almost done. "squawk box" begins in three, two, one ♪ good moorngd welcome to a special edition, a christmas eve edition of "squawk box" live here from the nasdaq marketsite brian sullivan with us mcc in the house and tom farley here wearing the best blazer of the season >> merry christmas all >> you've got the sweater on

it is a tradition, right >> i'm trying to advertise this shirt i bought years ago one day a year i get to use it i go year off, year on i have a tie i sometimes do. tartan, what is the pronunciation we good with >> he's got the tartan each one means something a family or a clan >> we'll make up a story >> give him a couple of scotches >> you are an irishman, not a scott, right >> a quick shout out to dean and the whole crew that put that together, which is awesome >> every year, it is so fun. >> every year. shall we >> let's get it going. why don't we start with the markets. the markets are at all-time highs. the dow closer higher yesterday.

all three major averages closing with record closings more on boeing in the show the trading day is shortened so everybody can go out and panic shop and panic wrap. market closing at 1:00 eastern and the bond market at 2:00 p.m. eastern. the bond market ever a fraction higher any gain, whatever it is is going to be a new record look at the banner, the nasdaq winning streak now the longest in more than two years having their best year all the way back in 2003 it has been a pretty doig on goo year you wonder if that trickles through to holiday spending. the luxury side which has been hit goes up. >> the commercials with the car

with the giant bow, that could happen >> making people feel good >> that the stock market reflects a good economy. so you are going to have great retail sales >> a year ago, the s&p 500 on this day hit 2341. today it is at 22.30 it is up. >> we dropped 15.5% intramonth, came back and still ended down 0.8% the worst month in december since 1941 or something. >> that was a true panic this year, everyone is having a merry christmas. except maybe denis muillenburg >> shares of boeing closed

higher after the firing of muilenburg boeing has struggled to regain the trust of the public since the crashes of two 737 max yets killed 427 people. david calhoun will become the ceo in january i spoke to him in november his last public interer view as ceo. i asked then whether he would consider resigning >> has there ever been a day when you think, you know what, it is not working. i got to get out of here >> it is fair to say i've thought about it to be frank, that's not what is in my character. i don't he soo running away from a challenge, resigning as the right solution >> at the time he said that, i

admired the answer i really did does everybody here think, curious, is the david calhoun appointment a game changer stock went up 3% looking at democrat from connecticut and others who say, you know what, calhoun part of the problem. he came on air about a month ago. endorsed muilenburg and the time line he's been there most of this period is he enough of a change >> i think so. you and i had this debate yesterday off air. he's of the system but not the chairman of the company. this is a very complicated business by and large a great company if you bring somebody entirely new in, that brings all sorts of other challenges he's long had an exemplary

career >> the reason you bring in somebody new was to send a message. i'm sure he's been on the phone talking about what is going to be different now with regulators, et cetera. all of these things. what does he say, how does he say how the company has acted thus far >> i know david personally i've gotten it know him as a humanbeing david was an anti-denis. david, you can't get him to wear a suit he wears jeans he's a casual guy. he's a communicator. he was the ceo of neilson. he was running ge jet engine i think it comes down to how well do you communicate. obviously muil enburg as you did

that great interview he ticked off the faa. >> ticked off faa, regulators. >> ntsb. >> also lost the trust of his clients. the big airline ceos the frustration left, the fact that gary kelly was on the record on "new york times" and cnbc, the comments were scathing how do you repair that relationship even if you are the best guy in the world, even if you are the greatest and nicest guy. i think it is hard to get that credibility back >> at spirit airlines has announced they were buying 100 planes from airbus those sort of evidential points are there.

>> let's not forget. it was nowhere near the level of the 737 max. you had this star liner. >> rocket science is hard. >> i'm not a rocket scientist nor do i play one on television. that might have been, sort of, wow, miscalculations boeing rocket fails. >> it was bad timing, everybody fails in space politicians >> with this as well pile on. >> one other thing to highlight. boeing to a large degree affects national gdp in an out size way because those large items feed into when you hear, they are going to order airbus perhaps instead of boeing, it has an implication.

>> part of the story that we as cnbc haven't gone into enough. all of us around this table fly a lot. andrew >> yes >> when the max comes in >> you are talking to the wrong guy. i will look. >> i have met people who said i will never get on the plane again. would you fly the max? >> i ultimately will if it was the first plane out of the gate >> don't worry, phil will be on that flight. >> i'll say this, we were talking about this off air yesterday. some of these planes are flying around as we speak because they are being moved by special pilots or pilots from american and other airlines from one place to the next. from what i'm told, the pilots have no problem getting on them and flying them empty from one

airport to another just to store them the reason they don't is because they understand how the mcas system works i've also asked the question privately of airline ceos. while they've been in the air have they ever had a problem with the mcas system they said no >> there was a bank of america poll a high number of people. what people say and what they do is different they say they'll never get back on that plane. if you are united, southwest, american and your passengers start to say i need to be rebuked. and planes are half full >> i'll believe it >> i own shares of boeing. i bought them when they fell 20%. >> she's no longer an official journalist >> i'm going the other way i asked an analyst what is the stock of boeing if there is no

737. >> i would like to know. >> they said 275 >> i would be under water if that's the case. >> it is a real possibility. >> my understanding is the reason the pilots don't have a fear about it because they understand the mcas system a lot of it was a training issue and understanding what to do if you are getting certain signals. so it is not the plane that is the issue but the interface. >> these are the things they've not been able to say publicly. you can't blame the pilots part of the issue was the training and informing them. part of the issue was that i'm not sure the trainers even understood at the time >> a couple of days ago in the wall street journal. he raised an interesting point seeing that pilots moved

exclusively with simulators. the way you learn to ride a bicycle, you ride the bicycle and understand physically. when you fly a plane, there is a similarity about learning how the plane feels. the famous sully what he did here after taking off was about understanding intuitively the physics and dynamics of flying a plane >> i don't want to scare the public i had a conversation with an airline ceo about this privately. there is such a demand for pilots there is not enough of them. most pilots historically came from the military. they had hours and hours they were in a physical plane. today, that is not the case. now, the executive i spoke to believes genuinely, i think, i hope that it is just as safe

once you have -- if you have 2,000 hours, 40,000 hours. >> i've spoken to three pilots about this they moved the engine up and in, so one of the pilots i spoke about said it is like putting a v 8 in a volkswagen bug. you had to know the power. it is different. these are big engines. >> the other thing i picked up is that the foreign pilots are not necessarily trained as rigorously as u.s. pilots. which is my biggest nightmare. if i'm traveling abroad with my family, i want to believe those pilots are just as great >> do you remember the flight that flew into san francisco it was a foreign airline they did a huge story. the flight from south korea that

hit the tale after it was coming in after that article, i decline asian airlines because i'm not comfortable with the communication set up they have >> i've been on -- i've gone to africa and flown on little planes with a guy in flip flops who looks like he's 18 years old. >> those planes have a high floating ratio today marks the official start of the santa rally period. we've already been in a rally. will the trend continue? we'll talk end of year strategy. >> and elon musk tweeting the tesla stock price of 420 he had to step aside as board chairman

$420 stock price, so high. >> am i allowed to say, i hope he want when he tweeted that >> you can we're back after this. >> announcer: today's big number, 145,000. that's how many of boeing's 737 nachl flights have been canceled since june

welcome back good morning stocks continue to grind higher as they have all year long let's talk markets and your money ahead of the christmas holiday. that period they call the santa claus rally. joining us, the chief investment manager and on set, chief investment manager at qma. welcome to you both. it is the time of year to be honest and come clean have you been surprised at the resilience of this market dare i say, impeachment proceedings, trade wars, brexit we are having the best nasdaq run in two years

>> a little surprised by the strength and breath of the rally because of strong gains in the u.s. wehave had. >> because of the support of central banks. >> i wonder, you are talking about trade wars these are big, big headline events. again, the market has not cared one bit. >> right

they are headline events but what is really important for long term returns are inflation, low interest rates gdp growth, balance sheets if we are late in the cycle. >> it is important how well the banking sector is and the problem what the loans i think the market is paying attention and ignoring what ultimately grabs us. >> hank, everybody that has been on the last two days is bullish. what could go wrong? polar opposite from a year ago today when everybody was berish. what could go wrong right now? >> i think, tom, the set up is

you'll have a slightly stronger economy. >> the returns will not be as near as robust we are people tering the expectations it might be high single digits, low double digits. >> i see you nodding your head are you encouraging people to move out of equities and lighten up >> no. we are not encouraging people to move we have increased and we'll keep it there bonds are probably not going to do as well next year because yields are likely to rise given the stronger growth. >> i've been hearing that 30 years. the bond yields are going to go off. this will be the year. >> no. last year, 2019, they went from

2.7 to 1.5 or even below we should probably get back to somewhere about 2%, 2.5% because of the stronger gdp growth in the u.s. also a pick up in bond yields outside the united states. we've had a lot of negative bond yieldsin europe, japan and other countries. if they start grinding higher, we should also see some upward pressure on u.s. treasury yields >> hank, if you had to point to one thing in the market that still looked undervalued, i don't think you can see anything, is there one sector, one stock, one investment, anything that you go, yeah, that's going to be a good deal in 2020? >> brian, we still believe that

11 years in to an historic bull market, you can get better income in equities and growth of income that is quite remarkable just looking at equities relative to income and fixed income you are way ahead buying stocks. i'll give you one stock we like very much selling for 10 times earnings cvs. we think there is a tremendous opportunity for multiple expansion as they continue to beat on the top and bottom line integrating the merger with aetna. we like that coming into this year >> you like that too >> no. i'm going to talk more about regions and countries. for the last year and last 10 years, we have had the u.s. outperform international markets.

maybe this is the year we will probably see that out of the u.s. and likely to see stronger growth likely to see more stimulus in europe and monetary stimulus >> a good conversation gentlema gentlemen, if we don't see you both, happy new year we'll continue to track the potential for a santa rally. we'll get a little help from norad. they are tracking santa from space. my favorite segment of the year right after the break. ♪sp

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welcome back to "squawk box" on this christmas eve. it is also the first trading session of the santa claus rally period that happens on the final five trading days of the year and the first two trading days of the new year. the s&p 500 has posted a 1.3% gain on average since 1950 during the rally period. we want to get a little help tracking santa this morning from the north american aerospace defense command known as norad

joining us now to mark norad's 64th year of tracking santa's flight thank you for joining us this morning. we do have children who watch this program they'll want to know where santa is at this very moment >> good morning. we last saw santa leaving eastern russia and appears to be heading south towards make wake island and put him on the path for australia. we use those sensors to have a good look at where santa is going. that's where we last saw him >> do the russians ever block the signal are you able to keep constant contact with him >> we use our own signals and we use those same signals every day. we are pretty good at protecting

those signals. we haven't seen any interference yet. >> do you know if google is using your data? my children try to track santa using google we want to know if their information is as good as yours. >> we understand there are others that track santa but norad has been doing it the longest. we are pretty confident in the data we receive. we can't talk about what other people's data might show but we've been happy with where we are able to track santa. >> final question, my kids have asked me do you have his phone number >> you can get ahold of us at 1-877-hinorad but i don't know if you can get ahold of him. >> i have so many other

questions. >> thank you merry christmas to you >> merry christmas to you all. >> they use rudolph's nose >> i don't know if it is a gps system >> also, he's hustling he's moving about very fast. we've had that discussion about how fast he has to move. we have a big question about whether he gets a discount or sales treatment with certain big companies in terms of manufacturing the goods. >> because he buys in such volume are the efls making it in some branding and putting the brandon. we've had all of these questions. >> if you watch "elf." it is pretty clear >> not herme the elf where he wanted to be the dentist >> no. the classic "elf."

we want to know how does he get in our chimney window >> he's magic. he twinkles his nose >> shout out, a lot of viewers tweeting about that klaus movie. the origin story of santa. it is a secular version. it is fabulous >> wasn't he like -- all german fairy tales end with somebody being eaten. >> no, no. >> i want to make sure i don't tell me kids you know what i mean >> this is not a german fairy tale this is a cartoon fabulous film. >> klaus not clause it is so good. >> nike unveiling a new colin

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♪ ♪ it's the most wonderful time ♪ of the year >> welcome back on this christmas eve. take a look at futures at this hour we have green which matches the tree it looks like it would open about eight points higher.

s&p 500 up, we'll call it two points for now >> nike has deepened the partnership unveiling the new shoe, the ars force 1 shoe with kaepernick's face on the heel. it has been three years since he played in the nfl. just remember last month, the quarterback spared with the nfl over a location to work out for the teams which resulted in no offer for him and the moving parts and the whole thing and only eight teams showed up new shoe >> i wonder if everyone is b looking at other things. it is a little complicated issue. last year right about this time, i published a report about the role of credit cards and banks

helping to finance mass shootings. looking at every mass shooting since virginia tech and showed credit cards were a key part of the massacres. some of us has launched a cam pa calls on credit card companies including visa to report excessive gun and ammo purchases to law enforcement they've begun and extensive campaign we also want to warn you it is hard to watch. ♪ ♪

>> carter. carter carter ♪ >> in a statement to cnbc, visa spokesperson joined the round table calling on congress to come together to enact practical measures to help end the epidemic of mass murders in america and preserving the rights of gun owners the company adding, quote, we do not have an item level view of purchases and as a result, we

cannot track or flag purchases of guns or any other product sold it is an important point a point that some legislation that has been proposed in congress sense that report effectively saying that visa and master card and other companies on guns and gun related items should mandate that they get item by item information so that they could track this and so when you have these purchases, there are clearly erratic buying patterns. typically, the first thing that happens after a mass shooting is they go and get the credit card reseats. there are patterns and using machine learning and artificial intelligence, there are clearly people now in government and

inside the fbi that think this could be a very effective way of tracking and trying to avoid these things in advance. >> you've been all over this issue. i remember talking to you about it a year ago. it is counter intuitive to the viewers. but indeed visa and master card do not have that consumer line item the issuing banks do >> the issuing banks don't that's what is so fascinating about this issue >> so who does the retailer itself? >> the only people who have the information is the retailer themselves the problem with the system -- what happens in a lot of these instances. you go from one store, you buy two guns at one store, a third gun here, body armor here and go to a website and buy 1200 rounds of ammunition here.

>> imposing any kind of regulations on the retailers >> none on the books today, there is nothing that allows effectively right now law enforcement to see any of that the only people who even have a shot at that aos tensiblely woul be the credit card companies and visa and master card >> but they would have to mandate. >> for those types of products have to do that. this is not completely without precedent. right now, you should know, there are reports filed every single day by banks. >> for money laundering. >> for basic money being moved >> look, there is a political question some people say, i want this all

protected. some people believe this is part of the right look, this is not a straight forward situation. i think -- i believe if you mandated this, it would protect people's second amendment rights it would allow law enforcement to get ahead of these things to the extent they can. one man's argument >> we'll continue "squawk box" in a moment. what have you got, brian coming up, we'll get ready for a record breaking number of travelers in america so all you folks hitting the roads or the airports, god bless you. penn station today we'll give you the travel forecast and matt blank will join us. what are the best streaming shows of the year? we'll dig in and get some new ideas. no doubt we'll argue about it. you are watching "squawk box" on cnbc apps are used everywhere...

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♪ according to triple a, we are going to see a record 115 million americans traveling this holiday season joining us now manager and spokesman from triple a. how bad is it going to be?

>> very bad especially in new jersey we've identified certain roads and cities we are expecting in some cities, three and four multiplier. meaning if your trip usually takes an hour, it might take three or four. >> i left cnbc in engel wood at 3:53 and walked in the door at 6:45 it was 51 miles. that's the honey, break out the wine. >> where are some of the worse places >>i >> right here, new york, chicago, l.a federal driving administration says we are driving 250 billion miles. trillions miles a year we are burning gas like crazy. >> because of the strong economy? >> strong economy. americans get the fewest number

of vacation days you have a little bit of extra money in your pocket you take a trip and 90% of people will drive. if you look at rental rates, which are up it makes sense >> you've got to be busy i'm the only ding dong who commutes by car. thanks to our friend, the cell phone, the number of fender bender is up every night i drive home, every day, there are accidents people get out, take pictures. no visible damage. first of all, people, move over. >> hold on i want to ask about that i have been told you are not supposed to move you should take the picture where it happens so if there needs to be a police report filed. >> i am not trying to get people

to break the law if that's a law, i didn't know. >> that's not a law. it is a recommendation >> lawyers tell you to take the picture in the moment. >> have a dashcam. that helps even more on >> do you have one >> i have one in every single vehicle in the family. >> only in the front or the back >> just for the front. i'm looking for the ones that work in the back as well wireless and working. >> i have a stake in this. i will say this, get yourself -- i've been an aaa member for years. the discounts pay for themselves i'm always clicking aaa. >> unsolicited testimonial, i love it. we're anticipating 853,000 breakdowns for the holiday travel period and the top items are flat tires, dead batteries step out and do their quote, unquote key inside

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welcome back to "squawk box" on this christmas eve. holiday special edition of "squawk box. a report revealing a secretive tech firm. hawk fish will be the primary digital agency and primary service provider for the bloomberg campaign joining us with other big issues in tech land, charles dewing and

ed lee from "the new york times. what do we know about this agency and what they're doing? >> he's hiring -- you're a former bloom bergman. >> i am. full disclosure. >> what do you know? >> he's always been good at figuring out ways tow, you know what, i need to get the talent in you call it, give it a name or give it a corporation. >> he built a data company he built the most profitable data company in the world so it's a natural -- >> and he did it himself he didn't buy other companies. he did exactly what he's doing here. >> the most important thing -- >> i was there 13 years ago. >> the most important thing -- >> i called a contact of mine at the rnc, he said, this is the first time they've been worried. this is the first time someone

came in who has the agility, ability and money to build something and challenge what the rnc used to get trump elected. it has them terrified. a little bit enough that they're paying attention. >> it's an arms race always. what we saw the rnc do, we lost that arms race, now we need to and so now -- >> it's a very specific kind of arms race. if you'll think back to when trump was elected in 2016, the biggest issue within the clinton campaign, you had to get three people to sign off on an ad. they could run 10 to 15 experiments online, the trump folks, they ran 400 to 500 experiments an hour. for the first time you have someone who has the ability to go out and do that experry mentation. >> you're saying the advantage here is less bureaucracy. >> not only less bureaucracy but an attitude. everyone in the race for the dems are in a ground war

>> how far ahead is trump in the digital ground game, if that's what it's called, if you have to build a database. >> absolutely. the database is critical the only way you run it is by going out and vacuuming all the data he has a huge advantage. they did this four years ago second of all, they spent the last three years -- the white house might be a mess. the rnc is not because he has nothing to do with it. >> the sophistication of the digital campaign. >> i think it's always an underreported story because we don't know until afterwards what people are doing and what works and what doesn't work. >> it keeps changing what works on facebook, twitter, versus open google, getting all of those experiments, trump has been the most successful in terms of on facebook >> this is a long conversation

and we're out of time. there's a chance all of this digital spend can work >> absolutely. digital spending can win an election we don't know if it can win a primary. super tuesday is 1/3 of the american voters will be voting on super tuesday bloomberg could prove it. >> charles, ed, merry christmas. check out the story on cnbc.com. we're back with twbig o hours on this christmas eve right here on cnbc my name is john and i'm a 30 day fitness app user. i work long hours and i have no time to go to the gym.

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it's the day before christmas. joe and becky are gone, but andrew and sully are here to push on. and they're not alone, not by any degree we brought in tom farleigh and our friend m.c.c it's been a bad year for boeing. the stock price in question. will a new ceo cause a volatile session. the tickers are moving and we'll summarize just how the markets keep hitting new highs trade talks advancing, but will trump reveal when china will sign a phase 1 trade deal? kickback and relax the year's almost done "squawk box" begins in 3, 2, 1

♪ ♪ snoitsz ♪ good morning welcome to "squawk box," a special edition we should say on this christmaseve right here o cnbc that's very good theme music. >> impossible not to be in a good move. >> i'm andrew ross sorkin, brian sullivan and michelle caruso cabrera back at the table and tom farleigh, wearing the best blazer of the year how many times a year can you wear that? >> once a year merry christmas. >> carlos watson

ozzy.com >> i didn't do the tom thing i didn't want to crowd him >> we'll swap. >> very nice take a look at u.s. equity futures which is good. dow will open up 18.5 points s&p up 2 points and nasdaq opening 9 points higher. brian? >> here's what's making headlines at this hour on christmas eve. boeing has told its 737 max suppliers to suspend parts shipments beginning in january airlines have taken max flights off their schedules as far out as june. the news comes in the wake of boeing's firing of ceo dennis muilenbu muilenburg uber, lyft new york city victory. the city passed a rule in august

hoping to reduce traffic congestion and emissions. geico will be getting a new ceo. they've named tood combs as ceo. is this a hat tip that this is the next guy to take over berkshire hathaway when warren buffet eventually steps down >> i wish becky was here i think this is a big deal because i think this is a test this is an operational test to see whether tood combs can be a great investor and operator. there are a couple of, quote, unquote, operators in the business that have been flagged or tagged as a ceo of this company. the question has always been in the future whether you would have a ceo that's operating effectively or overseeing the businesses and a separate individual who's doing the investing piece or whether that's one person and potentially if tood becomes it,

maybe it is one person. >> and insurance company requires both of those skill sets, right? you get all of the premiums in and you need to invest them somewhere in order to generate the returns down the road. so this is a particularly good way. he's already been running the portfolio. now he can run the company. >> we will see having said that, there's been a huge value in tood sitting down the hall from warren he won't be down the hall now. >> 20 years ago we had jack welch's succession battle. that was interesting and ended in a little bit of a surprise. maybe you'll get a surprise on this one, too. >> could be. let's get now to the markets because you might have heard this the s&p 500 continues to hit record highs it's also on track for its best yearly performance all the way back since 1997. joining us now is the head of investment strategy at pro shares i mean, wow.

do you worry we had the data that retail investors put $11 million, the most in one day or something like that. do you worry with all of our viewers piling in at the wrong time >> well, look, the december meltup is not a surprise the opposite of what we had last year we had losses which were compounded, people taking tax losses, getting out. this year people are piling in it's the pros, too pms want to put winners on their book so they look like they were there. >> december 12th >> yeah. then of course is it any surprise that we're having dribbles of good trade news as the impeachment heats up you kind of knew that was going to happen. so this is of no surprise. but if you compare, everybody wants to compare the impeachments the similarities are late '90s, low inflation, low unemployment. what's different, valuations this time around

at the end of 1998 we were up 28 percent earnings this time around we're at 21 times and only 2% on the ten year so at least valuations. >> oh, 21 times forward earnings is nothing to sneeze at. that is still historically above average. what you're saying with interest rates and inflation where they are, we can handle the higher multip multiple >> we can. if you're looking for bargains or relative bargains, mid and small caps didn't quite melt up. they're at a 40% discount, especially midcaps that's only on the average of 10%. >> one year ago we had an ugly, ugly selloff it was off nearly 3% the mashts that day it was terrible. fast forward to a year later what drove that so low a year ago china trade war, concerns about the fed raising interest rates. kiss that good-bye. >> brexit. >> appears to be sort of solved.

>> go back to the clinton impeachment. we were overheating. the pass lightization is 83. 80's that inflation point. we're only at 77 then of course we had hikes in 1990 because we were overheating. i don't want to call it goldilocks, but there's certainly a lot less of that pressure from overheating because it's been so mute. >> because we're not at capacity and we're not seeing the inflation and the wage figures are rising. >> most people think unemployment is not quite as low as people think. >> what if we're in march, april, may and it looks like elizabeth warren or bernie sanders is going to get the nomination, how does that change your view? >> for sure that's a ris zblk how significant?

>> they're up to the election that we'll see fiscal surprises and things from the trump administration, you expect that. there's a risk if we get somebody on the far left i don't know how to quantify it. >> if you look at it, it's 1/5 not only will one of them win the nomination but they'll win the presidency. >> remember, they have to get the policies enacted some things we know from both the obama and the trump administrations, there's probably more latitude for the executive branch to do things than we all thought 20 years ago. >> what do you think about this? i had a meeting, a dinner with some people in the markets, whatever, i said, what's the real political risk at this point? they said, it's not political. here's the concern with the proposed transactions tax, so much of the market is high frequency trading, you effectively kill those guys. now the tax renders their business unprofit annual they're such a huge part of the

volume, there is a real concern that if that goes away is the market structure able to handle that i don't know what do you think? tom, this is your old world, man. >> i think it's stupid >> it would be a wet blanket it would be a wet blanket on the entire economy cost of capital would increase these are the sorts of things you will get from an elizabeth warren/bernie sanders presidency. >> what the sec can do the amount of phone calls. even if you don't get legislation, there are real things you can do. >> the limitations are there. >> i know the limitations -- >> but what we know about markets is that the favorite thing that the markets have is gridlock so to the extent there are at least the probably a split between the house and the senate will be limitations on how aggressively right or left the executive branch can go. >> the silicon valley, a lot of

the ipos, what would you be concerned about? how does that do >> i think it would be well worth seeing if you're lacking at tech valuations, they're not what they were back in the late '90s. the growth over value is actually retreated to just below its long-term average. there's certainly some room for some of that activity. >> would that help some of the new companies that go public like airbnb or would it help folks like lyft, uber, some of those? >> yes but i think it's also almost paradoxically going to help old tech we've seen some old tech, microsoft is in the headlines, but some of the tech dividend players who have lagged a little bit over the last year or so. >> who do you put on that list >> microsoft, oracle

some of the old school names apple which has increased six years in a row those are companies that are having some traction you think those valuations are stretched. we're only at 2.2 times relative growth >> what a moment to call apple old media. we can talk about that. >> thank you very much >> happy holidays. >> happy holidays. >> happy new year. a lot more on "squawk" coming up. reducing bias in lending first, make sure to subscribe to our podcast. squawk pod this is not just a repeat of "squawk. it genuinely is so much more if you haven't listened, you need to. katie cramer is our voice and she's amazing. you can get it everywhere you get podcasts, apple, spotify and more stay tuned, you're watching "squawk" on cnbc filling out for?

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welcome back to "squawk box" this morning more and more americans are shopping for a mortgage online and getting approved on an online app and that is actually helping some undeserved or -- underserved. not undeserved under served borrowers close in on a loan. diana olick joins us with this great story. i feel like i've already undermined the story, but

it's -- maybe i'm selling it in a different way. diana. >> reporter: look, online lending is taking over the mortgage market with older names like quicken and lending tree as well as upstarts like better.com the online platforms may be leveling the platform and reducing bias in the market. better.com, which reported 350% growth itself last year, also found some interesting numbers regarding its borrowers. a ten fold increase in married lgbtq couples, 5 times the number of single women, 675% jump in gen z borrowers and 411% for african-americans. 532% for hispanics better.com's agents do not work on commission. >> a mortgage broker might judge and say, hey, maybe you shouldn't qualify for this or you shouldn't buy in a particular neighborhood, maybe your monthly payment should be

this we're able to express the criteria that all the major investors and the government sponsored enterprises like fannie mae have and take that judgment out of the process and actually empower the consumer to make their own best decision >> reporter: now more than 40% of better.com's customers use their mobile phone to start their processes. they did 7 million in loercans s year and expects to do 2 billion in 2020. andrew >> merry christmas >> reporter: merry christmas to you, too. >> reminds me of blind auditions in the orchestra you can't see anybody. they do it behind the curtain. >> is that how they do it? >> a lot of orchestras do, yeah. >> malcolm gladwell's written about it. >> car loans, more people, particularly african-americans bought them online because they thought they would get a fair price. >> interesting coming up, you know what else is interesting?

the streaming wars and me thinks you like to talk about it, andrew. >> i do. >> the streaming wars, you might have heard, are heating up i would say they're red hot. we're going to speak with winners and losers, former show time ceo matthew blank what is the best new show of the year that's coming up. >> i have one for you. >> that's a tease. cmeiabrk. stand byea . we are committing to aflac. why aflac? because health insurance doesn't always pay it all. aflac! after surgery we had extra bills followed up visits, deductibles. we thought health insurance had us covered up for everything, but it didn't. aflac gives you money directly to help you with those things. i want to thank my wife, my mom, the duck. get help with expenses health insurance doesn't cover. get to know us at aflac.com

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welcome back to "squawk box" on this christmas eve special. it's been quite a decade for netflix. the company is the best performer in the s&p 500 in the past decade. a decade by far a $1 million debt on netflix you want to be happy or sad. most people will be sad hearing this if you placed that bet on january 1st, 2020 would be worth -- no, no, no. not if you placed it on -- >> that would be in the future >> right >> if you placed that bet in 2010 it would be worth now $43 million. >> bottom line, they made a lot of people really, really rich. >> really, really rich most of us not joining us to discuss netflix and what is in store for the

year ahead in the world of streaming, former show time ceo matt blank who is hear wearing his hanukkah blazer. >> sort of >> i like that. >> i like that you got that. we only heard about tom's jacket. >> why didn't we get the memo. >> i'm all dressed up. he's in a sweater. i don't know what he's in. >> memo? >> someone took a kilt and made -- >> i like the kilt >> my question for matt is, obviously netflix has had this remarkable run the question is, is it even -- is it possible for it to continue at anywhere near that rate >> no, not near that rate, but do i think netflix is still not going to be the big player if we're here a year from now, five years from now, of course they're going to be. >> do you think there's only going to be one or two of these companies that dominate? you've had a couple of analysts come on and say, two can dominate it will be netflix and disney. >> maybe three, maybe four

>> okay. amazon will be big >> amazon is going to be big because of prime, shipping, everything else or is it going to be big because of the content unto itself? >> i don't know. finish watching jack ryan. >> second season >> yeah. i think they're going to be a big player in their own. >> your wording was strong in netflix. you're that confident they are going to be -- >> nobody remembers where these guys come from they don't come from big studio lots and corner offices on sixth avenue a dozen years ago if you wanted to watch spider man on netflix, you waited for an orthopaedic surgeon in durham, north carolina, to send it back to them and send it to you. >> right >> and he never did. >> no. i mean -- >> these guys -- >> right >> everybody talks about the netflix. these guys are the original killers. >> they're throwing cash on a fire here's my issue. >> everybody is. >> to andrew's point, amazon,

apple, they've got so much cash, they can make 40 shows and if two are hits, they don't care. netflix doesn't have another source of revenue. >> they borrow and borrow -- >> but, you know, brian -- >> that may be their real advantage. this is what they do. >> fair enough. >> you and i talked about it during the break, that i'm watching less of it. i feel like i've almost hit my peak moment. i felt like in 2017, 2018 -- >> you're not going to pay that bill >> i'm going to pay that bill but quantity is not quantity we're talking about different shows on epix like "the god father of harlem." so it's easy to shiftd my attention. >> bring back that ten-year chart. if you bring up the chart, the last few years i've been pretty indecisi indecisive can we get the ten-year chart up see what happens there you had a great run, 2010 to late 2017.

now you've been kind of stuck. >> you guys are talking about them throwing money at things. look at the past week or two you saw a.m. ma stop and apple each spend $25 million for music documentary. billy ilish at apple and rihanna at amazon, $25 million show time used to spend $400,000 for a documentary. the world is changing. >> isn't that the point, matt? >> yeah. >> that netflix is going to have sustained vigorous competition and it's possible ten years from now they're part of one of those other companies with a deeper amount of cash >> i always think that your parent company comcast would be the perfect buyer for netflix at some point if a valuation comes in. >> have you discussed it with them >> andrew -- >> no, cover of "the hollywood reporter" has a prediction for next year saying that apple ultimately buys netflix. there's been conversations

whether apple needs a library, buying mgm, talking to the pac-12 >> there needs to be a valuation. netflix comes down is it easier for somebody to justify buying it. >> 70 to 80 pe they can't do the acquisition. if it keeps creeping down -- >> i think apple can do an acquisition. >> it's not out yet. >> they want to, it's just not rational. >> talking about the parntner i this network, peacock is coming. >> yes. >> do you think that can work as an advertising supported product? >> it's hard to say. i think they were a little bit late to the game and a little bit slow they're saying something that's not irrational they're saying these legacy businesses are pretty good businesses. >> right. >> you know, we don't want to just shut down these legacy businesses and say we're in the streaming business so it's ad supported or no ads for a certain price. we'll see what happens we've talked about this before

it's going to take years because of all of these free subscribers to see what's happening. free subscribers going to be moving through the universe for the next 2 or 3 years for all of these services and you're really not going to know what these businesses look like. >> the early days of the internet where everybody got everything free and migrate to paying. >> it's getting harder to find stuff, too >> everybody has that. >> so much stuff to find all the apps unless you literally -- you have to go to the internet and then you're going on other people's recommendations. >> yeah. >> i feel like these apps and streaming, matt, is all starting to look a lot like television. >> that's a good point you turn on netflix, amazon prime, apple plus, maybe there will be a live feed in the corner of your screen. you know >> what about cable though i still find that i'm finding more and more good shows not only on your old show time, epix, are we writing them off

too soon >> look, i hope people are watching you can stream the first six episodes of "ray donovan" right now. i'm obviously very dedicated to my old employer. you see things like shows coming back to pop after the holidays the question is how and when does it end up on netflix, hulu. >> it's schittsschitts-. >> happy new year. >> still to come on "squawk box," consumer spending, then and now. what's different what's the same? i don't even know what we're talking about. what all of this tells us about the future of retail you're watching "squawk box" on cnbc my name is claire and i'm a 30 day fitness app user.

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>> welcome back to "squawk box." we are live coming to you from the nasdaq market site on this christmas eve. consumers continue to drive the economy, but the distribution of those dollars is changing and we're going to get to ylan mui with that story right now. >> reporter: today everyone wants to talk about christmas present and i'm going to talk about christmas past let us rewind the clock all the way back to 1999 how were consumers spending their money when the internet was young, prince was on the radio and we were facing a brand new millennia. a lot more of our budget went towards food and clothes food used to eat up 13.6% of our income now it's 12.9% apparel was almost 5% of the budget, now it's 3%. part of the reason is because of lower prices and the rise of fast fashion but it's also the result of rising incomes american consumers are making

more so a smaller share needs to go towards necessities there's more good news for consumers on the housing front while the share has stayed the same on housing, we're paying a lot less in mortgage interest, thank you federal reserve. 30 year fixed mortgage in 1999 used to be 7.4%. today it is less than half that. so of course that means we should all have a lot of extra money, right not so fast. take a look at health care costs. they have gone up from 5.3% of the budget to 8.1% spending on health insurance has more than doubled. economists say the big culprit here is inflation. health care costs have risen 3.5% over the past 20 years while inflation has been at 2% guys, higher health care costs are part and parcel of what is to be expected when you have an aging population back over to you. >> hey, ylan, it's michelle. nice to see new your red christmas sweater. the rising health care costs you mentioned the costs and the

increase of 8.1% is that all insurance or is that insurance premiums and outlays as well because of high deductibles? >> it's unclear in the data. this is from the consumer expen did i sure survey. the share of our wallets hasn't changed very much over the past 20 years even though we all talked about higher drug prices. in terms of how much of our own wallets, that hasn't changed very much. >> we have seen consumer drug prices and the price has gone down because of the increase in generics approved by the fda so that makes sense based on what you said good to see you, ylan. >> reporter: good to see you, too. the consumer is expected to spend 4% more this year than last year. did you? joining us is edward hertzman

and jerone welcome. what do we think, edward how are the trends i'm sure you're getting data from all of the members. does it look like we are going to be spending more this holiday season >> absolutely. this is looking to be our best in years this past saturday was the single strongest shopping day of the season surpassing analyst's predictions of 34 billion. looks like we're coming in at 34.4 billion which is 10% higher than black friday. >> wow. >> so all early indicators are showing that this holiday season has been quite strong. >> in your data are you looking at -- i mean, do you get amazon data what are the retailers that are doing that >> so the early winners are absolutely amazon, costco, target, walmart. off price sector has had the best in terms of transactions.

off price sector continues to be very, very strong. i also like to look at nike, lulu some of the athletic brands are doing well i don't want to be the grinch. i think it's a little early to declare this holiday season a victory. i think while these numbers are strong, what we have to look at, and it may take until we see the q4 numbers, how promotional and how much did we have to discount to generate the sales. i think what we're going to see is that margin was really sacrificed in order to get the consumers into the store and drive this type of volume. >> i agree when you look at the beginning of the holiday season, black friday and cyber monday, you can see the discounts were higher then 74% of the merchandise at the department stores were highly discounted. >> black friday was a week, let's be clear it was a whole week in november. >> right coming into this week, that

number went down to 67% so below 70%. the average discount was above 40% back then in the beginning and now the average discount has come down to 28% coming into this week. >> you have to punish the p procrastinator procrastinators. when we rush into the stores tonight, we're not asking for discounts. you have to have something for tomorrow morning. >> yes, absolutely there's fewer chinese traveling here fewer middle east travelers spending on luxury goods does that show up in the numbers or is it not a big enough impact >> it's definitely showing it showed up in macy's earnings numbers and also tiffany's they both have two stores that are well known here in new york being visited by tourists. both saw traffic was down and spending down by tourists. >> besides the top four or five, costco, best buy, amazon, walmart, are there any other surprise winners this season

>> absolutely. one of our favorite ones is lovesac. >> the sactional. >> what is this? >> not love shack which is a song it's lovesac. stock's gotten crushed they make the giant bean bags. they rolled out a thing called a sactional. >> did you find out accidentally >> we had a guest on on "power lunch." >> that's right. brian angel. >> i'm like what the heck. i looked it up pretty nice. >> according to raninitive, they're going to have the strongest same-store sales 27% on top of a 32% comp last year you can buy more models to make your couch even bigger at any point in time or change the style instead of buying a brand-new couch. they have sustainable materials that resonate well with

millennials. then vince stores, their merchandise is resonating well so that bodes well. >> vince vince. lululemon not only because of at-leisure but because they have strong customer loyalty because of the community that they've built. >> you didn't mention b to c like new brands like away. >> yes, but when we look at more of the same-store sales, the highest ones, the ones that i mentioned have the highest sales. >> we like the data. >> i am asking for a friend. what about jewelry stores, are they doing well? selfishly. >> the ones in the mall have a lot of discounts over 50% of the jewelry will be on discount there. >> this is good to know. i find jewelry so useless. >> giving it. >> don't wait -- be sure not to wait until christmas. >> useless as a gift

>> yeah. >> depreciating on the other end. >> a lot of utility. >> edward, come back and tell us about all of these big numbers we've been hearing >> second lovesac reference. >> is there any utility in jewelry? >> they have the strongest same-store -- >> get off of utility i'm told hiring in america. the prospects for job growth in 2020 we're going to talk about it when squawk returns right after this don't forget to subscribe to our podcast. you'll get interviews, original content and behind-the-scenes access look for us on apple podcasts or on your favoriteodst pca app and subscribe to squawk pod today. 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.

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let's talk about jobs in america, shall we. kate rogers joining us to look at the hiring trends for the new year >> a hot economy led to a tight job market in 2019 with education and health services, leisure and hospitality and professional and business services leading the pack when it comes to job gains. here are three predictions when it comes to the labor market in 2020 first, workers remain in high

demand 2019 was truly an employee's market as companies across sectors named finding and keeping talent a top challenge expect the trend to continue next year as unemployment remains historically low baby boomers continue to age out of the work force leaving an even smaller pool for employers. second, incentives and training continue upscaling or training workers already employed by a company is a move many employers are making because the supply of available talent remains low training programs along with incentives like bonuses and more robust benefit offerings will be key in attracting and retaining workers. third, tech continues to change the game from manufacturing to retail, technology is becoming an increasingly important part of the equation for workers look out for technological advances continue to shape wear and how employees do their jobs. and when we come back right here on "squawk box," boeing's next chapter the embattled company getting a

new ceo but when will it get the 737 max back in the air. that debate and so much more on this special edition of "squawk box" on christmas eve. back in a moment my name is john and i'm a 30 day fitness app user. i work long hours and i have no time to go to the gym.

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dennis muilenburg is out of a job. chairman dave calhoun told us when he joined "squawk box" early last month

>> there's a job duty and that experience i brought to my aviation days. increasing visibility in the subject of safety straight up to the board and right down to the bottom of the organization >> we're now joined by jeffrey sonnenfeld from the yale school of management. car lo carlos watson is here. michelle caruso cabrera. tom farleigh i think you were a backer for a long time of dennis muilenburg no >> no. what i wasn't -- i'm not a finger pointer that there's a demon. i don't believe there has necessarily been any deception, any fraud here and that's what i thought, there was a rush to always find a bad guy.

sometimes there are really unfortunate circumstances that happen and it was either by bad calls or by bad technology but not because of bad actors. i don't look at it as bad actors. >> look forward for just a second here on calhoun is he the right guy? and the reason i ask the question is there's clearly -- you know, he's got the experience he's in there sort of but sort of not, which is a good -- cuts both ways but then he's in there in there in that he was on the air a month ago clearly blessing the plan as it was. >> i think he, too, is taking the position there aren't any demons here and less supportive of dennis muilenburg what's going on here, it's so odd to see somebody shot at sunset. >> this is usually when you shoot though, right? >> if there's a catastrophic situation, but here the catastrophe was last year and this is unfolding in the midst

of repair. to have this happen so suddenly right now where there's not a character issue is surprising. however, it is a cumulative weight the faa regulatory issues, the air carriers, the symbolic and genuine problem they had, of course, with the starliner spacecraft again of all things. >> that was it, right? that was probably the one thing. saying this is enough. >> was that and united making a technology equipment decision with brand x and stuff like that calhoun is the guy to address all of these things. however, what we've talked about yesterday on all of this, as if it's only calhoun. calhoun's resume is so unbelievable you can't imagine hollywood would have crafted something who has been a ceo run a 60,000 aviation manufacturing company. however, the cfo is fantastic, this guy greg smith. he's a decade younger.

all dressed up he's the culture carrier on the inside >> how long do you think it takes calhoun to actually turn things around. right now feels like there's a lot of states, a lot of stagnation production's not moving. some people down the chain are not producing anymore. >> that's a very good question there's a little gap just in what we heard yesterday and what actually happened. we are told yesterday that greg smith's the interim, calhoun is unwinding things at blackstone calhoun was already going off to air carriers and the faa so i think he's hitting the ground running, not to use aviation technology terms here, but he's actually taken off, hit the runway, i guess. i think calhoun has made a big difference larry kelner is reaching out to air carriers who are unhappy those are fantastic moves. i think they're making a big difference soon. a lot of the problem is a communications issue. >> that's what they're

addressing >> i want to go back and talk about communications you were on this network i was watching from home you key fended dennis muilenburg they're doing a great job of communication. >> i said -- >> since the accident -- you said since the accident, tragic accident, they have done a good job. my question for you, i'm not questioning the integrity of dennis muilenburg. this is a tragic episode do you feel hood winked? >> as i told on this very set and told dennis muilenburg several times to his face, he was getting a b, b minus on communications that's not a failing grade some wanted to hang him over. >> what's that grade now i think it's a d minus or f when you box in the regulator and you're wrong multiple times about the dates. >> four times we missed those dates. >> is that a b minus >> that's not a good grade that's a big credibility hit

whether or not there was a naivete but to get in front of your regulators, you know in the world of finance is not a great move. >> dickson and the guy that runs the ntsb, they're not only pilots, they were 737 pilots if you know pilots, they're in charge now you have a guy coming in basically telling two pilots, here's what we're going to do. not only are they regulators, their job to tell him what to do, they're also pilots. i imagine they were doubly ticked off. >> you also have these nine international authorities, the joint authorities, technology review board, and some of those countries don't like us a lot, china and others not making it easy you don't want to get in front of those guys. we had a whistle-blower, certainly a misleading one, faulkner i think was his name, that created some noise, a test pilot. the justice department knew all

about it the justice department was examining the faa so boeing couldn't tell the faa because they were both being investigated at the same time. that alienated steve dickson in a more effective way and i don't want to say tim knit with a much more take take sense from what we've seen from mule lenberg before. >> muellerberg was continually chasing the headline he knows how to frame the issues very well. he is charismatic. >> i know him a little bit personally he's on the board of virginia tech i kind of know him he's such a nice guy a great communicator jeans, no tie. salt of the earth dude he's the polar opposite of mule lenberg -- i don't know mule lenberg personally, but the impression of super stiff, super

inform informal there's fundamentally -- >> when you are in business, they do engineering and precisi precision. as we know from morgan brennan, the liftoff, the launch and the landing went perfectly technology worked perfectly. what went wrong, the stupid timer was set 11 hours off on a $4.5 billion -- >> but the details matter. details matter this is a business of details and clearly they missed the details. and beyond the details, the question i have is if you're david calhoun, can you walk in to gary kelly at southwest or american and somehow -- all of a sudden you have a differen level of credibility than dennis muilenburg as much as i hope that that's the case, i don't know. >> larry kelner can do that.

he can do that he will run cover that way he had a very good tour of duty at continental, though we also can see that what calhoun can do is to talk to the 900 subcontractors on this plane, 900 of them. we see in today's headlines there's a big ripple effect. >> there has to be people that lose their jobs because of this. >> already have been. >> nobody's asked the question, do we need this plane? there's nother plain and trump got on the phone with mule lenbele muilenberg. >> he called in right in the beginning asking -- >> right, take it out of the air. >> he was asking important questions, whether or not the cockpit is over programmed and people were treating him like he was a village idiot.

turns out that was a good question. >> jeff, thank you very much carlos, thank you for spending the hour with us. >> big thanks to you ozzy.com >> don't be like andrew ross sorkin and afraid to come. it's a lot of fun. >> i'm not afraid. >> he's paranoid. >> i want to come. >> i didn't get it >> i used to listen. >> it's a black sabbath -- >> i feel like such a failure. big tech stocks have had a huge 2019 check out these returns. you might have heard about apple, up 80%. facebook up 60%. even amid controversy the top analysts will tell you what you need to do if you own the faang stocks, buy more, sell tm.he we'll talk about it. stick around police officer: excuse me, sir. sit tight. yep, sit real tight, speedy. cause you've got to call it in, police officer: radio to dispatch... type it up, hey, dispa... (feedback ringing) deal with that, dispatch. write it up, walk it back,

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it's the day before christmas. joe and becky are gone, but andrew and sully are here to push on. and they're not alone, not by any degree we brought in tom farleigh and our friend mcc >> whew! >> it's been a bad year for boeing the stock price in question. will the new ceo cause a

volatile session the tickers are moving and we'll summarize just how the markets keep hitting new highs trade talks advancing, but will trump reveal when china will sign a phase one trade deal? kickback and relax the year's almost done "squawk box" begins in 3, 2, 1 ♪ ♪ ♪ good morning and welcome back to "squawk box" on christmas eve right here on cnbc we are live at the nasdaq market site in times square i'm andrew ross sorkin along with brian sullivan hanging out with us. michelle caruso-cabrera. joe and becky are off today.

we are talking holidays, all things holidays. we're saying today is -- the santa claus rally begins today is that the official period? >> first day >> last five days of the year. >> last five days of the year. >> going on for a year. >> they're playing along with us the dow looks like it would open up 26.5 points higher. s&p 500 looking to open 2 points higher nasdaq looking to open 6 points higher right now also, we should say a reminder today's trading day is shortened so everyone can get to christmas and christmas eve planning the bond market closes at 2 p.m. new this morning, bmw says it is being investigated by the sec following a report of a probe into the company's sales practices. at issue is whether bmw engaged in what's called sales punching or boosting sales figures by having dealers register cars as sold when in reality the vehicles are still sitting on the lot. bmw says it is fully cooperating with the investigation

fiat chrysler settled in september for $41 million. >> is this like stuffing the channel like they used to do in the supermarkets >> i imagine the car has to be sold to somebody maybe they haven't driven it home. >> there's not a lot of gray area they've either sold the car or not sold the car it's changed title or it has not. >> you said -- why is the car still sitting there? i don't know whose car is that? i don't know. >> meantime, one of warren buffet's top lieutenant's is going to go run geico. todd combs will take over geico on january 1st hired by berkshire in 2010 to help buffet manage the company's massive investment portfolio along with ted weschler. combs expected to report to the person who oversees all of the

investments. we'll see whether todd can ultimately take over the entire company as ceo both with the investing experience and now operational experience. >> is this the greatest succession question? >> the greatest succession story of business. >> it's been a determinative year for faang stocks. all of them up 20% facebook up over 50% a roundup in the year of tech and more importantly what's ahead in the stocks. victor anthony ishere, managin director for internet at aegis capital. good morning >> good morning. >> did we know that facebook was going to be up 50% this year >> i called it last year. >> you did >> i did i made it one of my topics. >> what's it going to be for next year? >> more up side. >> how is that >> at least another 30%. >> another 30% >> yeah. you're not worried about antitrust attention ramping up.

>> i published my 12 predictions for 2020 the first one is the antitrust regulatory backdrop which will escalate as we go deeper into the election cycle. >> eases off in the trump administration or eases off under an elizabeth warren administration >> irrespective of -- >> irrespective? >> you think elizabeth warren is paper tiger? >> that's my own personal belief as far as facebook and google, i don't see the rationale that we have breaking up those two companies. if you look at youtube, look at instagram, those two act so heavily intertwined into the core parent's operations, whether it be technology -- >> or politicians aren't necessarily rational, right? you don't see a rationale, but they may absolutely see a political rationale, right

>> in an election cycle, yes you have this rationale when the protection is off, rational thoughts come back into play. >> will the stock trade up and down based on the degree to which elizabeth warren appears to be rising, falling in the polls? she seems to be one of the most active when she's talking about what's going to happen. >> correct you see some headline risks. you will see some pressure on the multiple may not expand as fast as you think they should be because of this whole raw regulatory and antitrust issue. i was going to say, i do think there's a case for amazon? >> to break up >> as far as aws fairly distinct business. >> you're breaking that up on the industrial logic of breaking it up, not on a regulatory issue? >> correct. >> trying to get ahead of the regulatory issues? >> i doubt business wants to break it up. there's a case you can make -- >> you think it might be forced to break up? >> eventually.

longer term. >> people complain aws might know what their competitors are doing because so many companies -- >> this is the cloud service business -- >> how do you know if you're looking -- >> or it subsidizes the marketplace. >> that's been a longer term concern is the early days of it. it's a distinct business different growth profile from the core business. different margin and cash flow different business. >> what about google you don't see a rationale for google when i leave google for search, i'm never leaving google more and more services, flights, hotels, prices of wine, anything it's all now in the google box isn't there a rationale there if i'm a competitor and they're saying they're using the monopoly position in search to move into these other businesses in an anti-competitive way. >> the thing you have to look at is google is a massive ecosystem. when you disrupt ecosystems you disrupt the user experience. if you disrupt that, then i think -- >> consumers will be harmed.

>> yeah. >> you're saying how do i roast turkeys, you click a link. now the main result is in a box. you're never leaving google.com. >> you have an apple device. i imagine you're like me you're living on an apple device in a google world,which is sor of interesting if you're not on an android if you're such a google lover why is that? >> meaning if you think -- if everyone is living in a google world -- >> my desk tops and google worlds -- >> once you do a search on google, it provides everything on the screen. >> you're living in this google world. >> i'm still using google search i'm still stuck on your original comment that you and i are a lot alike. we have three kids, live in the city. >> we are alike. he's better looking. >> dress for the holidays. >> is there a better bet on tech stock? >> so on the large cap side i'm

actually going to go with facebook next year as well as amazon irrespective of what we just talked about. those two stocks will outperform >> there are some stocks that under performed this year that outperformed quite significantly. >> like what give us names. >> com score. >> what's it called? >> the meet group. >> me-e-e-m-e-e-t. >> yes >> yeah. >> yeah, right >> the other one could do well. >> for certain subset of the population. >> if there was angie home services. >> angie's list. >> they were disrupted which google that was an unforeseen event >> the new algorithms we will put-back blew out the search results. >> why are you so convinced it will come back >> they are diversifying away from google. so that's working. and also there's shifting the business to more of pre-priced

business. >> i'm handing you $10,000 on christmas right now. >> i give you 10,000 bucks you can only do one thing. what would you do? >> place my bets on facebook >> data is so strong from the user perspective i think it basically continues to outperform operationally as well as the stock. >> you got it right last year. hope you get it right this year. we'll see. >> thanks a lot. nice to meet your kids here. >> that was fun. >> thanks, guys. we're going to switch gears and talk about finance should you buy the bank stocks interest rates on the rise the fed is out there should you buy the financials in 2020 we're back right after this. i used to say i want to gain muscle

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♪ ♪ live shot ofchicago right there on christmas eve welcome back to "squawk box. take a look at futures ahead of christmas eve and the shortened trading session this morning dow off -- up, i should say, up

25 points. nasdaq looking to open up 8 points higher. the s&p 500 up by 2 points right now. financial sector trading almost exactly in line with the broader market both up now 29% this year. joining us now to talk about what to expect from banks in the new year, what challenges they may face is john curran. which bank would you buy we just had this conversation on the internet in tech if i gave you 10,000 bucks this morning, what would you buy for 2020 in the banking world? >> that's a great question i think it's been a great year for the banks. their structural soundness and their benign backdrop should hold them in good stead for 2020 i think jpmorgan from the bond holding is the best bank out there. >> from the bond holder perspective. not an equities perspective? >> that's right. it's a great question for equity holder important point for bond holder,

we look at the banks that have diversified businesses, strong balance sheets and durable deposit franchises and terrific asset quality. >> what kind of yield am i going to get if i have a jpmorgan bond holding? >> you'll get a yield that will carry your coupon and you'll get some compression, too. jpmorgan is the sleep easy at night bank story for 2020. >> but you don't like the equity back to an draw's original question >> it's a great question for my equity counterparts. i think certainly the top line of banks will be impacted by lower rates right now. if you look at jpmorgan's third quarter, $29.3 billion record revenues the banks that have leveraged to mitigate against flattening margins, they're going to thrive in a low interest rate environment. >> one bank in the headlines

pretty much throughout 2019 and not necessarily in a good way has been wells fargo they are trying to turn the page do they in 2020 and do you give them your money? >> i think it's a great question wells fargo still has some wood to chop. they're not out of the woods yet. the installation of kelly sharp as their ceo has been a good step i think they have a ways to go costs are an issue increasingly. their asset quality is pretty good you know, ultimately poor underwriting could break a bank. >> i was just sitting here thinking while john was talking about jpmorgan how well managed they are and then you ask a question about charlie sharp, one of the diaspora. so many great managers that come out that run banks, fin tech organizations. do you think that's jpmorgan's secret sauce >> i think so.

no one is going to make money betting against jpmorgan they have a deep management ben bench. it has proven leadership that has fanned out and gone on to become great things. >> the other bank with a lot of continuity, great management is bank one, merrill lynch, i don't know how long he's been there but many years what are your thoughts on bank of america >> i think that's an absolutely terrific point as well they've done a fantastic job they've come a long way from the throes of the credit crisis. they're working up solid mortgage loans losses are at just absolutely near skill levels. 34 basis points in the third quarter for portfolio losses and their capital levels are great while they're returning money to shareholders good story for bond holders and shareholders alike. >> john, final question for you.

consolidation in 2020. is it possible will regulators allow it what do we look for? >> another great question. we saw sun trust and bb&t. we'll see maybe some more regional bank consolidation, but for the larger banks with their large deposit footprints, i think more tuck-in acquisitions on the margins in areas where they want to further penetrate. >> we'll leave it there. we wish you a very merry christmas and happy holholidays. >> thanks for having me. it has been a terrible year for softbank's masa yoshi son.

♪ ♪ welcome back to "squawk box. this morning the futures are in the green on this christmas eve. let's show you where things stand and what is ahead. we still have close to about an hour before the market opens dow would open up 26 points higher s&p 500 up 2 points and the

nasdaq there opening up about 6 1/2 points higher. softbank hitting a wall in securing bailout financing for wework here's deidre bosa with the biggest challenges softbank faces in the new year. >> reporter: this past year was a wild ride for softbank and its vision fund portfolio companies. here's what to watch from masa son and his team in 2020 first, it could take longer to raise vision fund 2. after flops like uber and wework, they may struggle to get outside investors. softbank could also up its own investment in the fund or face a fund that is smaller than the targeted $108 billion. second, we could see softbank push more collaboration and even consolidation among vision fund portfolio companies.

masa son has said relationships are fostered third, the vision fund headaches aren't over yet. masa son has warned there could be wework like problems surfacing in other portfolio companies. next year trouble could brew in investments, particularly in china and india. >> masa son, big story of the year does he make it next year. what do you think? >> it's either all going to work out -- >> what do you mean by make it does he survive as the head of his own company? >> no, no, no, does he raise a second fund -- >> how do you raise a second fund when your first fund -- >> the question is, is -- >> if oyo works, if that works, that could -- that could actually make it all -- you know, all of these problems can go away. that's very interesting. >> that's the rationale in

investing millions of dollars in the companies but the lack of due diligence on wework in so many ways i think tarnishes him to some degree understatement of the year >> if you're the big buyer and you're sort of buying and almost bidding against yourself. >> all the time. >> you can make asset prices go up just by being the buyer of the asset, you know what i mean? if i buy that coffee mug from 5 bucks, i come back and say i'll give you 10 bucks, that's -- >> that's by and large what happened at wework soft bank was invesing in increasingly higher amounts. >> also at the venture capital level talking to people, i tried to invest in this company, wework comes in and want to give them double what they were asking for he up ended all the valuations out there in a way that people

thought he up ended them. >> vision fund 1 is inherently risky. before investorsmake money, that's the biggest question. will vision fund one return a positive return after the private payments >> in the spirit of giving, i have a column in "the new york times" about charity i gave an adapted version of this column as a speech. we are talking about sadaka. hebrew word that traditionally today means charity. in fact, the real definition of it many, many, many years ago. it was about justice the reason i mention this is so many people are so generous during this season and give so much money away to food banks and other great and needing

organizations. u.j. gives a lot of money to food banks one of the things i went to look at and i didn't realize this, who goes to food banks who goes to homeless shelters. 43% of working americans, people with full-time jobs end up spending time at food banks. 25% of people in homeless shelters are full-time employees, who are actually working. so one of the things that i can think of is what does it mean to have a living wage in america. in new york city today if you make $32,402, that is the poverty level. that's the threshold for poverty. if you are making less than $18 an hour in new york, which is higher than minimum wage in this state and much higher than other places in the country. as fabulous if you are a

business leader, the real charity is trying to figure out how to change that equation. that's my column for the day and i hope you have a chance to read it happy holidays >> all right coming up, a ceo shakeup at boeing you might have heard about this. stock getting a boost. we're going to talk about the challenges david calhoun will face take a look at u.s. equity futures. every day we go up, tom, is what >> a record high >> mer cisryhrtmas. >> we're back after this

♪ ♪ ♪ let's take a look at some stocks to watch this morning on christmas eve. we're wearing shares of industrial component wesco and is it anixter as a takeover battle is developing yesterday anixter agreed to a sweeping deal takeover $86 per share plus a so-called

contingent value right of $2.50 a share. wesco saying it's offering $90 per share. advanced micro devices they are raising their prices to 53 from 50 rbc saying it's seeing solid channel checks for amd's gaming and data center businesses let's get a quick market check on the fifth to last day of trading of the decade let's bring in rick santelli with the cme first and foremost, rick merry christmas my friend. i'm sending it digitally merry christmas. >> merry christmas to you and your family, sully >> thank you very much >> it's where our lower interest rates are. not many picked the 10-year note to be under 2% maybe the bigger question is are we going to be lower for longer.

it will be interesting for next year considering we're going to get some trade back into the equation, at least more capital spending poe terksl-- potentialy did you think we would close under 2% >> no. but, i mean, i was as wrong as wrong can be i'll admit it. >> the biggest shock is if you look around the globe and see the low interest rates in countries that are still positive how close to zero they are and then you look at their balance sheets, japan, 240% debt to gdp, but i do think you have to be really careful of the last few days we may have the santa claus rally after christmas, but within markets, 195. viewers, 195 in tens it's like the pacman and it

can't quite bite through if it does, i don't know that we're going to stay higher or above 2% for long. i'd be very careful about a technical prop in rates especially at thin markets going to year end. >> rick, are you implying that could be a risk to the equity move >> no. i think the equity markets -- yeah, no, i think the equity markets are quite comfortable with rates it would at least capture stock's attention. let's not forget that some of the best rallies we've had over the last several years, especially the one that occurred 2017, those rallies were accompanied by higher rates so the pairing is good. but, yes, i think that if all of a sudden we just started to run up stocks would pay attention but not towards the final few sessions of the year >> all right, rick thank you very much for that have a great day tomorrow. merry christmas. we'll see you southern, all right, buddy

>> thank you. >> rick, merry christmas we cut him off i wasn't trying to, rick i love you merry christmas. happy holidays hope to see you very, very soon. meantime, we want to talk about a gift it's the gift that keeps on giving because that seems so terrible especially what's coming out of here gift that keeps on giving. not a good look. boeing closing out the year with a ceo shakeup. dennis muilenburg is out and calhoun is in. we have anthony roman, president of roman and associates. >> good morning. >> good morning. >> does putting david calhoun in the pilot's seat, in this case, if you will, restore faith new >> i think it's terrific he has all the credentials to pull it together

he has the people skills to work with a very competent faa administrator dickson. dickson is not someone to be messing around with so to speak. he was an f-15 fighter pilot air force academy graduate vice president of flight operations for delta this man knows his airplanes and in particular knows the boeing he's flown both the airbus and just about every model boeing delta has. he's a great match he'll put them back on their feet he has the technical and management experience to put together the solution. >> that's a great american company. the board had no decision. they made a good choice. my question for you is larry kellner, david calhoun, are they

going to be trusted by the pilots there seems to have been a pretty significant fracturing between the relationship throughout the world. >> i think that fracturing was to be expected given what's happened after the first airline crash, boeing convinced the faa there was no problem with the max when, in fact, they had knowledge there was in fact some potential problems with the design not a big fan of taking a -- an aircraft, an existing model, and changing its center of balance and then overcoming those center of balance with computer coding. not for a boeing aircraft. so i think they can work together i think they can help solve these problems i think the pilots are going to

have a lot of confidence. >> can you back up when you talk about shifting the center of gravity, this plane shouldn't be in the air? they should just give it up? >> i didn't say it shouldn't be in the air i think they've overcome some of those issues within computer planning but being a pilot myself, i prefer that commercial heir craft that are what we call it, they don't have an ability to perform at the edges. >> you think this one does >> i think this one's, you know, well within the envelope but this center of gravity issue, not a big fan of computer code overcoming that in airliners i think it can be made safer

coding and aircraft is a very complex affair hundreds of millions of lines of coding. >> i have a question for you, anthony. long term do you think this is going to be the plane that will be the future of boeing? do you think this is going to be -- this model, if you will, will sort of come and go very quickly given what you're talking about here >> i think too much of an investment has been made for it to come and go very quickly. they're going to have to secure their margins from all of the investments to all of the losses that they've suffered. i do think that they will overcome these problems. it's a very fuel efficient design the boeing 737 basic design is a very strong foundation and i think it's going to become one of their most profitable and safest aircraft frankly. >> wow anthony, appreciate your time and your perspective this morning. thank you so much. merry christmas and happy

holidays. >> merry christmas. coming up, today marks the official start of what they call the santa claus rally on wall street it only happens on the five final two trading days of the year and the first two of the new year they have posted a 1.3% gain on average since 1950 during the santa claus rally period the question is, will it continue given the big run we've already had? we'll talk strategy later on jpmorgan, big media calls. tus higher we're back right after this.

how do they live there it's the land down under that's the santa tracker santa is beginning his epic journey, right, andrew how many children? millions of children billions of children just from one sleigh. >> one sleigh. >> is there nine rain ndur because rudolph is in the front? how many reindeer are there? >> that's a good question. >> doner, blitzen, peter, greg. >> the holiday shortened trading session will soon get underway in wall street remember, we close at 1 p.m. for

stocks, 2 p.m. for bonds let's get a check on the markets. james ciampi is joining us hi, james. here on set is chris harvey, head of equity strategy at wells fargo securities this is the easiest question of the day. s&p 500 is up 35%. how much more money and up side can this market really deliver >> i don't think much. >> you don't think much? >> no. you've beaten all expectations this year. you've beaten our expectation, every single person you've talked to. the santa claus rally, i think you've had it. when you look at 2020, i think you have to lower expectations the vix is 12, 13. we think you're going to get a correction in the first half of next year. >> a technical correction? 10% in actual correction >> we think 5 to 10% >> you are the most bearish person in two days

everyone else has come on the set -- >> only. >> the only. >> i'm so sorry. >> thank you for bringing some sanity. >> you're welcome. >> how does the election factor into your sobriety >> not really. it's just noise. whatever trend you have in place is a trend that continues. we've seen the equity market much higher. that's what we've seen over the last couple of months. as you move forward. because of the fed we're talking about it.

>> what's the callous. >> it's the perspective. >> as chris eluded to, the policy and mistake has mercifully been put into the rear-view mirror i think the upward bias on rates is here. we have a labor market that is near and full employment we have productivity gains that seem to be stalling in the face of deceleration of capital expenditure. the idea that there's going to be upward pressure to core inflation is in the market i think we put the lows in for

the treasury yield if we look around germany and other places, we bounced off the ridiculously negative yields that we had just 6, 12 months ago. signs do point to a modest increase in long term rates. >> what does that mean can you give us a number >> i'd say 2.25, 2.50 is a good entry point for a dead investor. >> i'm confused. you mean you expect -- let me ask something more basic dumb journalist. the 10-year yield in six months will be where? >> 2.25 to 2.50 i think is a number we'll settle into. >> that will be a good entry point. as a bond investor you get in? >> yeah. i think one of the things we look at in 2019, pretty much every asset class worked that includes longer duration and fixed instruments. right now we can take a pause from fixed income, not give up a lot of yield because of the short-term rates being high and

let this thing resettle in terms of where long-term rates are that's our trade in the market. >> they're putting $320 billion into the new york fed in the overnight reap ppo the early and the repo market is so wonky so boring. 160 billion on the first trading day of the year. remember that steven mnuchin i've e-mailed all of the bank ceos, everybody is like, why did you have to do that? he almost created a min be any crisis why are they putting 320 billion in the repo market sounds like something is going wrong that we need to know about but nobody seems to be that worried about it. >> you make an excellent point september the fed asked us to wish it away in terms of an imbalance in cash demand and cash supply. as we continue to accelerate federal reserve in the reap poe market which we view as a qe, the question has to be is the fed looking at a reap poe

counterparty that concerns them. if this is simply a mismatch, it's at best a bad look for the fed. if it's somebody saying i don't want to loan to you overnight, aka what happened in 2008, that's a lot more concerning we don't foresee that happening but it bears watching because somebody may be showing up to the repo market that folks balking at we view short-term markets very closely and they often are precursors to what can be trouble in the financial system. it bears watching in 2020 what happens with short-term funding. >> turning to the equity guy on the set. as the equity guy, do you worry about this and what the overnight rate -- the craziness we've seen there and what the fed is trying to do? >> we don't worry about the overnight rate we look at it. look to see if there's stress. what we worry about is the fed is backstopping the market that is putting risk on. it is the exact opposite furthermore, that's going to

cause dislocations they're reducing the duration of the market that's good for the short term once they stopped youcan see that curve flatten and risk off occur. what we worry about and what our clients are starting to say is they're frustrated leave the capital markets and stand on their own we don't need this intervention anymore. let's stop and let's start pricing things according to the fundamentals and according to what we see in the balance sheets and in the comparables. >> chris, i can hear it in your voice that you think 2020 is not going to be a good year, but when i look at the target that you have out there, it's up 6% it's up a pretty decent year what's going on? is this the corporate view wells fargo is saying we have to be up 6% >> no. wildly bullish that's the new bearish maybe that's what it is. >> no, we do think you're going to be up 6% but by the end of the year you're going to need it because there's going to be a lot of volatility. we think you're going to have a lot of spikes. maybe more

>> bad sharp ratio but ultimately up at the end of the year. >> you don't want to be married to positions ultimately it will end higher. >> dating, no marriage >> chris, thank you. >> match.com. >> or me tinder. >> thank you very much >> thank you, guys >> coming up, in our final ten minutes to go before the big holiday, three big media predictions you do not want to miss these for the new year from jpmorgan we're going to talk to the analyst who made the calls right after the break. this is a historic moment. demand has never been higher for what we do. creating compelling, engaging, and informative content and experiences. with this merger, viacomcbs will be one of the largest and most influential content creators in the world.

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♪ chestnuts roasting on an open fire ♪ ♪ jack frost nipping at your nose ♪ welcome back to "squawk box" on christmas eve jpmorgan out with predicts for the media sector in 2020 i want to start with the box office predicting a decline of 3% for this year. joining us now is alexa -- how do i pronounce your last name? i always mess it up.

the famed media analyst at jpmorgan thank you for being here. >> thank you for having me >> you think it is going to be a down year? >> this year, 2019 should be a down year. >> i'm talking about 2020. >> 2020, probably slightly down too. >> is that a function of what? the franchise films not carrying things, is that a streaming situation? >> i really don't think it is a streaming situation. i think if you look, there is a lot of negativity about the box office i think folks think, you know, there is this streaming and nobody is going to the box office so the declines have been steady, down 1% every year for the last five years on average and, you know, if you look at the box office in the last i think -- since 2000, there have been 12 record box office years. so we have seen great years at the box office the problem is their franchise dependent. and you look into 2020, and there is not a lot of big known franchises >> to me, it sounds like a streaming issue. i don't go to the movies as much because i can stream i do go to the movies when it is

a blockbuster or i want to hear the sound effects and see them on the big screen and speaks right to your -- >> i don't want to say there is no streaming effect, i think it is overblown there is a streaming effect. the small kind of not huge blockbuster movies, i think they're getting hurt by streaming. i don't need to go to the -- i do think the big box office is working really well and that's making up for it so when you look into 2020, you don't have a lot -- you have two pictures, but they're not big franchise names you're sure you're going to go to. >> disney had $7 billion box office movies in 2019. seven. and the box office numbers are down who is suffering >> down 3% you're coming off a regard year too. so keep in mind, but -- >> disney -- >> who is suffering is all the midsize. they're not quite as good. you had movies that didn't do quite so well. not necessarily from disney. >> what was the biggest bomb charlie's angels

no, that -- >> cats. >> play mobile >> they're redoing electronic rig it, right? there say play mobile animated movie that made like -- >> we can't remember them, they did so poorly. >> let's talk about -- you have another call, direct to consumer in terms of direct to consumer evolution. who is going to win. >> 2020, the year of turn. we had this proliferation of new streaming services, there is going to be more, we have peacock, we have hcbo max, i think you're going to see consumers try them all and turn off really quickly i think i read the stat that 10%, 10% churn every month just from -- >> as you take it that people will try them and never come back or try them for a certain show or two and then turn them off -- he's watching a show on

e epix >> "godfather of harlem". >> do you think people will watch ray donovan or whatever the show is, watch -- binge it all in one month, turn it off, go turn on epix, then turn it off, turn on apple plus, then turn it off, like that >> there will somebody steadies. disney plus will be a steady netflix will be a steady there will be some steadies, no question people get on to peacock, hbo max, fill in the blank. >> i don't want to -- maybe i'll be contrarian here, i can see people turning off disney plus. >> when the allure is over >> it is not clear to me there so much content on the service every month they're launching new product you ahave to see. you can plow through a lot of it >> you think if there is a 5-year-old kid -- >> watch frozen 16 times

>> that's the exception. >> like buying the dvd if you bought the library, it is a -- >> that audience will be an audience of people with young children. >> netflix has done such a good job of launching new product constantly you're so used to now turning it on, everybody has become add about is there new programming, what is the next thing what is the next thing if you turn on the system, and the same programs are there, day in and day out, i think -- >> just turning into television. everybody is streaming, tv with a bigger library that's -- think about how smart disney is. if your cable bill is whatever it is, and espn gets nine bucks a month. half that goes to comcast or verizon or whoever it is, disney is getting paid 450, now you got espn plus and disney plus on your iphone or apple tv, now $11 and $12. the economics seem to work well

for the producers. >> for the producers, absolutely that's why you keep in mind, the price point is so low, right >> but you add them all up, you might as well pay your cable bill. >> and maybe we'll see everybody go back it cable, i'm not predicting that, but a potential ty. >> sports. >> sports will be so topical next year. topical now. >> when are the big tech guys going to get in the game, pay huge amounts of money and will the leagues sell because of the eyeballs situation. >> the answer is not this round. big tech guys will be disrupters they'll try, offer big money, and i think at the end of the day, the nfl is not going to risk -- >> the nfl sunday ticket for 15 years, everybody is praying for it to go somewhere else because people don't want to put a satellite dish in their house. >> maybe the sunday ticket not the maj sundor sunday packas

we saw what happened with cbs and the s.e.c. rights, they had the window to extend and they decided not to they tried to bid and looks like they're not -- >> merry christmas very special -- merry christmas to brian thank you for being here mcc, thank you. >> see you thursday. >> see you thursday. tom farley and wonderful blazer. so great. >> with all of you. >> happy holidays, happy holidays to everybody. have a wonderful christmas and we'll see you on thursday. "squawk on the street" begins right now. ♪ good tuesday morning, welcome to "squawk on the street." i'm carl quintanilla with david faber at the new york stock exchange cramer has the morning off joining us, jim stewart with "the new york times," cnbc contributor, author of "deep state. rally rolls on today we think as the nasdaq goes for ten consecutive gains, only two times this decad