm dying or i feel like

i am and then i wouldn't have to physically go to the doctor. >> no, do this from the comfort of your own home turn it on we can't do it here because of the wify fire walls. >> can they prescribe medications? >> yes. >> they can. >> so this does not diagnose heavy, duty illnesses, ear infection, respiratory. >> yes. >> i feel like i'm speaking your language now >> you're speaking my language right now. >> the tongue depresser. andrew, if you maybe had -- >> if i would need z pack, that's what i'm talking about. >> you basically just plug it -- stick it on here, depress and they can see everything in realtime and then the data gets sent right to them. >> lori, you sold him. >> yeah. >> can you come here at least once a month from now on. >> i feel like andrew wanted everything i don't know about the rest of you. >> i want the mask. >> i already order mr. potato head. >> this men's skin, women's skin -- >> doesn't matter. >> i waited at the beauty store.

couldn't get in saturday or sunday to get makeup and beauty -- i want that there for all three girls, yeah. i can amoretize the cost across three. >> everything here people will love >> happy, happy, happy holidays. thank you. >> happy holidays to you. >> when we come back a lot more on "squawk." softbank hitting a road map in its ilt baouof wework. we have more on that when "squawk" returns after this. through the at&t network, edge-to-edge intelligence gives you the power to see every corner of your growing business. from finding out what's selling best... to managing your fleet... to collaborating remotely with your teams. giving you a nice big edge over your competition. that's the power of edge-to-edge intelligence.

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♪ good morning, welcome back to "squawk box" here on cnbc, we're live from the nasdaq market site in times square. look at the u.s. equity futures at that hour green arrows once again, looking at all three of the major averages which closed at new highs on friday. adding to the gains this morning. in fact, right now the s&p 500 and the nasdaq would open at new intraday trading highs dow is not quite there yet but the dow is indicated up by 50

points s&p futures up by 4.5 and the nasdaq up by 18. what do you think, tom, crashing into the new year? >> i was on with you a year ago, and so -- >> different story. >> in preparing i was looking back through my old notes. what i realized is the s&p today is up 40%. >> from where it was back then. >> from where i was on the set december 21st. >> we bottomed on christmas eve and straight up since then. >> 40%. >> that's nuts really >> yeah, 40% i think the dow was at 23.40 was the low and today we're at 3251. if you do the math, it's 39.something percent at these levels. >> more than i realized. >> it's staggering. let's talk about new details on boeing ceo dennis muilenburg's trip to washington, d.c. last week according to "the new york times," faa chief stephen dixon told muilenburg not to ask for any favors and boeing should

focus on providing all the documents needed to fully describe the 737 max software changes. the times described the private meeting as tense this was the first face to face encounter between these two men but we have heard about the difficulties in that relationship boeing thought they would be on a time line to get the 737 max approved by the end of this year the new faa chief thinks differently. he is not moving on boeing's time line and has been very outspoken. in the longer term it's for the best the other global regulators would approve if the faa approved this is strong signaling they're not in a cozy relationship and this is not an easy thing to get the faa easy to recertify. >> gary kelly was relatively scathing. >> i'm sure. southwest has more 737 max airlines than any u.s. airlines. >> keeps turning up the pressure. >> they have had to move their schedule again and again and

again because boeing has been fairly reassuring to all of the ceos they were going to get approval, they thought, by the end of this year they are not on track for that. >> it does seem like the worst thing you can do as an ceo is overpromise and understood deliver which is consistently what muilenburg has done. >> the wall street research analysts continued to prove him. i can't tell you how many guests they all say it's going to get back up in the air and it takes me to the next question is ralph nader's question, should this plane be flying at all when ever that question gets asked, you're being hyperbolic. >> steve dixon is no pushover. >> i question when this gets back in the air. >> the new faa is a pilot himself, this will not be recertified until he flies it and feels confident that it's ready to g w. one of the big concerns, now i'm starting to hear civilians people not in the markets say i don't want to fly on a boeing jet. >> i hear that and then i always wonder, do you know what flight -- what plane you're

booking when you book a flight i don't. >> i generally don't, now you hear of people who say now i'm looking. i don't know if it will actually have an impact, but the fact that it has seeped into a consumer mindset, away from beyond the investor mindset. >> it will have an impact. people will have drinks or take drugs before they get on a plane because they have such fear of flying, prescription drugs i think they will look -- >> what if. >> oh, yeah. people with severe fear of flying will have to fly for their job will take prescription drugs. >> i think if they actually were nervous about the 737 max they would look into it and say i'm not going to be on that plane. >> i think it will happen. >> to be continued we'll talk more about this. but meantime, when we come back, disney's newest star war's movie dominating the box office. we'll talk autbo the company's new strej heategy heading into e new year next. ♪

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welcome back to "squawk box" this morning star wars the rise of stywalker dominating the box office but it didn't perform as well as some other star wars films. what does that mean for disney and the state of the box office. julia bornstein joins us with more. >> good morning, andrew. >> happy holidays. >> happy holidays. >> she has the red it's all festive. >> great to be here and this holiday season is very important time at the box office and no movie bigger than star wars rise of skywalker

brought in $176 million domestically, the 12th biggest opening of all time, fwhau is at the lower end of expectations and below the prior two star wars grossed 220 million and $250 million respectively. now this film's performance was dragged down by negative reviews of 57% score on rotten tomatoes and its audience response b plus the lowest rating of the five films that lucas film released since disney bought the company. plus, there's the question of how the mandalorian is raising the bar of going to the movies the real test is what happens a the box office over the next week whether it reaches beyond its core fan base or combination of reviews and less positive word of mouth than prior star wars leads to a steep drop off to the box office over the next few days now the box office is down about

5% year to date from last year even with that decline, and skywalker not living up to recent disney dominates the opening. fox is up 26% market share last year andrew. >> julia, stay with us we'll continue this conversation for more on disney's dominance and whether they'll stay dominant in the state of box office is paul, he is the senior media analyst at comscore. good morning to you. >> good morning. >> i have just a question, julia can answer this as well, has the rotten tomatoes number gotten any better or worse over the weekend? >> so there are two scores there's the critic score and then there's the audience score. the critic's score is going between 56, 58% hovering below the 60%. the audience score was better likes 86%. >> still. >> a b plus. audiences like it more than

critics and oftentimes with these mu vis you have a big conflict of what audiences and critics think. the audience response is not as good as for the prior two star wars films >> hey, paul. >> yeah. >> i have a question -- >> i have to agree. >> go ahead. >> i have to agree with that i think when the critic's score is low, yet the audience score is high, that hopefully we can see this film build over the coming week. as julia said, this is a really important corridor, according to our comscore data this week could be half a billion dollars or more, running 4.6% behind last year, which was a record-breaking year what we're going to wind up around 11.45 billion in north america. that will be the second biggest box office year ever >> tom, had a very smart point just -- you did. couple -- >> that's one, all right. >> 45 minutes ago. >> that makes one. >> why is it that "frozen" and the "star wars" coming out so

close together seems to be a bunching of all this disney product at the same time disney plus is out. does it make sense in terms of timing >> i think it does what disney does is they keep their brand going. "frozen 2" crossed the billion dollar mark. it's very likely that skywalker will hit a billion which would be their seventh billion dollar film released in 2019. this past weekend's opening for skywalker is disney's seventh 100th debut. of course they have their streaming service disney plus running the mandaloria. >> paul, the reason i ask a question, how do you repeat that trick in 2020. you look at their lineup for next year, they won't have seven billion dollar films in business, you try to increase your cash flows each year if possible. >> right that's a good point. and by the way, 2019 to have

that many billion dollar movies, i don't know that any studio will repeat that any time soon that was an outlier for any studio to achieve that certainly for disney going into 2020, they have jungle cruise and black widow the next marvel video opening this summer. i don't know how you live up to a year like 2019 for any studio. but i think they have enough there plus the disney streaming that will give them a lot going forward. >> okay. one final question, paul and julia can answer this one, i don't know do you think there are families that wampblt to see this film and say i have disney plus i'm going to look at the clock and wait a couple months and homefully this film will be on disney plus. >> that may have been proven to more of a thing with "frozen." you have the original one and all the other princess content on disney plus

man mandalo rirks ian, drive more interest or distract, it will be people on the bubble i like mandalorian, main nybe n families >> paul, final word. they're playing us out. >> disney will to see how they n 2020 of course, disney plus always a factor. >> paul and julia, thank you happy holidays >> when we return, we'll tell you why the sec is reportedly investigating slack and some other unicorns for the debuts on the nyse ayig he.itt will join us next. st rhter we'll be right back.

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this probe will focus on how trading was handled on day one and other issues as one. for more on this, let's welcome former sec chairman harvey pitt. he is now the ceo of caloama partners thank you for being here today >> it's my pleasure. >> how should we read into this? >> well, i think this is a very logical extension of the commission's staff's concerns with how ipos and other preliminary offerings are being handled, in particular, i think they're worries about how price determinations take place, the independence of those who tend to be the market designated market makers and the like and making sure that all risk disclosures are fully disclosed. >> are you kernt with what

you've seen in the i p o market >> i think there are questions about how the process is operating. in the area of direct exchange listings which is what slack and before it spotify reflect, there have been questions about how the pricing was determined and those questions, i think, are difficult to answer without conducting a thorough investigation which appears to be what the sec is doing >> to say i'm close to the situation is an understatement i worked with my colleagues to design the direct listing and involved in many of the ipos i have to be circumspect the report really said nothing i don't know if you read it. it had this prominent placement. they said the sec are investigating. what i suspect and i have no firsthand knowledge. what i suspect they're investigating is what happens before a listing transpiers. the i doubt they're vekting the

correct price, the price at open when you look at the spotify or slack listings, they trade very, very smoothly on the new york stock exchange more smoothly than any exchange in the world about ut what happe but what happens is a black box. he goldman sachs and morgue an stanley do a great job of balancing orders but the process of how do those orders make it into the book, how is that communicated to the public and i think it's healthy to look at that and to say are we doing the best job possible? are we providing the most transparency and with the advent of direct listings, now is the time. >> sure. >> i view it as largely a good thing. that the sec is looking at it. but i want to reiterate, its no the clear what exactly they're looking at. >> harvey, part of the question is the valuations with he saw in the private markets before clearly, some of the valuations were just a nosebleed territory and doesn't deserve to be there. >> yeah. i want to make it clear, the sec

wond be looking into the correct valuation was or anything of that nature. that is not the sec's task and they scrupulously avoid that what they're looking at are the processes that take place to set the price. and then also the surrounding disclosures and particularly risk factors >> sure. >> so while i agree that we don't know what the sec is investigating, what we do know is that this is a process that is relatively new. it's used by large companies as very new and the entire review here will serve very well the markets and those who invest in these securities >> harvey, thank you for joining us today it's an interesting conversation i'm sure we'll have you back to talk more about it also want to thank joe an. it's been great seeing you >> thank you great to be here. >> happy holidays. >> happy holidays and we'll see you back here soon

>> thank you happy holidays to y'all. >> when we return, our investors going to get more record highs for christmas. that's a question. take a look at futures right now. it looks that way. dow looks like it's going to open up 55 points higher squawk returns with two big hours ahead. ( ♪ ) sure, the content's easy. but then you have to connect, download, edit, reformat, output, save, send, upload... still uploading... and maybe eventually post. this isn't working. introducing samsung business video solutions. with the galaxy note10, you can shoot, edit and post thumb-stopping videos, all from one device. samsung business solutions.

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santa clauss is coming to wall street. >> tariffs and trade, u.s. and china trying to get a deal done. the latest comments from both sides straight ahead >> plus, president trump's tax cuts, two years later. one the architects of the plan will join us live. second hour of box "squawk box" begins rightnow. >> good morning and welcome back to "squawk box." tom farry is hanging out, ceo of farpoint ventures and cnbc contributor and reviewer of movies including "cats" and "frozen 2.

we might surprise his review a little bit later also joining us this hour, cnbc contributor of weekly advisory group. take a look at u.s. equity futures this morning we're wearing red. the nice idea is we got green on the screen the s&p 500 looking to open 5 1/2 points high they are week. >> china announced a cut in import prices or in tariffs, i should say for frozen pork, drugs, and high-tech products. the cut applies to all of china's trading partners of course, comes in the wake of the u.s. and china announcing their phase one trade deal last week gasoline prices have fallen four cents over the last two weeks. the latest lundburg survey puts the average price at $2.61 a gallon that is 18 cents higher than a year ago more investors are taking note of the stock market's record run. about $16.6 billion flowed into

u.s. equity funds last week according to bank of america a report they put out. that is the highest weekly inflow in three months part of the reason you keep seeing new highs every day including on friday. news just in from sports betting company draft kings. it's going to become a public company through a business combination with two other entities one of them is diamond eagle acquisition. that say special purpose acquisition company. the other is sp tech, a provider of sports betting technology once the transaction is complete, the combined company will be known as draft kings and it will trade on nasdaq under a new ticker symbol. we'll talk to the ceo of draft kings coming up at 7:40 eastern time about why he's doing this what the purpose is. jason robins will be here on set. >> we'll get into this with jason. with very to preview, the spak king is here you're doing a spak. >> spak is no longer a four letter word. it's the wave of the future. i'm listening becky tell the

story with a large smile on my face >> i think this is a great company to merge with a spak i think they have a great market we can talk about online betting and talk about new jersey. i suspect they view this as a better path being public than an ipo. that is the gospel i've been preaching for a year now. >> why is it abouter to go betto through spak >> it's not great for every potential prospect i suspect, we'll ask the ceo, i suspect in their case it was a little bit easier. the when you combine two different companies, theres a story to tell there to ipo investors. you're limited in a quiet period, cooling off period in an ipo, you're not so limited in a spak. can you sit down with fidelity two days if you need to to tell the story. you can do it a little bit quicker. you don't have to go through all of the traditional ipo prep in order to do a spak and you can have a certain price and a certain proceeds whereas

with a traditional ipo you don't know either. >> we'll talk a lot more about that in a few minutes with the ceo of draftkings. meantime, big story of the markets for the year have been tariffs and trade. we're going to take a look at how this story is likely to develop in the new year. >> well, andrew, it was especially a volatile year for trade. 2020 could calm down a little bit. the wild card could be the election >> unpredictable tariffs and short lived truces in 2020, international trade will move back towards the status quo china tensions return to a simmer fireworks return when u.s. and china sign off on a phase one deal in early january. a second deal will remain far off. if china engages on and enforce this is first deal, expect tariffs to be rolled back slowly second, farm finances will be in

focus. it was a two year trade war and the new business with china, mexico, canada, and japan. sunny purdue says more financial aid will be warranted if the ag economy doesn't rebound quickly. third, europe will be back in the crosshairs prose trump eyes re-election, he'll hone in on the eu. rising tariffs on luxury goods, the president's stump speeches will be testing ground for new material on auto tariffs and energy sanctions but he'll pocket those fights until after november >> so that is what is expected we all know the status quo can change with a single tweet >> okay. before you go, you mention europe and these auto tariffs. you think that's a host -- that's a post november 2020 situation? >> legal experts are divided on

whether the administration still has the authority to actually put those in place because they missed the deadline. some within the administration think that they can still do that others think they need to open a brand new investigation to do that pretty much all of the president's advisors are advising him not to go forward with auto tariffs at the very least until after the election >> okay. cayla, thank you for that report in the last days of the years, the stock market tends to perform unusually well what quality calls the santa claus rally. they gained 1.3% since 1950. joining us to talk strategy ahead of the last days of 2019, keith banks, vice chairman and head of investment at bank of america and stephen reese, global investment strategist at jp morgan private bank and jim paulsen, good morning to everybody. let me ask this statistical question yes, there's the nice little runup in the santa claus rally tell me what happens to the first ten days of january.

st do >> does it get given back? >> i think they continue to go higher we were talking about the flows. we're looking forward to the fourth quarter earnings season this year earnings were terrible, right? i think we're going to see an acceleration into next year. helped by a lot of things most notably trade. i think it continues to go higher with he could see some consolidation. but those in my opinion are opportunities to be had. the. >> you're optimistic too >> we are. i'm not good at ten day increments as we go into 2020, we're still in the midst of a very aggressive global synchronized easing cycle rates are going to continue to come down. balance sheets of central banks around the world will continue to increase. and finally we're seeing countries utilize fiscal policy to also drive economic activity powerful stuff. >> i can take us back to where we were a year ago tom brought this up before he's right i mean, markets are up 37%

this is for the s&p 500. from where we were at the low of december 24th last year. how were you feeling on christmas eve last year? did you think we would be at this point now >> it was a tough christmas eve. we worked a lot. you know, just keep in mind where we are today and what the 30% plus rally is. it's a little expensive. not in bubble territory. for us this year is going to be all about finding the earnings growth we think earnings can grow close to 9%. >> so no more multiple expansion? >> could possibly happen but we're not calling for that >> you think it will come in at 9% right now the forward estimates are about 9% and we heard from a lot of analyst who's say, yeah, but that's going to come down. we're going to see 5% to 6%. >> i think the expectations are a bit lower. i think the risks are to the upside this year >> hey jim you there? >> yes >> how much of a possibility is the multiple expansion story in

2020 >> i think yields and interest rates are moving up in 2020. we had periods, even back if you go the last big rally in '17 into '18 where yields went up and pes continued to expand as well so it could happen but i don't disagree i think catalyst for 2020 gains is probably earnings you know, one thing i point out is i look -- we didn't have a bear market in 2018. but we got within a razor edge of 20% decline on december 24th. and so i look back since 1950 at every first year bull market and the average of all those is just about what we did here in 2019 and many regards it felt like first year of a bull market. a wall of doubt emerges. we had weak earnings but we were kept going up with massive drops in yields and massive policy stimulus and we had doubt all year long

i think 2020, year two of the bull, it goes up another 10% that is like 35, 3600 on the s&p 500. if it continues to track that. but the difference is in year two optimism returns fundamentals actually start to improve. earnings start to go up. even though yields climb, the stock market continues to rise because more and more players that are underincestvested comek into the market. that could be a common theme in 2020 >> and a question on the earnings storey. one characteristics of 2019 was a decline in earnings. profit margins receded labor costs are rising what is the math to get to 9% earnings growth? does that mean profit margins reverse higher and labor costs stop going up? >> i think it's a bit of a benefit. the billing call is that margins expand this year >> can i ask one more question one of the big issues mising is

capital expenditures ceos have not felt good about things if you see the markets pick up, if confidence comes back, could that be the next thing that really fuels a rally as ceos decide we're going to spend again? >> that is still a wild card in our mind it's a great point we're seeing all this without cap ex-really taking off and another interesting thing to your point earlier, if we're sitting here a year ago, we were expecting four rate hikes this year >> right >> we got three rate cuts. >> right. >> so you talk about dramatic turn around -- >> things can you predict and things you can't. >> yeah. the point around flow is interesting. we're seeing flows around the end of the year. you said you kind of get that. >> right >> but the flows in equities are still negative this year overall. if you go back to 2008 -- >> on a really bullish year. one way you can get some pe expansion, though we're big believers it will be earnings that drive the rally next year is if you start seeing real flows, positive flows in equities for first time since 2008

>> okay. keith, stephen and jim, thank you guys >> thank you. >> happy holidays. the. >> thank you >> when we come back, you can call it a silver lining. boeing star liner lands safely after part of the mission failed we'll talk about what is next in the great space race when we return first though, make sure to subscribe to our podcast it is called squawk pod. you'll get the interviews, behind the scenes access and much more. you can get it wherever you get your podcast stay tuned i used to say i want to gain muscle but where do i even start? maybe i'll just go to the gym tomorrow. i work a lot and barely have any time to myself. it takes forever to get to work and come home. i wish personal trainers weren't so expensive. now, with the 30 day fitness app it's like having a personal trainer in my pocket. i can work out wherever, whenever and however i want. i gained muscle with fitness plans tailored to me. try the 30 day fitness app today.

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welcome back to "squawk box," everybody. we have an update on a story we launched on friday morning star liner is back on earth after a successful landing the spacecraft landed in white sands, new mexico, just before 8:00 eastern time yesterday. nasa says this marks the first time that an american made human rated capsule touched down on land that is pretty amazing it came with the three parachute that's helped it descend slowly and then able to send something out that acted as a cushion for while it landed. now, of course, this return comes after a rocky start for the star liner a flight control system fired at the wrong time shortly after the launch and that put it in the wrok orbit because it was in the wrong orbit, that prevented the capsule from landing the most important part that it landed safely.

that would have been a much scarier situation if you couldn't bring astronauts back safely boeing said it was still able to conduct tests of many parts of the spacecraft the star liner mission was scheduled to carry astronauts but it's too early to say if that will happen next. >> and they talk to secure $3 billion from japan's they biggest banks stold. lenders hit internal lending limits soft bank is likely to enter the new year without the financing in place for the $9.5 billion rescue package the report says the deadlock in japan led softbank to secure a $1.75 billion line of credit we told you about that last week but do we know if they have a financing out in that deal in other words, did they commit hard to that or did they -- >> i think they're locked. the i think the idea was though thought that these banks in japan were going to loan them money against soft bank, not

against the weework. they didn't say we object this this transaction typically, when a bank lends a big corporation money, its not about where the money is going >> the relationships >> the relationship. so now by the way, the relationship from what i understand is actually strained with mitsubishi. you go to the different banks, it's a problem >> oftentimes in these types of transactions, there is a financing loss where it says i commit to do this but if the banks say, no i can rip up the contract >> i don't think the loan was never against weework, it was a soft bank parent >> i see >> and that's why. >> that's a much more conservative loan. >> and a much more -- and also now complicated. they thought they were going to get soft bank rates not weework rates. meaning in terms of the loan and that's why they could do it and why the economics they thought made sense >> and the difference is pretty radical. >> yes >> okay. coming up, when we return, promising new findings in a

quest to screen for heart problems long before any signs of any trouble we have good news to bring you we have details on that story next plus, the futures right now, nice green ahead of the holidays 75 points up on the dow, s&p 500 looking open that's 6 1/2 points higher stay tuned you're watching "squawk box" on cnbc

welcome back the fda granted breakthrough status for an al gogorithm. the mayo clinic's cardiovascular department chair they're co-developers of the algorithm and for viewers, frequent squawk viewers, you have seen this before thanks to dr. friedman gentlemen, welcome to both of you. for viewers who weren't with us last time, describe what this algorithm does >> sure. so heart failure is a condition with a heart pump is weak. that can lead to shortness of breath, exercise intolerance, arrythmia and sudden death and it turns out that about seven million americans don't know that they have the

condition. 9% of people over the age of 60. st so this algorithm was trained using artificial intelligence on roughly 100,000 ecgs and we would show the computer an ecg and say is a weak heart pump present, yes or no over a period of time it learned to identify subtle patterns that even an expert human can't see so what it does in the final form is in 15 seconds, it can read your ecg and tell you whether or not a weak heart pump is present something that usually requires a test like an echocardiogram or mri scan that costs thousands of dollars and may take you away from work for an hour or two or three to be seen by a specialist. >> explain us what the role is in all of this and what comes next >> we've been partners with the mayo clinic to develop the technology and be able to test it on hand held ecg devices so it can be a very efficient and quick screen in the physicians

office what this breakthrough status means is we're able to collaborate with the fda we get priority review with them and hopefully we can get this technology in the hands of clinicians and patients much more quickly >> how quickly do you think that can happen and what will this technology look like >> it's very hard to say with the applications it can take upwards of a few years. our hope is that we can get it on the market within a year. but it's pretty challenging to say. >> it is going to look like a watch? it is going to look like a piece of equipment that i buy and put on many i finger as a consumer, how would i handle this? >> we built a digital stethoscope and ecg combination device that clinicians can use and wear around the neck and screen every patient just as they would with a normal stethoscope. and that puts this ai technology in every day clinicians hands and use it as a easy to use piece of medical equipment rather tharnn a complex mgs

device how is this different from what apple is doing and trying to get directly to the consumer and visit be a piece of equipment to wear all the time. >> this is a more innovative al go rick imand we're screening for a condition that we didn't know necessarily was possible to detect with ecg previously that's what the work of the mayo clinic has shown we're able to find this correlation between ecg and the patient's heart pump efficiency that was impossible to detect. >> i think that is the thing that we were most astounded by when we came into studio and showed us how it worked. through ai, they're able to recognize and tell if somebody's heart looks like it is the heart of a 68-year-old and heart of a 43-year-old. it does tell you about the physical health.

>> that's right. these signals that our bodies are giving off have important physiologic information and now with the use of artificial intelligence, we can read it we've done a number of studies showing that it works and retrospective data and we're doing the prospective studies. doing that last mile of artificial intelligence showing in the real world when we use it prospectively, we're helping people and our partnership with echo is to make it part of our standard routine. they're doing what they always do but now they're getting additional information and it's important information which is why it got breakthrough designation from fda if we find heart failure is president e present, there are many well proven treatments. the treatments prevent the development of symptoms and early death. and so identifying the presence of this condition is important

you can have a routine checkup that may have been missed before sfwlchlt . >> this is one step in a long history that mayo clinic has of revolutionizing and coming up with new ways of doing things. everything from forcing doctors to sterilize all the way through proton therapy this is another exciting step. we want to thank you both for being with us today. of we'll talk to you soon for another update. >> thank you it's a pleasure to be with you >> thank you. >> still to come on "squawk box," so much more boeing ceo goes to washington. we're learning more about his strategy for talking to regulators and getting the max flying again we'll talk about that and more when squawk returns right after this

last week in washington a meeting taking place:the principal of caplan research what a story it was. it really made you think this plane may not be getting in the air any time soon and that the friction is real >> it is and, gosh, all of those projections over the months of, you know, first obviously many months ago and then the end of the year long after it was cleared, everybody else -- there is no way the plane can be recertified. and, you know, with the faa telling what stephen dixon telling us, no more artificial time lines, and we learned now from that report his predecessor is saying the same thing even as boeing is continuing to put out their artificial time lines.

>> the other question. gary kelly from southwest, you know, on the record in that story really going after had the company. >> yeah. the. >> and that's a long term issue for boeing, even if southwest orders nothing other than a boeing when they procured airplanes for the entire 50 year or so history until now, they never had any credibility. they're willing to look elsewhere. on one hand they got good volume discounts for being a great customer on the other hand, they have no leverage whereas, i think we all believe that southwest really is willing to order something else. the bias is still to order boeing because of all the skill it has that's going to put downward pressure on pricing forever. >> right. >> so, seth, here's the question i have which is, look, i admire the stance that dennis mull enburg has taken which is to say he wants to see this out meaning, he wants to be in the seat he thinks he's the right person to be in the seat until this

plane gets in the air. i get that the question i have is a credibility one. and the idea of effectively changing pilots in the mid air if you will at this point. which is to say if you're the board of boeing, this credibility issue is real. it's not a not real issue. it's a real issue with regulators it is also a real issue with buyers and clients and, yet, if you change out pilots mid air, does that make the situation better or worse? >> so at what point would you rather see what is behind door numberthree? >> this is the fund. al question. the board or the company >> i think the starting point is that the board of a company's job is to increase the value of the company. and let me ask you this. what do you think happens if there is an announcement that mullenberg is leaving? i think the shares at this point rise obviously, then the question is who's next and, you know, would you want that job but i think at some point, you

know, it's more of a part of the problem than the solution. we know this is not all his fault. but, you know, not only the design issues but the response has sort of been repeatedly botched from the early days. i know it's been tough and "the wall street journal" story confirms what you can see which is that he had lawyers pulling at him to say one thing and -- >> seth, you can't put calhoun in the job people will say it's the same problem. right? he's been there the whole time >> right >> if you take whoever you think the number two, three, or four person is, i'm not sure that works either you're going to, again, this is a credibility thing. are you going to bring somebody in from the outside who is supposed to credentialize this whole process and yet the outsider doesn't know all of the ins and outs of what's going on for the past year. >> right exactly. i think you call somebody like richard anderson who is now running amtrak, turning it around and who preef quhpreviou

around delta and who knows stephen dixon well the problem is boeing you can only -- there is a mandatory retirement age of 65 and he's 64 1/2. st but, you know, at least in some kind of caretaker role, it has to be somebody like. that you're right. it's the problem it's whoever has the institutional knowledge. it's going to be somebody up to speed quickly and has that credibility with the faa this again is a long term problem. the next aircraft certification is going to be very different and is going to cause many billions of dollars more probably because everything that is going on right now. >> seth, always great to get your perspective on all of this. appreciate it. happy holidays if we don't see before you christmas >> all right when we return, the big business of sports betting, we'll talk to the ceo of draft kings about his big deal that was just announced. this all comes just ahead of the college bowl season and nfl playoffs talk about how they're going to be going public. "squawk box" will be right back.

i'm a mother. i have no time to go to the gym. the 30 day fitness app solved my problems i love the fact you can do it anywhere because you don't need equipment. it keeps me going, because the way it's set up, i don't want to miss out on my workout days. i recommend it for everyone, whether it's to lose weight, get fit or just stay healthy. try the 30 day fitness app and start working out wherever you want. welcome back, everybody. sports betting company draftkings will become a public company in 2020 through a three

way business combination it is combining with diamond eagle. it already traded on the nasdaq. it is also combining with sb tech, a provider of sports betting technology when all is said and done, the company is going to be renamed draftkings which is the name you know joining us first on cnbc is the ceo jason robins great to see you >> thank you, happy holidays, everybody. >> happy holidays. big news, you wrapped this together i think i get it using the spac to go public makes sense. why don't you explain what the rational is, why this makes sense for draftkings right now >> this is a complicated deal. it is a three way merger we looked at different options for financing it this makes a lot of sense. it allowed us to secure capital up through a pipe that would then be used to complete the acquisition. we raised an additional pipe by april research franklin templeton, wellton and we also

wanted to give public some time in 2020 ideally. and this allowed us to do both so it's a good fit for us. >> and then sb tech getting wrapped in they do the back end technology that you're using instead of the company you use right now? >> yes sb stek a world renowned technology and trading and risk management provider for sports betting and online gaming services they've been around for 12 years, i think and really a fantastic company we're looking forward to -- >> had you notdone it this way would it have been a two step process? >> yeah. >> meaning go public and then either merge with them or buy them >> or the other way. raise private capital to buy them and then go public together >> this is what we talked about a half hour ago. there is a real reason to do it this way and congratulations >> thank you

>> i'm furiously going through the investor presentation here and commercial breaks. i have a couple questions. one, do i have a right that revenue next year will be around $500 million in change and enterprise value is something like $3 billion? >> that's right. so we'll be about $540 in revenues as combined business next year. and we expect about $3.3 billion to be market capitalization upon close. >> okay. and how did investors get comfortable with that valuation level? what comps do you point them to? >> that was -- that's above my pay grade. we had a lot of bankers that worked on the deal, did a great job helping. it's a unique company. it is difficult to comp, i think, and a lot of work went into it for sure >> one thing i've never seen in a spac is the duel class share structure. the first time i've ever come across that. how did that come to be? >> well, we felt that this was an industry that was going to take lots of twists and turns and was really important that the management be able to think long term and one of the things that we, you know, thought about

is becoming a public company is you don't want to fall into the traps of getting too caught up in quarterly earnings and things like that. and obviously, that's an important thing. we need to, you know, hit the numbers that we promised and also want to have the flexibility to be able to think long term and really plan on what will drive value over the next three to five years >> the original spak was a single class >> right >> correct >> so you had had to -- as part of the transaction, you're changing the classes of shares >> well, the whole thing is changing you know, three way mergers. so everything kind of hit reset. >> one of the things that is you can actually speak to investors. >> they have shared projections. >> the question i was going to ask is how comfortable or not and how many questions did you get about the governance issue when it comes to talking to some of the big investors on this >> you're right. one of the benefits is to be able to socialize not only, you know, the deal and the valuation

but other aspects of it. so we were pretty thorough we talked to a lot of investors. and generally speaking, you know, we got a lot of really good feedback on everything. and i think that for the most part we kind of stuck where we were we did make some changes along the way which is, you know, helpful part of the process to be able to get that feedback. >> jason, in ermz terms of raisg money going public yshgs do you need to raise money right now? you're growing really fast in terms of revenue what's the plan? what are you going to do with it >> there are a lot new states that legalized sports betting. michigan, colorado, about a month or so before we have a lot of reallyexcitin new mashgs that we would like to launch that requires capital investment. >> this is about building out and building the business, not about cashing out early investors. >> no. this is going to be mostly primary capital. >> jason, with he know the opportunity in the u.s. with all the major sports overseas in particular, europe, soccer is huge what is the opportunity outside

of the u.s. in a sport like that >> sports betting has been around in europe, australia and other parts of the world for a while. there is regulation happening all over the globe right now the primary focus is going to be the united states given, you know, really what we see as a market that's going to be rapidly developing i think you guys had an article that 2020 is the year of sports betting yesterday or the day before >> it depends on the time of year you know, with so many new states and growth it's kind of hard to tell the big ones are football, basketball, baseball, college sports are quite large as well and then golf, hockey, and some others are growing quite nicely. >> jason, i want to thank you for being with us today. it's a pleasure having you here. >> on day one. >> yeah. you'll come back and tell us more as this progresses. the. >> i would love to >> congratulations >> happy holidays, everybody. >> we'll be watching the

market's reception at 9:30 we'll see how the stock trades >> all right when we return, a lot more on "squawk box. president trump signing the tax cuts and jobs act two years ago. one of the architects behind it is going to joib us aftn us afte break. first, what stocks have done since those tax cuts were put in place? stay tuned

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good morning, everybody. welcome back to "squawk box. green arrows once again across the board. the dow is building with the gains we've been watching all morning. up about 80 points s&p 500 indicated up by 6 1/2. the nasdaq up by 25 points this comes after all three of the major averages closed at new highs once again on friday and that seems to be kind of a broken record at this point. our guest host tom farley is here we've been watching what happened in the markets. it's been phenomenal to watch this build into the end of the year you made the point earlier, it's the reverse of what happened this time last year. we looked at the markets going down bottoming out on christmas eve

>> today we had multiple guests come on saying everything is great. earnings next year are going to grow 9%. the 18 pe could increase >> it makes me nervous this time last year everybody is saying forget it don't do this. this is a falling knife. >> they were dead wrong. >> right a little nervous >> very festive atmosphere here on the desk this morning >> meantime, yesterday marked two years since president trump signed the tax cuts and jobs act. for a look at how the tax cuts impacted the markets, we want to bring in art laugher, chairman and co-author of "trumpenomics." he served as an economic adviser during president trump's campaign and is known as an architect of the president's economic platform and the laugher curve. >> good morning. what a lovely day.

>> what a lovely day. >> so two years after the tax cuts we showed a screen right before we came into this, before we went to break. the markets were up. did you see the number >> no. >> were you looking? >> i didn't see the number. >> in two years? >> no, this is markets rise since the trump tax cuts dow up 15% s&p 500 s& s&p 500 20% and what would it be without the tax cuts? >> i think it would have been a lot less. tax revenues are fine run right in line. i think employment has been improved dramatically. real wages have been increased substantially from the tax bill.

so i'm very pleased with the results. i look forward to a lot longer increases in prosperity from that tax bill. >> to the extent there are folks that said this pulled forward effectively or was a one time gain, do you think that's not real >> no, i don't think it's real i mean, what these people miss by the way on the tax revenues which bother ms me a lot is the a one time fourth quarter 2017 imputation of $250 billion in taxes from assets held abroad. $250 billion, they all start their analysis in january 1st, 2018 but that's wrong it really should be started in the fourth quarter of 2017 if you look at that, tax revenues are doing very well in the last two years if you look at gdp growth, we've come down some when you look at us relative to the rest of the year, we skyrocketed. we're ahead -- if we had grown

at the euro-zone growth rate which we were a little below before, you would be 2.5% lower than gdp today than we are 1.25 point a year ago. that is 700 plus additional gdf i attribute to the tax bill. >> all right, someone that is a proponent of lower taxes, what is your thought on using the tool of tariffs in approaching china and how we dealt with trade with other countries >> you know, that is a strategy question that i'm really not an expert on. i'm not a good negotiator. it is a traditional tool that is used from our founding fathers on you know, trade is a very intricate complicated, sophisticated area of economics. tariffs and quotas have been used extensively to get countries to behave differently. and we do it against north korea. we do it against zimbabwe, iran, all sorts of things.

i'm a free trader in almost all aspects. but using these for negotiations is a very legitimate way of negotiating with other countries. >> art, of course -- >> but i'm no expert on how to do it. >> of course the corporate tax cuts help the economy. if you have unxpetive rates and go to having competitive rates, it's going to be good for this country. why it is on the person tax side that the president and the republican congress has not gotten credit for lowering personal taxes >> well, because they were overshadowed by the corporate. s simms my we cut the corporate from 35% to 21%. we did all sorts of other corporate ones, 100% expensing all of that was really huge and really important and very needed the individual was from 39.6 to 37 and we had a couple of pass throughs as well which were very and judiciously used politically but it was overshadowed.

i think when the president is re-elected, he'll go to a much p lower personal income tax rate and really reform the system. >> art, it depends on where you live for the personal income taxes too. and blue states, those on the coast, a lot of those people are paying higher income taxes because in the exchange and salt deductions >> for sure. but we're paying less. here i am in a zero income tax state with no earned or unearned income here i'm having to subsidize new york because they decide that they can pay cuomo $100 and get a tax credit of $40. >> i know. but if you go back to the other side of that argument, listen to this debate a million times over the last two years if if you go to the other side, states, some of the red states are actually taking money from the federal government versus some of the blue states that are giving money to the federal treasury >> yeah. the government is never been meant to be balanced dollar for dollar by state. that never has or dollar to dollar by income class or any other group.

the federal government spends its money and the best ways possible and collects the money in a most efficient way possible and sometimes that leads to imbalances it shouldn't lead to imbalances by tax rates provided by equivalent people by different states there should be no deductions for state and local taxes. >> one of the goals of the tax -- at least the corporate side of this tax plan was to get corporations to repatriate, bring cash back to the united states i want to ask you about this the president specifically had pledged the companies would bring back four trillion dollars. that is the number to beat you look at the numbers thus far and they have fallen short >> they may well have fallen short. i haven't followed the numbers carefully. i don't remember exactly what the president said about ut what i do know is the taxes collected on those foreign earnings held abroad was $250 billion collected taxes on those foreign earnings and that's the revenue part. >> just to put in context for the full year of 2018, $664

billion had been brought back. when i say falling short, that's -- >> can i just ask a question who cares? who cares? why does that matter i don't understand -- >> i don't care. >> i don't understand why lower corporate tax rates somehow that's a sob to billionaires and if you don't have the exact amount of money coming back to the u.s. that's an issue. >> no. >> we have competitive tax rates now. and our economy is doing great >> and that's a great thing. the question is, is it doing all it's supposed to do and if -- and -- no, i'll tell you why because what you would have done, if you really cared about repatriating cash back, you would have come up with additional strategy that would have done something, forced money in certain ways or been at a different rate there are thicks you would have done around that if that was the issue. if it's not the issue, it's not. >> i don't want the government to force, you know, companies

ceos how they're going to give back >> then don't say i'm doing this for this reason. >> art >> let me balance your arguments out. the huge trade deficit increases are capital flowing into this country. that's where you want is the real capital that provides jobs, output and employment. that is the capital surplus which is an enormous move of real resources into the united states to provide employment what happened with the guard to the earnings abroad, we collected the taxes on them. what more do you want? if they want to sit overseas after paying taxes fair and square, god bless them but the real benefit has been the trade deficit bringing real capital back for the u.s. to provide jobs >> we have to run. we want to wish you a very happy holidays. >> thanks for allowing me to be on, especially on this day thank you. >> see new 2020. >> thank you, art. >> it's a deal >> all right our thanks to peter. thank you for spending the hour with us. we'll see you back here too. happy holidays >> you too >> six trading days left in 2019 actually five if you consider two of the sessions are half day

sessions we're going to tell what you investors need to be watching as we head into the new year this morning. green arrows across the board. the dow indicated up by 83 points stick around you're watching "squawk box" righhe ocnt ren bc my name is john and i'm a 30 day fitness app user.

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tlnch there is a tense meeting between mullenburg and the faa administrator. >> and what went wrong with the shut that will is supposed to be taking astronauts to the moon and what went right. >> and a million dollar look at the markets and the economy. >> i just made i $10 billion >> $10 million yeah >> wonderful $10 million! >> exclusive data from the millionaire survey is straight ahead. the final hour of "squawk box" begins rightnow. >> good morning, everybody welcome back to "squawk box"

here on cnbc we're live from the nasdaq market site in times square. i'm becky quick along with andrew ross sorkin joe is out today joining us is tom farley he is the ceo and cnbc contributor. good to have you here. >> great to be here. >> we have lots to talk about. we have a guest host with us this hour, joe lavornia. >> good to see you the economy is good and the market reflects it. >> looks great people are coming around that to that view. >> they are. take a look at the futures this morning. you're going to see right now the dow is indicated up by 80 points also the nasdaq indicated up by 26 points and then the s&p 500 indicated up by 6 1/2. there have been -- there's been talk about money kind flooding back in. people deciding not to fight the momentum that they've seen going for so many years. we're seeing some build to that right now. that is the opposite of what we were watching last year when the markets bottomed out on december 24th take a look at what is happening

in the treasury market today we've been yielding around 2% or just below that for the ten year which is now sit rg ting at 1.9. and then the two year at 1.6%. >> hedge fund capital management is shutting down the fund is back by blackstone group and billionaire bill ackman. the assets have slifld after two years of poor returns. the firm's founder and portfolio manager richard mcguire began telling ip vestors of that decision last week he expects to send the money back quickly because portfolio is now in cash he had been selling positions over the last months to meet with redemption requests they declined to comment >> also -- >> interesting story >> on two years which were pretty bullish years >> and some of the well known activists, elliott or third point my colleague dan lowe and his firm, they're generating good returns in that activist segment. that is one area that is not

suffering quite as much as other long-short hedge funds. >> senator chuck shumer is taking on tjx. he says that the discount retailer sold recalled and dangerous products to unses inspecting customers to are years. he is calling for a thorough investigation of the company which owns not only tj max but also marshals and home goods over the last faf years, tjx told 19 items that were recalled for safety reasons that list including electronic hover boards that can sometimes catch on fire or explode he says tjx ignored recall notices and continued to profit from the devices schumer sent a letter to the consumer product safety commission and is calling on tjx to alert consumers to any dangers and issue refunds. in a statement, tjx says the products were mistakingly left on the shelves and that it is working to ensure this doesn't happen again >> boeing star liner is back on earth after a test that was

marred by an error morgan brennan joins us. she's he is desk after being right there in the cape. cape canaveral, right? >> yeah. they're live on on the ground for the launch on friday morning. the launch itself went well. the issues happened after this star liner spacecraft got to space. so 7:58 a.m. eastern on sunday, yesterday morning, boeing's unmanned star liner touched down at the army's white sands missile range in new mexico. hurdling 23 times off the speed of sound about a mile above earth in the dark three parachutes deployed. this is a procedure that challenged them in the past. it is key to see that happen star liner is the first american made human rated orbital capsule to land on land. big question now, what happens next >> the malfunction was software based. a boeing official saying once they gather the data, they expect 85% to 90% of test

objectives to have been fulfilled. so what does this mean for humans getting aboard? expect analysis to take weeks if not months nasa debate wlz star liner needs another test without crew which given the fixed price contract boeing would presumably pay for. meantime, experts say this puts spacex in in the lead depending on the own key safety tests next month to become the first to take astronauts from u.s. soil to space in more than eight years. >> you said waits a clock issue. meaning -- >> a clock issue >> the internal clock wasn't set on the right time so the boosters went off at the wrong time or something? >> yeah. a timing error, a clock error. what essentially happened was the automated system within star liner basically reaches down into the united launch alliance atlas five rocket to gauge the timing and link up it was off by 11 hours >> what? >> that's part of the reason i think this didn't show up in simulations and why this was so unexpected they don't -- >> that is a big thing to have

wrong? >> i know. >> which is why i think -- >> not a problem with any of the systems, just timing >> exactly exactly. >> and this is also i think why nasa and boeing said if astronauts were onboard this issue could have been seen and rectified. they would have been safe. >> but if somebody was actually manually there to override this, could this have been prevented the most important part is the landing came in safely on sunday you were able to take off and land with no risk to anybody who would have been onboard. >> it was. it was to use the administrator's nasa's words, absolute bulls eye two important parts of a space mission, the launch and landing. both of those actually went right which is why i think this is even up for debate right now on whether a second uncrewed test is going to be necessary. >> what do you think is going to happen you want to handicap it? >> what do i think is going to happen i think, again this depends on spacex's own test in january, i think spacex could potentially

based on where we're at right now be the first again to bring humans into low earth orbit. i think it's a very strong likelihood that both of these companies will be doing that next year. the one other thing i would say in all of this, and nasa administeror said this to me when we spoke in "squawk alley" on friday is that i think this also now pushes nasa to look at other potential companies who could come into this program too whether it is lockheed martin with owe rhine or sierra nevada corporation, the other private billionaire backed commercial space company. >> let's bring in aerospace and defense analyst at jeffries. she has a buy rating and $420 price target on boeing and sheila, what did you think as you were watching this happen on friday? >> just culminating a year of not so great news for boeing i it this launch is successful the land is successful it was an autonomous capsule f there were astronauts onboard, it would have been potentially successful it goes to show this is the

commercial crew program trying to take astronauts to the interin ationinte international space station. boeing and air bus and a handful of defense primz the development programs are difficult. spacex encountered their own delays and hurdles the time lines are difficult. >> who do you think is in the lead between spacex and boeing just based on what's happened now? >> spacex's final abort flight test is scheduled for january 11th they look to be in the lead. >> if that goes well. >> if that goes well >> it seems to be the final test so potentially we could get astronauts in to iss by the second half or the first half. >> two morgan's point in, terms of what's happening, in terms who have else this might lure into space, do you think there could be other entrants that will look at this and say okay, this gives us room for entry >> it does but we don't know spacex is making money on the commercial crew program that is one thing.

that's why the costs are lower than boeing. it has to be somebody that is billionaire backed it can't be a start-up with billions of dollars. >> because you'll run out of money. >> yes >> i just wrote down the list of the failed missions. spacex had failed missions, blu origin, boeing, is this a piling on for boeing? this was a big story my twitter feed was full of it over the weekend perhaps it was your reporting. but is this an even bigger story because boeing is boeing at this moment in time with such a tough 2019 >> i think if the max was not grounded this would have been overshadowed and it would have been, you know, nasa was hesitant to call it a failure and looking into it. i think it would have been a glimpse and not as big of a story. >> i also think part of the story this got as much attention as it did, right or wrong, whether it was, you know, deserved or not, the fact this was a software issue, malfunction, also seemed to raise eyebrows within the

aerospace community. >> we may not have notice this if you weren't down there for the launch it was highly publicized and people were watching it. we watched you as it took off and able to go to you as soon as there were problems. there were problems with other ones that were not so well documented >> yeah. the commercial crew program is three years behind the, you know, initial schedule the reason is because there have been budget delays and then there are issues with development of both of the spacecraft along the way which i think is also why the fact you had the three parachutes deploy successfully in this star liner land as smooth as they did is very important >> she'll yashgs yila you said e terrible year for boeing you have a buy rating and $420 price target is that a 12 month price target? >> 12 months price target. we see the stock bf $400 a year from now i think you have to assume the max flies. and one thing that was overshadowed last week is the eu

regulator was thinking about february time line back into entry into the service so that didn't get as much news blow as the star liner i thought that was positive that the eu was leading the discussion. >> although, with very seen so much turbulence in the relationship with the faa at this point and the administrator there who basically is saying it's going to be on our time line and stop pushing us on any of those things >> right i think the faa and boeing have struggled on boeing being potentially overly optimistic. i think that's clear to say. but what's good news is we haven't seen any new technical updates, any software updates that have to be made it just seems that the faa wants the lead the discussion and faa will will also certify every aircraft that comes off the line, something previously delegated to boeing to do. >> let me ask you what may seem like a crazy question. if the 737 max never flies again, what does that mean to your price target? >> stock is worth $275 on a dcf assuming the max doesn't go away this is a $100 billion

the max accounts for $35 billion of revenue there the is the defense, boeing commercial which includes the 787 and 777. >> would they replace the max with assuming the military buys it and doesn't come back in a commercial use >> you could go back to the previous version which is the 737 ng so the max is an update to that ng what i think will happen is you could do that i think the likelihood of that is a 1% shot of the max never flying into the air again. wi we haven't seen any bad news in terms of technical updates and additional software that needs to be made >> you may made a key point. if they're certifying every aircraft instead of boeing it doing on behalf of them, what that means to the massive backlog of companies. >> boeing is producing this 52 a month. you had 400 aircraft pile up into inventory the question is you don't want to give airlines the aircraft two to three years ought so you might want to get rid of that inventory as quickly as possible and clearly it's going to slow

down the process if there's faa individuals certifying everything that comes out. >> phil lebeau said they may do that at the beginning but then they may give it back to boeing after they're satisfied that it's working. >> good to see you. >> great to see you. >> coming up, we return. draftkings striking a deal to become a publicly traded company. announcing just in the last hour we're going to talk to former ceo. he has a new company that is betting big on live sports stay tuned you're watching "squawk box" on cnbc what are you doing back there, junior?

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we raised an additional pipe as well. several other great ones and then we also, you know, wanted to get public some time in 2020 ideally. and this allowed us to do both of them in the same transaction as opposed to two separate transactions >> that was the ceo of draftkings speaking about the company's deal to go public.

literally in the past hour joining us right now to talk about the big business of live sports and betting, tom rogers, executive chairman at wind view and cnbc contributor what serendipity to have you on the same day this draftkings deal actually happens. >> i have another three way deal to talk about and covers similar territory but in other ways very, very different is. >> i want to get to your deal. i want to get your thoughts now that you heard this deal is out in public. >> well, it's been rumored for a while. so not surprised by it >> surprised it was done as a spac >> that had been rumored for a while too. jeff's been involved with all of that for some time really interesting to see sports gambling gaining the amount of traction that it is. we have a couple of themes that relate to that in terms of our deal we have a massive patent

portfolio covering mobile sports betting and mobile sports gambling cnbc had an article out as jason referred to with 20 states that legalized gambling will. >> and do they have to pay you for patent >> we haven't talked about specific companies and our licensing program, we're quite confident with all the people that looked at our patents that we have a major role to play in terms of mobile sports gambling. >> but what is the patent piece that is the most valuable? imagine you're watching satellite and i'm watching via cable and becky is watching via streaming, we all have different times and different latencies what is happening on the

football field arrives on our television set you have to synchronize everybody with the picture in the right time sequence and block everybody out simultaneously >> that's a he really interesting point. i never thought about that >> and we have key patent that go to the heart of making sure sports gambling via mobile or sports gaming or what i'm going to talk about in a minute is all done with the kind of integrity that you need. >> if i were the league, i would want to make sure that nobody is gaming >> we have the patents and lining up our licensing program. >> here's the part i don't understand let's say i'm watching at home on a spectrum cable. >> right >> or comcast, parent company to this network >> right. >> and somebody else is, as you said, watching it on streaming on this and watching somewhere else, how could you -- if i can see it, how can you lock that?

i understand if it we're all on the same device. but if i can get the information wrels -- by the way, if i'm live in the actual stadium? >> that is the key to it you have to be able to know when -- in a way that you are uniformly locking out how much time people have to enter relative to when they have seen something so people can't get that information first >> you no he what this is? i lived this for six years this is -- >> trading >> high frequency trading. >>exactly. >> you dweel theal with this ins of people being in the stadium and knowing delay relative to the fastest and slowest delivery systems that you're dealing with

>> you know what is interesting is the fed is worried about this in terms of speeches and there say big issue with the bank of england where this one service is paying to get people information like seconds >> right. >> before released. >> any time there is money on the line, you have to gain the system. >> let me tell you how what we're doing while it covers sports gambling -- >> you yale deal with e- sports. >> we're dealing with sports gaming of a different sort including e-sports what win view does is does this predictive gaming, game of skills games of skill as jason's other business, fantasy sports which is legal in about 85% of the country. predictive games of skill are largely legal as well. but you are getting 20 or 25 questions in a social context, playing against friends and

family or 20 nem an anonymous room and people playing for a post money based on paid ebb tri. they may enter a room that costs $2 to enter or $100 to enter that we believe is going to go way beyond the hard core gambler into much more social viewing. a small portion of them are gamblers >> are you writing a consumer product or enterprise piece of it behind the scenes >> both. >> we are both both technology that drives it as well as the direct to consumer engagement that makes all that happen. we're putting three companies together as you mention. one of them is e-sports to bring the competitive platform to e-sports another is in news to create the flip side answer to all of the streaming we've talked about and entertainment programming is going to streaming what happens to news and sports content when the bundle declines and the subfees that are supporting news and sports goes with it?

engine, e-sports and sports news is creating the revenue sports >> i want to talk more about that we have to go for now. you're going to have to come on back you're here all week >> i am here all week. >> all right we'll come find you. thank you, so many >> good to see you thank you for having me. >> thank you >> when we come back, protests in hong kong erupted into violence again last night. we will tell you what the demonstrators have planned for chris ma is eve and christmas day.

more demonstrations on christmas day in multiple districts. this past weekend was filled with rallies including one yesterday that ended in chaotic clashes between mass demonstrators and police we are well past six months of the demonstrations athe this point. >> coming up, when we return, we have breaking economic data to bring you on this holiday week we'll get to the latest. that's going to come in a couple minutes. plus, a million dollar view on the markets and the economy. we got new data from cnbc's exclusive millionaire survey you have to hart results all that straight ahead. ♪

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welcome back to "squawk box. holiday week, first of the data points we're looking at our november preliminary on durable goods orders it is out. it is down 2%. not nearly what we were expecting. we were looking for a number in the area of up 1.5%. the final number is downgraded from .5 to .2.

question tell the negative aspects of that headline were. once you strip out transportation, you are unchanged and last month we lost .2% and up to only .3%. let's look at capital goods orders nondefense aircraft. much business spending is the big topic this year. maybe it will be a big topic next year. this is the proxy. it was up .1%. it's following up 1.1% which is a strong number. it is unrevised. look towards shipments, do down .3% and revision, lost .8. we still have new home sales coming out for november. and interest rates, they're a little lofty globally. they haven't broken through that resistance ceiling in the low to mid 19 0e'0s >> and you're also wearing red happy holidays, merry christmas if i don't see before you. >> you too st you and your family, thank

you. >> you and your family too, rick there is a new cnbc survey this morning giving us a snapshot at how millionaires are thinking about everything from it markets and the economy to taxes and politics robert frank joins us with the headlines on that robert, good morning. >> good morning, becky american millionaires heading into the in you year a little more cautious about markets and the economy and they say the biggest risk to wealth is washington a third of millionaires say the economy will be the same next year while just under 40% say it will be weaker that's according to the cnbc millionaire survey they poll 670 americans with investable assets more than $1 million. they have grown more pessimistic since the summer and they're forecast for stocks have come down over 40% say the s&p 500 will be flat to down in 2020 while only 16% say it will be up more than 10%. the most are expecting investment returns between just 2% and 6%. the biggest risk next year, yep, politics 40% say government dysfunction is the biggest risk to the

economy next year. it's also the biggest risk to their personal wealth. with only 8% expecting higher taxes next year. now like the rest of america, millionaire views about the economy and markets depend a lot on their political party rather than their wealth levels two-thirds of democratic millionaires say the economy will be weaker and that the s&p 500 will be flat to down nearly two-thirds of republican billionaires say the market will be up at least 5% next year. >> joe lavornia is here. looking at this from the economic perspective and what you think about the durable goods numbers we saw >> the data that rob is showing tells me that there is going to be -- it's in the positioning, fear of losing out >> the market -- if you want to make the sum that is they're more financially astute. they're underweight risk we haven't had that euphoria

retail is not a big drier. there is pessimism about politics durable goods data look lousy. manufacturing will recover there is a lot of evidence to suggest it's bottoming when that happens, you're going to get cap ex to turn around i'm actually very bullish on growth next year and think we can do 3% which will be the best of the cycle >> all right let's continue this conversation speaking of millionaires, let's talk high end housing. douglas element, president and coo is here. scott, based on what robert just said, based on what joe just added to that, what is the outlook for real estate when you consider some of the wealthiest people are the ones who are a little concerned about things right now? >> we're finding the wealthy people are moving around >> what does that mean >> for instance -- >> leaving new york andth innen in and connecticut, headed to states like florida? >> florida and texas we're seeing a lot of migration. >> is that directly because of the tax changes that happened two years ago today? >> yes the salt the elimination of that. >> when you look at real estate

and the stock market, there is one common denominator with the wealth why i which they're really waiting for the risk to subside. so in the market, i'm sure you see they're holding a lot of cash i don't know if it it is record levels but near record levels. in real estate, similar thing. there is a lot of inventory. but there is a lot of wealthy people just sitting on the sidelines waiting for things to get a lot worse before they can jump in in >> that sounds like the fomo point that he is making. they mgsed out they have not participated >> right. >> but that doesn't necessarily mean to me -- and tell me on real estate side, that they're going to jump back in next year. i think they're waiting for better levels in the market and in real estate >> although, in the builder sentiment last week showed a record high reading instead of a 20 years high. it depends what region you're talking about. >> the builders have built luxury housing in the last five years. they haven't built first entry level housing.

>> why is it we hear a lot of reasons about why. what do you hear >> i think there is more money at that end and post mortgage crisis, the first time buyer was not bankable, having qualifications and millennials were stalled in buying the first home. they have come back into the fray we got that and the babyboomers are not leaving. so they're -- they used to sell in about eight years now it's about 13 years that they're holding on. >> by the way, the cost of building in new york between land and materials, $5,000 per square foot is the break even for a lot of the new buildings so, you know, it has to -- >> that's crazy. >> it has to be in big luxury building to sell at $6,000, $7,000 square foot >> that's why we have not seen the entry level stuff here of. >> correct >> so we say the dirt is too expensive. >> yeah. >> it really is. >> so crowded, nobody goes there anymore. >> right >> the saudis and chinese don't feel as welcome here anymore

carl icahn are moving to florida. are some of the big buildings up the street here going to be losers for the real estate developers, the ones that have $30 million, $40 million property tax >> our partner named that most expensive street in the world. 57th street. i think there is a lot to choose from about you what the we're noticing now in robert's probably finding this is it that the market sort of self corrected in the last quarter here with prices coming down aspirational selling is out. >> the developers at the point of making enough money is a good question in terms of financing and loans on the property. and we're still seeing -- we just sold an enormous department at west 57th street which is the steinway building. >> what was the sticker on that? >> $28.5 for 4400 square feet.

>> we talk about new york a lot. how does california fit into this mix >> well, california and new york are getting hit in a way that florida and texas are benefiting >> california had three sales at $100 million or more this year we just had one in new york this year which was ken griffin at $238 million but that was signed three years ago. so it's a weird thing. california should be seeing a salt effect. but -- and they are sort of at the $10 to $50 million but they have seen these three big trades at the top. >> that suggests that money is still there. >> they're skipping new york and heading to california. especially the international buyer. >> why is that >> it's a good question. i think it thooz do with the density here as well as the weather. >> the lifestyle >> the lifestyle

>> it's a much better lifestyle. >> new york, california. >> that's always been the case though >> we're seeing a lot of vertical living in california. they're overlooking l.a. it's been a huge success. >> more international in california is what i see the chinese, saudis are still buying there in a big way all the, you know, amir, qatar, new york just doesn't feel as welcome. broadly speaking, you know, the asset price inflation that we have seen which the wealthy feel and see more than any other group, i think they've gotten nervous about that whether you're talking about stocks or real estate. >> robert, thank you very much scott, thank you for joining us. >> thank you great to be here >> coming up, we're going to talk tech stocks when we return with a guest that just raised the price target on apple making him the most bullish analyst on wall street. please subscribe to our podcast and get behind the scenes interviews and access. there is so much more than what

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welcome back to "squawk box," everybody. the futures are higher weech we've been building on the gains. up by 83 points. nasdaq futures up by 34 points and the s&p 500 futures up by just over eight points >> okay. tech has been a one of the big winners of the year with the seconder up almost 47% but what can investors expect from the biggest names in the new year joining us right now is john freeman, vice president of equity research and cfra dan ives, out with a new note raising the price target on apple. highest on the street. $350 let's go there first >> yeah. in our opinion, i think we're only half way there through what i believe is a super cycle our checks in terms of asia continue to show not just iphone 11 but china overall ahead of expectations i think it's a drum roll into 5 g and rerating on the stock. many will say okay, the stock is up 75% year to date. i think only half way through. that's why i think $350 stt next

stop. >> 5-g is the next thing that everyone is waiting on do you believe there will be a 5 g phone come fall 2020 >> yeah. we just came back on our china trip and we believe you'll have four phones that will at least be 5 g enabled the key question right now is of the install base, you have $350 million. that's the upgrade opportunity they opened the floodgates for the next what i view is super cycle. >> one other question then get to john. on the 5 g piece this enabled whied is interesting a lot of people want the enabled version. but if 5 g is not really meaningfully available, except in major cities, will people actually upgrade next year or say 2021 is my year when the full network might have a better shot at being out? i actually think full network around country and meaningful way could be 2022 project. >> i think right now when you look at -- i think you have to

look at p apple as there's going to be a two parts to the upgrade. you have the 2020-2021. a third of the install base, they have not upgraded their phones in 39 months. so we're going into what is going to be a super cycle. i think you could have a mix of 4 g and 5 g. but that's what i love about the setup in apple and a rerating of the stock even though the skeptics continue -- >> meaning you're going to get a multiple. >> yes >> what multiple expansion >> to me it is services business today is worth $500 billion. >> i get nervous when i hear american tech company and china and part of your thesis is growth in china. you don't stee risk there of apple getting boxed out eventually if this trade war conversation goes awry >> that's definitely a black cloud. no doubt that's been a worry of investors. i think you look at it to day, 60 to 70 million iphones in china are am coming up for an upgrade opportunity. they're able to convert half of those, it's a success. so no doubt definitely headwinds in china if luke at what is baked into

numbers here, that's what i love about the setup for apple. >> john, you've been waiting patiently. what do you make of dan's call here >> you know, i actually am fairly bullish on apple as well. i think their strategy to, you know, to appoint more towards services is actually the right one for them i'd like to see a little more innovation from the company. but, no, in general, i think that's a -- the right call. >> let me ask you about tesla. did you see the reuters report just across the wires right now. tesla to take a $1.1 billion loan for shanghai vaktry this is according to reuters it's actually up, it looks like directly on that news. john, you have a take on this? >> yeah, i'm not raemy -- i don't yale know about tesla. i mean, i could go back and forth. i think the technology is amazing. i think the opportunity is

fantastic. you have to get to a certain degree of scale and really turn, you know, turn the profitability knob otherwise, i think it's a speculative. i think it's a very speculative investment at this point >> fundamentally, giga three is the big growth thesis. the bulls view this has a positive it shows giga three ahead of expectations that is a positive in terms of -- >> they can still access the capital markets. >> >> and especially fli china, if you can get giga three right now that, is the key to the bull thesis so if p you look at with this piece, as well as demand, its a positive in terms of what you're seeing on tesla. >> john, you have made a call on oracle that you recommended that they split the data base business from the applications businesses just knowing a little bit about oracle, they haven't really done spinoffs at all if you think it

is possible, what do you think with the said passing of mark heard? >> so, yeah, we have a sell on oracle i downgraded to a sell because of primarily because they're just not -- they're way earlier in had the shift in the cloud business and data base business and om premise bis is so large that, you know, the cloud, the movement of the cloud is going to be very deflationary for them every time somebody moves ab complication to the cloud, they'll lose a data base license sale opportunity or a maintenance contract so that is the primary issue i think, you know, obviously, they haven't -- they've always been the consolidator. i think that they're going to have to reorganize and streamline that organization i think if they thought it all the way through, i think it would make the most sense to separate the applications business which, you know, has some high growth cloud names in it like net suite and so forth and then the data base business

can, you know, can compete in and of itself. buy itself independently there is a negative synergy by having the two parts of the business combined. >> okay. we have to leave the conversation there john and dan, thank you. happy holidays, everybody. >> happy holidays. >> appreciate it. >> thank you for having us >> still to come, atop technician tells us what the charts are foreshadowing about investing in 2020. stay tuned you're watching "squawk box" right here on cnbc ♪ rocking around the christmas ee♪tr when i lost my sight, my biggest fear was losing my independence. mmm... good. so i've spent my life developing technology to help the visually impaired. we are so good. we built a guide that uses ibm watson... to help the blind. it is already working in cities like tokyo. my dream is to help millions more people like me.

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stocks have been rallying into the end of this year. do you remember what happened last year on christmas eve yeah, it was a little bit of a scary time check this out since that drop, you're seeing just the end of it right there check out what has happened. the s&p is up more than 33%, i think 36% or a little more joining us now with a technical look at the markets is chris ma rhone, partner and head of technical analysis at strategic securities and our guest host joe lavornia is here too you see more bullish signals given the gain since last christmas eve? >> you look at this business,

price tends to lead data we look at the macro charts now, steepening yield curves in u.s., in germany, in aussie, crude near a 52-week high, copper breaking out, this spells better growth in 2020 i think the question is, yes, the market is up a lot off the low, most markets around the world haven't made a lot of progress over two years. it is early to fade this. >> let's just put that for people who don't follow the charts, you look at things like oil and crude, those markets would tend to figure out if demand will be up or down from here, right? >> i think there is significant in terms of global demand. and it is not just the macro pictures, the industrials, expo, really good, the material stocks have started to firm, semis have been leadership all year these conditional inputs we look to for signal and whether growth is getting better or worse, i think .2 and improving to 2020. >> i couldn't agree more with what chris is saying and we were talking about this offline, macro data lagging,

there is some figures worthwhile, but the thing is the markets will have a way of creating the wealth and the opportunities and the financial conditions are so supportive that if you have high equity prices, the market is underowned, curb is steepening, good for financials and industrials, cyclicals and you get the better growth. i couldn't agree with -- you're spot on. >> we'll see i think the parts of the world in many respects have been most hated all decades, european banks, japanese stocks are those that receipt gooding better here i think industrials ought to look to them next year as areas of leadership. >> you mentioned a lot of markets, a lot of areas haven't seen the gains to this point what does that mean for a market like the u.s. equities market that has seen a lot of gains >> i think it is a question of where is leadership going to come from next year. we looked at the german pmi. when it is 40 or below, you want to buy every european stock you can find can't get worse.

you have that in hong kong, you have it in germany, australia, places that have been neglected over the last number of years is where some of the gains in 2020 will be found. >> chris, i'm nervous. we have been on air for three hours. >> nobody had any -- >> it is just a chorus of -- nothing can go wrong, rates are going to stay stable, we won't have any big geopolitical issues, the s&p will go up another 10% next year. what could go wrong? >> is positioning as mature as people are talking right now i think that's the big question. i think what it means, if you look at the positioning data, do people own the right stuff i think there is signs of excess in low volume stocks, in yield stocks are there really signs of excess in the risk on corner of the market cccs, high yield, not equity. >> it is this debate of where is positioning excess you look at the funnel flows this year, the sectors with the most flows, staples, utilities, telcos, that's not the risk on positioning that gets us worried. i recognize in the very

short-term here, put calls are very low, that can be a tactical risk but let's not confuse a correction or pause with a top most markets around the world are in good technical standing, tends improve, the macro charts are getting better. >> a year ago on this set, the markets were going to hell and everyone came on and said things are terrible 2019 is going to be a lousy year today feels like the opposite, which makes me nervous. >> the fed pivot though, that's the thing. these guys, gals, make such a big mistake, last year, by tightening rates, letting that balance sheet roll off and you have the exact opposite, they're basically doing qe, don't want to admit it, rates are low, curve is steeper and the positioning as chris was saying is really on -- the risky type of names >> i also think, s&p is up 27, 28 this year you look, it is a first percentile type year look at forward returns following that, they're better than you expect, better than historical average

i recognize this is an election year, you'll get a correction at some point i don't want to confuse a correction with the end of this bull market. i don't believe this bull market is ten years old >> predicted has bernie sanders, elizabeth warren, 20% chance combined of being the next president of the united states if it looks like they're going to win the combination come march, april, may what does that mean >> it means you buy march vol an sell december vol. the market is going to figure it out long before me or you. >> if there is a bad thing that comes, before the markets, markets will figure it out first. what should investors be watching to see, like, oh, boy. >> i think the price signals will tell us if we get a very adverse outcome, we'll start to see things like discretionary roll back over, copper roll back over this is truly about growth weakening, and i think until we get those prices, it was the price signals all this year that led the data so until that reverses, i'm

reluctant to take the other side here yet again, put calls are low, you can get a pause for consolidation. signs of a major top i don't think are in place >> what -- if you look at a market you think will be the best, you mentioned some european banks, what else do you think will be the markets that really take off or the areas that really take off >> i love japan here nikkei has been neglected for three decades. i think it is improving. you have the most stocks above their 200 day right now in the toppism than you had in about four or five years when participation expands, it is bullish japanese banks have started to turn, the japanese consumer and industrial stocks have all turned i think that is a neglected area of the world we surveyed 700 investors last week, what market they thought would be best over the next year, japan was last on that list i think you have sentiment on your side there as well. >> what are you kind of watching out for. what would be the bump in the road as far as you're concerned? >> gdp 3%, unemployment at 3%, wages moving up toward 4 and the

fed going, oh, my god. >> raising. >> raising. >> i don't think they're going to raise but you get that fear back in the market where fed is going to take the liquidity. >> make it harder for you. make it harder for you let's say you're right and we get close to the election. and then jay powell has to decide whether he's going to raise rates right at a time where the president will be screaming to go the opposite way. >> if the fed is going to hike, it is going to be -- >> my fear on the fed is spring. when it is clear, that some of the things chris was talking about and the data i'm projecting turns, it will be the spring and summer. they're not going to move, they're not going to be raising rates in october, november, the next year. >> right, i'm saying this spring, summer. >> wait, let me break in very quickly. boeing has been halted for news pending. i don't know what the news is, but it has been halted for the last couple of minutes i'm taking a look at it right now. we're about out of time for the session. "squawk on the street" will pick this up in a moment.

let's look at shares of boeing they are halted. official word is they are halted due to news pending. don't know what that news is, don't know if they heard anything else from the faa, lots of speculation about the leadership there we are out of time "squawk on the street" will pick this up now. gentlemen, thank you, all. >> happy holidays. join us tomorrow we're going to hand it to "squawk on the street" now and wait for the boeing news. >> we are going to watch that. good monday morning, welcome to "squawk on the street. cramer has the morning off this hour jim stewart with the "new york times," cnbc contributor, author of "deep state" is with us for the hour great to have you, jim. >> good to be here. >> futures are up on a holiday shortened week closed