japan. it is 2020 "squawk box" begins right now. >> a really good barbara walters. how many have you ever heard of or seen before >> i didn't see it i fell asleep and woke up to watch the ball drop. >> i was surprised to see post malone he's really good really talented. >> we are in 2020. good morning

welcome to "squawk box." i'm becky quick along with joe andrew is out today. strongly finished on the year. s&p up by about 17, nasdaq up by about 64 >> every january we say it, first day so goes the first week, so goodser first month it never really holds true one way or another if you had to predict the knee jerk opinion at the end of the year would be down >> maybe this is a one-day thing

that starts going down after a while. nobody does. the most confounding thing to be up 200 points after a 28% gain for the year up again, who knows. >> let's see what is happening in the treasury market yields for t for the 10-year. thursday today, the two-year is yielding 1.573%. in iraq, protesters have now withdrawn. a spokesman said the embassy is surrounded and secured yesterday, secretary of state mike pompeo postponed a trip there to deal with the elements.

it is an unfortunate situation it was a big response from the trump administration starting with a lot of marines, paratroopers and people deployed as a result, some people were talking about it being overkill. at least someone picked up the phone when the ambassador called that he needed help. at least this time, someone was there to respond >> i don't think the ambassador was there. >> i know. but our people who were in peril. i don't know what happened before but we didn't do those people any service at that point. no one came. they were on their own you've seen the movie? its what horrible.

overwhelming force and better outcome. >> it appears that way but this is not the same situation where you had lives lost >> we should tell you about hundreds of people that were arrested in hong kong. violents erupted through the cities please use the pepper spray to try to break up the protest. in all, people said they made 400 a grefts on charges of possession of offensive weapons. >> on the latest of the trade war with china, the president says he's going to sign a u.s. china phase one trade deal on january 15 later, the president said going

to discuss another phase of trade talks. trump administration to announce new vaping ban. an effort to try and curve teen vaping the wesweet and fruity vapors. frip is p expected we are talking about the new meds you're with the former fda commissioner he will join us. this is something he had been pushing for for a while to a least see those flavored cart wraths to be removed >> and the public service announcement i'm starting to see them on vaping in general. >> a teen saying

i fieblly tried. >> that's what the psa says? >> it is sark as tick. it is not just the flavored one. >> the menthol that's what the ulk issue. that was a huge part of the sales for juul too >> it is hard to make the argument that it is a bridge to stopping smoking if you don't smoke and you are a teenager 0 you are just figuring out a new way to deliver nicotine. sfloo former nba commissioner died he's credited with transforming

the league to a multibillion dollar global front. saying over the course as 30 years as commissioner, he ushered in the modern global nba. that is no exaggeration. people don't realize how in trouble. magic tweeted. when i announced in 1991 what i had hiv, people thought they could catch the disease by shaking my hand. david allowed me to play and then play for the dream teen talking with owner bob johnson, he turned this into an

entertainment. >> he was on the show a few times. nice man >> great man very decent person under all of it >> it was charges barkley and others talked about how much david stern changed the league he said when i came in, the average salary was'd $250,000. now it is noor hely $9 million he transformed the sport and changed the perception of the league

>> look at china there is a reason it is so popular in the first place >> we'll talk about the big market driver straight ahead and new details from carlos ghosn's escape they have a base case on it won't a flute case. he would not he'd need a big base case. more "squawk box" coming up. tom: my mom always told me actions speak louder than words. she was a school teacher. my dad joined the navy and helped prosecute the nazis in nuremberg. their values are why i walked away from my business,

took the giving pledge to give my money to good causes, and why i spent the last ten years fighting corporate insiders who put profits over people. i'm tom steyer, and i approve this message. because, right now, america needs more than words. we need action.

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today's big number $976,308,000,000 that's how much apple and microsoft's market capital grew. >> talking now as well street gets ared to trade off head of investment strategy.

options play out what is long term and short term you have a really short-term perspective in general >> over the short term, they are really overbought? >> is it an options strategy, so it is very short term. you see profit taking. that is the knee jerk opinion right now. up 200 or 160 today. will you change that or will you wait for it? did you get something wrong or is it possible that happens tomorrow or next week? >> we are still looking at 30 to 60 days out. if you look at where the vic was trading. tells me traders are trying to buy some protection going into

january or february. >> if this continues to go higher, do they cover? >> absolutely. getting out of that to actually close on tuesday >> when do you see a profit taking >> in a pull back of the s&p >> that is a level that would be targeted at. sometime in january to february. >> you are pretty short-term oriented can you use option in the analysis to figure out to overall for the jeer >> it is a 30-day window they don't trade actively as much looking at 2020 absolutely, we are more short term >> okay. what do you see for 2020 >> personally, i see markets the other thing is the dollar. the dollar making a meaningful

break below the average. i see some of the developing countries fx being a very big driver for 2020. also consumers, big theme i have right now. >> what does that mean for the s&p for the year >> i think marginally higher >> i'll take a swing at 2020 first from a business cycle standpoint, there is no sign of overheating. we've never had a recession without going over 80. we are at 77 there is no overheating going on a hidden catalyst. that is the big corporate tax cut we had spiking profit margins from 9% to 10% in 2018 that went half way down now we don't have to anniversary that anymore last year, you had 4% top line

earnings growth. i think you could see at least single digit earnings growth something plausible. >> one of the main points in your notes is that the midcaps are not cheap at all >> you look at clinton impeachment to trump impeachment, we look at th continues there. >> i totally forgot. what happened there. >> the articles were not sent. >> it was almost the same time the house proceedings started in december for clinton >> i don't know if they are planning it right. you did it we are not even talking about it market is up 200 points. what is going to happen? >> if we go back to the previous

impeachment, we know we had another 18 months of a roaring market >> he was in a second term though >> this is different because it is a first-term president. >> look, if you are looking for bargains, i still say midand small caps midcaps have doubled the leverage small caps have tripled. going down in cap, going down in quality is a good way to capture. we are in relatively full valuations in the large. >> in the crowd. >> i'll take that and concur with your emerging markets idea. >> if oil holds up, that's still a driver even though people don't look at it as much natural resources and commodity

prices are irvrelevant >> chances that the markets go up 20% this year >> that's a little high. what are the chances >> i'll give it one in four. >> we look to the options and i would say in that 10 to 15% range. >> as we get closer to the election, can i come to you to analyst at predict it.org. >> absolutely. we look at option pricing. >> to figure out the dem nominee, the house, the senate, the presidency >> people bet on all that stuff. it is much better than polls people don't answer in polls no one i recognize gets through

on my phone anymore jie don't answer it. >> you are the one who picks it up and tries to talk to these people >> i do. i say can i transfer all of my credit cards to you. i got $50,000 worth of balances, i'd like you to handle it. then i leave >> you know if you joke, you still register that you answered the pone those are internet phone numbers and they come under fake numbers. if you ever call back the number, the guy goes i didn't call you this is like a criminal activity >> there was just something signed against the robo-calls earlier this week.

end of last week it will only work if industry gets on board. i think industry wants to stop this nothing makes people cut their cord faster. >> i get more calls about the warranty on my car i sold 10 years ago. >> they need to get to the transaction. >> how old are you i need a millennial i can talk to >> i'm 33. >> that's smack dab in the middle >> can you leave your contact information. >> absolutely. >> you'll talk to a boomer >> i will. >> you won't talk down to me >> i will not. when we come back, tesla

shares about above 420 we have the latest news from the company from shanghai just ahead. we are going to show you the lines in chicago after illinois opened legal dispensaries. we'll be right back.

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deliver a second round of china made model 3 sedans. the delivery will happen on tuesday at an event at the shanghai factory adding that the company are not tesla employees. tesla shares up above 420. that number that was where the buyout was going to be that started that cascade of all the negative publicity >> funding secured >> it is now legal to buy marijuana in illinois for medicinal purposes hundreds lined up outside of the dispensary that happened at 6:00 a.m. the 11th state to allow the use for sale of those 21 and older neighboring michigan made it leg back on december 1

>> coming up, we are learning more about the whole carlos ghosn escape from japan and what he's planning next in lebanon. u.s. futures up higher on the dow almost 16 and almost 60 on the nasdaq through the at&t network, edge-to-edge intelligence gives you the power to see every corner of your growing business. from managing inventory... to detecting and preventing threats... to scaling up your production. giving you a nice big edge over your competition. that's the power of edge-to-edge intelligence.

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good morning welcome back to "squawk box. check this out on the first trading day of the year. dow futures indicated up about 150 points near levels that would set new

highs. not quite there. you'd need a gain of about 163 in the dow to actually be opening the day at a new high. we'll see as we get closer to the opening bell new details are emerging today about how former nissan chairman carlos ghosn got out of japan. i think it was like $13 billion. part of the whole point, phil. do you know, was it a base case or harp case do you know anything about that? >> then the report was that they saids that now how he got out of the country. there are more weird stories out there about how he was able to get out of japan than there are stories that were actually confirmed by anybody half the time you hear a report come out and then they come out and sighs that not true. this is what we do know.

you can bet there will be more details over the next couple of days first with japan scrutiny there about how they were able to allow a guy under house arrest with cameras and officers outside of his house, how they allowed him to get out of the country by the way, they raided his house there today. the french government is in an awkward position the french government owns par of renault how do they play this? then carlos ghosn was welcomed in to beirut earlier this week we did get a statement where he said, 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. here is the time line. think about it from his perspective. this is not saying what he did

was correct or right but his perspective. he was arrested november 19. then he was stripped of his job with nissan, then he was indicted generally speaking over the last 13 months, he has had limited almost no conversations with his family, his wife as a result, he clearly felt that best move for him was to get out of that country. you take a look at shares of nissan, renault, we have yet to hear from that company skipping bail and getting out of japan and since his arrest it is a wild story you get these reports that are then denied thep you get another wild report. these are all the little details that will be sorted out. >> the family is not going to confirm anything they may be shooting downey of

these things it is not like they are saying here is how he got out >> correct i am sure he is not going to share about his plan to get out. in part to help the people that helped him in japan. they had to have some help in japan. >> i don't know if it was with you but i sort of danced around not actually saying i would have done the same thing if they treated me like that frmt sort of what i was feeling after watching the whole saga. right? hard not to think he was treated very well. i don't know the details the spell it out snt journal the headline, or they took out of the oped piece. saying, it is hard to blame him.

it has bibeen a fiasco to start. the best way for justice to prevail is for truth to prevail. and they go on to say for japan to restore the justice system so they are more appropriate for the molt earn pre-market strategy >> i don't think anybody would disagree >> that's rare >> at the same time, that's why the most interesting side angel here, how does france play this? on one point, it's one of their citizens they were cite call on the other hand, they can't be too critical because they own part of wrrenault.

>> the question becomes is ghos ever able to leave lebanon >> he had citizenship in lebanon, brazil or france. he could go to one of those countries. i'm not sure what the extra decision treaty is there is one between brazil and japan. will he ever be able to get his reputation back and say, here are the facts. will that always be the one story people will focus on and this other story, which is incredibly important whether or not he miss reported or did not fully report tens of millions in compensation, will that ever

truly come out >> thank you, phil between boeing and this and tesla and everything else. >> it was a fun christmas break. >> in 2020, you've got a lot to be considered with too, i think. >> he's a busy man >> new ugly looking new truck. >> did you say there was aford down grade today >> not that ugly truck you've got to bring that down here to times square >> the day they bring one of those out, it will be a big don dog pony show. >> i want to see that thing in person it does kind of look like back to the future mixed.

>> what was it gigawats on the flex capacitor >> phil, thank you i'm sure we'll see him again soon when we come back, box office trends for the new year how the competition stacks up for 2020 later, new rules with the fda commissioner stay here with us on cnbc. to thl debate in this country, it sounds like we have a failed society. but nothing could be further from the truth. americans are compassionate and hardworking. we aren't failing. our politicians are failing. that's why i'm running for president. to end the corporate takeover of the government. and give more power to the american people. that's how we'll win healthcare,

fair wages, and clean air and water as a right. i'm tom steyer and i approve this message.

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welcome back, everybody. ending the year over $11 billion. about 4% less than 2018 but larger than 2017 taking a look at what to watch in 2020, paul, senior media analyst. great to see you this morning. >> great to be here. thank you. >> so 2019 was a pretty good year what about 2020? what are our expectations about what we know is coming up?

>> i think 2020 is going to be a big here the strength of the year will carry over into the new year star wars is out there, uncut gem, bombshells, little women. a lot of big titles set for 2020 i think this motion about streaming versus the movie theater, it's really kind of miss guided. people love doing both the people who love going to the movie theater. it is additive about people feel about entertainment and movies in general i think it will be a good year in 2020. >> you think it will be as good? i've heard it may be more difficult because not as many franchises expected.

>> internationally, figures are up reporting over $30 billion for the first time internationally we'll be over $40 billion nationwide the notion that movie theater is like horse and buggy and streaming is like the automobile is not true. it is more like ford versus ferrari. the movie theater in 2020 with "wonder woman. "984," "black widow. we have "james bond" in april. we have a "bill and ted" movie >> is that keanu reeves? >> it is he's coming.

>> alex winter too >> yes >> are they grown up or something? are they parents >> you got to look at the trailer. >> i'm kind of open to it. >> halloween >> wow that means she doesn't die >> another movie, tenant is anticipated. >> the top performers this year like "joker," "knives out. i think at the international box office it will be a good here, maybe even a record year in 2020 >> this is deaf in thely a year. what happens next year

this year, in 2020 you've got mulan, jungle cruise and another big marvel movie that market share will be more evenly distributed in 2020 among all the studios. 2019 for disney was massive. they had six and soon to be $7 billion releases. star wars will be the latest their market share with fox close to 40% of the total year box office in 2019 that's huge. >> i think that chart was wrong. i think it was really $13.5% we are looking at a bigger take than what that chart shows >> speak of fox, have you seen

that bombshell, yet? >> i haven't seen it yet it has been in the marketplace a few weeks. >> i want my hour and 40 minutes back i went with my son to see it if you lie of it as total fiction. >> the entire thing is going to be skewed. it was nothing like trump, nothing like megyn kelly nothing like real life >> well go see "little women." >> my wife, she loved it >> some really good movies out there. i think we don't just live by one immediate yaum or one platform look at the music business

i have every "who" album at home i'm going to go see them when they hit ceaser's palace with a residence. >> thank you for being here. >> thank you and happy 2020. coming up next, remembering david stern who passed away at the age of 77. we'll talk about legacy and worldwide impact we are coming right back legendary terrain in telluride,

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former nba commissioner david stern has died at the age of 77.

stern suffered from a brain hemorrhage three weeks ago he led the nba for 30 years, credited with transforming the league into a multi-billion dollar global brand. overseeing the most successful period of the nba. he joins us now about his legacy >> that's right, joe there were articles like time magazine, why did america accept the nba? will they accept this black league will sponsors accept it? that's not a question, we know what the nba has done. he grew profits 30 times in his 30-year tenure they added seven teams the tv rights deal is 250 times bigger than it was when he first started, so that was the financial growth that we think about with the nba and how big he made it internationally, he made the nba the first league to take regular season games across the world. he's the one that got the dream team in the 1992 olympics. you look at the league now so many international players. it's the -- america's biggest sports export, certainly more so than football or baseball.

so that was a big thing from an international growth and on the social issues, think about how big he was with magic johnson when he got that hiv diagnosis. a lot of people were afraid to shake magic's hand david stern was at the forefront sake, looks, he can play in the nba, he can be in the all-star game, he can be on our dream team that is a big thing for me i'm not going to let irrational fear stop magic johnson from being here he started wnba, developed a league for younger players trying to make it he instituted a dress code that at the time the players didn't like the inadvertent effect is it was a fashion icon because everyone had to dress nice for games. certainly a lot of impact that he had he ruffled a few feathers along the way, but a big impact. roger goodell called him the dean of the commissioners. >> great man, personally a great man, too >> absolutely. he said andrew sorkin, he called andrew a piss antoinette andrew start, got his start in journalism because he interviewed me for his school

paper in scars daily >> he called him a what? >> he said back when andrew was a piss-head student. >> you have to get your timing three months ago he called andrew a piss ant. >> don't jump on it too much, joe. >> he meant when he started out. we were talking about how andrew credits david with giving him his start. thank you. >> you got it. >> thanks, eric. joining us on the "squawk" newsline bob johnson, founder and chairman of rlj companies. bob was the first black owner of an nba team, the charlotte bob katz back in 2003. sold his majority stake as you probably know to michael jordan in 2010. and you heard eric and all of our discussions, bob what are your recollections about the man david stern himself? >> well, well, personally i would say david, you know, guided me both in terms with bias and enthusiasm about

becoming the first african-american owner of any national sports league team. and to me that was exciting. and having -- when i served on the board of governors of the nba, the one thing everybody -- the 30 owners in those meetings with david knew who was in charge he ran the nba in what i would call the iron fist inside a velvet glove but he really believed in what he set out to do with the nba, whether it was on the issue of, of the number of african-american players in the league, african americans in ownership positions, african americans in management positions and he had a vision about where the nba could go globally and i tell you, i've never been involved with a business executive who was so confident

in the asset, if you will, that he had, that was the nba, that you could have an nba board meeting. 30 owners would vote nay david would vote aye, the ayes have it. [ laughter ] >> you know, we were talking earlier about how he changed the league's fortunates to such an extent and charles barkley was talking very recently about this, about how when he joined the league back in 1984, the average player's salary was $250,000 today it's $9 million. obviously the owner's fortunates went up in a similar way it's kind of hard to go back to think about where the league was when he stepped into the role in '83 or '84 >> yeah, it's kind of hard to think about it because -- i heard the earlier commentary about whether or not fans and sponsors would accept a league with african-american players

throughout, throughout the game because -- one thing david told me, you know, bob, when our teams play, it's different from football a football player, football player is 30 yards from the nearest fan in the stadium and they have a helmet on. nobody recognizes them our players are within 2 feet of every fan. and so when you think of african-americans playing in a place where fans are white and they're seeing them and their style and their behavior, david recognized that as something that could be a social issue particularly if behavior of the players or style of the player was used by people who wanted to make an argument about the style, nature, competitiveness, brilliance, if you will, of african-american ball player david recognized that. he dealt with it with the dress

code he dealt with it with the way you couldn't express your accomplishments on the court, the choking signal all of these things, david was so sophisticated and so aware of what he had to do to make the league acceptable both nationally and globally that i can't think of another industry that's had to deal with a business model dominated by african-american talent. so that was, that was what was unique and so special about david. and he was -- he ran the league the way he believed the league should be run. i think every owner benefited from player contracts to the terms and conditions of tv rights >> the moral compass was so steady the entire time 30 years is a long time, bob, in the history of this country in terms of race relations and how -- i mean, we still have

some turbulence now obviously. and think about what he managed through. remember the clipper owner, all the stuff that went on it was unbelievable what he had to deal with and he -- >> yeah, the clipper owner, the incident with the clipper owner was adam and adam had a major stake in what the league did -- >> currently we still have issues even after all was said and done, we're still dealing with some of these issues and he was way ahead of the whole curve on all that stuff, right? >> no, he was. and personally for me, he said, look, i want you to be the first african-american owner of a sports league. >> right >> and i'm going to guide you through. and that was, that was david he did it with the women's league, wnba he really, he really saw the future going to china one thing david used to say -- this was a time when reality shows were coming on television,

every network had a reality show david would say to both the owners and the league, he said, every night our games are reality show you don't know how it's going to end. >> bob, we hope to see you guest hosting soon it's been a while. but thank you. appreciate the call-in today >> happy new year to you guys. i look forward to seeing you soon >> okay, great >> when we come back, ghosn's great escape we're going to speak with a reporter in tokyo who will give us the latest on exactly how we think the high-profile executive managed to flee pan jafor lebanon right before the new year

welcome to 2020. futures pointing sharply higher this morning we're going to tell you what you need to know to get your portfolio set for the new year >> how ghosn got gone. new details on how nissan's former chairman slipped out of japan and away from criminal charges. >> and vaporized the trump administration expected to announce a ban on many flavored e-cigarette pods forrer commissioner scott gottleib will join us live the second hour of "squawk box"

begins now ♪ ♪ >> good morning and welcome back to "squawk box" here on cnbc i'm joe kernen along with becky quick. andrew is off today. u.s. equity futures at this hour starting off the session, the new year, strongly in this session. up 152 points on the dow the nasdaq indicated up almost 58 and the s&p up 15, almost 16 points i saw the yield on the ten year -- >> 1.91. >> 1.91. and the dollar seems like it might be going the right way for the multinationals at this

point. >> which means down. >> a little weaker than people are forecasting at this point. >> let's tell you what's making headlines at this hour tiffany reportedly knocked on warren buffett's door seeking alternative suitor to france's lvmh the financial times reports the luxury goods retailer approached warren buffett to see if he was interested he was not tiffany eventually accepted a $16.2 billion take over deal from lvmh. the stakes have been raised again in an ongoing take over battle this morning. network equipment maker now says it has accepted another sweetened take over deal from clayton doublier and rice. this worth $9.50 a share bidding has gone back several times between clayton doubler and west coe international the original bid for anxter, the stock up 1.5%. the labor department will have the first labor report in less than 90 minutes. it's going to be issuing its

weekly report on initial jobless claims swiss expected to show a slight increase. new details emerging in the story of carlos ghosn's escape from japan reports say prosecutors in turkey have opened an investigation into how ghosn was able to make a stop-over in istanbul on the way to lebanon without the knowledge of turkish authorities. ghosn reportedly took private plane flights to get out of japan. according to the "wall street journal," this came after months of planning by ghosn's associates to spirit him out of japan and repeated petitioning by lebanon to allow ghosn to stand trial in his homeland. joining us right now for more on this is sean mcclain, staff reporter at the "wall street journal" and, sean, which still don't know a lot of the details how he got out. but what can you tell us >> well, thanks for having me. yeah, there are a lot of holes in this narrative. i mean, we still don't know for sure how he got from tokyo to that airport in osaka and got out. you know, authorities in japan and turkey today kind of took

the first steps to try to figure out for themselves what happened so maybe we'll get the details in the coming days >> i've seen reports already that ghosn met with the president of lebanon as he arrived there that day and then have seen another report suggesting that lebanon saying it would not honor a request for extradition. what do you know about this? >> yeah, lebanon as a policy does not extradite its citizens. and i think in retrospect, quite obviously, ghosn would want to be there it does seem one of the motivations by carlos ghosn to go to lebanon was to shop for a better jurisdiction. he says the japanese legal system isn't fair. it's stacked against the defendants if the japanese want to try him, they can try him in lebanon. our indication is the japanese are not keen on that idea. >> who does this create a bigger problem for? is this a problem for japan, having allowed him to escape and to get away? is this a problem for japan in terms of the justice system

there and lots of questions that have been asked about this or is this going to be a problem for carlos ghosn having fled the country? how will he then be able to say, okay, i'm not guilty of these things they've accused me of >> yeah, well, in carlos ghosn's case, he's always said i'm not guilty, but the japanese justice system is unlikely to let me prove that you know, they have a pretty high conviction rate over here >> something like north of 99% >> yeah. you know, people who get indicted, 99% of them tend to -- are convicted. so either the prosecutors are incredibly straight shooters and only take the guilty to trial or there is something hinky in the system i'm not going to comment on which one of those it is, but, look, nobody comes out of this looking good ghosn jumps bail, ran across the world to find a safer place to be the japanese justice system has well documented issues and

problems with this justice system that i think even the japanese acknowledge are there the lebanese are -- suddenly have a -- have a, you know, high-profile citizen that they have been publicly asking for the return of and now they suddenly have him there and i'm not sure they expected the situation to happen. and the turkish government is trying to figure out how the heck carlos ghosn went through their country without them knowing. so everybody is kind of turned upside down trying to figure out what the heck happened frankly the only person who may know what actually happened is carlos ghosn and he hasn't talked yet, and may not until sometime next week they haven't really figured out or told us when he's planning to do his big press conference that everybody is waiting for >> sean, do you think that carlos ghosn is going to be trapped in lebanon at this point? will he be able to travel internationally again at some point? >> well, look, he's facing

criminal investigations in france he has a passport in brazil, passport in france and passport for lebanon. he's facing criminal investigations in france if he goes to france he probably could go to france but if he goes to france, he's going to be facing investigations there, too. brazil, i guess, is a possibility, but between, you know, lebanon is one of the few countries that doesn't have extradition treaties for its citizens so he may not be going anywhere any time soon. >> sean, i want to thank you for your time today. good talking to you. >> no problem. any time thank you. >> coming up, same week different year welcome to 2020. futures are pointing at this point to a strong open, more of the same for what we saw in december, which was so much easier to take than december of 2018 yikes. anyway, we'll talk markets as we make our way towards the opening bell and is the e-cigarette industry about to get vaporized? we're told big changes are imminent we're going to get it straight from former fda commissioner scott gottleib

going to join us with his take on what's happening when "squawk box" returns ♪ ♪ ♪

some things are too important to do yourself. get customized security with 24/7 monitoring from xfinity home. awarded the best professionally installed system by cnet. simple. easy. awesome. call, click or visit a store today. the opening bell on the first trading day of 2020 is just a couple of hours away and stocks appear to be starting the year the way they ended 2019, higher let's talk markets now

what investors can expect this year joining us for that is jeff south, founder of south strategy and portfolio manager and chief investment strategist at capital wealth planning. also joining us is tom grath he is a partner and portfolio manager and head of fixed income at brown advisory. just for fun, let me start with fixed income because maybe that makes a difference out of what happens, tom. we're above 1.90, whatever, 1.91 on the ten year. what's your range for 2020 what are you expecting and will the range be sort of moving a little bit higher, do you think, or not >> yeah, thanks for having me, joe. we think that around 1.90 to maybe 2 or 2.10 is about as high as the ten year can go unless the market starts pricing in rate hikes, which would probably take a lot for that to happen. so i think in 2020, barring a really big surprise, around where we are now is probably about as high as it goes

>> really? that's not necessarily consensus? we've been looking for 2 1/2, to finally get back to what people call normal. maybe it's not normal. so you don't expect that to happen again this year, no 3%? >> no. i think the idea of normal rates really needs a re-thinking i don't think the fed is thinking in terms of rates needing normalize back to some natural level any more i think they're looking for guides from what happens with inflation or what happens with the economy softening to direct their next move. and unless the fed's going to make a change, there's no reason for rates to be a lot different in the immediate part of the yield curve. >> tom, does that mean the big worries about, you know, e & p, energy companies and their debt coming due, big worries about our debt at the federal government and global debt, high-yield corporate debt, all the worries that could come home to roost with the rise in rates, do we not have to worry as much

in 2020 about the spectre of all those scary things >> well, i think there's a lot to unpack there, joe if you're talking about companies from particular industries, i definitely think there's risk of softness in certain parts of the economy and given that companies are fairly indebted, you could have pockets of trouble we saw that in late 2015 and early 2016 in the energy market. it could be other places but as far as like a generalized recession, i do think those odds are lower and i don't think it has a lot to do near term with what happens with our debt those are more long-term troubles, not things we need to worry about particularly in 2020 >> all right sout, you're on. you can't be just crazy bullish at the beginning of every year i mean, it served you well -- i see you like the saints again this weekend, the -- is that -- what is that thing up over huh

are you a big saints again are you picking them this weekend? no, i know that's not what that is so, are you as ravidally bullish, another 25% this year or does jeff sout moderate his expectation for gains in the s&p? >> i came on here last year around this time and said, you know, 3200 for year-end of 2019. people laughed at me they didn't think it could happen i think the s&p will be somewhere between 3500 and 3600 by the end of this year. not as good a year as last year, but i expect the economy to strengthen i think that earnings are going to continue to come in better than expected. and i still don't see a recession. i mean, i've heard for the past three years we were going into a recession, and i just -- i don't see it >> that's pretty good, jeff. so you're talking double digits,

but not, not like this year. >> not like this year. the history, when you've had a decent year like we've had this year, the next year is up as well and so i think we're going to be up, and i think we're going to be up to 35 to 3600 in the s&p >> are people starting to not doubt every move higher yet? that's what we need to worry because they still for some reason think everything is overvalued and this can't continue and, you know, we're setting ourselves up for a fall and there's a lot of air under this market and it's fed induced. all the stuff we hear all the time when that changes and people say, wow, things are good, this market's going to keep going that's when you worry. where are we sentiment wise, do you think? >> it depends on who you talk to, joe. the professional investors are still pretty bullish the individual investors are still scared to death because they didn't manage risk in 2008 and early 2009

and as benjamin graham said in the book "the intelligent investor" the essence of intelligent investment is the management of risk, not the management of returns. that's what we do at capital wealth planning. we manage risk and we manage it wealth >> jeff saut thank you tom, thanksed for the fixed income side of things as well. we'll talk to you later. >> thank you >> thank you >> when we return, the verdict on vaping. the trump administration is expected to announce a decision any day now to ban certain flavors of e-cigarette pods. but that is not the end of the story. former fda commissioner dr. scott gottleib will join us next with all the unanswered questions. there are a lot of them. stay tuned you are watching "squawk box" right here on cnbc >> announcer: time now for today's affleck trivia question. what year did georgia vote to ratify the u.s. constitution in order to become the fourth state

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>> announcer: now the answer to today's affleck trivia question. what year did georgia vote to ratify the u.s. constitution in order to become the fourth state to join the united states? the answer, 1788 >> the trump administration is set to announce a ban on flavored e-cigarette cartridges. white house officials tell cnbc that menthol and tobacco flavors will be exempt, and that the new ban won't apply to tank vaping systems that are commonly found at vape shops. it's an effort to try to curb teen vaping. analysts say the sweet and fruity flavors represented 80% of retail store e-cigarette sales in 2019. president trump is expected to formally make that announcement tomorrow but joining us right now to talk about the ban and some big unanswered questions is dr. scott gottleib he is the former fda commissioner, he's also a cnbc contributor and a board member at pfizer and, scott, it's great to see you >> thanks a lot. >> we've been talking about this for a long time. you have been an advocate of making sure these flavors got

banned what happened with menthol is that a step back from the white house? >> it's a modest step. it's going to have an impact i think we're really going to be dependent on the new age restrictions to quell this youth epidemic the policy they announced effectively freezes the market as it is juul, the market leader and the number one product used by kids, already pulled all their flavors off the market this ban just affects the cartridge-based product. so products like juul end use enjoy, enjoy use with their ace dee vitamin, enjoy with their a alta device, i think that's backwards, they're going to have to pull their flavored pods like juul did >> you for a long time said menthol probably shouldn't be there either >> right >> menthol should get pulled what's behind the scenes >> the issue with the menthol is people worry about adult smokers using combustible products that are not menthol ated you want to leave it on the market for an option for adult

smokers. i think the issue we need to remember is this just affects the cartridge-based products if you go into a convenience store if you're a kid, you're still going to be able to find loose e-liquids. what we did in 2019 was withdraw it from the convenience stores where kids are getting access to the products it's still going to leave flavored e-liquids in bottles. >> they're banning cartridges, but -- >> not the liquids >> kids can still go in and buy it and get access to it? >> that's right. >> not just menthol, any flavor. >> any flavor. if you go on youtube, you'll seer how-to videos how to fill the pods with flavors you can buy in stores. one option was to withdraw the liquids entirely, all the flavored liquids from convenience stores where kids are getting them and just segregate them to the adult-only vaping shops >> you've never had a problem with the vaping shops, right, they are pretty careful who they let in the door. >> some of them, most of them. they have a better record on the

whole than the convenience stores and i think with the new age restrictions tobacco 21, they're going to be able to card up to 21, that will help keep the kids out of the stores. it's the convenience stores. you have to reduce the access and appeal to the kids the appeal is the factor juul. high nicotine and also the flavors. the access through the venezuela stores and the social buying in high schools, 18-year-olds buying them for 16-year-olds that's why tobacco at 21 is so important. one unanswered question about the policy is how will it treat disposable e-cigarettes. puff bars are becoming popular among kids right now juul is the most popular product, but puff bars is gaining on juul. these are fully disposable e-cigarettes made in china basically single use items i'm not sure how this policy is going to treat that because it talks about cartridge-base products >> why do you think the restrictio restrictions are getting watered down from what the president initially announced? >> the reports were there were political concerns about impact to the vaping stores

i'm sympathetic to the vaping stores adults are using the open products to convert off combustible -- right, to stop smoking. i would have been frankly more aggressive on the pod-based products and withdrawing them off of the market. juul, enjoy, should come off the market entirely. i don't think given the youth use they have enough redeeming public health value. >> are they bad actors did they intentionally go after this youth market and try to get kids addicted to nicotine? >> if you look at juul's historical practices, i believe so i think there were historical practices that targeted the product to kids. they cleaned that up, but the damage is done it's gained fashion among children >> where do we stand right now in terms of the addiction problem with kids who are getting addicted to nicotine and getting addicted to inhaling things into their lungs? >> it's growing. look, and kids are also now vaping thc, the active ingredient in cannabis because we popularized the notion of vaping liquids altogether. look, 2018 you saw 78% increase.

2019 the data showed another 30% increase of youth use on top of that so fully a third, almost a third of all kids are now using some form of nicotine vaping product. >> kids, what age? >> under the age of 18 will it go up again in 2020? if they can make rapid implementation of tobacco 21, that's our best hope for stopping this epidemic if they rapidly implement that and enforce it, hopefully you can get this to level off and maybe decline 2020 because the restrictions on the flavors that they put in place basically just freezes the market as it is. it's a real boon to juul because it forces juul's k0competitors o conform to what juul is already doing. they'll get market share as a result of the policy >> do you think the policy is toothless in terms of implementation >> i think the biggest impact will be from 2021. it will taken joy and use gaining market share, puff bars

hopefully off of the market in flavored forms that are attractive to kids juul still owns the kid market 60% of kids vaping are using juul >> you said they stopped bad practices. if 60% of the kids are using juul, what should that company actually be doing to try and make sure its products are not ending up in kids' hands >> i think it should come off the market when you have a single product that has that high of a violation rate, they've demonstrated they can't control access of their product. they should come off the market. there is a regulatory basis. they could have taken selective action and had the legal basis to do that they could have taken selective acts against all of them and pulled them off the market and left the open tank systems on the market they chose to do what they did, presumably if you believe the reports, ban the flavored cartridges that go in those products that will have an impact it will be incremental it's not going to have a significant impact on the market because really all you're

affecting is views and enjoy and puff bars. >> dr. gottleib, it's great to see you. thanks a lot >> where was the state where everybody is getting high now? >> chicago i think is where. >> they just legalized >> what could go wrong if we had a melting pot -- have we had -- not melting pot. have we had an experiment yet that we can watch exactly what happens when everyone can get stoned >> and also the concomitant use of thc in the developing brain that's a very dangerous -- >> is this okay? so what can you do now in chicago or illinois? recreational >> you can buy it. >> whatever you want and get high, huh? >> there's age restrictions. >> 21? >> i think so. >> how about driving, are you allowed to drive >> while you're high >> what do we know >> it's a good question. >> should i worry if i visit chicago? >> colorado, california, massachusetts. >> how did it work in colorado

in colorado, we were already there in the '70s. nothing's changed. >> colorado, the incidents of accidents went up. we talked to insurers in that state. incidents of accidents on the road >> are you concerned with this >> very concerned. >> if we go nationwide unlimited recreational pot use, is that good for -- >> it's dangerous. i didn't regulate it i was very concerned we didn't regulate what the states were doing. we regulated when they were making medical claims. vaping thc is dangerous. >> that's the lung -- we have to worry here because it's not just the people that are like woody harrelson, advocates anybody that's got three shares of some stupid cannabis stock, if we say the slightest thing about pot that maybe we ought to think about this, they get mad, right? they get mad if they own -- they get mad if you say the slightest thing. their stock might go down. >> i think the federal government needs to step in and federally regulate this. we have to have a reckoning between the states and the feds. >> doctor,thanks still to come on "squawk box," changes in strife at one of the biggest tech companies in the

world. why 2019 was such a pivotal year for google google. we're going to talk about what some veterans of the company are saying about how it's changed and where it goes from here. there's 100 zeroes on -- >> google plex >> stay tuned. you're watching "squawk x. yb ion kw.bo ♪ ♪ ♪ ♪ don't get mad. get e*trade, dawg.

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this is cnbc and we are live from the nasdaq market site in times square we're going to talk tech right now and specifically some emerging strife inside alphabet's google division veterans of the company are saying it's becoming unrecognizable from what it once was. deirdre bosa is here and she has more on the story. deirdre, good morning. >> thank you good morning, guys one of alphabet's challenges will come from in its own walls, the culture war building in the last three years the company has been mired in controversy around hate speech,

sexual harassment, employee walk outs part of this internal transformation that as becky said some veterans say have left the company unrecognizable a lot of it has to do with its size google other has scaled to more than 100,000 workers things that have worked very well over the last two decades, they may no longer be so straightforward. remember, this company is worth nearly a trillion dollars now. a few of them weekly all-hands meetings where workers can openly and aggressively challenge executives they can access almost nearly any internal document. that's been scaled back. but with less transparency and a work force raised on that unofficial motto, don't be evil, the controversies are piling up and employees are pushing back there was project dragonfly, a secret plan to develop a censored search engine remember anthony rubin has parachute after sexual conduct claims were found credible he canceled a.i. ethics board. those incidents and more

resulting in rallies to save google's open culture. all of this internal conflict, it doesn't look to be going anywhere and it will now all be on the c.e.o. to manage it as we head into 2020. guys, it's not just the culture war, it's political scrutiny a slower advertising business is going to be a challenging one for google >> do we have -- >> did i catch it from you >> i don't know, no. but you're dealing with this >> yeah. >> but we're here. is that good that -- >> everybody on this side of the table hold your breath >> anyway, thanks. who had it last? has it been two weeks? have you tried tamiflu >> i'm trying everything i need water, cough drops. >> let's expand our conversation maybe ed lee or joanne -- hot tea? that's not how -- ed lee is "the new york times" corporate media reporter joanne litman, distinguished journal at princeton, both cnbc

contributors let's talk about google. you heard -- i love all our big tech companies i think this needs -- >> you use google, right >> i use google maps it's free. i just -- 2019 was the year of looking a gift horse in the mouth and, you know, the rest of the world looks at us. if they had one facebook, they had one google, if they had developed one thing since s.a.p., they'd be happy. but they don't have it can't we -- >> it's really not just about 2019 as deirdre pointed out, this was going on before. i was actually on the google campus i happened to be giving a google talk on november 1st of 2018, which was the day of the walk-out over that $90 million pay out to andy ruben for sexual harassment to make him go away what's really interesting to me is to see there's been a transformation so at that moment -- i was in the middle of these thousands of people at headquarters

and the walk-out, the employees at that moment, it was the mood was more like disappointment with something you love, with an institution that you love. but it's really morphed, it seems, since then from disappointment to hostility. >> is this going to make it tougher for google or alphabet to be able to hire top talent? >> i think that's a great question because you had people who deeply love the company and love that don't be evil kind of concept, and now you have -- i hear it from younger people who have concerns about being affiliated with google because -- >> having said that, the stock has taken off. stock options -- >> is that a big part of not just for google, but facebook as well in silicon valley, it's not just the pay. it's the company you work for. they firmly believe in the mission, the direction, the product they create. you not only have to sell them on the salary. you have to sell them on the mission. that's important >> you can't lower the common denominated to the woke

millennial bernie sanders supporter that has a problem with the profit incentive in general. they're working for a company that they wish would not -- so there's nothing left over. profits and goodness is what they want. the common denominator in today's world with some young people, you're never going to get that woke if you're at a for-profit business. and to try to satisfy the wokeness of this new generation that's been told all this wacky stuff, you're never going to do it you're never going to do it. >> it's a leadership issue you're absolutely right. how much do you want to kowtow to your millennial employees -- >> the lowest common denominator. >> 70% think socialism is okay >> i wouldn't say lowest common denominator. i'd say you have a generation that has a differentoutlook about what they're looking for in a job >> google was able to do it for so long. this is a problem that's arisen over the last three years so they have been able to be quite successful by doing the right thing. that is all changing

>> they were in bed with the democrat hillary in the last election how much more woke -- they cried and had a corporate meeting to try to help soothe everyone's feelings when hillary didn't get elected. how much more woke do you need to get >> but they have an issue -- for example, they have been under scrutiny by the labor department for under paying women they have an issue where they don't have trans perron parency- >> i knew you were going to -- >> this is an issue that's already aired out -- >> let me change to another thing that i talk about. okay iger -- >> bob iger -- >> here's my point difficulties they was up 30.9% from january 2nd this is a variety piece. comcast up 32% what is that gees, okay

so tied let's call it. discovery, do we talk about zaslov and discovery >> zaslov does a great job, too. >> discovery was up 32.3%. at&t up 37%. that's kind of -- >> specific. a stock with a good dividend >> it was hurt in 2018 obviously. >> i think the credit that you're sort of wondering about -- >> he's a great executive. we should mention other people as well. it shouldn't be aldil disney, a iger all the time. >> he is mentioned in the context he took this well established, well run media company doing it in sort of the traditional way and decided, you know what, we're going to scrap this thing the way we've been doing it, which is linear television, and we're going to go all-in on streaming which has lower to no margins in a lot of cases. he actually told wall street, look, don't expect profits from the next 35 years. this is hopefully where we'll get.

so after day one, they actually released some numbers, 10 million new sign-ups in the first day. that's actually pretty astounding we don't know how many of those are free sign-ups. >> viacom cbs was down 4%. >> the fundamental change of their business model, i think that is what -- >> disney? >> arguably, right arguably the credit -- >> by owning all your i.p. globally, that's what discovery and disney -- >> he started that from when he had pixar, lucas film -- >> he has been canonized and he is the top, right? so where do you go from here here we are at the very beginning of 2020. what will disney look like in the coming year? and how does he top the year he has just had >> apparently they may make a movie this year that's not a sequel it's just in the works right now. it's just -- they're just talking about it it's not for sure. don't get your hopes up. >> it's working, they basically own the box office >> we'll see a halloween sequel.

>> do you have disney plus >> of course >> there you go. >> the best performing stock of the last decade has been netflix. it's moving forward. all we can talk about is streaming and of all the c.e.o.s you just listed, companies, disney is the most talked about at least the last few months thanks to baby yoda and other characters >> come on baby yoda, under iger's reign. >> that's your cap, baby yoda? >> how much baby yoda appears in my own time line, my own household. >> i'm told baby yoda made an appearance on the iger family christmas card >> are you going to be -- that lasts -- lasts three weeks >> that's intangible as a media executive >> i like him. i just think that, you know, other people -- >> it's good to be skeptical >> i'm not skeptical spread the love around >> if you have disney plus -- i'm sorry. beyond baby yoda --

>> it's not going to be $5 forever either we'll see in the first report how that's working for them, too. >> at the moment they are poised to be -- >> which is it >> it's 6 and change if you're buying it -- >> i'd rather do -- smart companies do advertise, advertising media in streaming >> you're talking about the forthcoming streaming service. >> peacock which diller liked >> which netflix and disney rise, fewer places for advertisers to put their stuff having peacock -- madison avenue is looking forward to it >> and get something free. how many bills am i paying for all these things >> there will be a price >> and there will be a shake up clearly. >> there will. and people are going to have to raise prices, too. but we're getting more content >> more content is good. >> it is good. all right. thank you. i knew it. i knew, you know, the first day of 2020, you get woke at some point and you did. thank you. >> thank you, joe. >> you're welcome.

>> my pleasure >> you, too. >> all right when we come back, tesla getting ready to ramp up deliveries in china. this comes after the first finished cars rolled off its shanghai assembly line last week the details are next when "squawk box" returns >> announcer: don't forget to subscribe to our podcast you'll get interviews, original content, and behind the scenes access look for us on apple podcast or on your favorite podcast app, and subscribe to "squawk" pod today. i am totally blind. and non-24 can throw my days and nights out of sync, keeping me from the things i love to do. talk to your doctor, and call 844-214-2424.

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welcome back to "squawk box," everybody. the futures this morning are indicated sharply higher on this first trading day of the new year looks like right now the dow futures are indicated up about 158 points if they get up to 163 points above fair value, you'd be looking at a new intraday trading high when the markets open at this point s&p futures just below what would be an all-time trading high intraday trading high for them, too, they need to be up just over 17 points. right now 16 points. nasdaq this morning indicated up by close to 62 points. it needs to be up by 79 points to be opening at a new intraday trading high >> tesla says it's set to deliver a second round of

china-made model 3 sedans to its customers. the company tells reuters the delivery will happen on tuesday at an event at the shanghai factory. it adds that the customers are not tesla employees. unlike those who received the first round of model 3s from the plant. tesla shares this morning are strong, up over 1% at 423, almost 424 coming up, we are a month out from the iowa caucuses so expect democratic candidates to start making the final pitches to voters on health care, the economy and taxes. we will talk about all three and how the eventual nomination run against the trump see economy and whether that's possible when "squawk box" returns ♪ ♪ ♪

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well, it is officially 2020, so the debate over taxes tha we've been having is about to kick into high gear. you have a presidential election now on the line for this year. joining us now is representative josh gottheimer, he's a democrat from new jersey. and doug, president of the american action forum and director of the budget office. good morning to both of you. >> hi, becky >> happy new year, and here we go it's 2020. it is an election year doug, what do you think happens next as we get closer to some of the big elections for who is going to take the leadership position among the democrats >> well, i think what you're going to see is a big emphasis

on the differences in the candidates i mean, there are lots of things they agree on, but elections are won on what the differences are. you're going to see some emphasis on probably some pretty extreme proposals, like the sanders wealth taxes, which sets them apart in the crowd. >> dr. gottheimer, it's going to be your party doing this you don't want to see taxes raised what do you think as the rubber hits the road here >> we have a big tent with a lot of people running and different perspectives obviously a agree with doug we shouldn't be raising taxes those proposals aren't the right path so many will be pushing for other ideas and obviously we have a lot of elections across the board in 2020 and many of us are going to be fighting like i am in the 5th district to cut taxes, make sure we get smart investment in infrastructure and get salt back, tax deductions. a lot of local issues many of us will be focused on in 2020 >> do you believe this guy, doug if i could clone you, josh -- >> you've got plenty of

democrats. just have to beat them >> i would clone you and populate the entire side of the democratic house with you. i don't think that's going to happen although can i ask you one question, josh >> sure. >> this is a serious question. i have seen zealously argued that you need a biden and a moderate to win, and i've seen the opposite the opposite -- i'm not going to say exact opposite because it already is if it's the opposite. but the opposite is that the energy is going to be on a younger, more progressive candidate and there's no way that someone that represents the old establishment can win. and it seems like if the party is right down the middle 50/50, it's divided, united we stand, divided we fall. i don't see how you can win an election if you can't decide what the moral or geographic center of the democratic party is right now >> listen, there's always tension in a primary, different perspectives coming out. i think you're seeing a push to the middle as we head toward the general election -- >> you're a middle guy, then i'm sorry to interrupt

you do a biden you don't think -- there are people that want bernie to be the nominee. >> booker here in jersey i think in the end we are going to get somebody who is more moderate that's the way you bring the country together you're still fighting for the swing voters and i think that's actually how we're going to win the election >> bernie raised $4 million, aikin. >> former vice-president biden might be more moderate, but just look at his proposals. they're not moderate this is an extremely high tax, high spend anti-growth agenda. it's something the entire democratic party has embraced and it's really going to harm them when push comes to shove. >> i don't agree with that i don't think we've embraced the perspective -- many of us want to cut taxes as you know, at the end of the year -- >> i'm thrilled to hear you say that i don't see the rest of them where are they >> did you see what we did in the end of the year we cut the insurance tax, the cadillac tax, medical device tax, got a great trade deal done. i think there's a lot of room for a more moderate perspective

to bring both sides together to show the country we can work together i think people are sick and tired of the screaming from both sides. you saw the tea party in years past we need to actually -- we have to bring back a more moderate perspective and i think that's the wait we're actually going to get things done in the country >> doug, what do you think of the congressman's idea the salt deduction needs to be brought back >> i'll just gently disagree i think that's an important piece of the tax reform that was begun in 2017. it was hardly inished. the definition of tax reform is broaden the base, lower the rates. i endorse that wholeheartedly. there was one left on the table. the one piece they did was capping the state and local tax deduction. they should continue to do more. >> doug, you raised the problem -- it raised our rates in jersey. you might have given a break to others, but you totally hosed us that's why we cut the taxes end of the year -- >> everybody shares in raising that revenue more efficiently. that's the definition of tax reform doing one target apiece is not a reform

i agree with that. >> i think the reform has to be we stop sending all these dollars to states that keep taking our dollars like mississippi and alabama and others that rely on the federal government to pay their state budgets instead of actually spending only what they send in to the government. that's actually -- want to talk about actually reasonable reform, we should start there. >> gentlemen, we'll have to safrm the conversatisave the conversation for another time thank you to doug and josh >> thank you >> thank you >> going to clone you. actually the guy got in trouble for genetic stuff. >> oh, the guy from china. >> yeah, probably can't do it yet, josh. soon coming up, some key chinese manufacturing data this morning. plus cuts in import tariffs on hundreds of products we'll bring you all the latest when "squawk box" returns.

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to scaling up your production. giving you a nice big edge over your competition. that's the power of edge-to-edge intelligence. a surge to start the year. futures pointing to a higher open on wall street. we'll get new data on jobs in just 30 minutes. >> ghosn's great escape. we'll talk about what's next for the ousted nissan chairman and the consequence for foreign business in japan. >> plus a new call on tesla. we'll talk to an analyst who says that this will be a make or break year for musk and company. the final hour of "squawk box" begins right now

♪ ♪ oh, it's me. good morning and welcome to "squawk box" here on cnbc live from the nasdaq market site in times square i'm joe kernen along with becky quick. andrew is off today. i can't believe who is in andrew's seat. you're here. >> i am, in the flesh. that's right >> this is unbelievable. do you know what time -- are you totally jet lagged it's nighttime >> it's nighttime. >> eunice is here. you came in for the big market opening, 146 points. dow is indicated to open up 164 points nasdaq up 66

the s&p up 17. treasuries are about 1.92 or so. when are we talking to you >> right now >> oh, right now >> right now that's right one of the biggest market drivers from 2019, of course, was the trade war. president trump is set to sign a phase one deal on january 125th. that's why eunice is here. she has much more on this front. it's great to see you in person. >> thanks very much. that's according to the white house. from china there isn't anything. there hasn't been any mention about the january 15 deadline, who exactly from the chinese side would be going to the white house. whether or not there is going to be -- yes. so there's no reference at all at this point. although that's not unusual because what we've been seeing in terms of the pattern is the chinese side has been very, very cautious that's already the type of style that the chinese prefer. >> and lately, like six months ago when you mentioned that the bad outcome would be confirmed,

in the last month or two when they haven't said anything right away, they eventually come and say yes, we are doing what was said >> though there hasn't been a mention of the agricultural purchase number. >> they haven't come out and said that's total crap >> they have not most people think it is going to happen it's not the 15th. at some point. and that's largely because of the economy. so overnight we had the data, which gauges the smaller and medium size manufacturers and it was worse than they expected it's a worse reading in three months then xi jinping, the course, president of china, had his new year's address and said stabilizing the economy was going to be a priority there was a huge event, multi-day conference that happened at the end of december as it always does. and they were saying the authorities were saying we want to make sure that the economy is going to be stabilized and you guys were mentioning it, the import tariffs have been cut

not only for the united states, but just generally, to try to stimulate spending the central bank as of monday is going to put more liquidity into the market, cutting the 50 basis points for banks and then one of the reasons why people think that there will be a big push for the economy is because president xi has made it clear that he wants to, for 2021 and the 100th anniversary of the communist party, make sure that they reach their stated goals, which is to double the gdp from 2010 by 2021 so the discussion is that 6% is going to be that number. >> that's what you have to hit, 6% >> 5.9, 6%, and that they be able to reach that number to have a moderately prosperous society, which is one of the goals. so then they would want to clear the decks of having to worry so much about the economy, and then move on to some other geopolitical issues that they

have to face but then that means that the trade truce would be beneficial for that plan. >> even though there's nothing that's been indicated by the chinese side in terms of a signing for the 15th of january, we just showed that calendar that showed the lunar new year is coming up i think on the 25th >> yeah. >> that lasts awhile >> it does >> and my guess would be maybe they would want to see something signed before they go into that? >> yeah. so, the timing looks like it makes sense because you have these moves right now to try to help things along, to improve the environment for a signing. and then the 21st, you guys are going to be going to davos, right? >> yes the thought was president trump wanted this to happen before he with entitle to davos. >> to davos. the top trade negotiators, mnuchin and lighthizer are supposed to be in davos for the 21st to the 24th when you look at the windows when things are available, the 15th does make sense >> what's the date, the second, it's 2020. so january 2nd, 2021, one of our

headlines today was hong kong protests >> yes >> will that be a headline on january 2nd, 2021, what's going to happen over the next year >> i think it's going to be a big issue. >> still >> yes, it's going to continue to dominate. >> how is it not the biggest thing happening maybe in the world, at least over there >> it's a huge, huge issue like i said, there are a couple of other headaches that the chinese leadership are facing. yes, hong kong -- >> it's like all your arteries clogged. >> help it -- kind of dealing with the way the western world is viewing how china treats muslims in the western country >> this is what we've been talking about for years and year it finally has to come, maybe not to completely, but it seems like more freedom, all the things that we want to be, you know, all the things we want to enjoy here, people want around the world. >> are you talking about in hong

kong >> no, talking about china, spreading past hong kong >> that is the biggest fear of the chinese government so they want to make sure that -- that's one of the reasons why you constantly hear that rhetoric about foreign forces need to stay out of hong kong, need to stay out of our business when it comes to domestic affairs >> people are going to want to come to the realization that they want more -- are we now off in china >> no, that's -- >> are we not offer the air? i'm sure we are. >> they cannot put a sheet between us they cannot block us out i can still see you. yeah but my guess is that probably. >> all right we're going to bring in the guest. we'll talk about the signing of phase one trade deal michael, senior policy at the brookings institution. we had navarro on. i tried to get him to say he didn't like the deal, didn't get enough he said there are some really good things in it and it's going to be signed do you believe that, michael >> i wouldn't be surprised given the political interests.

talking to the political situation you talked about earlier. good to be on. the chinese as well don't want to put the relationship fundamentally in jeopardy. by the way, the things they care about most from my vantage point, protecting their own state assets, trying to exploit intellectual property, you know, trying to favor their own high-tech sector even in they violate trade rules. i don't see them giving ground in phase one on those matters. they don't really have to, and therefore phase one doesn't cost them or hurt them that much. for all those reasons, largely symbolic and political on both sides, i expect this is a high chance of this being sent forward as expected. >> someone said that this phase one deal really gets pretty close to what we were hoping for in may of last year when it fell apart, and that -- there were certain things about i.p., baby steps towards addressing some of that -- some of those

issues >> baby steps is a good term and if it weren't so central to not only economic, but strategic relations, i might be content with baby steps. i'll give president trump credit for getting the country to realize and the chinese to realize the economic relationship and the strategic relationship need fixing, need fundamental attention. and it's the way in which china is trying to leap ahead in high-tech sectors. sometimes quite ill sometimes illicitly. sure, phase one would be fine. i think those of us who do defense policy, people who do longer-term economic policy are much more worried about the bigger steps, not just the baby steps. >> michael, in the next five years do you think there is going to be some radical changes

in the way china governors is i people here you can't have economic freedom without personal freedom. they're trying to do this hybrid system where -- a capitalist system, free economic system -- they're getting there anyway, hopefully. can they keep doing that and compartmentalize it and have the type of control over their people that they have? >> you know, i think they can to an extent, but i think it's always going to be a limitation on how strong their economy gets for all the things china does well, it's per capita income is still less than $10,000 a year >> right >> it has huge issues with poverty, with scarcity of resources. that's not just an environmental issue. that's an industrial issue because they don't have the water they need to do a lot of, you know, expansion of industry. they've got wage growth in key parts of the country that have been the areas of major economic growth before. but are now limited by their ability to do things economically on a global saying. so chinese leaders, i think, are, you know, asking themselves

the same question that you just posed to me. but also -- they're not willing to free up politics. what they're willing to do or what they feel they need to do is keep the economic machine going well enough that chinese are content with a strong economy, but very limited personal freedoms. that's been their model. it's worked a lot better than most of us would have predicted 20 or 30 years ago. i'm not going to say it's about to run out of steam but it does have a limitation. >> michael, what you just laid out this entire case, that sounds like a reason for signing phase one, but not necessarily working on a phase two >> it's a good point, becky. it does raise the question, does china, president trump, do they want to draw this out so they can still have bragging rights throughout 2020 which is a huge year for president trump rather than spend the next nine months with "squawk box" and others asking questions about why haven't you gotten to phase two, what are the problems, what are the limitations. so it's almost better for the two sides, in some sense if phase one is delayed, because it may be all they can get for the

foreseeable future having said that, i don't make any predictions on the tactics of when this gets finalized, but i do think it's the easier deal by far >> as a national security expert, my new term is unknown unknowns because i'm not as worried about the unknowns it's unknown unknowns i'm worried about. do you know -- it's not yogi that was another giant >> rumsfeld. >> rumsfeld, great shock and awe me with what's the worst unknown unknown in 2020 can be for markets, the globe in general? >> well, i still think that vladimir putin has a few things up his sleeve in terms of what he might do in eastern europe. he knows that we still have long-term aspirations to expand nato into the former soviet space. he finds that fundamentally unacceptable at the moment, he's trying to make nice a little bit or at least give the show -- an appearance of making nice with president zelensky of ukraine

and they're talking a little bit about resolving the eastern ukraine crisis i think there's just as high a chance of things getting worse in eastern europe rather than better >> did you see the article he can't stay in power unless he an x's belarus and he gets another term >> that is a possibility he has four more years regardless >> okay. okay, michael, thank you great to see you >> thank you >> see you in 2020 again >> that would be great thanks >> when we return, ghosn's great escape we'll talk about what it means for japan and foreign executives doing business in tokyo. stay tuned you're watching "squawk box" on cnbc ♪ ♪ on options trading, and look, it feels like i'm just wasting time. wasted time is wasted opportunity. >>exactly. that's why td ameritrade designed a first-of-its-kind, personalized education center. see, you just >>oh, this is easy. yeah, and that's >>oh, just what i need. courses on options trading,

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new details this morning on carlos ghosn's flight from japan. it has received an international wanted notice from interpol for ghosn. that story bringing some renewed scrutiny on the japanese legal system and how japanese c.e.o.s do business. joining us for more is jeff son enfeld, senior associate dean for leadership studies, also cnbc contributor jeff, this story, how do you think this plays out what does it mean for japan,

what does it mean for executives who might be doing business there, what does it mean for carlos ghosn >> this is definitely the drama of the new year, of the new decade happy new year, becky. when you and joe were talking with phil lebeau this morning you were saying how comfortable to be seeming to cheer for the outlaw in fact, we have a long tradition of doing that from bonny and clyde and butch cassidy, the great escape itself joe will remember hanib hanibel lecter as carlos ghosn put it, he wasn't fleeing justice, he was fleeing injustice. there is sympathy for whatever he may have done wrong, he is not going to be able to muster a reasonable defense with the ridiculous restrictions put on him of the solitary confinement initially, you know, and continually rejailing him.

it's 13 months and he can't talk to his wife. can't talk to his son. it's absurd and hard to meet with his lawyers and to get the facts so i think there is a lot of sympathy for this. and no extradition is going to happen from lebanon to japan >> what does this mean for c.e.o.s or for executives who travel to japan? would you warn them that things are more dangerous if they get into trouble there does this mean anything or does this all kind much blow over after time >> with the 99% conviction rate, which is the same as in russia or china, obviously there is something wrong with the judicial system that a prosecutor always wins the case. and as we can see, we have a lot of countries -- we were just talking about trade issues before the break with eunice there's a lot of concern about how people are being caught up in draping the flag around business issues. we saw that with the fiat chrysler deal being scuttled in

terms of doing something with renault that would have brought in nissan. just because of which countries are going to control what, there is a large french stake in renault. the japanese were concerned about the french having creeping control over their company, nissan, that already renault had successfully turned around nissan with the 45% stake. and there was some resentment about that as we see that happening, we look at what's happening in china right now where we have recently two americans detained, unable to seek counsel and get charges against them and two canadians, of course, over a year as a reciprocal, retaliation, it seems, for us -- for the canadians detaining and house arrest, in that case with the cfo of huawei. they were seeing international travel issues are a concern. state department put out an intensified warning for people going to china with dual citizenship issues yes, we've seen concern not

everybody can -- >> we've seen it impact business between united states and china, perhaps. i wouldn't say there's been an impact between business taking place between the united states and japan to this point. would you? >> what we are seeing right now is there's a lot of public discussion just in the last 48 hours, concern about the ripple effect coming from japan with japanese officials saying there has to be some reform of the legal system or companies won't be willing to put their a-team players in the country i don't know if b-team players will be happy to be considered that if you're dispensable if you're being put in japan. it's not a prime assignment if you're worried the only way to get out of the country is a double base instrument case spirited into turkey and into some other country so, yeah, i think there will be a chilling effect putting a-team players into japan unless there is some reform and you take a look at this. this is not how the japanese system works with japanese if you look at the fukushima

daiichi meltdown where there's tremendous casualties coming out of that nuclear reactor problem, or takata airbags. we didn't see this kind of punishment happening those guys weren't held in solitary confinement in cramped conditions in an unheated cell in fact, i believe that the three executives that the u.s. criminally indicted for the takata airbags where 20 people died and 200 injuries and 80 million cars were recalled and the company went bankrupt. those guys are still out free in japan and japan hasn't honored the extradition treaty to send them back to the u.s so it's not reciprocal instead, foreign executives are being treated differently in japan and this is quite stark. when you look at gross misconduct in japan and how japanese executives are treated and whatever gray areas there are here, maybe carlos ghosn did do something wrong certainly financial crime is not a capital offense. >> hey, jeff, what happens next for carlos ghosn he's in lebanon, but can he

leave? what does it mean for his career, for his potential down the road >> well, you know, that's very interesting. lebanon is a shaky country he clearly has great connections with the business elite and the political elite. and that's the way the press has left it. what you don't see in the press this morning is who is this political and business elite what's that relationship going to be with hezbollah it's hard to get a lot done in lebanon without hezbollah behind you. carlos ghosn is not political in that nature, and i don't know how he's going to navigate that. but he is a folk hero there. who knows, maybe he'll have a future in politics there he certainly won't go to france because passing over countries that could extradite him, france claims we won't honor any extradition. we don't extradite our nationals. he's a national of three different countries. passports of brazil, france and lebanon. he's better off just staying in lebanon, so, you know, i don't see the same ripple effect i guess he has $120 million.

he can live comfortably minus the 16 million bail he reneged on he's 64, 65 years old. i'm not sure how much of a global business career he'll have if he would like to have a trial in lebanon to clear his name and maybe that can happen. there were some penalties paid in the u.s. and his argument is that's because i couldn't muster my defense with the s.e.c. here. so all they got was the japanese side of the story. but he'd certainly like to clear his name and maybe they can hold a trial with japanese officials. it's quite ironic to the comic nature of all this that japan only heard about this from mtv lebanon that asked the japanese ambassador about it in lebanon they didn't know he'd escaped at that point so i don't know if the japanese will cooperate they're so embarrassed by this it's amazing he's not in some sort of electronic, you know, wasn't on some sort of electronic monitoring. >> jeff, lebanon has a 225

kilometer coast along the mediterranean just in case you're wondering you know what i mean there could be worse places, i think, to be >> no, i think it sounds pretty good to me, too, joe i agree with you >> i was talking to someone about it it's pretty nice and i think it's a little more stable than it used to be ten, 20 years ago, right? >> oh, yeah. it's come a very long way. and it's a beautiful place >> 120 million coast line >> rich cultural history, yeah >> all right >> jeff, good to see you happy new year >> thank you, same to you. >> better than our buddy assange, you know? >> yes stuck in the embassy >> all right coming up -- apparently he's not the best house guest >> a bullish call on tesla we're going to talk to an analyst who says it's going to be a me akor break year for elon musk "squawk" is coming right back.

still to come, the first economic data of the new year. we'll get gobless sclamz aftjobr this quick break "squawk box" will be right back.

welcome back to "squawk box. i'm jim iuorio we have breaking data in the form of jobless claims the number came out as 222,000 slightly worse than the 220 expected last month was revised slightly worse, too, but 224 to 222 continuing claims, 1,000,728, which is actually a little worse than before. a little worse than expected as well the stock market came in relatively buoyant the s&p is up 19 coming in the ten year has been hovering

around 1.98 it seems like two weeks now. that's kind of like the magnet, it seems so it's the first data of the year it comes in decent, not great. woulder still kind of hovering around 50 year lows in the jobless claims number. the magic recipe here for the stock market in my opinion is still numbers that are pretty decent and a fed that's still relatively dovish. it's light volume today, but the market is feeling pretty good. back to you, joe >> all right, jim. we have our little twitter moments occasionally do you enjoy those >> we do i do enjoy those thank you for those. >> could be about anything, couldn't it? i guess there's some good things about that service, right? anyway -- >> there's a ton of good things about twitter. we get to share a lot of stuff it's 80% nonsense. the 20% that's good is good. you don't agree? >> i don't know. the four follower hate mail that comes in, why do they do it? what's the point >> if you're not getting hate mail, i don't think you're doing it right if you're not getting hate mail. >> jim, stay with us

joining us now jeff taylor, co-founder, managing director of digital risk you know what, when you agreed to come on on the 2nd, first trading day of the year, you know you're going to get the big questions, jeff. can you handle them? what is p what's going to happen this year do you think >> i look at the housing market, i think we're set up for a fantastic year, a $2 trillion residential market i think interest rates are going to stay around 3.5 i think we're going to see two trends that will shape the housing market going forward millennials will be dominating the purchasing market and residential market they'll account for 50% of the home purchases this year the age range low age of 30. up to 40 they're finally getting out of the cities, not renting moving to the suburbs they'll be dominating that market secondly, looking for the home builders to have a fantastic year

right now the home builders sentiment confidence is at an all-time high since 1999 at 76%. up by five points since last month. and they have the millennials coming into the market that's new home construction they also have the effect of the baby boomers who are looking to downsize into more planned communities, retirement communities. that's new construction also they're set to have a fantastic year >> so the millennials are finally getting to that age obviously. the way that they, you know, manifest getting to that age with purchases, it goes to the burbs, don't they stay urban they do everything the same as plier generations? won't there be significant differences from what we know already? >> i agree with you. if we're looking at price point perspective, right now what they can really afford to buy, with the low interest rate, they can buy in the burbs they were looking at 1800, 2000

square foot house. there's a new dynamic than 20 years ago. the flexibility to work from home, you can telecommute three to five days a week, that allows them to have the life-style they want, live in the burbs, have a great house, something they can afford so that's the dynamic that's driving them back out into the burbs with the flexibility and the life they're looking for >> okay. so that's one trend to look at can you regionally tell us what's strong, what's going to be weak, where there's over supply, where there's high end inventory, but no low end inventory? these are all the things we heard about all last year. >> yeah. so, i think -- i'll start nationally i think this is going to be the tight est inventory year in the last five years for some of the reasons we just talked about right now. i think you're actually going to see nationally bidding wars. what i mean by that is for every offer that's made in 2020, i'm looking for three, about 30% of

those to be contested in a bidding war compared to 2019 where you had one in ten that was in that dynamic. regionally obviously real state is very location driven, right so i think you're seeing a lot of people still come to the south. charlotte, charleston. those are going to be hot areas, areas like florida where you're going to have a little maybe over supply, some of the higher end market call that 3 to 5 million i live in miami, florida we're still seeing that sort of soft right now maybe that will be a little bit soft >> all right jeff, thank you. >> i have a quick question >> go ahead. >> is this dependent on rates as well what happens if we do start to see a little bit of flesh, long-end rates go higher, margin rates go higher? is your thesis strong enough to outweigh that? >> my thesis is very strong. right now i don't see, even if the ten year rallies over 2, which is highly unlikely, i still think you're going to see it from a mortgage perspective, the 3.5, to 3.8, which is a

pointle pointless than it was this time a year ago i think you're going to have a strong housing market throughout 2020 not to mention the first half of this year, there were so many people that wanted to refinance loans where there just wasn't enough capacity in the system for the banks and the lenders to actually refinance those loans you've got a lot of bepent up demand to create a strong and fluid market >> okay. we're going to leave it there, jeff thanks iuorio, thanks we'll see you tomorrow >> thank you >> when we come back, tesla shares rising. we will bring a bullish analyst call right after the break "squawk box" will be right back. when i lost my sight, my biggest fear was losing my independence. mmm... good. so i've spent my life developing technology to help the visually impaired.

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♪ ♪ welcome back to "squawk box" the futures right now, is there a reason -- i like that song >> "these eyes?" because it rhymes with ives who is our next guest. ♪ ♪ >> yeah, what do you think >> i like the song >> we have music just for you.

>> it's a good drum roll into 2020 >> it's these ives >> i don't know if that's why. i'm making that up >> is it why >> is it really? sin chr syncronicity >> i wish i thought that up. good job, evans. >> thanks for being here >> we have to go to break. >> no. tesla stock continuing to climb as we start the new year in fact, if you check things out today, you'll see shares are up again this morning up about 2.1%, another $8.78 the chinese market could be worth $100 a share for tesla dan ives is here to talk more about that why do you think the chinese market is going to be such a big deal for tesla >> on two sides, it's production and demand side. giga 3 is really the linchpin success for tesla over the 12 to 18 months. it comes down to demand.

that could be another 100, 150 k units per year that's why right now a big part of what you're seeing in the stock is china i think china is worth 75 to $100 per share now it's really a prove me story. >> what do you think is happening in the factory there people have raised questions about whether things are being manufactured there, whether they're really being manufactured here and put together there what have you seen have they let anybody in >> in terms of component parts -- we've done a lot of work over there as well as asia. right now 34% of component parts are chinese made, that's going to continue to increase. i think it really comes down from an investor perspective, what's the production look like. a thousand cars per week right now they could be on the trajectory to 2 to 3,000 by the end of the year. that's where right now in tesla, ultimately, take out u.s. and europe going forward, fork in the road, if they can be successful in china right now, it looks like they can, that's why i think in our opinion, china is really the hearts and lungs of the bull

story for musk and company going forward. >> i want to talk to you about a bunch of other predictions you have for this year some interesting ones. first of all, what are the issues you are concerned about, the new law that went into effect in california, that will require companies like uber and lyft and others to pay their contractors as full-time employees or treat them as employees rather than contractors. what do you think that means >> it's really a gut punch to the economy. not just uber and lyft fundamentally, the whole worker contract issue, which just got put -- in california, it's going to be fought in the courts but if you look at what that could do, really it's a major change to the business model that's an $8 to $10 overhang for uber this is something in our opinion, we're following very closely because ab 5, and especially how it plays out in the courts, that's going to be significant -- >> what do you think happens in the courts yeah >> ultimately, we believe in the

courts it is ruled unconstitutional and ultimately does not get implemented that's at least in terms of how we see and that's our view if we thought ab 5 is going to be implemented in its current form, it's hard to be bullish on these names in our opinion >> if you think that's the case, should people buy right now if it's an 8 to $10 overhang? >> that's the table pounder in gig names to buy i look at uber and specifically lyft, fundamentals are going to increase right now it's a glass half empty. perceived on the names, fundamentally valuation wise, user names go much higher if we sit here a year from now especially our view on ab 5 and how that ultimately shakes out >> however, you also have one of your predictions for this year that uber winds up having to really scale back on uber eats >> that's a major overhang if you look right now, one of the biggest overhangs besides ab 5 is the food delivery business. it was viewed as an asset if you

look back to when they came public grub hub, door dash and others, so much pressure on profitability. >> because there is so much competition? >> because there's competition rates continue to be under pressure for a company data was put out there 2021 profitability, in my opinion they're going to have to significantly curtail it or shut it down in terms of uber eats. >> what about the fang names and which ones will do well in 2020? do you think apple will be a big winner >> apple, we sit here a year from now north of 350. i continue to believe in terms of all our work, that 5g super cycle is real. and i think it comes down to that install base. it's a valuation that continues to, i think, rerate higher on services but i think fundamentally in 5g, you can talk about qualcomm and others best 5g in our opinion is apple. but then you also look at a name like amazon. the reason that's going to work is really some of the parts in the cloud piece. the other theme, it's part why we're so bullish in microsoft.

it's that cloud piece. aws cloud piece for amazon is going to be the next leg of that bull theis >> that's the next level you think microsoft is the next winner in the round of cloud wars >> it's going to be a two-horse race, aws and microsoft. i think aws will help amazon rerate who will win in the next phase of cloud, forget google. i think it's microsoft and dell. in our opinion that's a stock that continues to go higher because in this next phase of clouds, you only have 30% of work loads in the cloud today. it goes to 55% in the next two years. it's redman and dell that win that that's why microsoft continues to be the best cloud play just like apple is our 5g play. >> but you still like amazon's shares because you think the cloud play there will continue to be a reason to buy the stock? >> it's really numbers if i look at 300 billion is spent in the cloud call it the last six years the next three years, 700 billion. the numbers are so big that

right now it's going to lift both microsoft and amazon. i think if you get the aws piece, that's something amazon is going to get aggressive not just organically, but through acwriquisitions that's why in terms of trans formational it's cloud one of our predictions, google is going to look to acquire a big cloud player you look at names like workday and service now and others >> you think they can get that passed with all the questions about already looking from regulators saying maybe we want to break up -- or politicians, i should say, maybe we want to break up some of these companies. would they be allow to do a purchase like that >> that would be under scrutiny. i believe in terms of fang names, you would start to see them get more aggressive on acquisitions rather more defensive. >> is that smart or is that tone deaf given the regulatory environment and given the political environment today? >> it's a great point. and i think no doubt they could take heat in the kitchen but i go back to covering microsoft back in the late '90s. i think gates will say to this day, one of their biggest

strategic mistakes is when they were under the bright spotlight, they went defensive, they didn't acquire, especially mobile and some other areas and it hurt them for decades loss i think these fang names are going to get more aggressive on m & a even though you say there's going to be more heat in the beltway. >> you think it's rootight thint do >> i think it's the right name strategically. health care, banking, cloud. you'll see them go on the offensive rather than defensive. i think that's going to be a tone set early on in terms of potential megamerger >> are there any stocks you don't like in your universe of coverage at this point >> front and center slack. just because i view it goes to the microsoft theme. going against microsoft right here is going to be extremely difficult for slack. that's why i think they're gross overstated they have a sell rating on that. i view it as there's not going to be all winners. there's going to be inherent losers slack is egg negative in terms of disney t' more

cautious on the netflix just given where they sit from a content and subperspective >> you're more cautious on disney or netflix? >> netflix >> because of disney >> because of disney when i like at iger and disney -- in terms of fang names, that's why apple, amazon, google to me stick out more bullish than a facebook. just given some of those content head winds i think subgrowth they're going to have to face, especially -- what i view as pricing hubris in terms of the current model >> of all the names you do like, which one is your favorite do you have a top pick >> top pick front and center right here is apple. i view it as -- stock is up 80%. that's just the first part of what i view as a massive rerating that's why i think 350 to $400 as we go into the next year is the one that sticks out. >> dan, thank you. it's great to see you. >> thank you >> it's nice to realize you finally have your own theme song >> for months, i'm told.

>> we're a little slow i'm thrilled i figured out y. >> you did figure it out do you know who is singing ♪ these eyes ♪ >> um -- >> big, big, big band in the late '60s. guess who. it's confusing for me. >> guess who >> who remember american woman, these eyes >> all right thanks, dan. >> thank you thanks for having me >> now that we know, you can come back so we can play that. >> i'm a little embarrassed. >> you don't have to be right about it he can tell us coming up, opening bell on wall street, future has big gains at the open we'll get you prepped for the first trading day of the year when "squawk box" returns. ♪ ♪ ♪ these eyes ♪

is

i think that's clearer than it's ever been interest i have to say one street over a lot of confetti still >> confetti but better than like -- >> nasty stuff. >> san francisco-type stuff. i mean, it's everywhere sometimes out there. anyway, ipt sad. if i say san francisco, people know what i'm talking about. it's great the city is suddenly known for human excrement. anyway, president trump's re-election campaign -- >> we have that here >> we don't have tents, lining every street in downtown, the most beautiful city previously in the world president trump's re-election campaign says it's raised $46 million in the fourth quarter, it heads into 2020 with about 103 million in cash on hand a trump campaign press release says a fourth quarter haul is the best one yet and better than

any fourth quarter announced by any democrats thus far although, people this morning are feeling the bern, keep it up bernie sanders campaign says it raised about $35 million in the foushl fourth quarter he sits at the top of the democratic fundraiser leaderboard. people wrote in, you just wait, you will be crying when he gets the nomination >> that is my most fervent desire there could not be anything i could wish for any more than that the former south bend indiana mayor pete buttigieg says it raised about $25 million in the quarter and entrepreneur andrew yang, people giving him money, more than $16 million in the fourth quarter >> hmm >> say something say something. >> no, i was shocked to see that bernie actually raised dlo34.5

million. >> bernie may pick up steam. >> he picked up steam. he had a heart attack. i think what stunned me from it the average giving total was 18.5, so he made that much money from a lot of people >> the heart attack, not the honeymooned in the soviet union. anyway, a little more than half an hour until the opening bell on wall street, joining us what to expect this month this quarter this year. president of sri kamal global strategy, you are finally going to be wrong, right or 192 where we go back to 1? >> joel, you said that, it's been fine listening to you over the last few years but great are we on the 10 year. we are 188 we have the worst back increase in yields that we saw a couple weeks ago. we are back and the ten year has

a tough time getting beyond 195 and i don't think that's going to change in during calendar year 2020 either, joe. >> in fairness, we had most of our guests say, no big, i don't know if they will be right most have said we will stay at 2 or below nobody is talking about 3 anymore. they've all come around to your way of thinking there. whenever you make your point, i get depressed. these aren't great reasons for why you see rates staying low. most of them are because of a continued sort of global malaise in terms of growth >> yes >> that is a part of it. but it is also, joe, that the u.s. population is getting older. we don't have enough immigrants who are young and who can add to consumption. we have other head winds which are structural which we cannot take care of which is why even if the fiscal difference increases in 2020, as expected, and more pressure issues are coming into the

market, i think the safe haven flow is also going to help you overall. look for instance on the safe haven side what happened with the phase 1 of the trade accord. president trump announced a january 15th signing, that has been silenced from the chinese side they have not confirmed a date and the chinese over the weekend instead look for more of trust from the u.s. side nothing upon the signing also you had a great interview on tuesday and he told you that they are waiting for the translation of the chinese version into english so i wonder whether anybody knows in english what it said in terms of the trade accord. i can't see where the optimism is coming from if those fail, then, once again, you are going to see the ten

year go doumpblt i am looking for below 150. >> you are looking for below 150. whenever you are on, you talk acted these things i listen. we put up fact charts that showed 28% last year gains 165 points on the dow today you are painting a picture that explains low yields. it doesn't explain what's going on in the stockmarket unless it's a big bubble. >> well, you always have the end of an nick cycle you have the divergence between the equities and bonds and what we are saying. look at 2007, december, we had the great recession begin stockmarkets hit the record high in october of 2007 the bond market had either inverted and the yield curve was talking to steepen towards the end of 2007 in anticipation of

eventual recovery in the fed cut. we see the same thing happening in 2019. we had an inversion followed by a steepening so, the similarities with 2007 on the bond market was equities, joe, are really what he said to me in terms of how close they are in terms of the similarity so equity is doing well when the bond yields are also going down. it's not unusual it's typically happens at the end of the cycle >> how close to the end of the cycle? >> becky on that, the timing is always veryiant. i would say from the past from 2001 recession, 2007 recession it is somewhere in the range of six months i'm looking by the beginning of 2020 but by past experience, becky, you do not know that you are in a recession until you are well into it. recall what happened in the

first half of 2008 with were in recession the equity market rallied. go figure. so that's what i think is likely to happen again. so going to joe's question, the equity do well continuing into the initial part of 2020 but that should not give you comfort if you are amedium ter investor >> it's great to see you >> it's great to see you both. >> happy new year, everybody right now, it's time for "squawk on the street" >> good morning, happy new year. welcome to "squawk on the street". i'm scott walker, we are live from the new york stock exchange carl, jim, david have the morning off. let's take a look at futures for the first trading day of the new year and there you go that's what china stimulus looks like for the u.s. market it looks likes we will set