decade i i know you argue when decades start. this thing could still continue to go in our view. >> thanks. we have got to -- we do have to get to "squawk on the street." we'll see you next year, ryan. happy new year. >> happy new year, everybody we're off tomorrow back on thursday "squawk on the street" begins now. ♪ ♪ one more time celebrate oh, yeah ♪ >> good morning. welcome to "squawk on the street." i'm scott wapner with morgan brennan and mike santoli live from the new york stock exchange carl, jim and david have the morning off. let's get you set up for the trading day by looking at futures. stocks off their worst day in four weeks and look now to open

lower yet again. nasdaq is coming off its first back-to-back losses in three weeks. nasdaq would open lower by 20. dow down by 50 and the s&p by about 5.5. and the latest s&p case-shiller report is out, showing 3.3% gain in home prices during october compared to one year ago our road map starts with the decade long bull run stocks on track for their best year since 2013. markets poised for a lower open on this final trading day of 2019 >> plus, uber and postmates sue california the ride hailing giant and delivery firm are trying to block a law that would require them to treat gig workers as employees. >> the ousted head of nissan renault fleeing to lebanon carlos ghosn saying he was escaping what he called a rigged japanese justice system. >> as we head into the final trading session of 2019, the dow up 22% year to date. the s&p 500 with a 28.5% gain and the nasdaq outperforming

both indices jumping by almost 35%. oh what a year it's been i guess maybe we're going to go out with a little bit of a whimper. >> not too much of a surprise. a little housekeeping and trimming by the end of the year. yesterday was very much a cash in on the winners and pick up some of the losers that's what you might expect to continue into january. i do think we're going out on a note that says the market is building an optimistic picture the question is does that picture take shape in a more visible tangible way in 2020 valuations have come up. but that's because financial conditions are very loose. we avoided recession, recession is not imminent. all those things together at the later phase of a long bull market, this is how the market trades >> it is incredible. you've seen strong gains across stocks, bonds and some of the key commodities like gold and oil. best year for oil since 2016, best year for gold since 2010,

tech, once again, on pace, for the best year since 2009 biotech, strong year as well ibb is on pace for the best year since 2014 question is are we going to continue to see these trends play out into the new decade. >> the market seized on where it could find growth in terms of corporate earnings streams apple now, of course, the largest company by market value in the world was the 11th best performer so far this year in the s&p. so how often do you have the biggest company, you know in the top 2% of performers. >> new york times to morgan's point, market in 2019 couldn't lose money if you tried. >> yeah. >> just that difficult bon bonds, stock, gold, oil, looked pretty good. wine and art and diamonds, those were the only investments that it appears that suffered any sort of decline. >> those things didn't crash at the end of 2018. so you didn't have that kind of benefit of coming off the low

base. >> hey, peter navarro says 32,000 on the dow in 2020. advisers making their stock calls now as well. you think about it, not that big of a leap. you figure as we said, the last couple of days, history suggests you could have a double digit percentage move in stocks which would get you there. >> wouldn't be out of the realm, none of this is out of the realm. it is interesting how people are trying to -- the math takes you to a pretty low return type forecast positive but low returns but giving calendar year doesn't conform to that type of a performance. very rare to get a 5% or 10% calendar year gain even though that's the long-term average of what you get annualized. >> it seems like, dollar strength, the fact that the dollar is continuing to come off, you got the dollar index lower again today, one of the key things to watch in 2020. what that means for the earnings picture. what that means for the

manufacturing picture and some of the other asset classes like commodities as well. >> table set, table set pretty well for the year ahead. economy is looking pretty good consumers in pretty good shape, got some of the noise of trade, you know, ougt of the way initially. >> i think that maybe is the biggest change we'll see that, we're pretty much finished talking about trade, i think as it sits right now, this deal gets signed, no longer -- look, trade going into this phase was never a big swing factor in the markets. it was just a generalized we try to get a better deal here and there. i think it gets back to the mode, even if it makes headlines, i don't think the market is going to fixate on it so much. >> i hope not. >> to spend another year having to talk about -- >> your point, though, the market -- i know it was a headline and it was a story all year long, the market hit new highs repeatedly in the face of

trade head winds >> and tariffs. >> it wasn't that huge of a deterrent to stocks doing their thing. and having a good year. >> it was an immediate reflex catalyst numerous times when the market was ready to have that kind of a move based n the stimulus but if you basically got the deal that was kind of on the table in may, and the market was higher when you got the deal in december than you got in may, it shows you it wasn't the only thing that mattered. >> if you told me at the beginning of the year, though, you would have all of this bluster about trade, that you would have tariffs put into place and you do nearly 30% in stocks, i would have told you no way. been that kind of year, though the market -- >> global economic, you know, accidents. it was a slowdown for sure but not something that got out of hand. >> and it speaks to the role that the fed played in its cuts this year and other central banks around the world, where there is stimulus as well. also, i think, cannot discount how big of an impact the tax reform and deregulation in this

country has been i think the debate is out there with another year under the belt on just how much that has offset any kind of impact, at least here in the u.s. on the tariffs. >> with the fed, the fed changed the game heading into this year, it stayed that way and that enabled stocks to do what they have done. let's bring in steve, head of institutional equity strategy, barry banister it has a great year. where do we go from here >> i hate to be debbiedowner, but if you think about it, the recessions tend to be high impact and low probability events there have been seven recession related bear markets declines in the last 50 years. we think that is about a 20% chance of a recession in the next 12 months in 2020 and we have to haircut the fair value by 7% probability times outcome and that's about -- that's why our target price on

the s&p, which is 3250 or so, is below the 3500 value that you could get to at a 20 multiple of zero real rates on about 175 consensus earnings, which above our estimates as well. >> so in your mind, the s&p is going to do nothing next year, even with a prediction of only a 20% chance of recession. how does that -- >> we would -- we would like to see the recession probability rece recede the market is underestimating the risk on the oil side towards midyear. the saudis will do anything it takes to get aramco off their loam stock exchange and on to the big board like london. that requires higher oil prices, significant production cuts on top of what they have already done after they monitor compliance among the rest of opec but in the march meeting the second thing is iran has maximum leverage to deal with the administration around the july 4th driving season.

so towards midyear there could be trouble in the strait of hormuz also the yield curve is pretty good predictor of trouble and we are at maximum consumer confidence as well the highest it has been since 99 and 69 1999 and 69. so, again, we are constructive on sector rotation and on october 13th we rotated from being defensive where the market was flat 600 days from late january to late -- early october, and we rotated to a cyclical profile, energy materials, industrials, technologies and financials. and we're going to stay with that long short cyclical to defensive ratio as we go into 2020 >> jim, i think that's a key question i wonder at what point do investors start to really hone in on the geopolitical risks out there. you have folks storming the embassy in iraq right now on the heels of those u.s. precision strikes over the weekend you've seen protests flaring up

and in many cases getting more violent and bigger in many parts of the world right now all of these simmering tensions with iran overall. north korea, i could go down the list right now does any of this begin to impact the market and how investors are thinking about where they're putting their money? >> no, it does not not unless and until there is enough of an impact in one of the regions you just mentioned to spill over and have lasting economic impact, will it have a market impact? investors basically have become rightly skeptical of all of the theories that draw from headline risk events. and i think as you go into 2020, just nas in 2019, it is importan to not let your investment decisions be driven by fear or fear of missing out. equally as important, don't let your political views get in the way of your investment goals the reality on the ground is that all of those risk events that you're talking about could, any one of them, spill over into

the marketplace, but it would take, i think, something quite dramatic the most dramatic thing we have seen on the screen that we know is going to take place in 2020 is the u.s. elections. i wouldn't be surprised to see some very volatile street protesting going on inside the u.s. as we wind our way up to and through that election. i think the 2020 u.s. election is the biggest risk with the greatest unknown outcome that 2020 investors face. >> all right, so that begs the question then, if you don't want to invest based on fear, fear of missing out, where do you put your money >> first of all, you follow the fundamentals with the fed in the corner and the consumer doing very well, i think you continue to focus on the things that drive the market for long-term investors. earnings, interest rates, economic data. if we begin to see cracks in the consumer, if we begin to see cracks in earnings, if we begin to see the fed do something unexpected, then, of course, we'll reassess right now we think the most

prudent approach to 2020 is the approach long-term investors should always take a discipline diversified approach with a good mix of both equities, bonds and cash, not just as a buffer, but also to take advantage of tips >> barry, you know, we basically had this relief rally over the last few months when the market realized 2% economy is not so bad. at what level of the s&p do we have the realization that 2% of the economy is not good enough, is that a die naming we'll be fa dynamic we'll be facing at some point next year? >> the fed engineeredto earning back down to the level of inflation. you got a 1.55% fed funds. and about a 1.5% core pce deflator as a consequence, your pe multiple is approaching 20 times as a fair value of full value for 2020 the street is looking at $175 of

earnings in year coming up we're about almost $10 below that, but market will price off the consensus. and in that case, you could argue for $3500 for the s&p. if you believe there is no chance of a recession at 2020. and that is the big question will there be a catalyst for a recession in 2020 and how much do you haircut the market based on those probabilities >> what do you think earnings are going to be in the year ahead. earnings growth. that's going to determine whether stocks quote/unquote deserve to be at the levels they are. >> exactly and one of the reasons why your previous guest had said that the market had somewhat limited upside in the previous show was because the earnings growth would only be about 4%, 5% in an optimistic scenario for 2020 as a consequence, very full multiple on the earnings, you have re lvery low single digit n

if you can avoid a shock, a recession, all kinds of mayhem that we all fear we're climbing that wall of worry now. >> we'll see how far we climb it gentlemen, happy new year. we'll talk to you in 2020. >> when we return, a new controversy surrounding carlos ghosn, former nissan chairman fleeing japan ahead of his financial misconduct trial we'll tell you what he's saying about his departure. meantime, take another look at the s&p's biggest gainers for the year chipmaker amd leading the pack other chipmakers like lam and kla up almost 100% on the year more "squawk on the street" live from post nine at the nyse after this break in a world where everything gets a sequel. it's finally time for... geico sequels! classic geico heroes, starring in six new commercials, with jaw-dropping savings. vote for your favorites at: geico.com/sequels

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times square not going to look like that later they're going to be lining up, packing that place pretty soon meantime, former nissan chairman carlos ghosn is now in lebanon he led japan where he was awaiting trial on financial misconduct charges ghosn issuing a statement saying, quote, i'm now in lebanon and will no longer be held hostage by a rigged japanese justice system where guilt is presumed, discrimination is rampant and

basic human rights denied. i have not fled justice, i have escaped injustice and political persecution. there are some reports out there about, you know, a large box used for transporting musical instruments may have been used, private jet and the like i assume we get a tiktok on how this all happened. >> he's a citizen in three countries, france, lebanon and brazil and all three passports were confiscated by lawyers who say they still have them so how did he get out? did he use a false identity. shares of nissan are lower on this as well today doesn't look like he got any comments from japanese authorities on the situation yet either >> i saw something cross on the bottom of the screen i want to read it for anybody not related to this specific

story, the trade deal with china will be signed on january 15th in a couple of weeks, holds to the schedule we heard yesterday, china south morning post saying it was coming up soon. there was a report from navarro yesterday it could be within a week or so so we'll let that slide a bit. but you're talking -- there it is there the bottom of the screen president trump saying the china trade deal to be signed on january 15th. >> at the white house. >> we'll see what the market reaction if any is to that there is a tweet from the president right now regarding that, ceremony at the white house. high level representatives of china will be present. at a later date, going to beijing where talks will begin on phase two that may be the biggest headline of the whole tweet that last sentence there, the president says he'll go to beijing where talks will begin on phase two >> i don't think -- phase two is this hazy thing that hangs out there. once we get into next year and, you know, your anniversarying

the tariffs already in place, i don't think it necessarily is going to be a big worry point for the market anything that comes further down the road in terms of agreement will be potentially a small bonus. >> interesting to see, though, what phase two entails and the details around phase one as well we have gotten -- we heard from officials within the white house what is involved, but the actual details, people starting to poke holes in the idea of structural reforms, state subsidies. is that going back -- >> let's be honest, it will get lost in the campaign, it is a statement of intent, maybe, i think, to continue talking. >> hard enough to get to phase one. let's, you know, maybe you're right, take a breath on that although, you know, navarro on "squawk" was talking about these trade issues with other countries and i wonder if there are flare-ups here and there they probably won't be viewed as large as with china.

but how much if at all the market will pay attention to anything that happens along the -- >> statement of orientation we're going to continue to contend for better terms that's fine. i think it also could be taken as their attention will go toward things besides china. if there is a phase two, it happens at a low burn behind the scenes >> also you got to take into effect we had struck -- started to strengthen bilateral trade agreements usmca, brexit moving forward, the expectation is that the u.s. engages in trade talks with the uk as well >> you guys want to finish the ghosn -- carlos ghosn chat we started this conversation noting this incredible, you know, apparent escape, you know, from japan carlos ghosn, he spent a lot of his childhood in beirut. so he escapes to lebanon and says he's going to freely talk

to the media in the days ahead and roughly paraphrasing what he said we'll see what happens. >> obviously hanging over this entire affair was this sense from his side that it was, you know, essentially a corporate espionage type thing, on the government on behalf of japanese companies, kind of drumming up these charges and then also, of course, spotlight the japanese criminal justice system with the nearly unanimous conviction rate and all the rest of it it is a fascinating, all the little subplots. >> even the impact it had on the future of these auto manufacturing consortiums and what look tos like going into 2020 and beyond as well. >> i would be fascinated, once we get some sort of reporting on it, how this actually happened, how somebody as high profile as mr. ghosn seemingly under some sort of surveillance or watch or something could escape in the dead of night or however it happened -- >> house arrest, right >> yeah, to end up in beirut

we shall see. >> await the details when we come back, a red hot year for chipotle. the stock up more than 90% the ceo brian niccol will tell us how he plans to keep the momentum going in 2020 as we head to break, a look at the -- you see the worst performers in the dow, walgreens, pfizer and 3m negative the traditional, the highest dividend yielding, those are also on the list, except for boeing more "squawk on the street" live from post nine at the nyse when we return.

> >> getting into the spirit on this the final trading day of 2019 final trading day, great decade for the market see what lies ahead when we ring in the new year, hours from now. >> decade, annual total return for the s&p, 13.5% keep in mind, to 2010 started the s&p already up 50% off the lows from earlier that year. we talk about it being a decade long bull market it is ten years and nine months at this point. not exactly getting it to the very beginning, but roughly speaking, that's a couple of percentage points better than the long-term average for stocks. >> we should remind people as well what you're looking at the bottom of the screen, speaking of a moment ago, the president tweeting minutes ago that they'll sign phase one of the trade deal january 15th at the white house with representatives

of china being present there and at a later date, the president says he's going to go to beijing where talks will begin on phase with so presidential visit in the new year, china seems to be in the cards, phase one signed according to the president and others talking today including peter navarro on "squawk box" this morning stocks not moving a whole lot on that specific headline we figured this would happen, getting more detail as to how the whole thing will take place. >> since october 11th, it seems like you had that sort of de-escalation move, people were handicapping the phase one deal was going to happen, i think the market put this kind of in their pocket and said this is a premise of what we're doing by the way, the chinese economic numbers have also stabilized related to the fact that trade tensions have gone down. and that has been some that has really underpinned this confidence that the global industrial activity is probably bottomed in the third or fourth quarter. >> china has been continuing

with stimulus measures to your point, had pmi out of china, unchanged overnight. above 50, still showing signs of expansion rather than contraction for second straight month in a row get more of those numbers globally over the coming days post holiday as well, including here in the u.s. by some manufacturing on friday. >> going to ring the bell in a couple of minutes. let's talk about uber for a minute uber and postmates are suing california over a new law that could force the companies to treat their workers as employees. this is everything this is a game changer for the business model of uber and lyft. u.p. uber set to open lower again this morning one of the most disappointing of the ipos of 2019 for certain who knows how this will shake out. but this is huge. >> yeah, and what is interesting to me is the fact that they are just filing this lawsuit now right at the end of the year you had the california trucking association come out and file a similar lawsuit as well.

this affects more than just the delivery companies and the economy workers and companies as well you had organizations representing freelance writers and photographers, put a lawsuit out too, saying 85 has been unconstitutionally limit free speech so it could have very wide ranging effects. and we have had a number of companies like microsoft who came out and said they will put the regulations into place, not just in california, but on a national level as well so i have a feeling this will be pretty big fight that makes its way through the court system throughout 2020. >> law takes effect on wednesday. >> right and presumably the companies are betting they're going to have some kind of a stay or maybe get relief on the immediate imposition of the new law. but it is everything if it happens, i guess but there is already so many doubts about the business model, if it can ever work. i look at the stocks and say maybe these guys are taking their pain for now, trying to bottom out or flatten out for a while. >> you heard the clapping start,

that means they're about to ring the bells here the new york stock exchange, the big board, bank of america, bryant park, celebrating the 7th year of the bank of america -- in new york city nasdaq, times square, getting ready for tonight's big festivi festivities, the weather looks to be pretty good today too in new york maybe near 50 degrees, clear skies. last year was just a deluge, a cold, rainy -- >> have you done it before >> i did it once i did it last year i did it last year, just to do it once. there it is. that's hard to believe that's where it is all going to take place later this evening it looks dead right now. but you know it is not going to remain that way for very long. >> no. >> and looks like, you know, starting to the downside here with the major indexes we just heard ryan dietrich on "squawk box" say that the last day of trading day of the year

is only up 7 out of the last 20 years. it just seems like it is a day mechanically when people back away and they bought all they're likely to buy. see if that holds true today and soften up that total year to date return. it is a full day of trading today. >> yes >> many would expect maybe before holiday, that we would have an early close, but the exchange is likely to basically let everybody do all their business by the end of the year because it is a lot that needs to be -- >> yeah. still, though, light volume day, in terms of what is outperforming relative to the market right now, given the red across the board is utilities, the single sector that is in the green. consumer staples are also right around the flat line energy, tech and communication services are the worst performing sectors again today in the s&p russell look like it is hanging around the flat line as well >> looking at shares of apple, michael mentioned the kind of year that apple had over the

last 12 months, stocks up 80%. over the decade, it is the biggest winner of the dow. up 868%. >> yes. >> interesting year for apple. >> didn't start the decade in the dow. >> it will take the credit for it, the gain of the dow. after such an amazing year, that maybe didn't necessarily match the fundamentals of the company's performance, still did an amazing job services business is where the money is being put the chips are being put in that place, things like the wearables and the airpods and things like that are flying off the shelves toward the holiday season. you can't necessarily say an 80% move in the stock was directly relative to the company's fundamental performance. questions about the auto iphone and -- >> earnings have been steady, flat since january 31st. so this isn't about people kind of revising up at least on paper what they think the company will

earn it is about the sustainability of it, i think, and the pe went from a depressed level of 11 or so at the bottom, early january of this year, to about 21, 22 on a forward basis. it is now trading at a premium to the market where a lot of folks thought it should be for a long time. the stock owes you nothing to your point, everything that the market has loved, which is great balance sheet, buying back a ton of stock, a very steady earnings stream and i think the way they smoothed out the phone upgrade cycle, right, it is no longer that much suspense of are they going to have uptake of the new phones. >> maybe those are the best words to use, smoothed out, in so many respects, tim cook, he smoothed out the way that he dealt with the trade issues with the president, he was one of the certainly the more vocal people with the president about the impact of trade. he was visible in ways that other ceos may not have been

this was a year of smoothing out in many respects, getting people to look past maybe the deficiency in sales of the iphone, some of the earnings estimates to focus on the high growth areas of services and wearables and get past the trade head wind. >> sure. again, what is the next act? if there is one, the stock had a history of going on the amazing streaks when it is considered to be dominant and, you know, bulletproof. and then, you know, just comes in for harvesting because it goes from underowned to overowned. you look at 2012, like the only stock driving the market and then the overall market had a great year in 2013, apple didn't do anything. >> in terms of the next act, it isgoing to be at least from wall street standpoint 5g and that model gets introduced next fall and this broader ushi iner an advent of 5g, a big impact

throughout the tech sector. >> amazon is going to be one to watch in the new year. underperform the market this year a lot of the big cap, big tech names did well. >> very conspicuous. you could kind of be generous and dial out two years, look at the chart and say, well, it had a monster move above 2,000, got there twice and it has been just digesting that for a while something seemed to have happened in the attitude. >> one day shipping. higher than expected costs associated with it. >> exactly so all of a sudden, you know, amazon's obsession with giving a customer everything possible becomes a worrisome cost element and logistical element to the companies. >> that will be one of the themes for amazon going into 2020 as well there has been some concern that you're starting to see some deceleration in the growth rate of that aws business as well what does that look like in 2020 part of the reason why that jedi

pentagon cloud contract has been getting so much attention. not the biggest contract by any stretch. talking about $10 billion over ten years, microwon it, big upset for amazon, amazon is now challenging it it is not the dollars. what it represents in terms of future contracts, future business, with government, with corporate america, and is microsoft now becoming a more formidable foe to aws. >> it is hard to be negative in any respect on amazon. underperformed relative to the s&p. you mentioned the issues with government contract. there has to be a managing of the relationship with the government the president and bezos are adversaries in many ways i don't think that relationship is going to cool or thaw anytime soon otherwise, how could you be that negative on amazon's prospect, people say, it is a spending year

they got the pulleys, they figure out what is going on. >> how much the tremendous dominant platform companies, their performance is about eye of the beholder. not much changes in the business as the that wall street narrative and willingness to pay up for the existing business you're right not a lot has changed there in terms of growth rate, the company's priorities and all the rest >> yeah. we did see this stock rally last week post christmas when they put out their numbers around the holiday season as well i think that's one of the things that analysts, the wall street community is focusing in on ais all of the investments into delivery, logistics, core retail business, whether we begin to see those pay off in a much more meaningful way in 2020 >> we mentioned -- >> still 96% buy ratings on amazon that's one thing that never budged was the allegiance of the sell side. >> i would be surprised if it was anything but let's mention the fact that stocks are in the midst of turning around, positive as

well, s&p positive by a fraction dow down by 6 points we'll see what the final -- the bulls are going to try and have a say on this last day even though i'm surprised that that stat that you read about the final trading day being down more times than not. >> last 20 years anyway. i don't think it extends back beyond that. >> i'll take 20 years. >> it is one of those things, mechanical stuff around the close. in this world of etfs, a lot of it does hinge upon just the rush for that final auction. >> easy to push things around today too. no volume whatsoever there hasn't been any. >> some of the strongest names for the year are the names once again, just as we saw yesterday, that are taking a breather today. key example of that with an aerospace and defense is lockheed martin. reached the 2019 target to deliver 131 f-35 fighter jets to the u.s. and allies. an increase of 47% in terms of

production, that's what they're expecting in terms of production in 2020. i should say they also brought the cost of the f-35 down a year ahead of schedule i bring it up because it is 25% of lockheed martin's overall revenue. another key target for them to hit and surpass this year. stock up 50% year to date and yet taking a breather today on this news. >> i was going to look at retail names just because we're talking about amazon and retail conversation coming up later in the hour the big winners are still winning. best buy is up today target has been a standout all year remarkable performance that stock is at double. that stock is flat today double on the year brian cornell has done an amazing job over at target walmart has been good. costco, best bye, amazon, that's been the big story in retail, walmart is up today. what i want to know is in the new year, whether some of the laggards, you know -- macy's,

for example, whether some of these stocks can get out of their own way in any way. >> it has been a sector that has not rewarded value contrarian thinking at all. the acclaimed winners have kept winning, the ones you mentioned the omni channel ones, if you have a lot of stores and you're kind of clothing oriented and in every mall, at gap or something like that, no matter how cheap the stock looks it has not worked -- down 30% or so this year i think that's a big question now. one thing absent is private equity years ago, distressed retail, catnip for leverage buyouts. that hasn't happened in years. and it shows you that basically the structural challenges make the private equity guys -- >> too many fleas for private equity. >> to bob pisani with more on what's moving. >> look forward to being with you in 2020. interesting about today, we do have an announcement from the president, they'll sign the china trade deal it is not moving the markets at

all. sign that we have the trade deal priced into the markets here banks had a good quarter overall. fractionally on the upside consumer staples unchanged vannic the star of the year. my bet for the number one etf for the year energy good run here in the last month or so. flat today retail, up about 3% on the month, down a little bit today here important thing is are we bottoming on the global economy? want to watch the manufacturing numbers that we had recently we had overnight last night we had china manufacturing numbers for december about in line about flattening out japan retail sales, end of last week, disappointment here. eurozone pmi and the u.s. ism manufacturing numbers. china had a great year, up 22% let me show you the global markets, you had to have a really hard time losing money in the global equity markets this

year i call it the year of 20%. everything up 20%, not just the s&p, equal weight. everybody complains. that's not really true equal weight was up 26%. all 500 equal weight in the united states. the russell 2000 also having a good year. not quite as good as the s&p but still up more than 20% here's what's really encouraging. awful for years, this is a great number overall, this is the broad european markets china has underperformed for years as well. very encouraging you got to sectors that have been global sectors underperforming for a long time that have done a little bit better overall this year let's talk about what is going to happen in 2020. are we going to be up or down, i don't know i play the averages, like at the total return including the dividend for the s&p 500 the last 90 years the s&p 500 including a dividend year over year is usually up, up 72% of the time from december 31st,

december 31st every year, up 72% of the time including the dividend and should include the dividend, down 28% everybody emails me, bob, we won't have another 20%, that doesn't happen yes, it does happen. it happens a lot more than anybody likes to acknowledge if you look here, you can see we're up about 20% of the time or more, 36% of the time, more than one third the largest categories up 20% or more in the s&p 500. this is 90 years of data and including the dividend here, 10% to 20% advance add this up, 57% of the time, the s&p is up more than 10% year over year. take a look here, zero to 10, 15, decline, 28% of the time is down here is the 20 year chart of the s&p, and the naysayers say what about 2000 yes, the year 2000 here were terrible we ended up down actually in 2009 compared to the end of 1999 that was a bit of an anomaly you can get periods when market underperforms. nobody is trying to say the

market goes up overer longer periods of time, the market tends to increase and that's why long-term buy and hold strategies are generally the most widely recommended unless you're really good at picking individual stocks. back to you. >> usually bails you out if you pick a bad entry point good reminder. record-setting year for the nasdaq as well to frank holland who has his place in times square at the nasdaq. >> the nasdaq coming off two down days starting today fractionally lower now moved fractionally higher. above the 9,000 level that it reached last week. and as you mentioned, still on pace to finish this year more than 30% higher. turning to the faang stocks, more than a third of the tech heavy index. all up or down about half a percent. apple, best performer in the nasdaq 100, up around a half a percent right now. biotech, another big part of this index, the ibb etf, lower right now. still on pace for its best year since 2014 yesterday was retailers making

the gains here on the nasdaq today, all about tech. we're seeing amd, micron, we saw broadcom move from negative to positive so far a somewhat positive day for the nasdaq, starting off in early trading. back over to you. >> frank holland, thank you. when we return, 2020 playbook on tech also ahead, investors and chipotle have big reasons to celebrate. stock is up more than 90% this year we'll talk exclusively with ceo brian niccol about his company's game plan for growth in 2020 "squawk on the street" will be right back

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welcome back major averages now fractionally higher, but that better way to end 2019 than with a look at tech it is this year's top performing sector so what about the road ahead josh lipton has the 2020 playbook on tech >> tech is on a tear the best performing sector this year, here are three predictions for next year. first, apple makes its 5g move the global 5g rollout is under way. promising super fast wireless speeds, apple will unveil its own 5g iphone in september but it won't be just new hardware expect new 5g enabled experiences too, perhaps in augmented reality. you can bet that with a major network upgrade apple will introduce new features second, hardware spending softens. ceos could spend less on

technology next year surrendvensurrendervendors haved economic challenges. that could be good news for others like cloud giants including amazon and microsoft and subscription services like zoom technology that could like zoom, technology that could be cheaper for corporate customers. third, make or break for wearables. apple dominates wearables with its popular watch and air pods, now time for rivals to make a choice throw in the towel or step it up with acquisitions. for example, google plans to buy fitbit or introduce competitive products like microsoft with its new surface earbuds coming in the spring >> josh lipton joins us from san francisco with more. good morning and happy new year. the wearables piece of this really gets my attention obviously it's such a growth point for apple and something that a number of analysts just in recent days have highlighted as part of the bull case for apple going into 2020.

how have they been able to create and maintain such such lead and is that -- is that lead going to narrow next year? >> so, that's an interesting question, morgan one, i think one interesting data point some analysts do estimate that only despite the traction and success we talk about here, that only about 10% of iphone owners use the watch today and that's why you see at least some on the street bulled up, and think there could be plenty of runway ahead there i think there's two broad reasons for apple's success. they are able to leverage that install base you have 1.4 bill devices out there in people's hands, enormous advantage for tim cook, but the install base you have to give apple credit. under cook's watch they've launched the watch and wireless buds, i checked the apple store, if you want apple pro, jim

cramer said that's the one thing he wanted this holiday, they're not going to get delivered until january 30th we'll see how rivals respond coming microsoft with the devices coming out in the spring. >> when it comes to 5g, obviously the industry is trying to make this an event and trying to get consumers focused in on this being a qualitatively different things, as opposed to networks always get faster, happening for decades right now. do we think the consumers are ready to make a purchase decision based on this >> with 5g you can understand the advantages and benefits, faster speeds, lower latency, even applications we haven't thought of yet, i do think a lot of analysts think that will be a meaningful 2021 story, but that doesn't mean that investors start to place their bets in 2020 of who they think really benefits there i think one interesting story there will be we just mentioned

apple. one key risk you're going to hear analysts talk about is, if these carriers are slower than we think in rolling out those 5g networks, how does that sort of impact investor expectations at least about success and traction that apple could have with that 5g iphone that we would expect to come in september >> josh, thanks a lot. talk to you again soon. you know how tech has fueled the nasdaq rally in 2019 a look at the year's worst performers in the nasdaq 1 hunz with mylan and kraft heinz topping that list of losers. "squawk on the street" will be right back

. coming up, chipotle's ceo brian niccol, his stock up more than 90% "squawk on the street" will be right back don't go anywhere.

♪ good tuesday morning welcome back to "squawk on the street." i'm scott wapner with morgan brennan and deirdre bowson live from post nine on this new

year's eve a look at the markets as well today. we've turned things around a bit. what started in the red is green, albeit slightly on this final trading day. major averages up fractionally at this moment. >> the last trading day of the decade we'll break down the biggest winners and losers over the last ten years and how to play your portfolio in the year ahead. >> ousted nissen chairman carlos ghosn fleeing to lebanon saying he was escaping a, quote, rigged japanese justice system. and it's one of the best stocks on the s&p for the year, the ceo of chipotle will join us for a cnbc exclusive >> first a live shot of south korea in seoul where they are ringing in the new decade. celebrations have been under way in various parts around the world. fireworks about to begin there any moment you can see a huge crowd gathered beautiful setting there live in

seoul where it's just midnight >> yeah. few seconds after. >> few seconds after. >> cue the fireworks they finally listened to us. there you go let's watch that for just a second [ speaking foreign language ] [ speaking foreign language >> special setting there in seoul. fun how to watch how the different nations ring in the new year a historic year for the stocks with all the averages seeing more than a 20% gain how should investors be positioned into the new year joining us now with their thoughts bleakley advisory

group's chief investment offer peter, and moody's analytic chief economist mark zandi happy new year to both of you. peter, i turn to you first, the keys for stocks in the beginning of the new decade are going to be what? >> i think it's where rates go we've had this extraordinary presence of negative interest rates around the world and there are signs that maybe we are at the end of this and if europe follows what the swedes did and decide to get out of negative interest rates, what does that mean for global interest rates we know asset prices generally speaking have been medicated on a very low rate type of environment. i think that's what i am most focused on over the next couple years because negative interest rates is just unsustainable, i think. >> yeah. we've certainly seen the effect it's had on financial systems in europe and other places of the world. i think the key question there, though, if you start to see that happen is it seen as a tightening in the monetary cycle? >> it's going to be, but that's the thing, if global growth

inflects higher in 2020 because of the fed engineering a soft landing, because of the trade deal, rates aren't going to be where they are they're going to trend higher and there's going to be pressure on the ecb to find out what the swedes did, what does the swiss do if your interest ratrise over t going to rise here asset prices are rich. the market is trading at 20 times earnings that can be sustainable if rates stay low if they go up what we done what the right multiple will be >> depends on what earnings will be how do you think that will shake out in the new year? >> i think corporate earnings will be flat i think sales growth should be mid single digits consistent with an okay economy at 2% gdp growth economy but profit margins, which have been under pressure now for the past three or four years economy wide will continue to weaken labor costs will continue to rise

wage growth will improve and productivity growth still be weak margins will be under pressure that will offset the mid-single digit sales growth and flat corporate growth i'm sympathetic be to peter's perspective. i think asset and stock prices are vulnerable in this kind of environment. >> i think -- >> both sound kind of negative on where returns can be in the year ahead >> i think if rates stay low, we can be oak >> what's low if like that's a relative term. >> the 10-year yield needs to stay below 2. >> below 2 >> it depends on why we go to 2.5, if we're going to 2.5 on a 10-years because the german 10-year went above 0 because the europeans want to get out of negative interest rates that's not a good thing we go to 2.5 because growth is okay, inflation while moving higher doesn't go up too much we can handle that. the pace of the rising rates. >> back to the conversation for going up for the right reasons

>> pretty much we know 2019 was all about multiple expansion. >> right. >> and in order to grow into that you need earnings growth, but you don't want an uncontrollable rise in rates i'm not saying it happens but that's the theme i'm watching in this world of negative rates. >> so you guys are sounding a little bit of caution. mark, where do you go then in terms of equities if you think that's going to be the environment heading into 2020? >> well, i mean i think stocks, if you told me stock prices a year from now or roughly where they are today i don't think i would argue with you we talked about interest rates and we talked about corporate earnings, but valuations are very high. my favorite measure of valuation is the ratio of the will shire 5,000, which is a value of all publicly traded stocks to economy wide corporate earnings. look at the gdp accounts and corporate profits. that is sitting at 15 times. in the past 40 years overs the period for which we have data,

the average is 9 and the all-time peak which was back around y2k was 17.5. the market is -- i don't think it's speculative, but it's certainly richly valued. all of the pilars of the stock market look shaky to me. i think the market is vulnerable to a correction and if you told me a year from now stock prices are where they are today i would say that sounds about right. >> where is the dollar headed in 2020 i ask that in part because i would imagine especially if you continue to see it weaken that could actually be potential lay positive for equities and other asset classes like commodities >> i think it continues to go lower. it's no coincidence as the fedex panneded their balance sheet the dollar started to weaken now the dollar at the lowest level since the early part of the year it will be good for multinationals and their exports. the key in getting back to my rate story if the dollar weakens, there's been a huge amount of foreign money that's flooded into u.s. corporate credit and treasuries in the

search for yield on an unhedged basis, if all of a sudden the dollar starts to weak thon those unhedged holdings could get hurt. you have to watch whether those flows start to revert back if the dollar were to weaken in a notable way. if it weakens slowly and softly we're fine, but if it does start to dramatically weaken, we can see a rise in rates as a result. >> i feel like we're going out of our way here, you and peter are, for why stocks can't sustain a good return for 2020 the economy is pretty good the dollar is pretty weak. >> i don't -- >> the economy -- >> earnings -- earnings, even if they grow a little bit >> well, no -- >> what's the problem? >> my characterization, the economy is okay. i mean we've been growing 2%, we grew 2% roughly in 2019, you know, expectations aren't as reasonable to expect 2% growth

in 2020. you know, that means nominal gdp growth, if everything is going fine, 4 or 5%. profit margins will be under pressure so corporate earnings are going nowhere. how can you be -- i don't know, how do you be optimistic about stock values in a world where valuations are very high, corporate earnings are -- >> all depends on where your earnings are really going to be. if earnings are zero, again, okay you're going to have to rely on multiple expansion can you back up what you did this year, maybe not. >> can you >> i don't necessarily think you can. but that's if you're right and earnings are going to be at zero you get any sort of earnings growth, that could be supportive of stocks having a decent year, not to mention the fact that history is on the full side based on what you put in the books for 2019 >> yeah. sure you can construck scenarios. if you're telling me the economy

will be better than 2% and corporate earnings growth that is mid high single digits i agree with you that's not my expectation. i don't think the economy is going to come rip roaring back it's going to be lackluster, 2% growth, 4% nominal gdp growth. even if profit margins were flat 4% corporate earnings growth margins will not be flat and they will decline. you can construct different scenarios. the most likely scenario is they go nowhere fast. >> all right we'll leave it there happy new year as i said mark and peter, best to the both of you. >> you too. >> the u.s. dollar which we touched on weakening over the last three months and if it keeps up the same companies who bemoaned the strength in the currency back in october could be the biggest beneficiaries of this swing our contessa brewer joins us now with more. >> the dollar index is down 3% in about 12 weeks, a move multinationals take very seriously. many currency watchers say the dollar will get weaker in 2020

we looked at companies in the s&p 500, 43% of their revenues come from overseas sales a weaker dollar makes the goods and services more competitive beyond our borders big tech is a beneficiary in individual ya gets 87% revenue abroad, that stock up 37% in three months amd almost 80% of its revenue overseas as the dollar has dropped over last three months, that stock has soared 57% and then, of course, there's apple. apple has 58% of its revenue coming from foreign sources and is up 30% in three months. on the other side of the coin, you have the big importers like walmart and home depot that could falter we've seen shares of walmart flat over three months and home depot down almost 6.5% a falling dollar is sometimes seen as a warning that u.s. economy is slowing but this time around you have, for instance, btig's julien emanuel suggesting

it just means the rest of the world is playing catch-up to the united states and he suggests if the dollar weakens another 3 to 5% in 2020, that's that slide would be graeat for corporate earnings translating to a tailwind to s&p 500 earnings. >> thank you weaker dollar could be a boom for the transportation stocks which have lagged the broader market this year some of the rail stocks and the like contessa brewer. still to come, retail's tough decade the last ten years taking down some of the country's biggest household names. we'll discuss what the decade ahead might look like. one of the best stocks on the s&p for the year, the ceo of chipotle will join us in a cnbc exclusive. we have got a big show ahead for you. stay tuned (upbeat music)

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welcome back it has been a decade of store closures with the country losing a number of household names to the retail apocalypse. courtney reagan joins us with more we've lost a lot but gained some as well. >> absolutely, deirdre it's sort of been a balancing act and a lot has changed in retail since 2009. that year, of course, saw consumers pull back during the great recession and the recession caused numerous ripple effects that are still present today. at least 130 retailers have filed for bankruptcy since 2009.

that's not including grossers and restaurants according to alex partners. many because of high debt payments that couldn't be repaid when they were due, some of that left over from debt taken on monk the financial crisis. among the names, borders, payless, original toys "r" us, gymboree and many others currently jc penney, j. crew, neiman marcus, pier 1 are some of the names flashing warning signs of possible trouble to come but the decade has also seen a lot of growth in retail. it's ushered in new retailers, accelerated direct to consumer models, names like warby parker, dollar shave club, stitch fix and many more weren't around a decade ago total retail sales, minus cars and restaurants, the core retail number, have grown from 2.62 trillion to a forecasted 3.8 trillion if you use the

mid-point of the national retail federation's annual estimate the share of sales done on-line has grown by a big factor 2.6 times from just 4.3% of total sales in 2009 to 11.2%, at least as of the third quarter this year according to the commerce depth. amazon we know a huge part of that growth. e-marketer estimates nearly 40% of on-line sales are done on the site this year while digital does get credit for growth, in store shopping is still capturing the majority of retail sales consumers that reverted to bargain shopping during the recession a decade ago, didn't necessarily shift back after we've seen big growth from off price and discount retailers like tj maxx, marshals, ross, dollar stores they've grown in store counts and share price best buy and walmart have seen a resurgence back to you guys at the new york stock exchange.

>> stay with us. joining us for more on that retail landscape is former walmart ceo bill simon thanks for being with us today. >> happy new year. >> happy new year to you courtney gave us an overview of what we've seen over the last decade looking to the next ten years. we've seen the rise of amazon and walmart has been able to keep pace. does that trend continue we're seeing cracks in that model, for example, nike ending its partnership with amazon. what is the next ten years hold? >> well, i think apoc be lips has always been a dramatic term than i would use it's more of a transition. retail is so dynamic, there's always comings and goings and trend changes. i think the amazon trend has impacted and changed how consumers think about retail the next ten years, you know, i think technology is going to impact everything and technology in brick and mortar is really just starting and as those stores get enabled as courtney

said in her report, right now, it's still 89% of retail and even by some of the most optimistic projections, it isn't going to hit 20. so how retailers adjust and adapt to adding technology into their business over the next ten years i think will determine who the winners are. >> so bill, what you're talking about is the sort of hybrid model even amazon has gone be towards, is that sort of the key to success for retailers in the next decade, having a brick and mortar presence with some interesting technology inside of it and an on-line presence of course >> exactly i think you're seeing target actually did a wonderful job and brine cornell and his team showed if you use your physical store platform to enable your digital business you can do it and make money walmart is now -- i think doug mcmillon or somebody at walmart made an announcement then they were going to start emphasizing the use of their super centers

to build a digital platform. amazon has realized after i get to two hours shipping, i can't go negative shipping, and that's expensive and can't make money, whole foods brought into the play and how will we have a physical presence to give the customer what they want whether order on-line, ship to home, order on-line and pick up in store, digital checkout, some of the technology that's just beginning to hit retail stores, which opens up just fascinating opportunities for companies and consumers. >> courtney, as we have this conversation, it sort of begs the question about where investment within the sector more broadly is headed you can be take be a look at stocks that have outperformed within a sector this year. they've had one of two things in common for the most part either they are companies that are providing the technology and some of that technological infrastructure like shopify or companies like walmart, like target that have invested heavily into this more omni

channel approach in terms of the laggards, have they been making the same types of investments >> so i think we've seen a lot of names go bankrupt or liquidate in the case of the original toys "r" us we know they're coming back. that's a good example, morgan, of a retailer that could have had an experience and could have really infused technology like what you're talking about and didn't part of the reason they didn't or couldn't was because of the big debt payments they had and sort of where the cash flow had to go. like any business, retailers obviously have to balance an awful lot of things and so i think the aim for everyone is to do a model like what target has done and try to use those retail stores and the on-line platforms as interchangeably as possible it's not going to work for everyone and every format and then i just keep thinking about a format like an off price retailer like a t.j. maxx or a ross stores. they have websites, but they're not exactly the same as a shopping website like shopping at walmart.com or at target.com.

so there is something about that treasure hunt and that experience that you also need to try to capture it's a little hard to say about the folks that have fallen behind and did they fall behind because they didn't infuse the technology and be that omni channel presence i think in some cases yes, but it's so much more complicated for a number of names that aren't doing as well >> certainly you need the right kind of technology, right. bill, i wonder how do retailers do it and how do they update themselves do you think we'll see more m&a activity from non-tech companies acquiring startups that are able to do these things on the back end partnerships or do they do it organically >> i think you probably see acquisitions and some organic growth organic growth is difficult, particularly if that's not your sweet spot and as a brick and mortar retailer probably wouldn't be. i think acquiring some of the technology or licensing some of the technology will be the way

to go. fundamentally i think if you project ten years from now, i don't think we've even begun to imagine what could be done to bring technology into retail you know, you see it on-line but could we have virtual changing rooms so that you can just scan an item in a store with your phone and try it on yourself without actually having to try it on. i mean there's just amazing technology that's already available if it were applied to retail would fundally change the shopping experience. >> absolutely. you're already seeing that i don't know morgan if you've been in a reaffirmation. you order it on an ipad, bring it in and try it on, amazon with the payments with the cashierless. it will be an interesting decade to see how technology changes the landscape. thank you very much for that. >> thank you >> thank you see you. as we go to break, take a look at best performing stocks on the dow for the year with

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welcome back been a banner year for stocks with all sectors positive year to date. energy is the laggard with gains of just about 7% joining us now former shell oil president john hofmeister, the founder and ceo of citizens for affordable energy. john, nice to see you again. happy new year to you. >> happy new year. >> oil on track for the best yearly gain since 2016, though the space itself, the stocks haven't done well at all are you surprised when i read you that sort of data? >> no, i'm not surprised the big problem we've had is understanding the economics of the shale business it's a different kind of business than the traditional conventional oil, and a lot of the wild caters who have been successful early on really didn't have the capital strength to maintain their operations so

they ended up borrowing too much money. when you live based on the banks, that's not a good way to run a business, frankly, and so fra from a consumer standpoint we're in good shape, supply will be strong, there's a lot of drill, but uncompleted wells out there, which could bring more oil to bear if they're needed, and i think that the problem is going to be oil price for a stansds -- sustained period of time because the permian and bakken it takes more oil price to make a go of it. >> i want to dig into the price specifically and what you think the sweet spot would be but the s&p energy sector overall it's up a mere 5.5% over the past decade, despite all the disruption, all the technological advances in terms of fracking and u.s. shale coming on-line do you think going back to the fact that debt is such a key part of this, that there is a

reckoning coming for u.s. producers? >> yes, i do think there will be a significant amount of m&a or call it rash be shunnalization or call it cost reduction, whatever it will be, it will take multiple forms and faces, but the industry is very good over time at getting its costs in line with its profitability, in line with its financials, so i would not write this industry off, i will tell you the technology is getting better, but here is a hole in the formula, the hole in the formula right now is natural gas and the inability, because of lack of physical infrastructure, to move the natural gas to markets, and so they're flaring an enormous amount of natural gas which is not monetizing a valuable natural resource. so that's a little bit of a hole in the bucket that is draining strengths from the industry so we really need the physical

infrastructure to come together to move the natural gas to market it will happen, it will come, it's taking longer than most people would like. >> could another hole in that formula be pressure from climate change it's hard to see how this sector continues to attract the amount of capital, given pressure from governments for the banks that are funding these projects. >> yes, that's a good point and from a political standpoint there's a bull's eye on the fossil fuel industry for sure, especially on the part of the democratic party, and until, you know, they may have some success politically, until the price rises to where consumers say i don't want to pay that much, let's have more oil and natural gas available, but here's something to watch and i think 2020 will be a big year for this, the industry, particularly at the leadership level of the integrated majors are really getting their act together when it comes to the carbon

management technologies of the future whether it's capturing co2, whether it's reusing co2, whether it is somehow producing less co2, i think the decade, the next ten years, are going to be a dramatic turnaround in how the industry itself, not the government, because the government can't do anything really other than say no to things, but the industry will figure out how to manage that co2 issue and i think it will position itself on a much more sustainable footing for the decade ahead. >> that's a positive note. thanks for being with us and a happy new year's eve to you. >> thank you. >> let's send it over to sue for a cnbc news update. >> good morning, deirdre, everybody. here's what's happening at this hour dozens of angry shiite militia supporters broke into the u.s. embassy compound in baghdad after smashing a main door and setting fire to a reception area this in response to deadly u.s.

air strikes targeting the iran-backed militia. u.s. guards fired tear gas as smoke rose over the grounds. president trump tweeting iran will be held fully responsible. the media gathered outside the beirut property of former nissan chairman carlos ghosn after he fled japan awaiting a criminal trial ghosn had been released on bail but was not allowed to travel overseas however he does hold french, lebanese and brazzon passports. chinese president xi has called for hong kong to return to stability in a new year's address he said a peaceful, stable environment was key to the asian financial hub's prosperity and more than a million people descended on sydney harbor and surrounding areas to ring in the new year, despite the ongoing wells fargo crisis ravaging new south wales sydney harbor was granted an exemption to the fireworks ban

because of the wildfires you are up to date that's the news update this hour morgan, back downtown to you >> what a beautiful display it was. >> absolutely. >> sue, thank you. when we return, an exclusive with the ceo of chipotle, with that stock soaring for the year up more than 90% "squawk on the street" will be w dckba doisown 54 don't go anywhere.

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welcome back to "squawk on the street." chipotle one of the top performing stocks in the s&p 500 for 2019, the stock is up more than 90% for the year. the company looking ahead to digital growth and wage increasings in 2020. joining us now to discuss chipotle ceo brian niccol thanks for being with us. >> happy new year. >> my goodness, what a turnaround story for the stock and for the company overall in 2019 a couple analyst notes out in

the last couple days focused on things, including menu relaunches for 2020. what's on tap? how are you going to continue to further that growth? >> yes so obviously we've had a phenomenal 2019 and really excited to get rolling in 2020 you know, i believe we're building just a wonderful culture. we've got 85,000 employees across all our restaurants and those guys and gals just do a phenomenal job every day giving people great chipotle experiences and, you know, i think we made a lot of progress in our operations in the restaurant so i think the food is consistently better, i think the speed at which we're doing it is better, and then obviously we've added new access around this digital space in the digital system that's been a growth driver in the business and then the other thing that we've done, we've done fun things around the menu, whether lifestyle bowls or recently the carne steak. >> yeah. and certainly want to get into

the digital piece of this and a little more depth in a moment, but first, later in the hour we were having a conversation about the fact that many companies have seen margins come under pressure because of higher labor costs and wage growth. we have some minimum wage increases set to take effect this year. has that been a headwind for chipotle how are you thinking about that, versus balancing it with this idea of perspective consumers having more money in their pockets? >> yeah. obviously we've been very focused on making sure that we provide our employees with the right wages, the right benefits, everything that goes into the chipotle jobs and we historically have been one of the higher payers, but i think what we hear back from our employees is, what they're really excited about is they get to be a part of a growth company, they can join us in one of the crew roles but quickly work their way from crew to a service manager, a kitchen manager, a restaurant manager, and then ultimately even a field

leader or something beyond that. they love the purpose that our has around food with integrity, so we attract i think the right type of employee and we teach them real culinary skills and they get really excited about the growth opportunities and we try to surround them with all the right benefits i don't know if you saw some of the things we recently announced, mental health benefits, english as a second language for not just the employee but the entire family, these are things that our employees told us is important to them. debt-free degrees, tuition reimbursement. it's more than just the wage what is we found we're always going to be competitive because we want to attract the right employees and build the right skills into them so they grow accordingly. >> brian, i usually sit in san francisco and cover the ride sharing and food delivery space very closely i know you guys have a partnership with door dash and i don't know if you heard this but the grub hub ceo said that customers were promiscuous

does it matter to you who you go with i know you guys are taking more of that process back into your own hands, but in terms of who's delivering your foods do you see the same thing, it doesn't matter whether you go with an uber eats or postmate or door dash >> what matters to us is the partners that will deliver our food, first, we need to make sure they integrate with our system we want to make sure is, it is seamless for our customer and it is seamless for our employee door dash was really one of the first folks that was willing to int grate with us on our point of sale system, which created a really nice system and that's why our delivery times were less than 30 minutes and the food was getting to people on time accurately you know, as we continue to evalua evaluate who are the right partners, we want to make sure they can integrate into our system, and the next piece of the puzzle can they deliver it at the speed and accuracy we're

lookinged for and obviously we want to make sure we've got insights around the data that is generated in the digital system around delivery. >> right. >> those are the points of difference we look for whether we're using postmates or door dash or maybe uber eats, you know, we'll see how that plays out, but we want to make sure we're giving the right customer and employee experience. >> a lot of this for these players has been a grab for market share, so you guys and some of the other big players in the food delivery space have gotten very good rates but they're talking about rationalization. do you think that chipotle is going to have to be giving a bigger percentage of that delivery of revenue to the food delivery companies going forward? >> look, i do think over time, the rates will goup, but i think the thing that's great for our business is we're positioned really well with this second line which we call our digital

make line. it creates a different economic model for us to do these delivery occasions and, you know, at the end of the day when i have these conversations, obviously it's got to make economic sense for door dash and uber eats and for chipotle if they want to be effective agaters they need the chipotle brand to be there and if we want to be a big delivery player we want to be in the spaces where people are accessing deliveries. there's a nice balancing act to make sure that economics makes sense for both players and then one of the things i'm really optimistic about is, the fact that we have all our restaurants with the second make lines already that are digitized sets us up for a really unique community to drive the space whether through our app or through the aggregator's app >> brian, is there any chance that you would announce an initiative for breakfast in 2020 and what would have to change from your current thinking on that for chipotle to do

breakfast? you said in september that it was not in your plans any time soon does that mean you're thinking about it for some time down the road >> yeah. look, i would tell you there's no plans for us to do breakfast in 2020. i am excited about the innovation that we do have planned for 2020, which will be more along the lines of continuing to move our digital system forward, as well as some menu innovation, but, you know, it's not going to be breakfast look, i thinks the breakfast day part is something that maybe down the road there's an opportunity for us to extend our hours into earlier in the day, but i think there is just a lot of things we would have to tweak on the operating model in order to be really effective the food is the easy part here eggs, chorizo in a burrito, freshly prepared, what's not to love about that? >> keep talking to me. >> i know. makes me hungry. >> what else

>> right so the challenge for us is more, how do we do it in our operating model so that we continue to give people those great experiences and it would be a lot of work for us to move all of a sudden into that breakfast day part and there's so much opportunity, frankly, in the lunch day part, the afternoon day part, the dinner day part, the digital system around all this, that we're not ready to take that on down the road it could be another growth opportunity for now, we've got so much growth opportunity with the food we're proividing we're not going to get distracted by that right now. >> you are taking on drive-throughs why does it make sense to do that >> yeah. thanks for asking about this we have it in about 60 of our restaurants now, and it's another access point for our digital system and the reason why we love it is, you know, it's already really fast at chipotle when you order in our

app or the website we have these pick-up shelves so when you walk in you just grab your order and go. you've already paid. you selected the time it was going to be prepared what this drive-through window allows in our chipotle lane, another access point so you don't have to get out of your car to grab your food. we were already really fast. now i've seen in these restaurants average times less than 20 seconds, somewhere between 10 and 20 seconds because you've ordered ahead, it's gone to our digital make line, the second line that i've talked about, they make the food based on the time that you select, you drive up to your selected time, pull up to the window, you would say it's morgan, i'm here for my chipotle order well, hand it out the window and off you go. it's hugely convenient and we love it because one of our best economic transactions or most profitable transaction is off of

our digital make line. creating another access point where people can order ahead and get orders from the digital make line it drives the top line, bottom line and customer experience those are all really good things. >> yeah. wow. lastly, and quickly, brian, given the fact that it is the last day of the fourth quarter any kind of guidance you can give us on how the last three months have faired in terms of comp sales >> you know, obviously we don't do that. we'll have our earnings call in early february, but, you know, we are really proud of what we've accomplished in 2019, really proud of our teams. you'll hear us talk about this in our fourth quarter earnings call, but i really do believe we're building the right culture with the right people and as a result we're getting great results. >> all right brian niccol, thanks for joining us happy new year. >> thanks for having me. happy new year coming up, ousted nissan chairman carlos ghosn on the run

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is this year's best dow performer setting up for a fall? one top tech investor has a warninfog r apple investors. more "squawk on the street" is coming up.

former nissan chairman carlos ghosn fleeing to lebanon leaving japan saying he was escaping a quote rigged japanese justice system let's bring in our own phil lebeau on the newsline for more. aside from the obvious question how in the world did he get out without his passports, where does this leave the nissan/renault alliance? can he restore order from lebanon? where does this leave him? >> he's out in terms of any leadership roles at the nissan/renault alliance and that

was determined by the shareholders this year you mentioned that carlos ghosn really, for the first time in several months, we're hearing from him late last night he issued a statement through a spokesperson in that statement he says, i am now in lebanon and will no longer be held hostage by a rigged japanese justice system where guilt is presumed and discrimination is rampant and basic human rights are denied. in flagrant disregard of japan's legal obligations under international law and treaties, is bound to uphold, i have not fled justice, i have escaped injustice and political persecution. i can now finally communicate freely with the media and look forward to starting next week. that's the indication of what we'll hear next from carlos ghosn, likely in the next week he will hold a press conference or start doing extensive sbrirs and during those interviews you're going to see the questions focus on three things,

first and feoremost how did he get out of the country, his attorney in japan said he still has all of carlos ghosn's passports. how was he ushered or snuck out of that country and now that he is in lebanon and we have heard reports that the justice system or leaders of the justice system in lebanon said look, he is here illegally those are the first area of questions. second will be what's happened in the last year or so he has been arrested and essentially full or house arrest since november of 2018 what has that been like, what has happened and finally, there will be a lot of questions about what exactly happened when he was ceo and chairman of nissan renault and the allegations that were put forth when he was arrested of not reporting or underreporting essentially $140

million in compensation over a nine or ten-year period. those are the three areas where questions will be focused on first and foremost, guys, everybody wants to know how did he get out of this country >> certainly it must have been some kind of operation without his three passports. >> what's so fascinating to me, it has been such a drama you could call it such a fall from grace if you will for such a powerful auto ceo and now basically finding some sort of way, i'm sure more details will be revealed at some point out of the country ahead of this trial. is there any other time in history where we can point to a similar scenario playing out >> none that i can think of off the top of my head, morgan i'm sure there have probably been other executives in unusual situations like this where something similar has happened, but certainly nobody of the profile of carlos ghosn. and think about this

he was widely, widely, widely respected within japan prior to this arrest. so this was a high profile person who was under house arrest there raises all sorts of questions. and look, there are a ton of them, regarding the japanese justice system and the fact that he was essentially held without any communication or limited communication with his family since november of 2018 but the questions, if you're under house arrest, who is watching him how is it that he was able to get out of the country but those are just a few of the questions. the broader questions and the ones that carlos ghosn is going to raise when he starts talking publicly is this system that held him under arrest since november of 2018 that's the one that he is going to hammer. and a lot of people are asking about. >> he seems eager to talk, too thank you, phil. "squawk on the street" will be right back don't go away. (soft music)

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tonight you may be toasting the new year with products hit by existing twifs or facing new levies, up to 100% in a matter of weeks kayla tausche has the latest >> two weeks before french champagne and cheese could be

targeted by tariffs, barring major break through between the white house and oecd on global tax negotiations, the tariff up to 100% would be in addition to existing 25% tariffs on european scotches, whiskeys, and all wines. part of the trump administration effort to target european luxury goods in retaliation for unfair aircraft subsidies and big tech taxes. he says luxury is a misnomer it is not all of the top shelf spirits that will be effected and see prices raised but entry level spirits too, and perhaps your entire night out. >> a great quality cocktail can range 10 to 15 if we push the bar from 12 to 17 or 15 to 20, when you start thinking about this, you really start thinking about how expensive it is to go out and have a few drinks. we're not talking about

overconsumption here, not talking about somebody drinking half a fifth of whiskey a day, we're talking about them enjoying one or two drinks >> it could be cost prohibitive to take a date night out and come to a place like this. more than 300 companies weighed in, commenting vastly opposed to the measure. there are importers, distributors and a host of businesses down the chain that will be effected before it gets to a place like this >> one to watch. meantime, stock up happy new year, kayla tausche. "squawk alley" is up next. don't go awhe.nyer

good morning it is already 2020 in hong kong. 11:00 a.m. here on wall street and "squawk alley" is live ♪